Beukes  vs Dudley-Owen

IN THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

JOHANNESBURG                                                                                                        CASE N0: 9912/01

2003-03-07       

In the matter between

BEUKES, ANGELA MEGAN                                                                                               Plaintiff

and     

DUDLEY-OWEN, WILLIAM ANTHONY                                                                             Defendant

JUDGMENT

MEYER, AJ: The plaintiff in this action claims payment of damages resulting from bodily injuries which she suffered in a motor vehicle collision. The trial was set down for hearing on 4 February 2003. It is recorded in the minute of the pre-trial conference held on 19 July 2002 that the parties had agreed that the merits had been settled and that the matter would proceed to trial for the determination of the quantum of damages on the basis that the plaintiff would be entitled to 75% of her agreed or proven damages.  

On the morning of 24 February argument was heard by Goldblatt J in relation to an application to amend the plaintiff's particulars of claim and a postponement of the trial if the application to amend was granted. After the argument had progressed for about an hour and a half, the plaintiff withdrew the application to amend and the plaintiff was ordered to pay the wasted costs relating to the application to amend and the application for a postponement.

The matter was then referred to me on the basis that the trial would proceed. I was advised by counsel for the parties that it was estimated that the trial would last at least a week and possibly as long as nine or ten days. In accordance with the practice in this division the registrar had been informed that the duration of the trial was likely to exceed five days.

On the afternoon of 24 February I heard the evidence of two expert witnesses called by the plaintiff. The trial did not, however, proceed on the following day because I was informed that morning that the parties were attempting to agree on issues relating to the quantum and subsequently that there were discussions about a possible settlement. That afternoon I was informed at about 15:30 that the matter had been settled and I was asked to considered argument as to whether the plaintiff was entitled to the costs of two counsel.

When I arrived in court that afternoon I was informed by Mr Ancer SC, who appeared with Ms Goodenough for the plaintiff, that the plaintiff had accepted the an offer of settlement made by the defendant. Mr Ancer informed me of the terms of the offer and stated that it had been agreed by the parties that the defendant would be liable for the qualifying fees of three of the plaintiff' expert witnesses, namely Dr Earl, Mr Viljoen and Dr Braude. Mr Ancer then sought to hand up a notice in terms of Rules 34(1) and (5) of the Uniform Rules of Court.

At this point the defendant's counsel, Mr Strydom, interjected and informed me that before I considered the document, he wanted to make it clear that he would contend on behalf of the defendant that if the tender had indeed been accepted by the plaintiff, the court could not make any ruling on costs issues. Mr Strydom submitted that by reason of the fact that the defendant's notice including a tender to pay the plaintiff's taxed or agreed party and party costs on the High Court scale up to the date of the notice, I was not entitled to make any order at all in relation to the costs on the basis that the acceptance of the tender meant that all issues between the parties, including the defendant's liability for costs, had been settled. That, so it was contended by Mr Strydom, was the end of the matter because all disputes between the parties had been terminated. Mr Strydom challenged the plaintiff's counsel to confirm that the tender  had been accepted. I told Mr Strydom that Mr Ancer had told me in no uncertain terms that the tender had been accepted and Mr Ancer then confirmed that this was so. Mr Strydom conceded that in these circumtances I was entitled to consider the terms of the document but he contended on behalf of the defendant that, firstly, the court was precluded from considering any issues relating to costs and that, secondly, in any event, the employment of two counsel by the plaintiff was not justified.

Counsel for both the plaintiff and the defendant informed me that they wished to argue these issues fully and, due to the lateness of the hour, it was agreed by the parties that such argument would be heard on the following day, i.e. 26 February.

On 26 February argument was addressed on these issues and I was referred by counsel to a number of authorities which they contended supported their respective contentions.

In order to consider the effect of the plaintiff's acceptance of the offer, it is first necessary to consider the provisions of Rule 34 and, in particular, subrules (1) and (5) and I quote those subrules. Rule 34(1) reads as follows:  

"(1)            In any action in which a sum of money is claimed, either alone or with any other relief, the defendant  may at any time unconditionally or without prejudice make a written offer to settle the plaintiff's claim. Such offer shall be signed either by the defendant himself   or by his attorney, if the latter has been authorised thereto in writing." 

Rule 34(5) reads as follows:

   "(5)     Notice of any offer or tender in terms of this rule shall be given to all parties to the action and shall state –

            (a)       whether the same is unconditional or without prejudice as an offer of settlement;

(b)               whether it is accompanied by an offer to pay all or only part of the costs of the party to whom the offer or tender is made and further that it shall be subject to such conditions as may be stated therein;

(c)               whether the offer or tender is made by way of settlement of both the claim and costs or of the claim only;

(d)               whether the defendant disclaims liability for the payment of costs or for part thereof, in which case the reasons for such disclaimer shall be given and the action may then be set down on the question of costs alone."  

The defendant's notice is dated 25 February 2003. It is headed "Notice of offer of settlement in terms of Rule 34(1) and (5)". It reads as follows: "BE PLEASED TO TAKE NOTICE that without prejudice and without admissions of liability and by way of offer in full and final settlement of the Plaintiff's claim, the Defendant hereby tenders:        

1.   Payment direct to the Plaintiff the sum of R1 000 000,00.(One Million Rand).

2.      Take note further that the amount reflected in paragraph 1 above is net of the interim payment made by the Defendant.     

3.      The defendant also tenders, in the event of this Offer of the event of this Offer of Settlement being accepted by the Plaintiff, to pay the Plaintiff's taxed or agreed party and party costs on the High Court scale up to the date of this notice and including any costs attendant upon the obtaining of payment of the amount referred to in paragraph 1 above."  

Mr Strydom referred me to the provisions of Rule 69(1) which reads as follows:  

"Save where the Court authorises fees consequent upon an employment of more than one advocate to be included in a party and party bill of costs, only such fees as are consequent upon the employment of one advocate shall be allowed as between party and party."  

Mr Strydom contended that because the plaintiff accepted the defendant's offer to pay the "taxed or agreed party and party costs", this means that only the costs consequent upon the employment of one counsel can be allowed. This is so, he argued, because the court did not authorise the fees consequent upon the employment of two counsel. Mr Strydom contended that once the offer has been accepted, all issues between the parties, including those relating to  costs, have been resolved by agreement and the court has no power to supplement or qualify the terms of such agreement because all disputes between the parties have been terminated, including the dispute concerning the defendant's liability for costs. 

There are two decisions in this division which Mr Strydom relied on to support his contentions, namely Modise v Standard General Insurance Co Ltd 1989 (2) SA 276 (W) and Erasmus v Santam Insurance Co Ltd 1992 (1) SA 893 (W). In Modise's case the defendant made an offer in terms of Rule 34(2). The offer incorporated a tender to pay the plaintiff's "taxed or agreed Supreme Court party and party costs to the date of the service of the notice". The tender was not accepted within the 10 day period then allowed by the Rules of Court for acceptance of the offer. However, after the 10 day period had lapsed the plaintiff accepted the tender and the defendant consented to the late acceptance of the tender. The question which then arose was whether the plaintiff was entitled to an order for the costs which had been incurred after the date on which the tender had originally expired, that is 10 days after the date on which the notice had been given.

Morris AJ at page 277F-G stated as follows:

"It seems to me that on the ordinary principles of the Law of Contract that this tender amounts to an offer which is capable of being accepted so that a binding contract results between the parties. It is trite law and it is unnecessary to refer to authority on this proposition that an offer may be accepted only on the terms on which it is made. And it is equally trite that when an offer is accepted, a binding contract exists or comes into being between the parties. Applying that to the present matter, the acceptance contained in the document dated 18 September 1987, brought about an agreement or contract between the parties that the defendant would pay the sum of R 6000,00 and that it would pay certain specified costs. The effect of accepting a tender under Rule 34 is to bring the proceedings to an end. In my opinion, therefore, when the tender was accepted, it was accepted on the basis and in the terms that the defendant was liable for costs only up to the date of the service of the notice including the other costs specified."

In the Erasmus case, the relevant defendant made a tender in terms of Rule 34 to pay the plaintiff an amount in settlement of his claim and the plaintiff's taxed or agreed party and party costs to the date of the tender. After the tender was made, the plaintiff decided to brief senior counsel in addition to the one advocate who had been on brief up to that time [at 896F]. The plaintiff accepted the tender after senior counsel had been briefed and after accepting the tender sought to contend that he was entitled to the costs of two counsel. Flemming DJP held that in those circumstances the court had no discretion to intervene and the offer to pay costs did not "include an item of costs which was deliberately (and avoidably) incurred on a later date". Such an offer did not, it was held, "include an item which was included in the word costs only when a rider is added." (See 899D-E). The rationale was based on the proposition that the offer was not an offer to pay costs "with a rider".

In my view the facts in both cases quoted above are distinguishable from the facts in the present matter. The plaintiff does not claim that she is entitled to an order which would include the costs incurred after the date on which she was entitled to accept the Defendants offer, as was the case in the Modise decision. The order for costs which the plaintiff now seeks relates only to the costs up to the date on which the offer was made. That was the same day as that on which she accepted the offer. She therefore does not seek additional costs as those which were sought in Modise's case.

At the time when the tender was made in this matter the defendant well knew that the plaintiff had for some time been employing the services of two counsel. It is evident from the pre-trial minutes that at least as far back as July 2002 both senior and junior counsel were acting for the plaintiff. To my mind, this makes the facts quite distinguishable from those which pertained in Erasmus' case. In any event, the approach adopted by Flemming DJP in the Erasmus case, ignores the principle that the trial court has an overriding discretion on costs under Rule 34: See Griffiths v Mutual and Federal Insurance Co Ltd 1994 (1) SA 535 (A) at 549A-B.

The discretion must include the discretion to authorise the taxation of fees consequent upon the employment of more than one advocate in appropriate cases. Such an authorisation does not vary or alter the terms on which the offer was made and accepted. If this discretion was excluded, a plaintiff could in effect be held to ransom by a defendant who is unwilling to pay the costs of two counsel and would be placed in an intolerable dilemma if the offer did not expressly include the costs of two counsel. Even if costs of two counsel are obviously justified, the plaintiff would, if not satisfied with the costs of only one advocate be compelled to reject the offer and continue with the trial. The issue as to whether costs of two counsel should be allowed could only then be determined  after considerable additional. costs have been incurred in pursuing the trial. This makes no sense to me.

It is also instructive to have regard to Rule 34(5)(b) and (d) which are quoted above. When the offer was made in this matter, the defendant was, as I have stated above, well aware of the fact that the plaintiff had been employing two counsel. If it wished to avoid payment of the costs consequent on the employment of two counsel, the defendant ought to have stated the grounds on which it disclaimed liability for the costs of two counsel. As a result of its omission to do so, the term 'taxed' or 'agreed' costs remains, in my view, subject to the discretion provided in Rule 69(1).

Mr Strydom also referred me to the decision of the Full Bench of the Cape Provincial Division in Hassett v Santam Insurance Co Ltd. 2000 (1) SA 403 (C). In that judgment the court cited the Modise case and the Erasmus case with approval. However, in that matter  the court was, as in the Modise case, dealing with additional costs incurred after the date on which the tender expired. What is important from that decision is what was stated by Brand J at 407C, namely:  

"It is, however, almost self-evident that in each particular case  the trial Court must exercise its discretion in the light of all the facts and circumstances of that case. It follows that reference to decisions in other cases where the facts and circumstances were substantially different is not of much assistance in deciding the costs issue".  

In any event, some support for the approach which I have adopted is to be found in the decision in South African Eagle Insurance Co Ltd v Serebo 1985 (4) SA 50 (W) which was dealt with in argument by both counsel. In that matter the defendant made an offer which included an offer to pay the plaintiff's taxed party and party costs, including certain costs relating to qualifying expenses for witnesses. The plaintiff accepted the offer but sought clarification as to whether the offer included the costs of two counsel and the qualifying fees of additional expert witnesses. There was a dispute between the parties in relation to the qualifying fees and the court was asked to make an order that the qualifying fees were taxable and such an order was made. The defendant applied for the rescission of the costs order and Strydom AJ came to the conclusion that because the issue relating to the qualifying expenses of witnesses had not been resolved, the court had correctly exercised its discretion in awarding those costs to the plaintiff.       

During the course of his argument to me, Mr Strydom stated that before the offer had been accepted in this matter, the plaintiff's attorney had approached the defendant's attorney and asked whether the defendant agreed to pay, firstly, the witnesses' qualifying fees of the three witnesses I have referred to above and, secondly, the costs   of two counsel. According to Mr Strydom the defendant's attorney stated that the defendant was agreeable to paying the qualifying fees of the three relevant witnesses but not the costs of two counsel. Mr Strydom submitted that it was thus clear to the plaintiff before the offer was accepted that the offer did not include an offer to pay the costs of two counsel. Therefore, he contended, when the plaintiff accepted the offer, there was no doubt about its terms and the costs were therefore limited to taxed party and party costs which meant that the costs of only one advocate could be allowed. In my view, this contention, if at all relevant, could only have substance if the term 'party and party costs' were not susceptible to the authorisation which is referred to in Rule 69(1). As I have indicated above, I believe that the court retains the discretion afforded to it in Rule 69(1) even where an offer incorporating the taxed party and party costs has been accepted.  

Having come to the conclusion that I am entitled to consider whether the costs of two counsel should be allowed in the present circumstances, it remains for me to apply the accepted tests to the present circumstances.

Mr Ancer submitted in written heads of argument which he handed up that the costs of two counsel were justified for the following reasons:  

1.            It was a wise and reasonable precaution on the plaintiffs part to employ two counsel, especially in view of the importance to the plaintiff of this case, the outcome of which would fundamentally affect the rest of her life.

2.           The amount involved in the action was very large, particularly for a private individual.

3.           The nature of the issues in dispute between the parties was unusually complex in that the plaintiff's injuries were out of the ordinary, and the sequelae thereof and the quantum of her damages were in dispute.

4.           There were over 17 expert witnesses  whose opinions had to be studied and understood in depth, and in respect of which preparation for trial had to be carried out.

5.            The plaintiff had 11 of its own experts to lead at the trial. All of these witnesses had to be consulted with before the trial.    

6.             It would have been unreasonable and unwise for the plaintiff to expect one counsel to consult with and prepare sufficiently thoroughly on 11 expert witnesses in addition to the lay witnesses.

7.            There were several lay witnesses who had to be consulted with. It was necessary to consult in depth with plaintiff and to prepare a detailed chronology, particularly of the last 11 years of her lifetime in order to prepare and present to the court a comprehensive picture of the nature and extent of her damages. This took many hours of preparation.    

Mr Strydom contended that the issues were not that complex and that many of the issues had become common cause. The issues, he stated, were thus quite limited and were not of a complex nature. I am unable to understand, if this was so, why it was anticipated by the parties that the trial would last as long as 9 to 10 days. That     could not have been the case if the issues were as narrow as suggested by Mr Strydom. In my view, the factors which were referred to by Mr Ancer indicate to me that the cots of two counsel should be allowed.

Accordingly I make an order in the following terms:   

1.         In terms of Rule 69(1) the court authorises that the feees consequent upon the employment of two counsel shall be allowed as taxed party and party costs.

2.         In addition to the costsup to the date of the tender, the defendant is ordered to pay the costs relating to the argument     5 on 26 February 2003, including the costs of two counsel. The order for costs which I make in relation to the argument on 26 February follows the usual principle that the unsuccessful party ought to pay the costs relating to the argument. No other basis on which to decide this issue relating to costs was suggested 10 to me. Indeed I understood it to be accepted by both Mr Ancer and Mr Strydom that the usual principle was applicable.  

3.              The qualifying fees of Dr Earl, Mr Viljoen and Dr Braude are allowed.  

In addition to the order which I have made, I note at the request of the parties that it has been agreed that the defendant will pay the plaintiff the amount of R1 million in respect of the capital.