REPUBLIC OF NAMIBIA
IN THE HIGH COURT OF NAMIBIA, MAIN DIVISION, WINDHOEK
RULING IN TERMS OF PRACTICE DIRECTION 61
Case Title: FIRST NATIONAL BANK NAMIBIA LIMITED Plaintiff and MARTHA SOOVOYE NEPOLO Defendant AND FIRST NATIONAL BANK NAMIBIA LIMITED Plaintiff and ERIKSON NEPANDO Defendant | Case No: HC-MD-CIV-ACT-CON-2023/01529 HC-MD-CIV-ACT-CON-2023/01544 | |
Division of Court: Main Division | ||
Heard on: 19 March 2024 | ||
Heard before: Honourable Lady Justice Rakow | Delivered on: 26 April 2024 | |
Neutral citation: First National Bank Namibia Limited v Nepolo (HC-MD-CIV-ACT-CON-2023/01529) ( HC-MD-CIV-ACT-CON-2023/01544) [2024] NAHCMD 196 (26 April 2024) | ||
Order: | ||
In the first matter - First National Bank Namibia v Nepolo AD CLAIM 1
AD CLAIM 2
In respect of the second case - First National Bank v Nepando AD CLAIM 1
AD CLAIM 2
AD CLAIM 3
IN RESPECT OF CLAIMS 1 AND 2
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Reasons for order: | ||
RAKOW J: Introduction
Arguments on behalf of the plaintiff
Legal considerations and discussion
‘There has been a raging debate over the years regarding the scale of costs, especially whether there should be a distinction between attorney and client costs and attorney and own client costs. Generally, costs are granted on the party and party scale. There are those case, where because of some untoward behaviour that the court may sanction costs on the punitive scale, otherwise referred to as attorney and client costs. There is another category, referred to as attorney and own client costs over which there is debate regarding whether it differs from attorney and client costs. It is unnecessary to engage in that debate in the light of what follows below. [9] There are instances, such as in Whelan v Whelan2 where parties enter into an agreement in terms whereof the defendant is to pay ‘all the costs incurred by the defendant on the scale as between attorney and own client so as to give the defendant a full indemnity is respect of such costs.’ As intimated above, the instant matter was such a case. [10] In dealing with class of attorney and client costs, Zietsman J held as follows in Whelan v Whelan: ‘It is clear that parties can agree to a basis of taxation different from that which will be applied when a simple order is made that attorney and client costs are to be paid. In the case of Enslin GR v Gallo D 1984 (1) PH F27 (D) it was held that where an unsuccessful litigant was ordered to pay the other party’s costs “as between attorney and own client” such costs should be taxed on the most generous of the three bases referred to by Roos. But even in such a case costs authorised by the client, but which could be described as unnecessary luxuries would not be allowed.’ [11] Dealing with the concept of attorney and own client costs, Van Dijkhorst J stated the following in Ben McDonald Inc and Another v Rudolph and Another 3: ‘The term “own client” is a misnomer. In the context of taxation or otherwise an attorney can only tax a bill of costs incurred by him in respect of his (own) client’s matter. Not that of the client of somebody else. “Attorney and own client costs” therefore has a technical meaning – pertaining to the basis of taxation – when used in the context of litigation. These costs are allowed on taxation of an attorney’s bill to his own client. They include all costs except when unnecessarily incurred or of an unreasonable amount.’ [12] It is clear that in this matter, the parties entered into a written agreement in terms of which all costs incurred in relation to litigation would be paid at the rate of an attorney and own client. In this regard, the costs, as stated immediately above, include all costs. This means that if DBN, for instance, incurred costs in instructing counsel in the drafting or settlement of the pleadings and appearance in court, it is accordingly entitled, in terms of the agreement, to recover those costs incurred in relation to counsel from the defendants in this matter. [13] It would appear to be trite learning from the Ben McDonald case above that the only basis upon which the taxing officer can legitimately disallow items relating to attorney and own client costs is if the said costs are unnecessarily incurred or of an unreasonable amount.’
‘1. Party and party costs: These are costs awarded against the losing party in litigation and are taxed in terms of Rule 70 with a view to a full indemnity to the successful party but limited to costs necessary or proper for the conduct of the litigation… 2. Attorney and client costs: 2.1 In cases where the losing party in litigation is to pay them, this means the same as attorney and own client costs as defined below. 2.2 In cases where the losing party in litigation is to pay them to the successful party this means all reasonable costs incurred on behalf of the client although not strictly necessary or ‘proper”. In practice this means that these costs are taxed according to tariff, but generous where there is some leeway. Items not in the tariff may be included and so may amounts which would be reduced on taxation on party and party basis. The limited scope of this taxation follows from the fact that Rule 70 also governs taxation between attorney and client. 2.3 Attorney and own client costs, whether in the sense of 2.1 above or where they are to be paid by the losing party to the successful party, means all costs incurred except where unreasonable. Agreed items or amounts are presumed to be reasonable… This presumption of reasonableness cannot be irrebuttable as this would open the door to clients agreeing to exorbitant fees with attorneys or counsel in the knowledge that the opponent will foot the bill. This will be contra bonos mores. My approach that in an attorney and own client bills which have to be paid by the other party the attorney should not be given a free hand, untrammeled by the frown of the Taxing Master, is in conformity with the approach of the Appellate Division in Nel v Waterberg Landbouwers Ko-operatiewe Vereeniging 1946 AD 597 at 608. The appellate Division in placing its stamp of approval on orders for attorney and client costs still insisted on a stricter approach on taxation where the bill is taxed against the losing party as ‘it is essential…to prevent injustice to the latter’. Admittedly the term ‘attorney and own client costs’ was not used, but the principle is the same. A court may castigate a party in an award of costs but will not countenance unjust treatment.’
‘Inasmuch as Eksteen J applied the principles of Nel, Loots is in my respectful view further authority for the propositions that: 1. When a bill drawn as between attorney and client is to be taxed, the basis of taxation varies according to whether the costs debtor who must pay the bill is the attorney's own client or the opposing party. A stricter basis of taxation applies when the opposing party must pay ('inter-party attorney and client taxation') than when the attorney's own client must pay ('pure attorney and client taxation'). This is to avoid injustice to the opposing party. This stricter (inter-party attorney and client) basis of taxation is referred to as an 'intermediate' basis because, though 'stricter' (ie less generous to the costs creditor) than the taxation of a bill to be paid by a client to his own attorney, it is nevertheless in principle more generous (to the costs creditor) than the party and party taxation of a bill to be paid by a costs debtor, in the ordinary way - a taxation that must adhere strictly to the tariff in Rule 70 (unless the case is one contemplated by Rule 70(5)(a), so that the Taxing Master may, in his discretion, depart from the tariff). 2. The 'intermediate' (inter-party attorney and client) basis of taxation applies whether the costs debtor has been ordered to pay attorney and client costs, or whether he has merely agreed to do so (cf Loots (above at 433H); and Markman v Richardson 1969 (3) SA 465 (E) at 467C - D). 3. The 'intermediate' basis of taxation does not justify departures from the tariff in Rule 70 except, in terms of subrule (5)(a) 'in extraordinary or exceptional cases, where strict adherence to such provisions would be inequitable'. 4. The mere fact that one party ('the costs debtor') has agreed to pay the costs of another ('the costs creditor') taxed as between attorney and client does not necessarily constitute an 'extraordinary or exceptional' case within the meaning of that phrase in Rule 70(5)(a); nor does the fact 7 that a law association of local attorneys has agreed amongst themselves upon a tariff higher than that contemplated by Rule 70.’
In the first matter - First National Bank Namibia v Nepolo AD CLAIM 1
AD CLAIM 2
In respect of the second case - First National Bank v Nepando AD CLAIM 1
AD CLAIM 2
AD CLAIM 3
IN RESPECT OF CLAIMS 1 AND 2
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Judge’s signature | Note to the parties: | |
E RAKOW Judge | Not applicable | |
Counsel: | ||
Plaintiff: | Defendants: | |
A Strydom On instructions of Theunissen, Louw & Partners, Windhoek |
1 Development Bank of Namibia v Vero Group CC (HC-MD-CIV-CON-2021/02716) [2022] NAHCMD 50 (11 February 2022).
2 Whelan v Whelan 1990 (2) SA 29 (E) 30-31.
3 Ben McDonald Inc and Another v Rudolph and Another 1997 (4) SA 252 B-C.
4 Ben McDonald Inc and Another v Rudolph and Another 1997 (4) SA 252 B-C.
5 Aircraft Completions Centre (Pty) Ltd v Rossouw and Others 2004 (1) SA 123 (W).
Cited documents 1
Judgment 1
1. | Development Bank of Namibia v Vero Group CC and Another (HC-MD-CIV-ACT-CON- 2716 of 2021) [2022] NAHCMD 50 (11 February 2022) | 3 citations |