Court name
High Court Main Division
Case number
HC-MD-CIV-ACT-DEL- 3647 of 2018
Case name
Chico/Octagon Joint Venture v Roads Authority
Media neutral citation
[2021] NAHCMD 192
Judge
Prinsloo J

 

 REPUBLIC OF NAMIBIA

 

 

 

 

 

                                                  IN THE HIGH COURT OF NAMIBIA, MAIN DIVISION, WINDHOEK

 

JUDGMENT

 

IN THE HIGH COURT OF NAMIBIA

 

Case Title:

CHICO/OCTAGON JOINT VENTURE v ROADS AUTHORITY

Case No:

HC-MD-CIV-ACT-DEL-2018/03647

Division of Court:

MAIN DIVISION

Heard before

HONOURABLE LADY JUSTICE PRINSLOO, JUDGE

Date of hearing:

30 March 2021

Delivered:

23 April 2021

Neutral citation: Chico/Octagon Joint Venture v Roads Authority (HC-MD-CIV-ACT-DEL-2018/03647) [2021] NAHCMD 192 (23 April 2021)

Having heard KUJEE RUKAMBE, on behalf of the Plaintiff(s) and SARAPHINA PAULUS, on behalf of the Defendant(s) and having read the pleadings for HC-MD-CIV-ACT-DEL-2018/03647 and other documents filed of record:

JUDGMENT IS GRANTED IN THE FOLLOWING TERMS:

1.         Costs in respect of the exception application dated 23 May 2019: Costs is granted in favour of the Defendant and such costs are not limited in terms of Rule 32(11).

2.         Costs in respect of the interlocutory applications:

            (a)  Application for variation of the cost order heard on 8 February 2021 and the ruling delivered on 11 February 2021 is as follows:

(i) Costs are granted in favour of the defendant, such costs to be limited in terms of Rule 32(11).

            (b)        Argument on costs heard on 30 March 2021 and delivered on 23 April 2021:

 (i) Costs are granted in favour of the defendant, such costs to be limited in terms of Rule 32(11).

3. In respect of the withdrawal of the action: Plaintiff is liable for costs of suit. Such costs to be taxed. The court order dated 4 November 2019 is varied accordingly.

 

Reasons for orders:

 

Introduction

[1]      The applicant and respondent in these interlocutory proceedings are the defendant and plaintiff in the main action. For ease of reference, I will refer to the parties as they are in the main action.

 

Background

[2]      The matter before me has a long history of litigation. It was birthed from a Supreme Court appeal[1] against the dismissal of a review application by this Court, wherein the Supreme Court was tasked to consider whether the plaintiff’s constitutional rights had been infringed as a result of the defendant awarding a tender to another party. Although the Supreme Court found that the defendant’s conduct amounted to unlawful administrative action, it refused to set aside the tender award, thereby dismissing the plaintiff’s appeal.

 

[3]      The Supreme Court decision precipitated the plaintiff’s lawsuit against the defendant, which it instituted during September 2018.  The plaintiff claimed constitutional damages for infringement of its rights under Article 18, read with Article 25 of the Namibian Constitution, alternatively damages under delict.

 

[4]     The defendant noted its defence to the plaintiff’s action and proceeded to raise an exception to the particulars of claim on eight grounds, all of which maintained that the plaintiff’s particulars of claim did not contain the necessary averments to sustain a cause of action. The parties argued the exception, and on 23 May 2019, I upheld seven of the eight grounds of exception, with costs in favour of the defendant.

 

[5]        As part of the 23 May 2019 order, the plaintiff was granted leave to amend its pleadings, which it elected to do. Unfortunately, the amendments attracted a further attack by the defendant, who raised three grounds of exception to the amended particulars of claim.

 

[6]        Before the parties could argue the second exception, the plaintiff withdrew its action, obviating the need for hearing the application. On 4 November 2019, this court confirmed the plaintiff's withdrawal of its case with costs.

 

[7]       The withdrawal of the action was, however, not the end of the matter. The parties were at odds as to the interpretation of the cost orders made by the court in respect of the order dated 23 May 2019, specifically whether or not rule 32(11) applied. Resultantly, the plaintiff applied the variation of the court order for 23 May 2019 and 4 November 2020, in terms of rule 103, seeking an order  in the following terms:

 

‘1. The court order dated 23 May 2019 is varied to read as follows: “the second to eighth exceptions are upheld with costs, such costs to include costs of one instructing and two instructed counsels and which costs are not limited in terms of rule 32(11).

 

                2. The court order dated 4 November 2019 is varied to read as follows: “the matter is removed from the roll: case withdrawn with taxed costs, such costs to include costs of one instructing and two instructed counsels and to include costs occasioned by the interlocutory application and the main action.’[2]

 

[8]      The parties argued the application for variation of the court orders. On 11 February 2021, this court made an order[3] granting the parties leave to argue the issue of costs regarding the orders dated 23 May 2019; 4 November 2019 and 11 February 2021.

 

[9]        The parties filed written heads of argument and submitted oral arguments before this court on 30 March 2021. The parties’ respective contentions are summarised below.

 

Arguments on behalf of the defendant

[10]      The defendant argued that the limitation imposed by rule 32(11) did not find application in respect of the court orders of 23 May 2019.

 

[11]        In respect of the 23 May 2019 order (first exception application), the defendant’s argument was mainly couched in the South African Poultry Association and Others v Ministry of Trade and Industry and Others[4] judgment, where the court set out a list of factors to be considered in its determination of cost orders. Some of the factors relied on by the defendant were the importance and complexity of the matter, and the dispositive nature of the interlocutory application.

 

The importance and complexity of the matter

[12]       Ms Kuzeeko, on behalf of the defendant, argued that part of the importance afforded to this matter is its novelty. Although claims for constitutional damages were not novel to our courts, the present matter was indeed novel in that it was an unsuccessful tenderer who sought constitutional damages. She argued that had the matter run its full course, the outcome would have significantly impacted the ramifications for parastatals such as the defendant.

 

[13]     The defendant further contended that the matter was important “because it touched on the point of whether a party that has litigated judicial review proceedings may seek to do so in separate proceedings. [This] court had to consider whether the Supreme Court already exercised its constitutional discretion to grant and just and equitable remedy and whether the High Court can exercise that discretion again.”[5]

 

[14]       The complexity of the subject matter and area of law, which the defendant submitted had been widely litigated in South Africa, necessitated the instruction of Mr Scott, an advocate from the Johannesburg Bar. His services were essential to the success of the defendant's case as he acted for the defendant in the Supreme Court appeal and was thus familiar with the history of the matter and, more importantly, possessed the necessary expertise in constitutional damages cases.

 

Dispositive nature of the first exception

[15]       The defendant argued that the exception raised to the plaintiff’s particulars of claim was dispositive of the matter entirely as seven of the eight grounds of exception were upheld. In addition thereto, even after the plaintiff amended its particulars of claim, they were still lacking, prompting the defendant to raise three exceptions against the amended pleading.

 

The quantum of the damages claimed

[16]       Ms Kuzeeko submitted that the substantial quantum of damages claimed was an additional factor that justified the court allowing the costs granted to exceed the limit imposed by rule 32(11). The plaintiff's claim in the main action for damages in the amount of N$90 million. Had the plaintiff been successful in its claim, payment of the damages would have come from the public purse. She argued that any matter that affects public interest is a serious one, which further necessitated Mr Scott's services.

 

Application of rule 97 in respect of the plaintiff’s withdrawal

[17]     Ms Kuzeeko reminded the court that on the morning of the hearing date of the second exception, the plaintiff withdrew its action. Rule 97 was clear in that a party who withdraws an action may tender costs, and in the absence of such tender, the successful party may apply to the court for an appropriate cost order.

 

[18]      It was submitted that the costs in respect of the second exception related to the withdrawal of the action and therefore costs should be dealt with in terms of rule 97.

 

Arguments on behalf of the defendant

[19]      Ms Simson, on behalf of the plaintiff, submitted that upon a proper interpretation of rule 32(11), costs in interlocutory proceedings may exceed N$20,000 only where circumstances justify it, and the onus lay with the defendant to prove such circumstances. Ms Simson contended that the defendant had not made a case for the court's deviation from the limitation imposed by rule 32(11).

 

[20]    The defendant argued that the plaintiff's case was neither novel, nor complex in that the principles governing constitutional damages, alternatively delictual damages, were well established in our law. Ms Simson argued that the Supreme Court had already made a determination on whether there had been an infringement on the plaintiff's constitutional rights. Therefore, this court would have been limited in its inquiry, thus further limiting the complexity of the case. She submitted that the defendant had neither made a case for the complexity of the matter, nor for the necessity in appointing Mr Scott.

 

[21]     Regarding the second exception application, the defendant submitted that the parties had agreed to costs on a party-party scale. It further submitted that where the costs of defending the main action fall within the domain of an interlocutory such costs are limited to N$20,000, which was the case in the present matter.

 

Discussion

 

Costs in general

[22]     Cilliers[6] defines the concept of “costs” as being the sum of money a court orders one party in proceedings to pay to another party as compensation for the expense of litigation incurred. In considering the purpose of costs Maritz JA stated the following in Afshani and Another v Vaatz[7]:

               

                ‘Costs are not awarded on a party and party-basis as punishment to the litigant whose cause or defense has been defeated or as an added bonus to the spoils of the victor: The purpose thereof is to create a legal mechanism whereby a successful litigant may be fairly reimbursed for the reasonable legal expenses he or she was compelled to incur by either initiating or defending legal proceedings as a result of another litigant’s unjust actions or omissions in the dispute. . .It is intended to restore the disturbed balance in the scale litigation expenses.’

 

[23]     The court has a discretion in the apportioning of costs liability, which discretion is to be exercised judicially and not arbitrarily.

 

Application of rule 32(11) in interlocutory proceedings

[24]     Rule 32(11) imposes a limitation on the fees recoverable in interlocutory proceedings and reads as follows: 

         ‘Despite anything to the contrary in these rules, whether or not instructing and instructed legal practitioners are engaged in a cause or matter, the costs that may be awarded to a successful party in any interlocutory proceeding may not exceed N$20 000.’

 

[25]      In Spangenberg v Kloppers[8] the court confirmed that the capping of fees to N$20,000 was the default position and a deviation therefrom was not merely to be had for the asking. A party seeking costs on a higher scale bore the onus of convincing the court that rule 32(11) should not apply.

 

Costs of withdrawal of action

[26]      Rule 97 of the Rules of Court provides that where a party withdraws his or her action, he or she must do so by notice of withdrawal and may include in that notice a consent to pay the opposing party's costs.[9] In the absence of such consent, the other party may apply to court on notice for an order for costs.[10] 

 

[27]       In The Prosecutor General v Africa Autonet CC t/a Pacific Motors[11] Angula DJP stated as follows:

               ‘[26] It has been held that when and where a litigant withdraws an action or an application, very sound reasons must exist why a defendant or respondent should not be entitled to his or her costs. The plaintiff or applicant who withdraws his or her action or application is in the same position as an unsuccessful litigant. This is, because his or her claim or application is futile, and the defendant or respondent, is entitled to all costs associated with the withdrawing plaintiff's or applicant's institution of proceedings.[12] In such a case it is not necessary to go into the merits of the matter.

 

[28]      The Africa Autonet matter follows on the dicta in Germishuys v Douglas Besproeiingsraad[13]  which has been adopted in this jurisdiction[14]. In the aforementioned matter the court said:

 

        “Where a litigant withdraws an action or in effect withdraws it, very sound reasons . . . must exist why a defendant or respondent should not be entitled to his costs.  The plaintiff or applicant who withdraws his action or application is in the same position as an unsuccessful litigant because, after all, his claim or application is futile and the defendant, or respondent, is entitled to all costs associated with the withdrawing plaintiff’s or applicant’s institution of proceedings.”

 

Application of the law to the facts

 [29]       In order to be successful in an application for a cost order deviating from rule 32(11) a clear case must be set out if the court is to allow a scale of costs above the upper limit allowed in the rules.[15]

 

[30]      Ms Kuzeeko argued that the quantum of the claim and accompanying risk should the plaintiff have been successful justified the court’s deviation from the limitation found in rule 32(11). It has however been held that a cost order is not intended to be compensation for the risk to which one has been exposed but a refund of expenses actually incurred.[16]

 

[31]     I however, tend to agree with the defendant in that the matter before this court was indeed complex, which was evident early on during the exception hearing. Taking into account the factors surrounding this case and the arguments submitted by the defendant, I find that the defendant has made out a case for costs on a higher scale than that prescribed in rule 32(11) and should be indemnified for the expenses it incurred in defending its case against the plaintiff.

 

[32]        With regards to the cost of withdrawal, it is common cause that the plaintiff withdrew its action against the defendant. Whether such withdrawal was induced by the defendant’s second exception application or otherwise is irrelevant. By virtue of the withdrawal, the plaintiff is liable for the costs of the action and not merely for the costs of the exception. I, therefore, find that rule 97 applies in this instance.

 

[33]       The defendant prays for costs in respect of one instructing and two instructed counsel. The court found this request peculiar in that one of the instructed counsel and the instructing counsel were legal practitioners from the same firm. When questioned on this aspect of their request Ms Kuzeeko explained that it was the practice in their firm to claim costs on a scale of one instructing and two instructed counsel where a junior legal practitioner instructed both an advocate as well as a senior legal practitioner (in the same firm). She drew a corollary between this practice and that of having two advocates (one senior and one junior) instructed on a case.

 

[34]       Rule 124 governs the fees of instructing and instructed legal practitioners. Rule 124(6)[17] is pertinently clear that it does not permit the employment of instructed counsel if such counsel is a member, partner or employed by the same firm as the instructing counsel.

 

[35]      Ms Kuzeeko submitted that Mr Scott's services were essential to the success of the defendant's case as he had acted for the defendant in the Supreme Court appeal. Still, with all due respect to counsel, it is not clear to what extent Mr Scott was involved in the action proceedings, if at all. All the papers filed of record was done so under the hand of either Mr Kauta or Ms Kuzeeko. Although the matter was complex, it was the defendant's choice to consult with counsel from South Africa, where and whenever necessary. However, it would not be fair to burden the plaintiff with the cost thereof, especially because at no stage up until the argument on costs was any mention made of the use of Senior Counsel in this matter. 

 

[36]       In light of the discussion above, I am not convinced that the defendant is entitled to the cost of instructed counsel, regardless of whether it is one or two instructed counsel.

 

[37]    One last issue that I need to address is the cost of the two intermediate interlocutory applications. The parties are ad idem that the cost in both those application should be limited to rule 32(11) and I am in full agreement with them and order same accordingly.

 

[38]     My order is as set out above.

 

 

Judge’s signature

Note to the parties:

 

 

 

 

Not applicable.

Counsel:

Plaintiff/Respondent

 Defendant/Applicant

Ms Simson

Sisa Namandje & Partners

Ms Kuzeeko

Dr Weder, Kauta & Hoveka

     

 

 

[1] Chico/Octagon Joint Venture v Roads Authority and Others SA 81/2016.

[2] Applicant’s notice of motion dated 12 November 2020.

[3] Roads Authority vs Chico/Octagon Joint Venture (HC-MD-CIV-ACT-DEL-2018/03647 [2021] NAHCMD 35 (11 February 2021)

[4] South African Poultry Association and Others v Ministry of Trade and Industry and Others 2015 (1) NR 260 (HC).

[5] Applicant’s heads of argument at para 19.

[6] A C Cilliers Law of Costs para 1.03.

[7] Afshani and Another v Vaatz 2007 (2) NR 381 (SC) para [27].

[8] Spangenberg v Kloopers 2018 (2) NR 494 (HC).

[9] Rule 97(1).

[10] Rule 97(4).

[11] The Prosecutor General v Africa Autonet CC t/a Pacific Motors (POCA 5/2017) [2017] NAHCMD 265 (13 September 2017).

[12] Germishuys v Douglas Besproeingsraad 1973 (3) SA 299 (headnote).

[13] 1973 (3) SA 299 (NC) at 300E.

[14] Erf Sixty-Six, 66 Vogelstrand (Pty) Ltd v The Council of the Municipality of Swakopmund (A 260-2007)[2012]NHC(12 March 2013); Bertolini Ehlers and Another (HC-MD-CIV-ACT-DEL-2016/03201) [2017] NAHCMD 284 (06 October 2017).

[15] South African Poultry Association and Others v Ministry of Trade and Industry and Others 2015 (1) NR 260 (HC) as quoted on p 247 of Damaseb P Court-Managed Civil Procedure of the High Court of Namibia 2020 Juta.

[16] Payen Components South Africa Ltd v Bovic Gaskets CC 1999 (2) SA 409 (W) 417D.

[17] (6) This rule does not apply to the employment of one legal practitioner by another legal practitioner where the last-mentioned legal practitioner so employed –

(a) is an employee or a partner or a member of the same law firm as the first named legal practitioner who employed him or her; or

(b)…….