Court name
High Court
Case number
APPEAL 385 of 2010
Title

Otjozondu Mining (Pty) Ltd v Purity Manganese (Pty) Ltd and Others (APPEAL 385 of 2010) [2011] NAHC 307 (14 October 2011);

Media neutral citation
[2011] NAHC 307
Coram
Smuts J














13












CASE NO.: A 385/2010



IN THE HIGH COURT OF
NAMIBIA







In the matter between:







OTJOZONDU MINING (PTY) LTD
…................................................................APPLICANT







and







PURITY MANGANESE (PTY) LTD
…....................................................1ST
RESPONDENT



THE TAXING MASTER OF THE HIGH COURT
OF NAMIBIA
….........2ND
RESPONDENT



THE SOCIETY OF ADVOCATES OF NAMIBIA
…................................3RD
RESPONDENT



THE LAW SOCIETY OF NAMIBIA
…....................................................4TH
RESPONDENT











CORAM: SMUTS, J







Heard on: 4 October 2011



Delivered on: 14 October 2011











JUDGMENT















SMUTS, J.: [1] This is a
review of the decision of the taxing master to disallow two items
claimed in a bill of costs. The items in question are instructed
counsel fees and the costs of the costs consultant in preparing the
bill of costs.







[2] The applicant was successful in
litigation comprising two separate applications against the first
respondent. Those applications were set down together by agreement
for a period of three days, namely 5, 6 and 7 October 2009. Those
applications are described in more detail in this review application.
The first application was for an interdict to restrain the first
respondent from mining outside the perimeters of its mineral licence
upon an area covered by the applicant’s mineral licence. This
application is conveniently referred to in these papers as the
unlawful mining application.







[3] The second application raised
contraventions of the Agricultural Land Reform Act (ALRA) by the
first respondent. This latter application was referred to as the ALRA
application. It was voluminous and would appear to raise complex
questions to the extent that the Chief Justice granted leave to the
applicant to engage senior junior counsel (of 27 years standing) from
outside the Republic of Namibia under s85 of the Legal Practitioners
Act, 1995 (the Act).







[4] Both applications were opposed by
the first respondent. In the weeks preceding the hearing dates,
detailed heads of argument were filed on behalf of the applicant.
After these were filed and shortly before the hearing, the first
respondent withdrew its opposition to both applications.







[5] The applicant points out that the
issues raised in the ALRA application have not been previously
determined. As a consequence, instructed counsel remained on brief to
argue the application.







[6] The unlawful mining application
proceeded and was determined on the first day of the set down, namely
5 October 2010. The parties were however informed on that date that
the presiding judge (Damaseb, JP) was not available to hear the
second application on 6 October 2009 because he formed part of a
panel of judges in an appeal in the Supreme Court on that day. The
second application then proceeded on 7 October 2009. As had been
anticipated, Damaseb, JP required instructed counsel to present
argument in support of the application before granting it. The
applicant succeeded in both applications and its success was
accompanied by a costs order.







[7] The applicant’s instructed
counsel had reserved himself for five days for the applications.
These five days were from 4 to 8 October 2009 inclusively. They
included a day of preparation on 4 October and an additional day of 8
October by reason being out of town.







[8] His fee was N$15 000 per day which
was within the parameters of the then applicable guidelines for
counsel who are members of the Society of Advocates of Namibia for
counsel of his standing. Counsel invoiced the applicant in the sum of
N$75 000 for those five days on the basis of his preparation and
appearances, having thus reserved himself for five days.







[9] The parties agreed that the bill
should be taxed in the basis of the costs including one instructing
and one instructed counsel. The taxing master however disallowed
those fees.







[10] The applicant correctly accepted
that it would not be entitled to the additional day (in respect of 8
October for being out of town) and confined itself in this
application to 50% of a day fee in respect of preparation on 4
October – thus claiming fees representing a total of 3 and half
a days at N$15 000. The applicant contends that counsel’s fees
in the sum of N$52 500 should thus have been allowed by the taxing
master who had instead permitted instructed counsel charges at a half
hourly rate (of N$350) as reflected the tariffs contained in the
sixth schedule to the Rules (the schedule) for actual time in court.







[11] In disallowing counsel’s
fees, the taxing master was of the view that counsel was not entitled
to any fee for a reserved day and was furthermore not entitled to
charge a day fee at all, even on the days when counsel did in fact
appear in court. The applicant points out that the taxing master
considered that counsel is obliged to and is confined to charging
fees in accordance with the hourly rate provided in the tariff in the
schedule for the actual number of hours of an appearance. The
applicant disputes the correctness of that approach. This is the
primary issue raised in this review.







[12] The taxing master accordingly
only allowed instructed counsel’s fees with reference to the
hourly rate as set out in the tariffs in the schedule. No fees were
allowed for the additional day (of 8 October). As I have said, the
applicant rightly does not take the issue with this. No fees were
allowed for preparation on 4 October 2009. Day fees were refused for
5, 6 and 7 October 2009. In this application the applicant only seeks
half a day fee in respect of preparation on 4 October 2009 and day
fees in respect of 5, 6 and 7 October 2009.



[13] The taxing master’s ruling
was based upon the approach of Parker, J in
Kaese
v Schacht and Another (Pty) Ltd
.1







[14] In the Kaese
matter, Parker J referred in some
detail to the fusing of the legal profession brought about by the Act
in 1995. In his discussion of the changes brought about by that Act,
he concluded
2
that in terms of the rules there are
only prescribed tariffs for all legal practitioners whether they are
instructing or instructed counsel and that practitioners must present
their charges according to the tariffs prescribed in the rules of
court. Parker, J then referred to the latest prescribed tariffs
contained in the schedule (introduced in 2006) and accepted a
contention made that fees cannot be charged on a day basis but must
be charged on a half hour basis in accordance with the tariffs as set
out in the schedule. Parker J premised his approach upon the equality
of the legal practitioners and that tariffs should apply to all
practitioners. This underlying premise is in my view correct. Subject
to the qualification set out below, it not only accords with the Act
but also follows from the eloquent exposition of the changes brought
about by the Act by Maritz JA in
Afshani
and Another v Vaatz
3.
But that premise











does not in my view mean that counsel
is confined to fees charged with reference to the hourly tariffs set
out in the schedule.
Parker, J
proceeded to conclude from this premise of equality that
practitioners are however restricted to charging the hourly (or half
hourly) rates set out in the tariff listed under items 1, 2, 3 and 5
of the of the schedule and that the charging of a day fee would not
be competent. I am in respectful disagreement with this conclusion. I
decline to follow it as it is in my view clearly wrong for the
reasons which follow. The approach of Parker J, with respect,
overlooks item 4 of the schedule read with the rules as amended in
the context of the practice of law in the Republic of Namibia.







[15] The schedule was promulgated in
September 2006. The relevant portion of the schedule deals with the
tariffs of fees of counsel for litigious work. It was promulgated
pursuant to rule 70 of the rules. Under the heading, “consultations,
appearances, conferences and inspections”, item 1 provides for
a set fee for taking instructions to institute and defend any
proceedings. Items 2 and 3 then provide for a tariff at a half hourly
rate in respect of necessary consultations
4
and the provision of advice on the
merits or proceeding or on evidence
5.
Item 4, which was not referred to in the judgment of Parker, J,
relates to fees for:



Preparation
for any appearance in court, not otherwise provided for, heads of
argument and any such appearance”



The fee applicable for attendances of
this nature is not set as an hourly tariff but is rather stated as
follows:



" any fee which the taxing
master considers reasonable, due regard being had to the time
necessarily taken, the complexity of the matter, the nature of the
subject matter in dispute, the amount in dispute, the seniority of
counsel employed, the fees ordinarily allowed for like services and
other factors which the taxing master considers relevant.”







[16] Item 4 thus expressly permits and
contemplates the taxation of fees for the attendances listed, with
reference to what the taxing master considers as a reasonable fee,
taking into account the further factors set out there. Counsel would
accordingly plainly not be limited to charging at the half hourly
rates specified as against item 2, 3 and 5. (Item 5 refers to any
other necessary attendance such as a Rule 37 conference, proceeding
to court and inspections in loco, settlement negotiations and
attendances on the Registrar). A fee, calculated or determined with
reference to a day (a day fee) which is how advocates had prior to
the Act charged out their services specified in item 4, is thus not
excluded by the schedule. On the contrary, when read with rule 69(4),
this item would in my view expressly contemplate that.







[17] Item 4 is furthermore to be read
with rule 69(4) which was introduced in 1996 after the passing of the
Act. I pause to point out that rule 69 contemplates that counsel may
employ another counsel and, on occasion, more than one other counsel.
Counsel is defined as meaning an admitted legal practitioner.







[18] Rule 69 which deals with the fees
of counsel generally includes rule 69(4). It was also not preferred
to by Parker J. It provides:



The
taxation of the fees for counsel employed by another as between party
and party shall be allowed by the taxing master as he or she
considers reasonable, due regard being had to the other provisions of
this sub-rule, the time necessarily taken, the complexity of the
matter, the nature of the subject matter in dispute, the amount in
dispute, the seniority of counsel employed, the fees ordinarily
allowed for like services prior to the promulgation of this rule and
any other factors which he or she considers relevant.”







[19] This sub-rule thus in my view
clearly contemplates the taxation of fees for counsel employed by
another counsel to include those ordinarily allowed for like services
prior to the fusion of the profession. Whilst the statutory
distinction between attorneys and advocates came to an end and their
professions were fused when the Act came into operation, with a
single controlling body governing them, the Act however permits
practitioners to structure their respective practices in different
ways which can give rise to implications when it comes to the
taxation of fees. Rule 69(4), read with item 4 of the schedule, does
precisely that by contemplating that reasonable fees of counsel
engaged by other counsel may be taxed with due regard for the factors
referred to, including fees ordinarily allowed for like services
prior to the Act.







[20] The provisions which permit
practitioners to differently structure their practices have resulted
in a referral practice of the kind conducted by advocates in the past
being continued by legal practitioners who choose to do so after the
Act came into operation. This position was succinctly summarised by
Maritz JA in Afshani matter as follows:



Exemption
from holding a fidelity fund certificate may be granted to
practitioners who practise for gain on their own account but who do
not, in the conduct thereof, accept, receive or hold moneys for or on
account of any other person – much as advocates have practised
prior to the promulgation of the Act. Hence, although the legal
professions have been fused into one, many legal practitioners
voluntarily opted to structure the mode of their practices, within
the permissible ambit of the Act, more or less along the same lines
as advocates and attorneys have done before. Within the sphere of
civil practice one nowadays finds legal practitioners who take
instructions directly from clients but only attend to the more formal
side of litigation and instruct other legal practitioners to attend
to the forensic aspects thereof (the former sometimes referred to as
‘instructing counsel’); those who do not take
instructions directly from clients but only from other legal
practitioners representing them and who mainly render services of a
forensic nature (generally referred to as ‘instructed counsel’
or, informally, called ‘advocates’) and, lastly, those
legal practitioners who take instructions directly from clients and
who render both formal and forensic services in civil litigation to
them. Although, de jure there may only be one legal profession, law
is in reality practised by legal practitioners in a number of diverse
styles under one regulatory and protective statutory umbrella. This
diversity of practice, especially in civil litigation, further
compounds the construction and application of the rules relating to
fees and costs as they apply to the taxation of the costs in
question
6.”







[21] Maritz JA went on to state that
the High Court Rules seek to specifically take cognisance of the
diversity of styles of practice and differentiates – without
discriminating – amongst legal practitioners for the purpose of
the taxation of fees. This, in my view, is achieved in rule 69(4)
read with item 4 of the schedule.











[22] Not only does the Act thus permit
a referral practice of the kind practised by legal practitioners more
or less along the same line as advocates had done before, but the
rules would in my view furthermore contemplate the taxation of fees
(reasonably charged by practitioners practising along those lines) as
were ordinarily allowed for similar services prior to the
promulgation of rule 69(4). Fees of that kind include day fees and,
in certain circumstances where justified, reservation fees.







[23] Whilst the tariffs in the rules
apply to all legal practitioners, there is however specific provision
in rule 69(4) for the taxation of the fees of counsel employed by
another and to contemplate those ordinarily allowed for similar
service prior to fusion. This differentiation would apply to all
practitioners employed by another whether they











practise with or without fidelity fund
certificate. It is not inconceivable for practitioners to conduct a
specialised forensic practice and accept referrals from other
practitioners and do so in a practice with a fidelity fund
certificate (and not as a member of the Society of Advocates.) The
provisions of rule 69(4) would apply to all practitioners similarly
situated who are employed by another practitioner to perform the
services referred to in item 4. What is of importance is the
similarity of services by counsel employed by other counsel and not
the nomenclature necessarily used by the practitioners in question.







[24] As I have sought to demonstrate,
the rules not only do not limit practitioners to the half hourly
rates specified in the schedule but permit and in my view contemplate
the taxation of day fees. The taxing master, in following approach of
Parker, J to the contrary, in my view reached his conclusion based
upon a wrong principle. It follows that the disallowance of counsel’s
fees in the circumstances of this application falls to be set aside.







[25] The approach I have followed
would also accord with the fundamental principle applicable to the
taxation of fees embodied in rule 70, namely that an award of costs
should provide for a full indemnity for all costs reasonably incurred
by a successful litigant. This is also in accordance with the basic
purpose of taxation as reaffirmed by Maritz, JA in
Afshani
as being the creation of 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...
7







It would thus be for the taxing master
to have regard to the work actually done by practitioners and have
regard as to what would ordinarily be allowed for like services prior
to the promulgation of the rule 69(4) and take into account the
further factors listed in rule 69(4) and item 4 of the schedule, in
determining what is a reasonable fee in the specific circumstances of
each case.







[26] Having set aside the disallowance
of instructed counsel’s fees in respect of the attendances for
4 to 7 October 2009, it would seem to me that this would be a proper
case to correct the ruling. The applicant has referred to then
applicable guidelines of the Society of Advocates in respect of
counsel’s fees for such work and the rate applicable, taking
into account the seniority of the counsel in question. The
reasonableness of those guidelines has not been placed in issue.
Indeed none of the respondents has filed an answering affidavit. A
full day fee for 5 and 7 October should in my view have been allowed.
A fee representing half a day in respect of preparation for 4 October
2009 would also seem reasonable and should have been allowed. A
reservation fee for 6 October 2009 should also be allowed, given the
fact that the court was not available that day. In expressing this
view, I wish to make it clear that the reasonableness of each claim
for reservation fees would need to be separately determined and
justified with reference to the specific facts and circumstances of
each case. The mere fact that counsel has agreed to be reserved for a
certain period would not necessarily mean that the extent of the
reservation is reasonable. It also follows that counsel’s fees
for the items in question should have been taxed in the sum of N$52
500, as is contended by the applicant.







[27] There remains the question of the
costs of engaging a costs consultant. These are the costs relating to
the preparation of the bill of costs. They were disallowed. No basis
was put before me as to why the applicant should be precluded from
recovering those charges. I can think of none. I accordingly set
aside the decision to disallow those costs as well.







[28] The applicant did not seek the
costs of this application. It is follows that my order is not
accompanied by any costs order.







[29] In the result, the order I make
is:



(a) The taxing master’s
disallowance of instructed counsel’s fees for attendances 4 to
7 October 2009 is set aside. Such fees should be allowed in the sum
of N$52 500.00.



(b) The taxing master’s
disallowance of the costs of the costs consultant for drawing the
bill of costs is set aside and such costs should have been allowed.



(c) No order is made as to the costs
of this application.











___________



SMUTS, J











ON BEHALF OF THE APPLICANT: MR T.
BARNARD



Instructed by: KOEP & PARTNERS











ON BEHALF OF THE RESPONDENTS:
NON-APPEARANCE



















1Case
number A 319/2007, unreported, 5 November 2009




2In
paragraph 24




32007
(2) NR 381 (SC) at 385-388, par 11-21




4Item
2




5Item
3




6Paragraph
4




7At
paragraph 27