Human v CMC Chemicals (Edms) BPK and Another (9832/2007) [2011] ZAGPPHC 21 (4 February 2011)

Human v CMC Chemicals (Edms) BPK and Another (9832/2007) [2011] ZAGPPHC 21 (4 February 2011)

The court found that the agreement between the plaintiff and defendants constituted a pactum de quota litis, which is unlawful and unenforceable under South African common law, as the defendants were not impecunious and did not require such an arrangement to access the courts. The plaintiff's business model was found to be speculative and akin to trafficking in litigation. Clause 4 of the agreement was held to be a penalty clause under the Conventional Penalties Act, and the penalty claimed was excessive and reduced to zero. The plaintiff failed to discharge the onus of proving that the defendants breached clause 3 of the agreement, as the settlement amount represented the outstanding...

Citation
[2011] ZAGPPHC 21
Parties
Plaintiff: F J Human; Defendant: CMC Chemicals (Edms) BPK; Defendant: Timberlife (Edms) BPK
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
4 February 2011
Case Number
9832/2007
Procedural Posture
Civil Trial / Final Judgment
Outcome
Plaintiff's claims against the defendants are dismissed with costs.
Judges
Omar
Legal Topics
Pactum De Quota Litis, Conventional Penalties Act, Breach of Contract, Contingency Fee Agreements
Commercial and Corporate Civil Procedure Pactum De Quota Litis Conventional Penalties Act Breach of Contract Contingency Fee Agreements

Case Brief

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Parties

F J Human

Plaintiff

CMC Chemicals (Edms) BPK

Defendant

Timberlife (Edms) BPK

Defendant

Procedural Posture

Civil Trial / Final Judgment

Legal Issues

  1. 1 Whether the agreement between the plaintiff and defendants constituted a pactum de quota litis and is therefore unlawful and unenforceable.
  2. 2 Whether clause 4 of the agreement is a penalty as contemplated by the Conventional Penalties Act 15 of 1962 and, if so, whether it is excessive.
  3. 3 Whether the defendants breached clause 3 of the agreement by settling their insurance claims without the plaintiff's written approval.

Ratio Decidendi

The court found that the agreement between the plaintiff and defendants constituted a pactum de quota litis, which is unlawful and unenforceable under South African common law, as the defendants were not impecunious and did not require such an arrangement to access the courts. The plaintiff's business model was found to be speculative and akin to trafficking in litigation. Clause 4 of the agreement was held to be a penalty clause under the Conventional Penalties Act, and the penalty claimed was excessive and reduced to zero. The plaintiff failed to discharge the onus of proving that the defendants breached clause 3 of the agreement, as the settlement amount represented the outstanding...

Court Disposition

Plaintiff's claims against the defendants are dismissed with costs.

Orders

  • The plaintiff's claims against the defendants are dismissed with costs.