L.N and Another v Z.Y.M Ndzabela Incorporated and Another (365/2019) [2019] ZAECGHC 132 (12 December 2019)

L.N and Another v Z.Y.M Ndzabela Incorporated and Another (365/2019) [2019] ZAECGHC 132 (12 December 2019)

The court found that the Contingency Fee Agreement entered into on behalf of the applicant did not comply with the requirements of the Contingency Fee Act and its Regulations. The agreement provided for a flat rate of 25% of the capital amount as fees, without describing the method of calculating the attorney's success fee or specifying that the fee may not exceed double the attorney's normal fee or 25% of the amount awarded, whichever is lesser. The court held that such non-compliance rendered the agreement void and of no force and effect. The applicant, although not a direct party to the agreement, had locus standi to challenge its validity as the agreement was entered into on his...

Citation
[2019] ZAECGHC 132
Parties
Applicant: L[...] N[...]; Applicant: N[...] N[...] obo L[...] N[...]; Respondent: Z.Y.M. Ndzabela Incorporated; Respondent: Vuyelwa Miranda Ndzabela N.O.
Court
Eastern Cape High Court, Grahamstown
Jurisdiction
South Africa
Judgment Date
12 December 2019
Case Number
365/2019
Procedural Posture
Civil Application / Judgment
Outcome
Application granted. The Contingency Fee Agreement is declared invalid, void, and of no force and effect. Ancillary orders granted as per prayers 1 to 9 of the Notice of Motion.
Judges
NG Beshe
Legal Topics
Contingency Fee Agreement, Contract Rectification, Attorney Client Fees, Taxation of Costs
Civil Procedure Commercial and Corporate Contingency Fee Agreement Contract Rectification Attorney Client Fees Taxation of Costs

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Parties

L[...] N[...]

Applicant

N[...] N[...] obo L[...] N[...]

Applicant

Z.Y.M. Ndzabela Incorporated

Respondent

Vuyelwa Miranda Ndzabela N.O.

Respondent

Procedural Posture

Civil Application / Judgment

Legal Issues

  1. 1 Whether the Contingency Fee Agreement complies with the Contingency Fee Act and prescribed Regulations.
  2. 2 Whether the agreement is invalid, void and of no force and effect.
  3. 3 Whether the applicant has locus standi to challenge the agreement.

Ratio Decidendi

The court found that the Contingency Fee Agreement entered into on behalf of the applicant did not comply with the requirements of the Contingency Fee Act and its Regulations. The agreement provided for a flat rate of 25% of the capital amount as fees, without describing the method of calculating the attorney's success fee or specifying that the fee may not exceed double the attorney's normal fee or 25% of the amount awarded, whichever is lesser. The court held that such non-compliance rendered the agreement void and of no force and effect. The applicant, although not a direct party to the agreement, had locus standi to challenge its validity as the agreement was entered into on his...

Court Disposition

Application granted. The Contingency Fee Agreement is declared invalid, void, and of no force and effect. Ancillary orders granted as per prayers 1 to 9 of the Notice of Motion.

Orders

  • The Contingency Fee Agreement entered into between the applicants and respondents is declared invalid, void, and of no force and effect.
  • If the agreement is found valid, the respondents' total fees may not exceed 25% of R4,000,000.00 inclusive of VAT.