Manyakama v Magqabi Seth Zitha Inc (318/2019) [2019] ZAECGHC 133 (17 December 2019)

Manyakama v Magqabi Seth Zitha Inc (318/2019) [2019] ZAECGHC 133 (17 December 2019)

The court found that the contingency fee agreement between the applicant and respondent did not comply with the Contingency Fees Act. The agreement allowed the respondent to deduct 25% of the capital award without a taxed bill of costs and included clauses permitting additional agreements with subcontractors, which are not permitted by the Act. The respondent's concessions and arguments for rectification were rejected, as strict compliance is required and any non-compliant agreement is void. The applicant demonstrated that the respondent allocated itself exactly 25% of the capital award without justification, and the impugned clauses were contrary to public policy. Accordingly, the...

Citation
[2019] ZAECGHC 133
Parties
Applicant: Bulelani Manyakama; Respondent: Magqabi Seth Zitha Inc
Court
Eastern Cape High Court, Grahamstown
Jurisdiction
South Africa
Judgment Date
17 December 2019
Case Number
318/2019
Procedural Posture
Review Application / First Instance Judgment
Outcome
Application granted. The contingency fee agreement is declared unlawful and void. Respondent ordered to make interim payment, produce bill of costs, pay any balance due, and pay costs of application.
Judges
Beshe
Legal Topics
Contingency Fee Agreements, Attorney and Client Costs, Invalid Contract, Road Accident Fund Claims
Civil Procedure Commercial and Corporate Contingency Fee Agreements Attorney and Client Costs Invalid Contract Road Accident Fund Claims

Case Brief

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Parties

Bulelani Manyakama

Applicant

Magqabi Seth Zitha Inc

Respondent

Procedural Posture

Review Application / First Instance Judgment

Legal Issues

  1. 1 Whether the contingency fee agreement between the applicant and respondent complies with the Contingency Fees Act.
  2. 2 Whether the respondent was entitled to deduct 25% of the capital award without a taxed bill of costs.
  3. 3 Whether the impugned clauses of the agreement are contrary to public policy and unenforceable.

Ratio Decidendi

The court found that the contingency fee agreement between the applicant and respondent did not comply with the Contingency Fees Act. The agreement allowed the respondent to deduct 25% of the capital award without a taxed bill of costs and included clauses permitting additional agreements with subcontractors, which are not permitted by the Act. The respondent's concessions and arguments for rectification were rejected, as strict compliance is required and any non-compliant agreement is void. The applicant demonstrated that the respondent allocated itself exactly 25% of the capital award without justification, and the impugned clauses were contrary to public policy. Accordingly, the...

Court Disposition

Application granted. The contingency fee agreement is declared unlawful and void. Respondent ordered to make interim payment, produce bill of costs, pay any balance due, and pay costs of application.

Orders

  • The contingency fee agreement entered into between the parties is declared unlawful and of no force and effect.
  • The respondent is ordered to make an interim payment to the applicant’s attorney pending taxation of the bill of costs in the sum of R100 000.00.