Rectron (Pty) Ltd v Kara Smit Rekenaardienste CC (21420/04) [2005] ZAGPHC 48 (25 April 2005)

IN THE HIGH COURT OF SOUTH AFRICA(TRANSVAAL PROVINCIAL DIVISION)CASE NO: 21420/04REPORTABLE DATE: 25/04/2005RECTRON (PTY) LTD APPLICANTandKARA SMIT REKENAARDIENSTE CCRESPONDENTJUDGMENTPOSWAJFACTS:[1] This is an application for the winding up of the respondent and it camebefore me on Thursday,24February,2005.[2] It is common cause that(a) the applicant and the respondent entered into a written agreement,whose terms are set out in annexure "P3" to the applicant'sfounding affidavit;(b) the respondent would, in terms of the agreement. become theapplicant's dealer and the applicant would supply the respondent2with certain goods related to,inter alia,the business of "hardware, software [and] network implementations";(c) the respondent was permitted to make payment, for goods suppliedby the applicant, by cheque;(d)"no cheques [would] be issued in payment unless there [were]sufficient funds";(e) in the event of a breach by the respondent of any terms andconditions of the agreement, the applicant would be entitled to "institute any action in either the Magistrate's Court or High Court at its sole discretion."(f) during March and April, 2004 the applicant sold and deliveredcertain goods to the respondent;(g) although the parties disagreed on the interpretation of annexure"P4",that document contains the list of goods sold and delivered by the applicant, disagreement being on how to

calculate the total amount due for payment by the respondent;(h) the respondent fell in arrears in its payments for goods sold anddelivered by respondent;(i)her arrangement was made between the applicant and therespondent in terms whereof the respondent would settle the arrears in four cheques, three of which would be postdated;(j)pursuant to that arrangement, the respondent furnished the applicant with four cheques dated3(i) 18 March, 2004, for R20, 000. 00;(ii) 14 June, 2004, for R48, 755.00;(iii) 4 July, 2004, for R48, 755. 96;(iv) 4 August, 2004, for R48, 755. 96;the total whereof I have calculated to be R166, 266. 92;(k) the respondent'sfirst two cheques were duly met but therespondent stopped payment of the third cheque;(I) the respondent gave as its reason for stopping payment the factthat the applicant had enlisted it to some credit-watch institution, i.e. "Credit Sure"; the applicant says it reported to "Credit Guarantee" and not "Credit Sure," which makes no differenceto the issues herein;[m] the respondent seemingly became aware of such reporting when itcould no longer make purchases of items it required for the business because its name appeared in the list of defaulting debtors, which is kept by what the respondent calls "Credit Sure,"[n] the respondent regarded this act on the applicant's part as one ofhostility and not in keeping with the spirit of the

arrangement I have referred to, between it and the applicant, that resulted in the making of the four Cheques.[3] The applicant's attitude is that the respondent has, for whatever reason,failed to pay an amount that was due, thus breaching the terms of the contract contained in annexure"P3".Itexplained, further, that it reported to "Credit Guard," its insurer, in terms of an agreement with the latter, which permits the applicant to enter into any arrangement with a debtor,4subject to the applicant reporting such arrangement to "Credit Guard." The applicant thought that "Credit Sure" might have picked up the report from "Credit Guard," in the course of their own relationship as credit-watch institutions.[4] I have omitted a lot of detail that is not necessary for purposes of givingthe background against which this application arose. Suffice to say that this dispute came to me as an opposed application for liquidation of the respondent. With the impression it had in mind, before this explanationbythe applicant, in the latter's replying affidavit, the respondent stopped payment of the third cheque, forR48755.96. That action resulted in this application. It appears to be the applicant's attitude that the respondent's stoppage of payment of thecheque(s) delivered in consequence of the arrangement that resulted inthe issuing of the postdated cheques contravenes the terms of

Annexure"P3."Consequently, it resorted the provisions of that earlier, the main, agreement, part of which reads:"The customer hereby declares that no cheques will be issued in payment unless there are sufficient funds and that such funds will remain available in order that all cheque payments will be honoured andunder no circumstanceswill anycheque be stopped. (Emphasis added).Because para18-7 of P3 reads;"18.7 The supplier shall have the right to institute any action in either the relevant Magistrate's Court or the High Court at its sole discretion,"the applicant chose to apply for the respondent's sequestration. It justifies its application in the founding affidavit of one Pramod Otham, who says,inter alia,the following, in para 28;"Although the Applicant has obtained the right, title and interest in and to the Respondent's claim against its debtors, it is favorable (sic) that the Respondent be liquidated."[5] The application is opposed.[6] Mr. Gradidge informed me, in chambers, that there was no appearance forthe respondent, and that he had been informed that the respondent's5attorneys of record had withdrawn as its attorneys. There was no notice of withdrawal in both the court file and his brief. I requested him to make investigations about this report of withdrawal by the attorneys concerned, before the hearing commenced, as there would be problems withouta written notice

of withdrawal in terms of the Rules.[7] When the matter was later called, Mr. Gradidge still had no information ofsubstance. After a further stand-down, he brought a "NOTICE OF WITHDRAWAL AS ATTORNEYS," dated 18 February, 2005,bythe respondent's attorneys of record, received by the correspondent attorneys of the applicant's attorneys on Monday, 21 February, 2005. The notice did not bear the Registrar's date stamp. It reflected thatithad been addressed to the Registrar and the applicant's attorneys. It did not mention that it had been addressed to the respondent, let alone being received by the respondent.[8] Mr. Gradidge argued that I could and should make a provisionalordergranting the application, in the form of arule nisi.No harm would bedone to the applicant, so he argued, because it would return to Court, if it so desired, to show cause why the provisional order shouldnot be confirmed.[9] I informed Mr. Gradidge that, besides that "notice" appearing not to havebeen issued by the Registrar, it also clearly omitted mention of the respondent. In the circumstances, I declined to make an order in the applicant's favour, in the form suggested by Mr. Gradidge or in any form whatsoever. Consequently, Mr. Gradidge applied for a postponementand asked that the respondent be ordered to pay costs occasioned by its default.[10] As I told Mr. Gradidge, in light of apparent

non-compliance,bythe respondent's attorneys of record, with Rule 16(4), I was not inclined to6award costs against the respondent but against the respondent's attorneys of record.[11]At his request, I granted Mr. Gradidge a stand down to enable him to obtain some written information about the rumoured withdrawal. He returned and handed up a faxed copy of a "NOTICE OF WITHDRAWAL AS ATTORNEYS," signed by the respondent's attorneys of record on 18 February, 2005. It is stated in that notice that it was received(bythe applicant's attorneys) on (Monday) 21 February, 2005. It does not bear the Registrar's stamp and it never reached the court file. For reference purposes, the name of "Mr.Marne Stevenson" is given. In all other material respects, this document is a replica of the one earlier handed up by Mr. Gradidge.[12] The second document did not appear, to me, to alter the factual and legal positions from what they had, hitherto, appeared to be. As it was already late in the day, I ordered that the application be postponed to the next morning, 25 February, 2005. I also arranged that Mr. Morne Stevenson, the attorney reflected in the "notice" as the person to deal with for reference purposes and with whom Mr. Gradidge or the applicant's attorneys had had communication about what had transpired concerning the withdrawal by the respondent's attorneys, be notified to attend Court the

next day. He was to show cause why the respondent's attorneys were not to be ordered to pay costsde bonis propriis.Mr. Stevenson was duly informed and he attended Court the next morning, Friday, 25 February, 2005.[13] Before attending Court, however, Mr. Stevenson wrote me a letter, on the same day, Thursday, 24 February, 2005, in which he explained,inter alia,that he had advised "Mr. Marius Smit, the husband of the sole member of the respondent, [to] be present at Court to confirm the content of this letter7[written to mebyMr. Stevenson]." That letter, to which is attached acopyof the same "notice of withdrawal," drew attention to the Registrar's date stamp on the face of the attached copy. It is dated 21 February, 2005. The letter also stated that Mr. Marius Smit had given the respondent's attorneys instructions "to withdraw as attorneys of record." The "notice" attached to Mr. Stevenson's letter is the third version of the "notice of withdrawal."[14] I permitted Mr. Stevenson to appear as "counsel" for the respondent'serstwhile attorneys on the question of who should be ordered to pay costs. That was after he had conceded, from the Bar, and had confirmed by reference to the letter, that the notice was not in compliance with Rule 16(4)(a), to the respondent. Because I accepted Mr. Stevenson's statement that his firm of attorneys had received "instructions" from Mr. Smit, to

withdraw as the respondent's attorneys, I did not find the need to hear Mr. Smit, to confirm what Mr. Stevenson had told me. I must mention that, during the course of the morning, the original of the notice of withdrawal as the respondent's attorneys of record - which original bore bearing the Registrar's stamp - had surfaced. That was after I had instructed the Registrar's office to hunt for it. The original confirmed that the notice had, indeed, beentimeously filed, on Monday, 21February,2005.[15] The main issue here is, in my view, whether the notice complied withRule 16(4). I have already stated that Mr. Stevenson conceded that, to the extent that it reflected that it was not served on the respondent, the notice did not comply. The further question is whether I should have granted the provisional order argued for by Mr. Gradidge, in which event there have been no need for postponement of the application.8[16]Inmy view, the question as to whether to proceed with this application ornot, in the respondent's absence, raises the further question of the right of access to courts (s. 34 of the Constitution, Act 108 of 1996). In respect of this right, Yacoob,Jsaid the following, when delivering the judgment, of the Court, in the case ofDe Beer NO v North -Central Local Council and South-Central Local Council and Others (Umhlatuzana Civic Association Intervening)[2001] ZACC 9;2002

(1) SA 429(CC), para. [1], at 433H;"Section 34 of our Constitution promises a fair hearing to anyone involved in a justifiable dispute that can be resolved by the application of law."He then went on to elaborate as follows, in para. [11], at 439G-440B;"This s. 34 fair hearing right affirms the rule of law, which is a founding value of our Constitution. The right to a fair hearing before a court lies at the heart of the rule of law. A fair hearing before a court as aprerequisite to an order being made against anyoneis fundamental to a just and credible legal order. Courts in our country are obliged to ensure that the proceedings before themarealways fair. Since procedures that would render the hearing unfair are inconsistent with the Constitution, courts must interpret legislationand Rules of Court,whereitis reasonably possible to do so, in a way that would render the proceedings fair. Itisacrucial aspect of the rule of law that court orders should not be made without affording the other sideareasonable opportunity to state their (sic) case.That reasonable opportunity can usually only be given by ensuring that reasonable steps are taken to bring the hearing to the attention of the person affected. Rules of Courts make provision for this." (Emphasis added).See also:D.F Scott (EP) (PTY) L TD v Golden Valley Supermarket2002(6)SA 297(SCA)at301G, para. [9], where Harms JA says;"Rules

of Court are designed to ensure a fair hearing and should be interpreted in such a way as to advance, and not reduce, the scope of the entrenched fair trial right."9[17] I think that Plasket,Jsums this point up aptly, inPremier Freight(Pty)Ltdv Breathetex Corporation (Pty) Ltd2003(6)SA 190(SECLD), at 193H-I,where he states;"The founding constitutional values must also be borne in mind. The founding constitutional value of the rule of law, enshrined in s. 1 (c), and the right to access to court[s], entrenched in s. 34 of the Constitution, encapsulate a commitmentbythe State to make available to the public for the resolution of disputes courts that function according to fair procedures."[18] Rule 16 of the Uniform Rules of Court sets out the law with regard torepresentation of parties in civil proceedings in the High Court. Sub-rule 16 (4) deals pertinently with the situation in which thepartiesfind themselves in this case. With regard to the case where an attorney ceases to act for his or her client, the following is stated;"(4)(a) Where an attorney acting in any proceedings for a party ceasesso to act, he shall forthwithdeliver notice thereof tosuchparty,the registrar and all other parties: Provided that notice to the party for whom he actedmay be given by registered post.(b) After such notice, unless the party represented, within 10 days after the notice, himself notifies all

otherparties of a new address for service as contemplated in subrule (2), it shall not be necessary toserveany documents upon such party unless the court otherwise orders: Provided that any of the other parties may, before receipt of the noticeof his newaddress for service of documents, serve any documents upon the party who was formerly represented.(c) The notice to the registrar shall state the names and addresses of the parties notifiedand the date on which and the manner in which thenotice was sent to them.(d) The notice to the party formerly representedshall inform the said party of the provisions of paragraph (b)."[Emphasis added].10This is sub-section 16(4) as it is after being updated in Service 20, 2004, in Erasmus "Supreme Court Practice," B1-120. I have highlighted the words "deliver notice thereof to such party," in (a), to emphasise that the client also has to be notified of the withdrawal. I have similarly highlighted the words "and the date on which and the manner in which the notice was sent to them," in (4)(c). Finally, I have also highlighted the words "shallinform the said party of the provisions of paragraph (b)" in (4)(d).[19] InTransorient Freight v Eurocargo Co-ordinators1984 (3)SA542(W), at545F- 546C,Flemming,J,as he then was, said;"It is important that practitioners do realise that Rule 16(4) requires more than a notice of withdrawal with freely

chosencontent. The document to be filed by the Registrar must not only state that the attorney is withdrawing. It must state:(a) who the 'parties' are who were notified of the withdrawal;(b) when each 'party' was notified of the withdrawal;(c) how each notification was 'sent'; and(d) reflect the contents of the original notification or notifications toparties, generally probably by way of attaching a copy of the document which was - clearly at a stage prior to the signing of the notice now under consideration - 'sent'.A registration slip,requiring assumptions, inferences and guesswork,is not mentioned by the Rule as a substitute. Whether the notice to the Registrar can or should properly state an addresswhich will henceforth be an address for service will depend upon the facts of the case .....Failure to comply withtheveryexplicit requirements ofanotice of withdrawal to the Registrar may then, on the lines which I have indicated, render an attorney liable to pay some compensation to the opposite party.The position of an attorney clearlycreates obligationsnot only towards his own client butalso towards the Courtand to some extent to the opposite party. However, the interests to be guarded over by the Courts cannot be made dependent upon the degree of activity of individual parties in respect of claims for compensation. It may well become appropriatemero motuto order an11attorney

whose failure to comply withRule 16 (4) causes costs of additional service or postponements, to pay such costsde bonis propiis. "[20]It is not necessary for me to restate what Flemming,Jso eloquentlystated. I need only add that, when the right of access to courts is kept in mind, it becomes evident that a party that engages the services of an attorney or an advocate, at great expense where that is not done through the Legal Aid Board or some other public service body, does so to ensure that its interests are adequately placed before the court. The court must, at all times, receive representation from the party's legal representatives before it makes any order that will or may have an impact on the rights of such party. This, in my view, is precisely what Yacoob,Jmeant in DeBeer (supra),when he said; "It is a crucial aspect of the rule of law that court orders should not be made without affording the other side a reasonable opportunity to state their (sic) case." Where the party is legally represented that "reasonable opportunity" is afforded to it throughitslegal representative, until the latter's mandate has been appropriately terminated.[21]In this regard, Mr. Gradidge drew my attention to the case ofDe Wet vWestern Bank,1979(2)SA, 1031(AD), where the following appears at1038B-G;"Counsel for the appellants referred inthe first instance, to the factthat, in

withdrawingasattorney for the appellants, Lebos had failed to comply with the provisions of Rule16(4)in at least two respects. This is common cause. The formal notification to the Registrar did not specify the date when, the parties to whom, and the manner in which notificationwassent to allparties concerned, and itwasnot accompanied byacopy of last-mentioned notification. It was, accordingly, contended that the proceedings before Van ReenenJwere irregular and thatthe judgments against the appellants had been erroneously sought and granted. Inmyview there is no substance whatever in this contention. The appellants cannot avail themselves of the fact that their attorney had not12complied with all the requirementsofRule16(4).There is no question of any irregularity on the part of the respondent. At thestagewhen Leboswithdrewasthe appellants' attorney, the case had already been set down for hearing on 16 August1979in accordance with the Rules of Court, and there was no need tor the respondent to serve any further notices or documents on the appellants inconnection with the resumed hearing. As far as the trial courtwas concerned the Rules of Court had been fully complied with and the noticeoftrial hadbeen duly given. When thecase wascalled before Van Reenen J neither the appellants nor their legal representative were present in Court, and, in the circumstances, the respondent's

counselwasfully entitled to apply for an orderofabsolution from the instance with costs in termsofRule39(3)in respect of the appellants' claims and to move for judgment against the appellants under Rule 39(1) on the counterclaim. The fact that the appellants had not been advised timeously of the withdrawal of their attorney is, of course,afactor to be taken into account in considering whether good cause hasbeen shown for the rescissionofthe judgments under the common law, but it is notacircumstance on which the appellants can effectively rely for the purpose of an application under the provisions of Rule 42(1)(a). "[22] Mr. Gradidge argued that what is stated Flemming J, inTransorientFreightvEurocargo Co-ordinators,(supra), earlier quoted herein, is in conflict with this passage. I agree with Mr. Gradidge that there is, definitely, conflict between the two judgments. It is evident thatFlemmingJ's attention was not drawn to theDe Wet decision,because he says nothing about it. I must say that I am of the view that Flemming J's interpretation of Rule s16(4) is more convincing. It seems to me that the intention of the legislature was to protect lay persons from being abandoned by unscrupulous attorneys, as, unfortunately, such attorneys surface from time to time, although they are in the minority in the attorneys' profession. It would seem, to me, that the bestwayto determine

whether an attorney who withdraws as the attorney of record has informed his or her client of his or her intention to withdraw and that he or she has done so timeously, is to compel the attorney to write thatJ3down in the notice and give details as to when and how he or shedelivered it to his or her erstwhile client.[23]In the light, however, of what was recently stated inJayiya v MEC for Welfare, Eastern Cape ProvincialGovernment,[2003]2 All SA 223(SCA), and in a number of Supreme Court of Appeal decisions(Afrox Healthcare Bpk v Strydom2002(6)SA21(SCA), at paras.[25-26].{Headnote}:Blaawberg Meat Wholesalers v Anglo Dutch Meats (Exports)2004(3)SA 160, paras. 20, 167J-168D;Sv Kgafela2003(5)SA339(SCA), at 341A-D,para.[3];(SC)), and inEx parte Minister of Safety and Security,in reS v Walters[2002] ZACC 6;2002 (4) SA613(CC), at 646F-H, para. [61]and para. [12], 624G-625C), however, I am bound to follow the judgment inDeWet(supra),unlessIthink it is distinguishable.Ithink it is distinguishable, as I now set out to demonstrate.[24]When the Appellate Division, as it then was before 1994, gave its decision, it did not have the Constitution as a basis on which to interpret Rule 16(4).Inow have to consider the implications of the provisions of the Constitution on whether or not an order may be made againstaparty who is in default, after he or she becomes timeously aware of the date set

down, but in respect which the attorney's notice ofwithdrawaldoes not indicate that the party had beennotifiedof such withdrawal, as prescribed in Rule 16(4)(a) and (d). I am of the view that s34 of the Constitution, Act 108 of 1996 and the remarks by Yacoob,JinDe Beer NO v North Central Local Council and Others (Umhlatuzana Civic Association intervening), (supra)make the distinction.[25]I couldnot accede to the applicant's request that a provisional order favour be made in its favour. Once made, that order would place the applicant at an advantage that it would have earned simply because the respondent was not present to try and persuade the Court to accept its14own view of the dispute. The order would hang over the respondent's head, with all the risks that go with that kind of burden. It would already be faced with, effectively, arule nisi,to show cause why the provisional order should not be made final. It would have to act within imposed time frames with non-compliance therewith resulting in the provisioned order becoming final without the respondent having had opportunity to contest the application for insolvency. This is not as speculative as it may be thought when it is borne in mindthat the applicant appears to have relied on the provisions of the initial agreement, in respect of the respondent's conduct that is based on the subsequent agreement. It may well be that,

when the application is argued, the existence of a second agreement in spite of the first agreement countenancing no other agreement, would call for determination of the extent to which the applicant could rely onthefirst agreement, in the circumstances. In any event, Mr. Gradidge would not have argued for this order to be made if it was not to benefit his client, the applicant, and only the applicant.[26] No order of that nature should, in my view, be made in the absenceof theparty against whom it is to be made,without evidence as to why thelatter party is in default, especially where, as is the case here, it is mentioned that that party's legal representatives have, somehow but informally, communicated that they no longer represent the party concerned.[27] Consequently, I informed Mr. Gradidgethat I would not grant his request for a provisional order and that I also did not think that the respondent should pay costs occasioned by the postponement, as arguedbyhim. The application was then postponed to enable Mr. Stevenson to show cause why I should not order the respondent's attorneys of record to pay costs,de bonis propiis.They had not, after aII, notified the Court of their rumoured withdrawal as the respondent's attorneys and they had not even15attended court to orally report that position. I took it upon myself to arrange for Mr. Stevenson's attendance.[28] I permitted Mr.

Stevenson to give explanation from the Bar, after he dulyattended Court. His explanation can be summed up as follows:(a) He conceded that the notice is not in compliance with Rule 16(4), tothe extent that it was not sent to the respondent;(b) The reason for not sending a copy of the notice to the applicantwas that Mr. Smit, the respondent's sole proprietor's partner ("my eggenoot" according to para 2.1 of the proprietor's, Mrs. Annanda Smit's, Opposing Affidavit) had informed Mr. Stevenson that the respondent was no longer opposing the application; at a time when the proprietor was already aware of the date of set down for the hearing of the application;(c) It was an oversight, on his own part, not to have complied with Rule16(4), nonetheless, but such oversight did not justify an order of costs against him or the firm of attorneys for which he worked.For reasons that Mr. Stevenson was totally unable to explain, he submitted that the respondent should be ordered to pay costs of the postponement.[29] Having heard Mr. Stevenson, I am satisfied that the respondent's attorneys of record failed to comply with the provisions of Rule 16(4) for,inter alia,reasons given by Mr. Stevenson.COSTS16[30] Having conceded that the notice of withdrawal is defective, in that it wasnot delivered to the respondent Mr. Stevenson, nevertheless, argued, as I have already stated, that an order for

payment of costs,de bonis propiis,should not be made against him or his firm of attorneys. He submitted that he had not actedmala fide,negligently or unreasonably in not sending the notice to the respondent. He pointed to a portion in the respondent's affidavit(s) that showed that Mr. Smit had frequently been used by the respondent as its agent in transacting with the applicant. Consequently, he submitted that he was justified in dealing with Mr. Smit and in accepting from him the instructions to withdraw.[31] Indeed, in the letter I have referred to, Mr. Stevenson wrote;"I did not see it necessary to forward a copy of the Notice of Withdrawalto the respondent as I received instructions to withdrawdirectly from the respondent.I did, however,confirm with the respondentthathisinstructions were duly carried"out." [Emphasis added.]In the light of his own presentation and submissions before me, Mr.Stevenson's highlighted portions are incorrect. Such "instructions" werenot "directly from the respondent" but from Mr. Smit.[32] It is evident that Mr. Stevenson either does not know the provisions ofRule 16(4) or does not take them seriously. Sub-rule 16(4)(a) requires that the notice of withdrawal be delivered to theerstwhile client. Sub-rule 16(4)(d) specifically prescribes that "the notice to the party formerly represented shall inform the said party of the provisions of paragraph

(b)." The notice in this case does comply with that instruction but it was notdelivered to the respondent or, for that matter, to Mr. Smit, whom Mr. Perterson regarded the respondent's representative or agent. In any event, I do not think that it was the intention of the legislature that proof of compliance with the provisions of Rule 16(4) be sought outside the notice, itself. Even so, neither Mr. Stevenson's oral assertions before me nor the17letter he wrote contained information that could cure the defect in the notice.[33] Whilst I accept that Mr. Stevenson was, not actuated by malice when deciding not to forward the notice to the respondent or, for that matter, Ms Smit, I cannot but feel that he, to say the least, acted unreasonably, if not negligently.[34] When I put the question to him, as to who should pay the applicant's costs, if not the attorneys, Mr. Stevenson hesitated before saying the respondent should. He had difficulty answering the question as to what the respondent's conduct was that had caused the postponement. Let me emphasise that the cause of the postponement was that I could not make any order against the respondent when, on the only available evidence, even if onlyprima facieevidence, in the form of the then unstamped notice, the respondent had not been notified of the attorneys' withdrawal. When the original notice surfaced, its only difference was

that it had the Registrar's stamp, which the earlier document did not have.[35] The applicant was forced to ask for a postponement because I refused togive it judgment by default, having been informed that it appeared that the respondent's attorneys had withdrawn and it being clear that the notice of withdrawal had not been delivered to the respondent. The attomeys did not as much as bring Ms. Smit to Court, for her to come and confirm the alleged withdrawal of opposition, neither did they obtain an affidavit from her to that effect. It does not appearthat Mr. Stevenson ever considered these options because he brought, instead, Mr. Smit, who is neither the respondent nor, contrary to what Mr. Stevenson said, the respondent's agent. I did not give Mr. Smit an opportunity to give evidence, in the light of the fact that it was not being suggested that he had been lawfully18mandated to represent the respondent in respect of the alleged decision by the respondent not to oppose the application.[36] Having been informed by Mr. Smit that the respondent was withdrawing itsopposition to the application, Mr. Stevenson did not file a notice of withdrawal of opposition thereto. He clearly had opportunity to do so, because he had time to file the defective notice of withdrawal by the respondent's attorneys of record.[37] If one applies the so-called "usual rule" that a party that seeks and

obtainsa postponement pays the costs occasioned by such postponement(VanRooyen v Naude1929OPD122-3, a decision discussed in numerous subsequent decisions and applied in many of them), the applicant would have to pay costs occasioned by the postponement. That would, surely, be unjust. Fairness to both sidesin an action is a major consideration when the question of costs is being determined.(Gelb v Hankins,1960(3)SA 687 (AD), at 694). As Coleman, J said inBurger v kotze and Another1970(4) SA 302 (W), at 304E-F."I do not think it is correct to state as a general rule that the wasted costsare to be paid by the party who seeks a postponement."See also,Van Staden v Union andSWAInsurance Co, Ltd1972(1) SA 758(E).[38] Awarding costsde bonis propiisagainst a legal representative is a rare occurrence and is not to be lightlyresorted to. It is undesirableto make legal practice, especially for attorneys, equivalent to a quagmire or a landmine-infested territory. Courts should not, however, hesitate to award such costs in appropriate circumstances and thus protect parties who are not responsible for wasted costs from facing costs unfairly. With litigation so unreasonably costly, in my view, an award of costs on a party is often terminal to the party's action. In any event, it makes a huge dent in any19party's financial resources and would, on the facts of this case, in all probability, have

crippled the respondent or Ms. Smit, unjustifiably. It would have cost the respondent's attorneys very little and, in any event, no more than it cost them to file the notice of withdrawal as attorneys of record, for them to file, instead, a notice of withdrawal of opposition, with a tender by the respondent to pay costs occasioned thereby.[39] An attorney guilty of sufficiently reprehensible conduct or who displays unreasonable, reckless or negligent conduct in the handling of his or her client's affairs or case renders himself or herself open to an award of costsde bonis propiisagainst him or her.Jenkins v F.J.J de Souza and Co. (Pvt)1968 (4)SA559(R); Nkosi v Caledonian InsuranceCo.1961(4)SA 649(N), at 663C-D; Machumela v Santam InsuranceCo.Ltd 1977(1) SA 660 (AD); Washaya v Washaya1990(4)SA419(Z.H.), at 45G-I; Khan v Mzovuyo Investments (Pty) Ltd1991 (3)SA47(Tk), at 48G-I.Flemming J's warning inTransorient (supra)should be added to the many voices that warn of the danger of such conduct on the part of legal practitioners.[40] The case was postponedsine die,and the respondent'serstwhileattorneys (and not Mr. Stevenson personally) was ordered to pay costs occasioned by the postponement,de bonis propiis.[41] In the course of my preparation of this judgment and after the case hadbeen postponed, I came across the case ofTake and Save Trading,CCv Standard BankofSA Ltd,2004(4) SA 1

(SCA), where Harms JA says the following, at 4H-5B;"One of the oldest tricks in the book is the practice of some practitioners, whenever the shoe pinches, to withdraw from the case (and more often than not to reappear at a later stage), or of clients to terminate the mandate(more often than not at the suggestion of the practitioner), to force the court to grant a postponement because the party is then unrepresented. Judicial officers have a duty to the court system, their colleagues, the public and the parties to ensure20that this abuse is curbed by, in suitable cases, refusing a postponement. Mere withdrawal by a practitioner or the mere termination of a mandate does not. contrary to popular belief, entitle a party to a postponement as ofright."[42] It appears to me that this statement is so wide that it could be said toinclude every situation where an attorney withdraws at the last moment on account of termination of his or her mandate at the last moment. This, according to Mr. Stevenson, is what happened in the present case. Talking for myself, I must say I am not in a position to agree that, "more often than not," clients "terminate" their mandates "at the suggestion of the practitioner(s)." I have no reason todoubt the integrity of "practitioners," i.e. attorneys, as a branch of the legal profession. Even if what the learned judge of appeal has observed is

general practice, I have sufficient evidence in the present instance to know that that is not the case here. Mr. Stevenson brought Mr. Smit, who, according to him, would have assured me that the notice of withdrawal was genuine. The idea was to assure me that it was unnecessary to postpone the application, the very opposite of what Harms, JA's has experienced. I have already stated that I refused to make an order against the respondent because of my interpretation of the right of access to courts and the remarks by Yacoob, J inDe Beer (supra),in that regard.[43] Both Rule 16(4) and Harms, JA remarks appear to leave me with theultimate discretion, even in circumstances where the notice of withdrawal is faultless. In Rule 16(4)(b), referring to a notice of withdrawal that has been delivered to all parties concerned, including the erstwhileclient, it is stated that"it shall not be necessary to serve any documents upon such party[the erstwhileclient of the withdrawing attorney]unless the court otherwise orders ... "(Emphasis added.)21[44] It is, therefore, contemplated that a Court, which is seized with a scenariowhere the notice of withdrawal is perfect and where the party whose attorney has withdrawn fails to notify other parties of a new address for service, may still order that there be service of documents on such party in any other appropriate manner. Harms, JA, himself,

qualifies his statement by making it clear that it is only "in suitable cases" that a postponement may be refused where the party whose attorney has withdrawn,after the case has been set down for a hearing, is in default.[45] I am of the view, in any event, that Harms, JA's remarks areobiter.Hewas not dealing with Rule 16(4). That was a case where, in the courtaquo,as Harms, JA puts it, "the defendants' legal team withdrew without proffering any reason." The defendants then applied for a postponement. In grudgingly granting the postponement, the learned judge, PC Combrinck, J,"expressed in no uncertain terms that he thought that there was little merit in two aspects of the defendants' case and that the postponement ... amounted to an exercise in futility ... When the matter was again enrolled, the defendants, now represented by another counsel applied by way of notice of motion, for the Judge to recuse himself. He refused the application and the subsequent one for leave to appeal met the same fate. This Court eventually granted leave. 3A-4A.The question of the entitlement or otherwise of a party, whose legalrepresentative withdraws at the last minute, to a postponement was dealt with inTake and Save TradingCC (supra), the context of deciding whether or not PC Combrinck, J was entitled to say what he said about the genuineness of the application for a postponement.[46] Finally,

concerning Harms, JA's views, as expressed in that case, I mustpoint out that he does refer to "Everyone [being] entitled to a fair trial and [that] that includes the right to a hearing before an impartial adjudicator." He goes on to say; "This common law right is now constitutionally22entrenched." It is clear, however, that he makes those remarks in the context of an application for recusal for he says:"Present a reasonable apprehension of bias, the judicial officer is duty bound to recuse himself." 4B.The authorities he cites, in Footnotes 1 and 2, includingPresidentofthe RepublicofSouth Africa and OthersvSouth African Rugby FootballUnion and Others1999(4) SA 147 (CC), relate to the question of recusal.[47] In conclusion, I re-iterate that the respondent's attorneys of record areordered to pay,de bonis propiis,the costs of the postponement, which postponement was occasioned by their failure to deliver their notice of withdrawal as the respondent's attorneys to the respondent, in terms of Rule 16(4)(a), (c) and (d) .J NM. POSWAJUDGE OF THE HIGH COURT_._--HEARD ON: 24 January 2005FOR THE APPLICANT: Adv B GradidgeINSTRUCTED BY: MESSRS Kramer&Viljoen C/o Attorneys FOR THE RESPONDENT: Adv M StevensonINSTRUCTED BY: MESSRS Van Huyssteens C/o Attorneys DATE OF JUDGMENT: 25 April 2005

IN THE HIGH COURT OF SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

CASE NO: 21420/04REPORTABLE DATE: 25/04/2005RECTRON (PTY) LTD APPLICANT

and

KARA SMIT REKENAARDIENSTE CC

RESPONDENT

JUDGMENT

POSWA

J

FACTS:

[1] This is an application for the winding up of the respondent and it came

before me on Thursday,

24

February,

2005.

[2] It is common cause that

(a) the applicant and the respondent entered into a written agreement,

whose terms are set out in annexure "P3" to the applicant's

founding affidavit;

(b) the respondent would, in terms of the agreement. become the

applicant's dealer and the applicant would supply the respondent

2

with certain goods related to,

inter alia,

the business of "har

dware, software [and] network implementations";

(c) the respondent was permitted to make payment, for goods supplied

by the applicant, by cheque;

(d)

"no cheques [would] be issued i

n payment unless there [were]

sufficient funds";

(e) in the event of a breach by the respondent of any terms and

conditions of the agreement, the applicant would be entitled to "institute any action in either the Magistrate's Court or High Court at its sole discretion."

(f) during March and April, 2004 the applicant sold and delivered

certain goods to the respondent;

(g) although the parties disagreed on the interpretation of annexure

"P4",that document contains the list of goods sold and delivered by the applicant, disagreement being on how to calculate the total amount due for payment by the respondent;

"P4",

that document contains the list of goods sold and delivered by the applicant, disagreeme

nt being on how to calculate th

e total amount due for payment by the respondent;

(h) the respondent fell in arrears in its payments for goods sold and

delivered by respondent;

(i)

her arrangement was made between the applicant and the

respondent in terms whereof the respondent would settle the arrears in four cheques, three of which would be postdated;

(j)

pursuant to that arrangement, the respondent furnished the applicant with four cheques dated

3(i) 18 March, 2004, for R20, 000. 00;

(ii) 14 June, 2004, for R48, 755.00;

(iii) 4 July, 2004, for R48, 755. 96;(iv) 4 August, 2004, for R48, 755. 96;

the total whereof I have calculated to be R166, 266. 92;

(k) the respondent's

first two cheques were duly me

t but the

respondent stopped payment of the third cheque;

(I) the respondent gave as its reason for stopping payment the fact

that the applicant had enlisted it to some credit-watch institution, i.e. "Credit Sure"; the applicant says it reported to "Credit Guarantee" and not "Credit Sure," which makes no differenceto the issues herein;

that the applicant had enlisted it to some credit-watch institution, i.e. "Credit Sure"; the applicant says it reported to "Credit Guarantee" and not "Credit Su

re," which makes no difference

to the issues herein;

[m] the respondent seemingly became aware of such reporting when it

could no longer make purchases of items it required for the business because its name appeared in the list of defaulting debtors, which is kept by what the respondent calls "Credit Sure,"

[n] the respondent regarded this act on the applicant's part as one of

hostility and not in keeping with the spirit of the arrangement I have referred to, between it and the applicant, that resulted in the making of the four Cheques.

[3] The applicant's attitude is that the respondent has, for whatever reason,

failed to pay an amount that was due, thus breaching the terms of the contract contained in annexure"P3".Itexplained, further, that it reported to "Credit Guard," its insurer, in terms of an agreement with the latter, which permits the applicant to enter into any arrangement with a debtor,

failed to pay an amount that was due, thus breaching the terms of the contract contained in annexure

"P3".

It

explained, further, that it re

ported to "Credit Guard," its insurer, in terms of an agreement with the latter, which permits the applicant to enter into any arrangement with a debtor,

4

subject to the applicant reporting such arrangement to "Credit Guard." The applicant thought that "Credit Sure" might have picked up the report from "Credit Guard," in the course of their own relationship as credit-watch institutions.

subject to the applicant reporting such arrangement to "Credit Guard." The applicant thought that "Credit Sure" might have picked up the report from "Credit Guard," in the course of th

eir own relationship as credit-

watch institutions.

[4] I have omitted a lot of detail t

hat is not necessary for purpose

s of giving

the background against which this application arose. Suffice to say that this dispute came to me as an opposed application for liquidation of the respondent. With the impression it had in mind, before this explanationbythe applicant, in the latter's replying affidavit, the respondent stopped payment of the third cheque, forR48755.96. That action resulted in this application. It appears to be the applicant's attitude that the respondent's stoppage of payment of thecheque(s) delivered in consequence of the arrangement that resulted inthe issuing of the postdated cheques contravenes the terms of Annexure"P3."Consequently, it resorted the provisions of that earlier, the main, agreement, part of which reads:

the background against which this application arose. Suffice to say that this dispute came to me as an opposed application for liquidation of the respondent. With the impression it had in mind, before this explanation

by

the applicant, in the latter's replying affidavit, the respondent stopped payment of the third cheque, for

R48

755.96. That action resulted in this application. It appears to be the a

pplicant's attitude that the re

spondent's stoppage of payment of the

cheque(s) delivered in conseque

nce of the arrangement that resulted in

the issuing of the postdated ch

eques contravenes the terms of Annexure

"P3."

Consequently, it resorted the provisions of that earlier, the main, agreement, part of which reads:

"The customer hereby declares that no cheques will be issued in payment unless there are sufficient funds and that such funds will remain available in order that all cheque payments will be honoured andunder no circumstanceswill anycheque be stopped. (Emphasis added).

"The customer hereby declares that no cheques will be issued in payment unless there are sufficient funds and that such funds will remain available in order that all cheque payments will be honoured and

under no circumstances

will any

cheque be stopped. (Emphasis added).

Because para18-7 of P3 reads;

"18.7 The supplier shall have the right to institute any action in either the relevant Magistrate's Court or the High Court at its sole discretion,"

the applicant chose to apply for the respondent's sequestration. It justifies its application in the founding affidavit of one Pramod Otham, who says,inter alia,the following, in para 28;

the applicant chose to apply for the respondent's sequestration. It justifies its application in the founding affidavit of one Pramod Otham, who says,

the following, in para 28;

"Although the Applicant has obtained the right, title and interest in and to the Respondent's claim against its debtors, it is favorable (sic) that the Respondent be liquidated."

[5] The application is opposed.

[6] Mr. Gradidge informed me, in chambers, that there was no appearance for

the respondent, and that he had been informed that the respondent's

5

attorneys of record had withdrawn as its attorneys. There was no notice of withdrawal in both the court file and his brief. I requested him to make investigations about this report of withdrawal by the attorneys concerned, before the hearing commenced, as there would be problems withouta written notice of withdrawal in terms of the Rules.

attorneys of record had withdrawn as its attorneys. There was no notice of withdrawal in both the court file and his brief. I requested him to make investigations about this report of withdrawal by the attorneys concerned, before the hearing commenced, as th

ere would be problems without

a written notice of withdrawal in terms of the Rules.

[7] When the matter was later called, Mr. Gradidge still had no information of

substance. After a further stand-down, he brought a "NOTICE OF WITHDRAWAL AS ATTORNEYS," dated 18 February, 2005,bythe respondent's attorneys of record, received by the correspondent attorneys of the applicant's attorneys on Monday, 21 February, 2005. The notice did not bear the Registrar's date stamp. It reflected thatithad been addressed to the Registrar and the applicant's attorneys. It did not mention that it had been addressed to the respondent, let alone being received by the respondent.

substance. After a further stand-down, he brought a "NOTICE OF WITHDRAWAL AS ATTORNEYS," dated 18 February, 2005,

the respondent's attorneys of record, received by the correspondent attorneys of the applicant's attorneys on Monday, 21 February, 2005. The notice did not bear the Registrar's date stamp. It reflected that

it

had been addressed to the Registrar and the applicant's attorneys. It did not mention that it had been addressed to the respondent, let alone being received by the respondent.

[8] Mr. Gradidge argued that I cou

ld and should make a provisional

order

granting the application, in the form of arule nisi.No harm would bedone to the applicant, so he argued, because it would return to Court, if it so desired, to show cause why the provisional order shouldnot be confirmed.

granting the application, in the form of a

rule nisi.

No harm would be

done to the applicant, so he argued, because it would return to Court, if it so desired, to show cause why the provisional order should

not be confi

rmed.

[9] I informed Mr. Gradidge that, besides that "notice" appearing not to have

been issued by the Registrar, it also clearly omitted mention of the respondent. In the circumstances, I declined to make an order in the applicant's favour, in the form suggested by Mr. Gradidge or in any form whatsoever. Consequently, Mr. Gradidge applied for a postponementand asked that the respondent be ordered to pay costs occasioned by its default.

been issued by the Registrar, it also clearly omitted mention of the respondent. In the circumstances, I declined to make an order in the applicant's favour, in the form suggested by Mr. Gradidge or in any form whatsoever. Consequently, Mr. Grad

idge applied for a postponement

and asked that the respondent be ordered to pay costs occasioned by its default.

[10] As I told Mr. Gradidge, in light of apparent non-compliance,bythe respondent's attorneys of record, with Rule 16(4), I was not inclined to

[10] As I told Mr. Gradidge, in light of apparent non-compliance,

the respondent

'

s attorneys of record, with Rule 16(4), I was not inclined to

6

award costs against the respondent but against the respondent's attorneys of record.

[11]At his request, I granted Mr. Gradidge a stand down to enable him to obtain some written information about the rumoured withdrawal. He returned and handed up a faxed copy of a "NOTICE OF WITHDRAWAL AS ATTORNEYS," signed by the respondent's attorneys of record on 18 February, 2005. It is stated in that notice that it was received(bythe applicant's attorneys) on (Monday) 21 February, 2005. It does not bear the Registrar's stamp and it never reached the court file. For reference purposes, the name of "Mr.Marne Stevenson" is given. In all other material respects, this document is a replica of the one earlier handed up by Mr. Gradidge.

[11]

At his request, I granted Mr. Gradidge a stand down to enable him to obtain some written information about the rumoured withdrawal. He returned and handed up a faxed copy of a "NOTICE OF WITHDRAWAL AS ATTORNEYS," signed by the respondent's attorneys of record on 18 February, 2005. It is stated in that notice that it was received

(by

the applicant's attorneys) on (Monday) 21 February, 2005. It does not bear the Registrar's stamp and it never reached the court file. For reference purposes, the name of "Mr.

Marne Stevenson" is given. In al

l other material respects, this document is a replica of the one earlier handed up by Mr. Gradidge.

[12] The second document did not appear, to me, to alter the factual and legal positions from what they had, hitherto, appeared to be. As it was already late in the day, I ordered that the application be postponed to the next morning, 25 February, 2005. I als

o arranged that Mr. Morne Steve

nson, the attorney reflected in the "notice" as the person to deal with for reference purposes and with whom Mr. Gradidge or the applicant's attorneys had had communication about what had transpired concerning the withdrawal by the respondent's attorneys, be notified to attend Court the next day. He was to show cause why the respondent's attorneys were not to be ordered to pay costs

de bonis prop

r

iis.

Mr. Stevenson was duly informed and he attended Court t

he next morning, Friday, 25 Febr

uary, 2005.

[13] Before attending Court, however, Mr. Stevenson wrote me a letter, on the same day, Thursday, 24 February, 2005, in which he explained,inter alia,that he had advised "Mr. Marius Smit, the husband of the sole member of the respondent, [to] be present at Court to confirm the content of this letter

[13] Before attending Court, however, Mr. Stevenson wrote me a letter, on the same day, Thursday, 24 February, 2005, in which he explained,

that he had advised "Mr. Marius Smit, the husband of the sole member of the respondent, [to] be present at Court to confirm the content of this letter

7

[written to mebyMr. Stevenson]." That letter, to which is attached acopyof the same "notice of withdrawal," drew attention to the Registrar's date stamp on the face of the attached copy. It is dated 21 February, 2005. The letter also stated that Mr. Marius Smit had given the respondent's attorneys instructions "to withdraw as attorneys of record." The "notice" attached to Mr. Stevenson's letter is the third version of the "notice of withdrawal."

[written to me

Mr. Stevenson]." That letter, to which is attached a

copy

of the same "notice of withdrawal," drew attention to the Registrar's date stamp on the face of the attached copy. It is dated 21 February, 2005. The letter also stated that Mr. Marius Smit had given the respondent's attorneys instructions "to withdraw as attorneys of record." The "notice" attached to Mr. Stevenson's letter is the third version of the "notice of withdrawal."

[14] I permitted Mr. Stevenson to a

ppear as "counsel" for the res

pondent's

erstwhile attorneys on the question of who should be ordered to pay costs. That was after he had conceded, from the Bar, and had confirmed by reference to the letter, that the notice was not in compliance with Rule 16(4)(a), to the respondent. Because I accepted Mr. Stevenson's statement that his firm of attorneys had received "instructions" from Mr. Smit, to withdraw as the respondent's attorneys, I did not find the need to hear Mr. Smit, to confirm what Mr. Stevenson had told me. I must mention that, during the course of the morning, the original of the notice of withdrawal as the respondent's attorneys of record - which original bore bearing the Registrar's stamp - had surfaced. That was after I had instructed the Registrar's office to hunt for it. The original confirmed that the notice had, indeed, beentimeously filed, on Monday, 21February,2005.

erstwhile attorneys on the question of who should be ordered to pay costs. That was a

fter he had conceded, from the B

ar, and had confirmed by reference to the letter, that the notice was not in compliance with Rule 16(4)(a), to the respondent. Because I accepted Mr. Stevenson's statement that his firm of attorneys had received "instructions" from Mr. Smit, to withdraw as the respondent's attorneys, I did not find the need to hear Mr. Smit, to confirm what Mr. Stevenson had told me. I must mention that, during the course of the morning, the original of the notice of withdrawal as the respondent's attorneys of record - which original bore bearing the Registrar's stamp - had surfaced. That was after I had instructed the Registrar's office to hunt for it. The original confirmed that the notice had, indeed, been

timeously filed, on Monday, 21

[15] The main issue here is, in my view, whether the notice complied withRule 16(4). I have already stated that Mr. Stevenson conceded that, to the extent that it reflected that it was not served on the respondent, the notice did not comply. The further question is whether I should have granted the provisional order argued for by Mr. Gradidge, in which event there have been no need for postponement of the application.

[15] The main issue here is, in my view, w

hether the notice complied with

Rule 16(4). I have already stated that Mr. Stevenson conceded that, to the extent tha

t it reflected that it was not s

erved on the respondent, the notice did not comply. The further question is whether I should have granted the provisional order argued for by Mr. Gradidge, in which event there have been no need for postponement of the application.

8

[16]

In

my view, the question as to whether to proceed with this application or

not, in the respondent's absence, raises the further question of the right of access to courts (s. 34 of the Constitution, Act 108 of 1996). In respect of this right, Yacoob,Jsaid the following, when delivering the judgment, of the Court, in the case ofDe Beer NO v North -Central Local Council and South-Central Local Council and Others (Umhlatuzana Civic Association Intervening)[2001] ZACC 9;2002 (1) SA 429(CC), para. [1], at 433H;

not, in the respondent's absence, raises the further question of the right of access to courts (s. 34 of the Constitution, Act 108 of 1996). In respect of this right, Yacoob,

said the following, when delivering the judgment, of the Court, in the case of

De Beer NO v North -Central Local Counc

il and South-Central Local Counc

il and Others (Umhlatuzana Civic Association Intervening)

[2001] ZACC 9;2002 (1) SA 429(CC), para. [1], at 433H;

[2001] ZACC 9

2002 (1) SA 429

"Section 34 of our Constitution promises a fair hearing to anyone involved in a justifiable dispute that can be resolved by the application of law."

He then went on to elaborate as follows, in para. [11], at 439G-440B;

"This s. 34 fair hearing right affirms the rule of law, which is a founding value of our Constitution. The right to a fair hearing before a court lies at the heart of the rule of law. A fair hearing before a court as aprerequisite to an order being made against anyoneis fundamental to a just and credible legal order. Courts in our country are obliged to ensure that the proceedings before themarealways fair. Since procedures that would render the hearing unfair are inconsistent with the Constitution, courts must interpret legislationand Rules of Court,whereitis reasonably possible to do so, in a way that would render the proceedings fair. Itisacrucial aspect of the rule of law that court orders should not be made without affording the other sideareasonable opportunity to state their (sic) case.That reasonable opportunity can usually only be given by ensuring that reasonable steps are taken to bring the hearing to the attention of the person affected. Rules of Courts make provision for this." (Emphasis added).

"This s. 34 fair hearing right affirms the rule of law, which is a founding value of our Constitution. The right to a fair hearing before a court lies at the heart of the rule of law. A fair hearing before a court as a

prerequisite to an order being made against anyone

is fundamental to a just and credible legal order. Courts in our country are obliged to ensure that the proceedings before them

are

always fair. Since procedures that would render the hearing unfair are inconsistent with the Constitution, courts must interpret legislation

and Rules of Court,

where

is reasonably possible to do so, in a way that woul

d render the proceeding

s fair. It

is

a

crucial aspect of the rule of law that court orders should not be made without affording the other side

reasonable opport

unity to state their (sic) case

.

That reasonable opportunity can usually only be given by ensuring that reasonable steps are taken to bring the hearing to the attention of the person affected. Rules of Courts make provision for this." (Emphasis added).

See also:

D.

F Scott (EP) (PTY) L TD v Golden Valley Supermarket2002

2002

(6)

SA 297

(SCA)

at

301

G, para. [9], where Harms JA says;

"Rules of Court are designed to ensure a fair hearing and should be interpreted in such a way as to advance, and not reduce, the scope of the entrenched fair trial right."

9

[17] I think that Plasket,

sums this point up aptly, in

Premier Freight

(Pty)

Ltd

v Breathetex Corporation (Pty) Lt

d2003

2003

SA 190(SECLD), at 193H-I,

where he states;

"The founding constitutional values must also be borne in mind. The founding constitutional value of the rule of law, enshrined in s. 1 (c), and the right to access to court[s], entrenched in s. 34 of the Constitution, encapsulate a commitmentbythe State to make available to the public for the resolution of disputes courts that function according to fair procedures."

"The founding constitutional values must also be borne in mind. The founding constitutional value of the rule of law, enshrined in s. 1 (c), and the right to access to court[s], entrenched in s. 34 of the Constitution, encapsulate a commitment

the State to make available to the public for the resolution of disputes courts that function according to fair procedures."

[18] Rule 16 of the Uniform Rules of Court sets out the law with regard to

representation of parties in civil proceedings in the High Court. Sub-rule 16 (4) deals pertinently with the situation in which thepartiesfind themselves in this case. With regard to the case where an attorney ceases to act for his or her client, the following is stated;

representation of parties in civil proceedings in the High Court. Sub-rule 16 (4) deals pertinently with the situation in which the

part

ie

s

find themselves in this case. With regard to the case where an attorney ceases to act for his or her client, the following is stated;

"(4)(a) Where an attorney acting in any proceedings for a party ceases

so to act, he shall forthwithdeliver notice thereof tosuchparty,the registrar and all other parties: Provided that notice to the party for whom he actedmay be given by registered post.

so to act, he shall forthwith

deliver notice thereof to

such

party,

the registrar and all other parties: Provided that notice to the party for whom he acted

may be given by registered post.

(b) After such notice, unless the party represented, within 10 days after the notice, himself notifies all otherparties of a new address for service as contemplated in subrule (2), it shall not be necessary toserveany documents upon such party unless the court otherwise orders: Provided that any of the other parties may, before receipt of the noticeof his newaddress for service of documents, serve any documents upon the party who was formerly represented.

(b) After such notice, unless the part

y represented, within 10 days a

fter the notice, himself notifies all other

parties of a new address for se

rvice as contemplated in subrule (2), it shall not be necessary to

serve

any documents upon such party unless the court otherwise orders: Provided that any of the other parties m

ay, before receipt of the notice

of hi

s new

address for service of documents, serve any documents upon the party who was formerly represented.

(c) The notice to the registrar shall state the names and addresses of the parties notifiedand the date on which and the manner in which thenotice was sent to them.

(c) The notice to the registrar shall state the names and addresses of the parties notified

and the date on which and the manner in whic

h the

notice was sent to them.

(d) The notice to the party formerly represented

shall inform the said party of the provisions of paragraph (b).

"

[Emphasis added].

10

This is sub-section 16(4) as it is after being updated in Service 20, 2004, in Erasmus "Supreme Court Practice," B1-120. I have highlighted the words "deliver notice thereof to such party," in (a), to emphasise that the client also has to be notified of the withdrawal. I have similarly highlighted the words "and the date on which and the manner in which the notice was sent to them," in (4)(c). Finally, I have also highlighted the words "shallinform the said party of the provisions of paragraph (b)" in (4)(d).

This is sub-section 16(4) as it is after being updated in Service 20, 2004, in Era

smus "Supreme Court Practice," B

1-120. I have highlighted the words "deliver notice thereof to such party," in (a), to emphasise that the client also has to be notified of the withdraw

al. I have similarly hig

h

ligh

ted the words "and the date on which and the manner in which the notice was sent to them," in (4)(c). Finally, I h

ave also highlighted the words "shall

inform the said party of the provisions of paragraph (b)" in (4)(d).

[19] In

Transorient Freight v Eurocargo Co-ordinators

1984 (3)

SA

542

(W

), at

545F

- 546C,

Flemming,

J,

as he then was, said;

"It is important that practitioners do realise that Rule 16(4) requires more than a notice of withdrawal with freely chosencontent. The document to be filed by the Registrar must not only state that the attorney is withdrawing. It must state:

"It is important that practi

tioners do realise that Rule 16

(4) requires more than a notice of withdrawal with freely chosen

content. The document to be file

d by the Registrar must not only state that the attorney is withdrawing. It must state:

(a) who the 'parties' are who were notified of the withdrawal;

(b) when each 'party' was notified of the withdrawal;

(c) how each notification was 'sent'; and

(d) reflect the contents of the o

riginal notification or notifica

tions to

parties, generally probably by way of attaching a copy of the document which was - clearly at a stage prior to the signing of the notice now under consideration - 'sent'.

A registration slip,requiring assumptions, inferences and guesswork,is not mentioned by the Rule as a substitute. Whether the notice to the Registrar can or should properly state an addresswhich will henceforth be an address for service will depend upon the facts of the case .....Failure to comply withtheveryexplicit requirements ofanotice of withdrawal to the Registrar may then, on the lines which I have indicated, render an attorney liable to pay some compensation to the opposite party.The position of an attorney clearlycreates obligationsnot only towards his own client butalso towards the Courtand to some extent to the opposite party. However, the interests to be guarded over by the Courts cannot be made dependent upon the degree of activity of individual parties in respect of claims for compensation. It may well become appropriatemero motuto order an

A registration slip,

requiring assumptions, inferences and guesswork,

is not mentioned by the Rule as a substitute. Whether the notice to the Registrar can or should properly state an address

which will henceforth be an add

ress for service will depend upon the facts of the case .....

Failure to comply with

the

very

explicit requirements of

notice of withdrawal to the Registrar may then, on the lines which I have indicated, render an attorney liable to pay some compensation to the opposite party.

The position of an attorney clearly

creates obligations

not only towards his own client but

also towards the Court

and to some extent to the opposite party. However, the interests to be guarded over by the Courts cannot be made dependent upon the degree of activity of individual parties in respect of claims for compensation. It may well become appropriate

mero motu

to order an

11

attorney whose failure to comply with

Rule 16 (4) causes costs of ad

ditional service or postponements, to pay such costs

de bonis propiis. "

[20]

It is not necessary for me to restate what Flemming,

so elo

quently

stated. I need only add that, when the right of access to courts is kept in mind, it becomes evident that a party that engages the services of an attorney or an advocate, at great expense where that is not done through the Legal Aid Board or some other public service body, does so to ensure that its interests are adequately placed before the court. The court must, at all times, receive representation from the party's legal representatives before it makes any order that will or may have an impact on the rights of such party. This, in my view, is precisely what Yacoob,Jmeant in DeBeer (supra),when he said; "It is a crucial aspect of the rule of law that court orders should not be made without affording the other side a reasonable opportunity to state their (sic) case." Where the party is legally represented that "reasonable opportunity" is afforded to it throughitslegal representative, until the latter's mandate has been appropriately terminated.

stated. I need only add that, when the right of access to courts is kept in mind, it becomes evident that a party that engages the services of an attorney or an advocate, at great expense where that is not done through the Legal Aid Board or some other public service body, does so to ensure that its interests are adequately placed before the court. The court must, at all times, receive representation from the party's legal representatives before it makes any order that will or may have an impact on the rights of such party. This, in my view, is precisely what Yacoob,

meant in De

Beer (supra),

when he said; "It is a crucial aspect of the rule of law that court orders should not be made without affording the other side a reasonable opportunity to state their (sic) case." Where the party is legally represented that "reasonable opportunity" is afforded to it through

its

legal representative, until the latter's mandate has been appropriately terminated.

[21]

In this regard, Mr. Gradidge drew my attention to the case of

D

e W

et v

Western Bank,

1979(2)

SA, 1031

(AD), where the following appears at

1038B-G;

"Counsel for the appellants referred inthe first instance, to the factthat, in withdrawingasattorney for the appellants, Lebos had failed to comply with the provisions of Rule16(4)in at least two respects. This is common cause. The formal notification to the Registrar did not specify the date when, the parties to whom, and the manner in which notificationwassent to allparties concerned, and itwasnot accompanied byacopy of last-mentioned notification. It was, accordingly, contended that the proceedings before Van ReenenJwere irregular and thatthe judgments against the appellants had been erroneously sought and granted. Inmyview there is no substance whatever in this contention. The appellants cannot avail themselves of the fact that their attorney had not

"Counsel for the appell

ants referred in

the first instance, to the fact

that, in withdrawing

as

attorney for the appell

ants, Lebos had failed to comply with the provisions of Rule

16(4)

in at least two respects. This is common cause. The formal notification to the Registrar did not specify the date when, the parties to whom, and the manner in which notification

was

sent to all

parties concerned, and it

not accompanied by

copy of last-mentioned notification. It was, accordingly, contended that the proceedings before Van Reenen

were irregular and that

the judgments against the appell

ants had been erroneously sought and granted. In

my

view there is no substance whatever in this contention. The appellants cannot avail themselves of the fact that their attorney had not

12

complied with all the requirementsofRule16(4).There is no question of any irregularity on the part of the respondent. At thestagewhen Leboswithdrewasthe appellants' attorney, the case had already been set down for hearing on 16 August1979in accordance with the Rules of Court, and there was no need tor the respondent to serve any further notices or documents on the appellants inconnection with the resumed hearing. As far as the trial courtwas concerned the Rules of Court had been fully complied with and the noticeoftrial hadbeen duly given. When thecase wascalled before Van Reenen J neither the appellants nor their legal representative were present in Court, and, in the circumstances, the respondent's counselwasfully entitled to apply for an orderofabsolution from the instance with costs in termsofRule39(3)in respect of the appellants' claims and to move for judgment against the appellants under Rule 39(1) on the counterclaim. The fact that the appellants had not been advised timeously of the withdrawal of their attorney is, of course,afactor to be taken into account in considering whether good cause hasbeen shown for the rescissionofthe judgments under the common law, but it is notacircumstance on which the appellants can effectively rely for the purpose of an application under the provisions of Rule 42(1)(a). "

complied with all the requirements

of

Rule

16(4).

There is no question of any irregularity on the part of the respondent. At the

stage

when Lebos

withdrew

the appellants' attorney, the case had already been set down for hearing on 16 August

1979

in accordance with the Rules of Court, and there was no need tor the respondent to serve any further not

ices or documents on the appellants in

connection with the resumed he

aring. As far as the trial court

was concerned the Rules of Court had been fully complied with and the notice

trial had

been duly given. When the

case was

called before Van Reenen J neither the appellants nor their legal representa

tive were present in Court, and

, in the circumstances, the respondent's counsel

fully entitled to apply for an order

absolution from the instance with costs in terms

39(3)

in respect of the appellants' claims and to move for judgment against the appellants under Rule 39(1) on the counterclaim. The fact that the appellants had not been advised timeously of the withdrawal of their attorney is, of course,

factor to be taken int

o account in considering whether good cause has

been shown for the rescis

sion

the judgments under the common law, but it is not

circumstance on which t

he appellants can effectively rely for the purpose of an application under the provisions of Rule 42(1)(a). "

[22] Mr. Gradidge argued that what is stated Flemming J, in

Transorient

FreightvEurocargo Co-ordinators,(supra), earlier quoted herein, is in conflict with this passage. I agree with Mr. Gradidge that there is, definitely, conflict between the two judgments. It is evident thatFlemmingJ's attention was not drawn to theDe Wet decision,because he says nothing about it. I must say that I am of the view that Flemming J's interpretation of Rule s16(4) is more convincing. It seems to me that the intention of the legislature was to protect lay persons from being abandoned by unscrupulous attorneys, as, unfortunately, such attorneys surface from time to time, although they are in the minority in the attorneys' profession. It would seem, to me, that the bestwayto determine whether an attorney who withdraws as the attorney of record has informed his or her client of his or her intention to withdraw and that he or she has done so timeously, is to compel the attorney to write that

Freight

v

Eurocargo Co-ordinators,

(supra), earlier quoted herein, is in conflict with this passage. I ag

ree with Mr. Gradidge that ther

e is, definitely, conflict between the two judgments. It is evident that

Flem

ming

J's attention was not drawn to the

De Wet decision,

because he says nothing about it. I must say that I am of the view that Flemmi

ng J's interpretation of Rule s

16(4) is more convincing. It seems to me that the intention of the legislature was to protect lay persons from being abandoned by unscrupulous attorneys, as, unfortunately, such attorneys surface from time to time, although they are in the minority in the attorneys' profession. It would seem, to me, that the best

way

to determine whether an attorney who withdraws as the attorney of record has informed his or her client of his or her intention to withdraw and that he or she has done so timeously, is to compel the attorney to write that

J3

down in the notice and gi

ve details as to when and how h

e or she

delivered it to his or her erstwhile client.

[23]

In the light, however, of what was recently stated in

Jayiya v MEC for Welfare, Eastern Cape Provincial

Government,[2003]

[2003]

2 All SA 223(SCA), and in a number of Supreme Court of Appeal decisions

(Afrox Healthca

re Bpk v Strydom2002

21

(SCA), at paras.

[25-26].

{Headnote}:

Blaawberg Meat Wholesalers v Anglo Dutch Meats (Exports)2004

2004

(3)

SA 160, paras. 20, 167J-168D;

S

v Kgafela2003

(5)

339

(SCA), at 341A

-

D,

para.

[3]

;

(SC))

, and in

Ex parte Minister of Safety and Security,

in re

S v Walters

[2002] ZACC 6;2002 (4) SA

[2002] ZACC 6

2002 (4) SA

613(CC), at 646F-H, para. [61]

and para. [12], 624G-625C), however, I am bound to follow the judgment in

De

W

et

(supra),

unless

I

think it is distinguishable.

think it is distinguishable, as I now set out to demonstrate.

[24]

When the Appellate Division, as it then was before 1994, gave its decision, it did not have the Constitution as a basis on which to interpret Rule 16(4).

now have to consider the implications of the provisions of the Constitution on whether or not an order may be made against

party who is in default, after he or she b

ecomes timeously aware of the d

ate set down, but in respect which the attorney's notice of

withdrawal

does not indicate that the party had been

notified

of such withdrawal, as prescribed in Rule 16(4)(a) and (d). I am of the view that s34 of the Constitution, Act 108 of 1996 and the remarks by Yacoob,

in

De Beer NO v North Central Local Council and Others (Umhlatuzana Civic Association intervening), (supra)

make the distinction.

[25]I couldnot accede to the applicant's request that a provisional order favour be made in its favour. Once made, that order would place the applicant at an advantage that it would have earned simply because the respondent was not present to try and persuade the Court to accept its

[25]

I could

not accede to the applicant's request that a provisional order favour be made in its favour. Once made, that order would place the applicant at an advantage that it would have earned simply because the respondent was not present to try and persuade the Court to accept its

14

own view of the dispute. The order would hang over the respondent's head, with all the risks that go with that kind of burden. It would already be faced with, effectively, arule nisi,to show cause why the provisional order should not be made final. It would have to act within imposed time frames with non-compliance therewith resulting in the provisioned order becoming final without the respondent having had opportunity to contest the application for insolvency. This is not as speculative as it may be thought when it is borne in mindthat the applicant appears to have relied on the provisions of the initial agreement, in respect of the respondent's conduct that is based on the subsequent agreement. It may well be that, when the application is argued, the existence of a second agreement in spite of the first agreement countenancing no other agreement, would call for determination of the extent to which the applicant could rely onthefirst agreement, in the circumstances. In any event, Mr. Gradidge would not have argued for this order to be made if it was not to benefit his client, the applicant, and only the applicant.

own view of the dispute. The order would hang over the respondent's head, with all the risks that go with that kind of burden. It would already be faced with, effectively, a

rule nisi,

to show cause why the provisional order should not be made final. It would have to act within imposed time frames with non-compliance therewith resulting in the provisioned order becoming final without the respondent having had opportunity to contest the application for insolvency. This is not as speculative as it may be thought when it is borne in mind

that the applicant appears to h

ave relied on the provisions of the initial agreement, in respect of the respondent's conduct that is based on the subsequent agreement. It may well be that, when the application is argued, th

e existence of a second agreem

ent in spite of the first agreement countenanci

ng no other agreement, would cal

l for determination of the extent to which the applicant could rely on

th

e

first agreement, in the circumstances. In any event, Mr. Gradidge would not have argued for this order to be made if it was not to benefit his client, the applicant, and only the applicant.

[26] No order of that nature should, in m

y view, be made in the absence

of the

party against whom it is to be made,without evidence as to why thelatter party is in default, especially where, as is the case here, it is mentioned that that party's legal representatives have, somehow but informally, communicated that they no longer represent the party concerned.

party against whom it is to be made,

without evidence as to why the

latter party is in default, especially where, as is the case here, it is mentioned that that party's legal representatives have, somehow but informally, communicated that they no longer represent the party concerned.

[27] Consequently, I informed Mr. Gradidgethat I would not grant his request for a provisional order and that I also did not think that the respondent should pay costs occasioned by the postponement, as arguedbyhim. The application was then postponed to enable Mr. Stevenson to show cause why I should not order the respondent's attorneys of record to pay costs,de bonis propiis.They had not, after aII, notified the Court of their rumoured withdrawal as the respondent's attorneys and they had not even

[27] Consequently, I informed Mr. Gradidge

that I would not grant his requ

est for a provisional order and that I also did not think that the respondent should pay costs occasioned by the postponement, as argued

him. The application was then postponed to enable Mr. Stevenson to show cause why I should not order the respondent's attorneys of record to pay costs,

de bonis propiis.

They had not, after aII

, notified the Court of their rumoured withdrawal as the respondent's attorneys and they had not even

15

attended court to orally report tha

t position. I took it upon myse

lf to arrange for Mr. Stevenson's attendance.

[28] I permitted Mr. Stevenson to give explanation from the Bar, after he duly

attended Court. His explanation can be summed up as follows:

(a) He conceded that the notice is not in compliance with Rule 16(4), to

the extent that it was not sent to the respondent;

(b) The reason for not sending a copy of the notice to the applicant

was that Mr. Smit, the respondent's sole proprietor's partner ("my eggenoot" according to para 2.1 of the proprietor's, Mrs. Annanda Smit's, Opposing Affidavit) had informed Mr. Stevenson that the respondent was no longer opposing the application; at a time when the proprietor was already aware of the date of set down for the hearing of the application;

(c) It was an oversight, on his own part, not to have complied with Rule

16(4), nonetheless, but such oversight did not justify an order of costs against him or the firm of attorneys for which he worked.

For reasons that Mr. Stevenson was totally unable to explain, he submitted that the respondent should be ordered to pay costs of the postponement.

[29] Having heard Mr. Stevenson, I am satisfied that the respondent's attorneys of record failed to comply with the provisions of Rule 16(4) for,inter alia,reasons given by Mr. Stevenson.

[29] Having heard Mr. Stevenson, I am satisfied that the respondent's attorneys of record failed to comply with the provisions of Rule 16(4) for,

reasons given by Mr. Stevenson.

COSTS

16

[30] Having conceded that the notice of withdrawal is defective, in that it was

not delivered to the respondent Mr. Stevenson, nevertheless, argued, as I have already stated, that an order for payment of costs,

de bonis propiis,

should not be made against him or his firm of attorneys. He submitted that he had not acted

mala fide,

negligently or unreasonably in not sending the notice to the respondent. He pointed to a portion in the respondent's affidavit(s) that showed that Mr. Smit had frequently been used by the respondent as its agent in transacting with the applicant. Consequently, he submitted that he was justified in dealing with Mr. Smit and in accepting from him the instructions to withdraw.

[31] Indeed, in the letter I have referred to, Mr. Stevenson wrote;

"I did not see it necessary to forward a copy of the Notice of Withdrawalto the respondent as I received instructions to withdrawdirectly from the respondent.I did, however,confirm with the respondentthathisinstructions were duly carried

"I did not see it necessary to forward a copy of the Notice of Withdr

awal

to the respondent as I received instructions to withdraw

directly from the r

espondent.

I did, however,

confirm with the respondent

that

his

instructions wer

e duly carried

"out." [Emphasis added.]

In the light of his own presentation and submissions before me, Mr.

Stevenson's highlighted portions are incorrect. Such "instructions" were

not "directly from the respondent" but from Mr. Smit.

[32] It is evident that Mr. Stevenson either does not know the provisions of

Rule 16(4) or does not take them seriously. Sub-rule 16(4)(a) requires that the notice of withdrawal be delivered to the

erstwhile client. Sub-rule 16(4)

(d) specifically prescribes that "the notice to the party formerly represented shall inform the said pa

rty of the provisions of parag

raph (b)." The notice in this case does comply with that instruction but it was not

delivered to the respondent or, for that matter, to Mr. Smit, whom Mr. Perterson regarded the respondent's representative or agent. In any event, I do not think that it was the intention of the legislature that proof of compliance with the provisions of Rule 16(4) be sought outside the notice, itself. Even so, neither Mr. Stevenson's oral assertions before me nor the

17

letter he wrote contained inf

ormation that could cure the de

fect in the notice.

[33] Whilst I accept that Mr. Stevenson was, not actuated by malice when deciding not to forward the notice to the respondent or, for that matter, Ms Smit, I cannot but feel that he, to say the least, acted unreasonably, if not negligently.

[34] When I put the question to him, as to who should pay the applicant's costs, if not the attorneys, Mr. Stevenson hesitated before saying the respondent should. He had difficulty answering the question as to what the respondent's conduct was that had caused the postponement. Let me emphasise that the cause of the postponement was that I could not make any order against the respondent when, on the only available evidence, even if onlyprima facieevidence, in the form of the then unstamped notice, the respondent had not been notified of the attorneys' withdrawal. When the original notice surfaced, its only difference was that it had the Registrar's stamp, which the earlier document did not have.

[34] When I put the question to him, as to who should pay the applicant's costs, if not the attorneys, Mr. Stevenson hesitated before saying the respondent should. He had difficulty answering the question as to what the respondent's conduct was that had caused the postp

onemen

t. Let me emphasise that the cause of the postponement was that I could not make any order against the respondent when, on the only available evidence, even if only

prima facie

evidence, in the form of the then unstamped notice, the respondent had not been notified of the attorneys' withdrawal. When the original notice surfaced, its only difference was that it had the Registrar's stamp, which the earlier document did not have.

[35] The applicant was forced to ask for a postponement because I refused to

give it judgment by default, having been informed that it appeared that the respondent's attorneys had withdrawn and it being clear that the notice of withdrawal had not been delivered to the respondent. The attomeys did not as much as bring Ms. Smit to Court, for her to come and confirm the alleged withdrawal of opposition, neither did they obtain an affidavit from her to that effect. It does not appearthat Mr. Stevenson ever considered these options because he brought, instead, Mr. Smit, who is neither the respondent nor, contrary to what Mr. Stevenson said, the respondent's agent. I did not give Mr. Smit an opportunity to give evidence, in the light of the fact that it was not being suggested that he had been lawfully

give it judgment by default, having been informed that it appeared that the respondent's attorneys had withdrawn and it being clear that the notice of withdrawal had not been delivered to the respondent. The attomeys did not as much as bring Ms. Smit to Court, for her to come and confirm the alleged withdrawal of opposition, neither did they obtain an affidavit from her to that effect. It does not appear

that Mr. Stevenson ever consid

ered these options because he brought, instead, Mr. Smit, who is neither the respondent nor, contrary to what Mr. Stevenson said, the respondent's agent. I did not give Mr. Smit an opportunity to give evidence, in the light of the fact that it was not being suggested that he had been lawfully

18

mandated to represent the resp

ondent in respect of the allege

d decision by the respondent not to oppose the application.

[36] Having been informed by Mr. Smit that the respondent was withdrawing its

opposition to the application, Mr. Stevenson did not file a notice of withdrawal of opposition thereto. He clearly had opportunity to do so, because he had time to file the defective notice of withdrawal by the respondent's attorneys of record.

[37] If one applies the so-called "usual rule" that a party that seeks and obtains

a postponement pays the costs occasioned by such postponement(VanRooyen v Naude1929OPD122-3, a decision discussed in numerous subsequent decisions and applied in many of them), the applicant would have to pay costs occasioned by the postponement. That would, surely, be unjust. Fairness to both sidesin an action is a major consideration when the question of costs is being determined.(Gelb v Hankins,1960(3)SA 687 (AD), at 694). As Coleman, J said inBurger v kotze and Another1970(4) SA 302 (W), at 304E-F.

a postponement pays the costs occasioned by such postponement

(Van

Rooyen v Naude

1929

OPD

122-3, a decision discussed in num

erous subsequent decisions and applied in many of them), the applicant would have to pay costs occasioned by the postponement. That would, surely, be unjust. Fairness to both sides

in an action is a major conside

ration when the question of costs is being determined.

(Gelb v Hankins,

196

0(3)

SA 687 (AD), at 694). As Coleman, J said in

Burger v kotze and Another

1970(4) SA 302 (W), at 304E-F.

"I do not think it is correct to state as a ge

neral rule that the wasted costs

are to be paid by the party who seeks a postponement."

See also,

Van Staden v Union and

SWA

Insurance Co, Ltd

1972

(1) SA 758(E).

[38] Awarding costsde bonis propiisagainst a legal representative is a rare occurrence and is not to be lightlyresorted to. It is undesirableto make legal practice, especially for attorneys, equivalent to a quagmire or a landmine-infested territory. Courts should not, however, hesitate to award such costs in appropriate circumstances and thus protect parties who are not responsible for wasted costs from facing costs unfairly. With litigation so unreasonably costly, in my view, an award of costs on a party is often terminal to the party's action. In any event, it makes a huge dent in any

[38] Awarding costs

de bonis propiis

against a legal representative is a rare occurrence and is not to be lightly

resorted to. It is undesirable

to make legal practice, especially for attorneys, equivalent to a quagmire or a landmine-infested territory. Courts should not, however, hesitate to award such costs in appropriate circumstances and thus protect parties who are not responsible for wasted costs from facing costs unfairly. With litigation so unreasonably costly, in my view, an award of costs on a party is often terminal to the party's action. In any event, it makes a huge dent in any

19

party's financial resources and would, on the facts of this case, in all probability, have crippled the respondent or Ms. Smit, unjustifiably. It would have cost the respondent's attorneys very little and, in any event, no more than it cost them to file the notice of withdrawal as attorneys of record, for them to file, instead, a notice of withdrawal of opposition, with a tender by the respondent to pay costs occasioned thereby.

[39] An attorney guilty of sufficiently reprehensible conduct or who displays unreasonable, reckless or negligent conduct in the handling of his or her client's affairs or case renders himself or herself open to an award of costsde bonis propiisagainst him or her.Jenkins v F.J.J de Souza and Co. (Pvt)1968 (4)SA559(R); Nkosi v Caledonian InsuranceCo.1961(4)SA 649(N), at 663C-D; Machumela v Santam InsuranceCo.Ltd 1977(1) SA 660 (AD); Washaya v Washaya1990(4)SA419(Z.H.), at 45G-I; Khan v Mzovuyo Investments (Pty) Ltd1991 (3)SA47(Tk), at 48G-I.Flemming J's warning inTransorient (supra)should be added to the many voices that warn of the danger of such conduct on the part of legal practitioners.

[39] An attorney guilty of sufficiently reprehensible conduct or who displays unreasonable, reckless or negligent conduct in the handling of his or her client's affairs or case renders himself or herself open to an award of costs

against him or her.

Jenkins v F.

J.

J de Souza and Co. (Pvt)

1968 (4)

559

(R); Nkosi v Caledonian Insurance

Co.1961

1961

(4)

SA 649(N), at 663C-D; Machumela v Santam Insurance

Co.

Lt

d 1977(1) SA 660 (AD); Washaya v Washaya1990

1990

419

(Z.H.), at 45G-I

; Kh

an v Mzovuyo Investments (Pty) Lt

d

1991 (3)

47

(Tk

), at 48G-I

Flemming J's warning in

Transorient (supra)

should be added to the many voices that warn of the danger of such conduct on the part of legal practitioners.

[40] The case was postponed

sine die,

and the respondent's

erstwhile

attorneys (and not Mr. Stevenson personally) was ordered to pay costs occasioned by the postponement,

[41] In the course of my preparation of this judgment and after the case had

been postponed, I came across the case ofTake and Save Trading,CCv Standard BankofSA Ltd,2004(4) SA 1 (SCA), where Harms JA says the following, at 4H-5B;

been postponed, I came across the case of

Take and Save Trading,

CC

v Standard Bank

SA Ltd,

2004(4) SA 1 (SCA), where Harms JA says the following, at 4H-5B;

"One of the oldest tricks in the book is the practice of some practitioners, whenever the shoe pinches, to withdraw from the case (and more often than not to reappear at a later stage), or of clients to terminate the mandate(more often than not at the suggestion of the practitioner), to force the court to grant a postponement because the party is then unrepresented. Judicial officers have a duty to the court system, their colleagues, the public and the parties to ensure

"One of the oldest tricks in the book is the practice of some practitioners, whenever the shoe pinches, to withdraw from the case (and more often than not to reappear at a later stage), or of clie

nts to terminate the mandate

(more often than not at the suggestion of the practitioner), to force the court to grant a postponement because the party is then unrepresented. Judicial officers have a duty to the court system, their colleagues, the public and the parties to ensure

20

that this abuse is curbed by, in suitable cases, refusing a postponement. Mere withdrawal by a practitioner or the mere termination of a mandate does not. contrary to popular belief, entitle a party to a postponement as ofright."

that this abuse is curbed by, in suitable cases, refusing a postponement. Mere withdrawal by a practitioner or the mere termination of a mandate does not. contrary to popular belief, entitle a party to a postponement as of

right."

[42] It appears to me that this statement is so wide that it could be said to

include every situation where an attorney withdraws at the last moment on account of termination of his or her mandate at the last moment. This, according to Mr. Stevenson, is what happened in the present case. Talking for myself, I must say I am not in a position to agree that, "more often than not," clients "terminate" their mandates "at the suggestion of the practitioner(s)." I have no reason todoubt the integrity of "practitioners," i.e. attorneys, as a branch of the legal profession. Even if what the learned judge of appeal has observed is general practice, I have sufficient evidence in the present instance to know that that is not the case here. Mr. Stevenson brought Mr. Smit, who, according to him, would have assured me that the notice of withdrawal was genuine. The idea was to assure me that it was unnecessary to postpone the application, the very opposite of what Harms, JA's has experienced. I have already stated that I refused to make an order against the respondent because of my interpretation of the right of access to courts and the remarks by Yacoob, J inDe Beer (supra),in that regard.

include every situation where an attorney withdraws at the last moment on account of termination of his or her mandate at the last moment. This, according to Mr. Stevenson, is what happened in the present case. Talking for myself, I must say I am not in a position to agree that, "more often than not," clients "terminate" their mandates "at the suggestion of the practitioner(s)." I have no reason to

doubt the integrity of "practiti

oners," i.e. attorneys, as a branch of the legal profession. Even if what the learned judge of appeal has observed is general practice, I have sufficient evidence in the present instance to know that that is not the case here. Mr. Stevenson brought Mr. Smit, who, according to him, would have assured me that the notice of withdrawal was genuine. The idea was to assure me that it was unnecessary to postpone the application, the very opposite of what Harms, JA's has experienced. I have already stated that I refused to make an order against the respondent because of my interpretation of the right of access to courts and the remarks by Yacoob, J in

De Beer (supra),

in that regard.

[43] Both Rule 16(4) and Harms, JA remarks appear to leave me with the

ultimate discretion, even in circumstances where the notice of withdrawal is faultless. In Rule 16(4)(b), referring to a notice of withdrawal that has been delivered to all parties concerned, including the erstwhileclient, it is stated that

ultimate discretion, even in circumstances where the notice of withdrawal is faultless. In Rule 16(4)(b), referring to a notice of withdrawal that has been delivered to all parties con

cerned, including the erstwhile

client, it is stated that

"it shall not be necessary to serve any documents upon such party[the erstwhileclient of the withdrawing attorney]unless the court otherwise orders ... "(Emphasis added.)

"it shall not be necessary to serve any documents upon such party

[the erstwhile

client of the withdrawing attorney]

unless the court otherwise orders ... "

(Emphasis added.)

[44] It is, therefore, contemplated that a Court, which is seized with a scenario

where the notice of withdrawal is perfect and where the party whose attorney has withdrawn fails to notify other parties of a new address for service, may still order that there be service of documents on such party in any other appropriate manner. Harms, JA, himself, qualifies his statement by making it clear that it is only "in suitable cases" that a postponement may be refused where the party whose attorney has withdrawn,after the case has been set down for a hearing, is in default.

where the notice of withdrawal is perfect and where the party whose attorney has withdrawn fails to notify other parties of a new address for service, may still order that there be service of documents on such party in any other appropriate manner. Harms, JA, himself, qualifies his statement by making it clear that it is only "in suitable cases" that a postponement may be refused where the par

ty whose attorney has withdrawn,

after the case has been set down for a hearing, is in default.

[45] I am of the view, in any event, that Harms, JA's remarks are

obiter.

He

was not dealing with Rule 16(4). That was a case where, in the courtaquo,as Harms, JA puts it, "the defendants' legal team withdrew without proffering any reason." The defendants then applied for a postponement. In grudgingly granting the postponement, the learned judge, PC Combrinck, J,

was not dealing with Rule 16(4). Tha

t was a case where, in the court

quo,

as Harms, JA puts it, "the defendants' legal team withdrew without proffering any reason." The defendan

ts then applied for a postponem

ent. In grudgingly granting the postponement, the learned judge, PC Combrinck, J,

"expressed in no uncertain terms that he thought that there was little merit in two aspects of the defendants' case and that the postponement ... amounted to an exercise in futility ... When the matter was again enrolled, the defendants, now represented by another counsel applied by way of notice of motion, for the Judge to recuse himself. He refused the application and the subsequent one for leave to appeal met the same fate. This Court eventually granted leave. 3A-4A.

"expressed in no uncertain terms that he thought t

hat there was little merit in tw

o aspects of the defendants' case and that the postponement ... amounted to an exercise in futility ... When the matter was again enrolled, the defendants, now represented by another counsel applied by way of notice of motion, for the Judge to recuse himself. He refused the application and the subsequent one for leave to appeal met the same fate. This Court eventually granted leave. 3A

4A.

The question of the entitlement or otherwise of a party, whose legal

representative withdraws at the last minute, to a postponement was dealt with inTake and Save TradingCC (supra), the context of deciding whether or not PC Combrinck, J was entitled to say what he said about the genuineness of the application for a postponement.

representative withdraws at the last minute, to a postponement was dealt with in

Take and Save Trading

CC (supra), the context of deciding whether or not PC Combrinck, J was entitled to say what he said about the genuineness of the application for a postponement.

[46] Finally, concerning Harms, JA's views, as expressed in that case, I must

point out that he does refer to "Everyone [being] entitled to a fair trial and [that] that includes the right to a hearing before an impartial adjudicator." He goes on to say; "This common law right is now constitutionally

point out that he does refer to "Everyone [being] entitled to a fair trial and [that] that includes the right to a he

aring before an impartial adjud

icator." He goes on to say; "This common law right is now constitutionally

22

entrenched." It is clear, however, that he makes those remarks in the context of an application for recusal for he says:

"Present a reasonable apprehension of bias, the judicial officer is d

uty bound to recuse himself." 4B

The authorities he cites, in Footnotes 1 and 2, includingPresidentofthe RepublicofSouth Africa and OthersvSouth African Rugby FootballUnion and Others1999(4) SA 147 (CC), relate to the question of recusal.

The authorities he cites, in Footnotes 1 and 2, including

President

the Republic

South Africa and Others

South African Rugb

y Football

Union and Others

1999(4) SA 147 (CC), r

elate to the question of recus

al.

[47] In conclusion, I re-iterate that the respondent's attorneys of record are

ordered to pay,de bonis propiis,the costs of the postponement, which postponement was occasioned by their failure to deliver their notice of withdrawal as the respondent's attorneys to the respondent, in terms of Rule 16(4)(a), (c) and (d) .

ordered to pay,

the costs of the postponeme

nt, which postponement was occasioned by their failure to deliver their notice of withdrawal as the respondent's atto

rneys to the respondent, in term

s of Rule 16(4)(a), (c) and (d) .

J NM. POSWAJUDGE OF THE HIGH COURT

J N

M. POSWA

UDGE OF THE HIGH C

OURT

_._--

HEARD ON: 24 January 2005

FOR THE APPLICANT: Adv B GradidgeINSTRUCTED BY: MESSRS Kramer

&

Viljoen C/o Attorneys FOR THE RESPONDENT: Adv M Stevenson

INSTRUCTED BY: MESSRS Van Huyssteens C/o Attorneys DATE OF JUDGMENT: 25 April 2005