Vari-Deals 101 (Pty) Ltd t/a Vari Deal and Others v Sunsmart Products (Pty) Limted and Another (21061/2004) [2007] ZAGPHC 140 (3 August 2007)

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IN THE HIGH COURT OF SOUTH AFRICA (TRANSVAAL PROVINCIAL DIVISION)

CASE NO: 21061/2004 Date: 03/08/2007 UNREPORTABLE

IN THE COURT OF THE COMMISSIONER OF PATENTS FOR THE REPUBLIC OF SOUTH AFRICA

CASE NO: 97/10535

In the matter between

VARI-DEALS 101 [PTY] L TD tla V ARI DEAL First Applicant

JILL BELINDA DRAK

Second Applicant

ZIMSTONE [PTY] LTD t/a ZIMSONE

Third Applicant

KEITH ARNOLD MUNRO

Fourth Applicant

UWE FRIT

Fifth Applicant

SPECIALITY SEWING SERVICES CC

Sixth Applicant

GUTENBERG ORANGE ADVERTISING

Seventh Applicant

AND

SUNSMART PRODUCTS [PTY] LIMITED Mr VON VOLLENHOVEN NO

First Respondent

Second Respondent

2

JUDGMENT

BOSIELO J

INTRODUCTION

1.1

The applicants and first respondent are locked in a fierce

legal battle relating to the use of a flag or banner. The first

respondent claims to have patent and design rights over

such a flag or banner. In an attempt to protect what it

perceives to be an unlawful use of its patent by the

applicants, it instituted proceedings in this court for an

interdict against the applicants. This dispute was referred to

oral evidence by this court during 2005.

1.2

It is common cause that the applicants had briefed one Adv

Bester, who allegedly is a specialist in intellectual property

law. The matter was enrolled for hearing on or about 4

November 2005. It then transpired that Adv Bester was not

available for the days on which the matter was enrolled. As

the applicants regarded Adv Bester as the only counsel

suitable for their case, they required a postponement. This

was vehemently opposed by the first respondent. Suffice to

1.3

1.4

3

state that there was a formal application for a postponement

which was heard in the urgent court before Patel J. Sadly for

the applicants the application was dismissed by Patel J with

costs on an attorney and own client scale.

Subsequent to the dismissal referred to in para 1.2 (supra),

the first respondent prepared a Bill of Costs for taxation by

the Taxing Master. It is not in dispute that the notice of

taxation together with the attached bills of costs was served

on the applicant's correspondents in Pretoria, viz Messrs

Hack, Stupel & Ross on 22 June 2006. It is furthermore not

in disputed that shortly thereafter Messrs Hack, Stupel &

Ross sent the said notice of taxation together with the bills to

the applicants' attorneys per telefax. It is common cause that

neither the applicants nor their attorneys attended the

taxation of the bill of costs by the Taxing Master on 15 June

2006 when the bills of costs were taxed in the amount of

R194302-44.

On or about 19 June 2006, the applicants' attorney received

a letter from the first respondents' attorneys demanding

payment of the taxed amount. According to the applicants'

1.5

4

attorney this was the first time he became aware of the

existence of the bills of costs. The applicants' attorney,

although admitting that the bills of costs and the notice of

set-down were duly sent to his offices by Messrs Hack,

Stupel & Ross, he is unable to explain why same was never

bought to his attention. In the circumstances, he accepted

that the fault lay at the door of his own office. Suffice to state

that after some exchanges of correspondence between the

respective firms of attorneys representing the parties, the

applicants' attorneys was advised by a letter dated 31

August 2006 from the first respondents' attorneys that the

first respondent declined to consent to a re-taxation of the

bills of costs. In the interm in and out of fear of execution

against their properties, the applicants paid the taxed amount

into the account of the first respondents' attorneys, without

the knowledge of their attorneys.

As applicants' attorney was concerned about the state of

affairs and the respondents' intransigence, he reported the

matter to his professional insurers, who in turn instructed a

specialist cost consultant to prepare an opinion regarding the

bills. Suffice to state that the specialist cost consultant, Ms

5

Belinda Patricia Spiers (Spiers) furnished her report on 7

August 2006. It is clear from Spiers' report, attached to the

papers as "Annexure J" that she was of the opinion that the

amounts taxed by the Taxing Master were grossly excessive

and in fact amounted to over-reaching. I find it necessary to

state that the Taxing Master filed reasons for the taxation

which are annexed to the papers as "Annexure CRJ". It is

clear from the Taxing Master's Report that amongst other, he

allowed higher tariffs on the basis that this matter was

complex due to the fact that it was a patent matter and

further that only specialist attorneys can do such matters

(see p 101). Furthermore, the Taxing Master held the view

that the mere fact that the bills of costs were in respect of an

application for a postponement only, that did not detract from

the fact the main application was a complicated patent

matter. As a result of this, the Master held, amongst others,

that this was “a complex postponement and that ±500 pages

of the main application became relevant to this application"

(see p 101). It is not in dispute that flowing from the above

perception, the Taxing Master permitted taxation at 3.5 more

that than the rate as prescribed by Rule 70.

1.6

1.7

6

It is important to note that at p 103, the Taxing Master

concedes that "the rulings made on the main bill had to be

applied to the correspondents bill. It does seem that this was

not done correctly. See for instance item 55 on the main bill

which was reduced to 1 ½ hours and item 58 on the

correspondents bill which was not reduced." Furthermore, at

the end of the report, the Taxing Master concedes further

that value added tax (VAT) should have been taxed off.

Relying amongst others, on the above- state concessions,

the applicants assert that there are reasonable prospects

that should there be a re-taxation of the bills of costs, the

bills might be appreciably reduced.

On the other hand, first respondent also filed a report by his

own specialist costs consultant. Sophia Avvakoumides who

severely attacked and criticised the report by Spiers. Suffice

to state that Avvakoumides supported the bills as taxed by

the Taxing Master and asserted that the Taxing Master had

applied her mind properly to the bills and further that the bills

are justified by that fact that they are based on an

"Agreement and Mandate between attorney and client,"

which was validly concluded between the respondents and

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their attorneys? It is worth mentioning that the bills of costs

under attack were prepared by Avvakoumides. This in a

nutshell set the scene for this application before me.

2.

LEGAL SUBMISSIONS

2.1 It was argued on behalf of the applicants by Adv Segal that

whatever delay there was in bringing this application for

review and the setting aside of the Taxing Master's taxation of

the first respondents' bills and the concomitant allocatur is

satisfactorily explained in the application papers. Mr Segal

argued that it is abundantly clear from the actions taken by the

applicant's attorneys that no mala fide or unlawfulness can be

attributed to him in failing to attend the taxation of the bills. It is

clear from the papers that after he became aware of the taxed

bill, Mr Sklaar tried to resolve this with the respondents'

attorney. He also informed his insurers. In the process he

sought and obtained legal opinion. When it became clear that

the first respondent were not willing to accommodate him, he

took action. With respect, I agree with Mr Segal that the

applicants cannot be faulted for the delay which was caused

by the applicants' attorney valiant attempts to resolve the

problem amicably. To my mind the mistakes which occurred in

8

Mr Sklaar's office (the applicants' attorneys) which led to him

not attending the taxation is the sort of mistake which occurs

on a daily basis in attorney's practices. No evidence was

adduced to contradict Mr Sklaar's assertion that had he known

of the notice of set down for taxation, he would have attended

the taxation, In my view, his failure to attend the taxation is

excusable.

2.2 Regarding the actual amount taxed, Mr Segal argued

vigorously that the amount taxed and allowed is so grossly

excessive that it induces a sense of shock. He submitted that,

had the applicants been represented during the taxation, they

would have impugned a number of items on the bills which are

patently exorbitant and unjustified. Furthermore, he argued

that without failure, the applicants would have seriously

questioned the basis on which the Taxing Master found that

simply because the main application relates to a patent, ipso

facto, the application for a postponement is also complex and

deserved a higher tariff than an ordinary tariff. Mr Segal

argued further that the Taxing Master seriously erred in

allowing fees for both the instructing attorneys and the

Johannesburg's attorney for attending together to a simple

9

application for postponement which, quite paradoxically, was

argued by senior counsel. Another question to be raised is the

necessity of having two senior, experienced attorneys

attending to a postponement which was handled by a senior

counsel.

2.3 The other point raised by first respondents was the fact that

the applicants had already paid the taxed amount without any

protest or reservation of rights to challenge it. If I understood

the respondents correctly, the argument is that by paying the

taxed bill, without protest, the applicants waived their rights to

object to the taxation. In responding to this, Mr Segal

submitted that it is clear from the facts of this case that the

applicant never acquiesced in the taxed bill or waived their

rights to impugn same. He argued that it is patently clear from

the facts, that the applicants merely succumbed to the serious

threats of imminent execution based on the taxed bill simply to

avoid unnecessary inconvenience and the concomitant

embarrassment. It is not in dispute that the respondents made

it crystal clear that they intended to execute against the

applicants property. Mr Segal argues that payment by the

applicants of the taxed bill, in the circumstances, qualified to

10

be termed involuntary payment. For this proposition, Mr Segal

placed great reliance on the dictum by De Villiers JP in

Niehous v Eloff 19.13 at p 188 where the learned judge stated:

"Where a Court has ordered a judgment to be

carried into execution, the mere payment of

the amount or part thereof by the party

condemned to pay is no doubt consistent. A

fortiori it seems to me that where a person

pays, as in this case, under pressure, to avoid

judgment being taken against him the next

day, the doctrine of acquiescence cannot be

relied upon. The fact of payment is consistent

with

respondent's

acquiescence

in

the

taxation, but it is equally consistent with his

anxiety to avoid judgment taken against him.

In such circumstances, therefore, it cannot be

said that the act is such an unequivocal one

that the other party is justified in drawing the

inference that there has been acquiescence in

the judgment. With regard to the question of

waiver, for a man waive to his rights there

must be clear proof that he did so with

2.4

11

knowledge of the facts, and there is no proof

of that here.”

In reply, Mr Labuschagne SC (for first respondent) argued

that there

is ample

by one

Mr

expert evidence

Labuschangne that the tariffs agreed upon between

respondent and their attorneys were reasonable in the

specialised field of patent attorneys. In the alternative, Mr

Labuschangne submitted that it is incorrect to allege that the,

Taxing Master did not apply his mind to the bills as it clear

from copies of the bills that the Taxing Master did consider

the bills and reduced some of the items reflected in the bills.

Reliance was also placed on the admission by Spiers that

during the taxation, the Taxing Master asked many questions

about certain items in the bills. Mr Labuschange, submitted

that as were no longer tariffs applicable, the Taxing Master

was correct to accept the 'Mandate and Agreement' as the

starting point. He argued further that the Taxing Master was

correct in regarding the application for postponement as

being complex by virtue of the fact that reference had to be

12

made to the main application to justify the request for a

postponement.

3.

CONCLUSION

3.1 First respondent raised as a principal objection to this

application the fact that the applicants used a wrong

procedure. Mr Labuschagne argued that this matter cannot be

brought to court under Rule 53 nor under Promotion of

Administrative Justice Act 2000 (PAJA) as the applicants

failed to set the proper factual foundation out. As a result, he

argued that this application be dismissed. With respect, I

disagree with Mr Labuschangne. This issue is not novel and

has enjoyed the attention of our courts on various occasions.

I have found considerable support and guidance in the

judgment of the Road Accident Fund v Luzuko Sifimba &

Others Case No 21/02 514/02 (Transkei)as yet unreported

where in a similar situation, the learned Miller J expounded the

requirement for such an application as follows:

"The requirements for a rescission in matters where there

has been a default of appearance are well-known; they

being (1) that the applicant must give a reasonable

explanation of its defaults (2) that the application must be

13

bona fide and not made with the intention of delaying the

matter; (3) that the applicant must show that it has bona

fide defence or in a matter such as this, that there is a

reasonable prospect of the allocatur being reduced"

Furthermore, Miller J stated the following important

principle to the effect that "The court has discretion in

matters such as these and a measure of flexibility is

required in the exercise of the court's discretion. An

apparently good cause defence may compensate for a

poor explanation for the default and vice versa."

3.2 A similar approach was adopted in Grunder v Grunder En

Andere 1990 (4) SA 680 (CP) where the correct legal position

concerning the rescission of an allocatur granted by default

was stated as follows at p 685 B-H:

"Na my mening is die beginsel van die gemenereg wat by

die tersydestelling van vonnisse by verstek geld, ook, van toepassing op die tersydestelling van die allocatur van n

Takseermeester. Die allocatur van 'n Takseermeester word

nie normaalweg as 'n vonnis bestempel nie; dit word

normaalweg

gesien

as

'n

administratiefregtelike

handeling. Die uitspraak van 'n Hof is ook maar 'n

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admimistratiefregtelike handeling, meer bepaaldelik 'n

regsprekende administrtiefregtelike handeling. Die pligte

van 'n Takseermeester by taksasie is kwasie-judisieel,

administratiewe handeling van regsprekende aard. Hy

moet partye of hul regsverteenwoordigers aanhoor,

desnoods self getuienis aanhoor, en 'n regterlike

diskresie uitoefen. Die verrigtinge voor hom is 'n geding in

die kleine.

Tersydestelling op gronde wat in De Wet and Others v

Western Bank Ltd (supra) vermeld word, geld stellig nie

ten

aansien

van

kwasie-judisiële

administratiewe

handelinge oor die algemeen nie. Ek hoef my nie hieroor

uit te laat nie. Die Kwasie-judisiele handeling van die

Takseermeester val egter in 'n besondere kategorie. In

Bills of Costs (Pty) and Another v The Registrar, Cape,

and Another 1979 (3) SA 923 (A) word die taksasieproses

so beskryf:

'It follows from what has been said above that

traditionally taxation has been, and still is, regarded as

an integral part of the judicial process and that the rights

and obligations of the parties to a suit are not finally

15

determined until the costs ordered by the Court have

been taxed.'

(Op 946B) Die takasie van koste is eintlik niks anders as 'n

kwantitisering

van

die

aanspreeklikheid

wat

die

kostebevel van die Hot oplê nie. Laasegenoemde word in

algemene terme gegee en is, sonder die Takseermeester

se medewerking, onvolledig en inderdaad onafwingbaar.

Ek kan geen rede sien waarom 'n litigant daardie gedeelte

van 'n vonnis teen hom wat deur die Takseermeester

gekwantitiseer word, as dit in sy afwesigheid gedoen

word,

nie op

dieselfde

wyse kan aanveg as 'n

verstekvonnis wat die Hot teen hom verleen nie."

Based on the above exposition, I am satisfied that Mr

Labuschagne's submissions are wrong.

3.3

have

given

this

matter anxious

and

careful

consideration. Without dealing with each and every item

as taxed by the Taxing Master, I am of the view that the

Taxing Master seriously misdirected himself in a number

of crucial issues which had an adverse and serious

effect on the taxation. It is clear that the misdirection

3.4

16

influenced him seriously in considering the bills. To

demonstrate the point, firstly it is clear to me that to a

large extent the Taxing Master was influenced to regard

this application for postponement as complex simply

because it relates to a patent matter. In my view, this

was a simple application for a postponement which

required no special legal or forensic skills. The fact that it

relates to a patent matter, is to my mind, an irrelevant

consideration.

However it is clear that the mere fact that it relates to a

patent matter was unfortunately, given undue and

unnecessary weight by the Taxing Master. In all

probability, this is the most important fact which unduly

persuaded the Taxing Master to allow fees to two senior

specialist patent attorneys attending to a postponement

whilst assisted by a senior counsel. In my view, this

cannot be justified. I cannot think of any logical and

cogent reason why the instructing attorneys in Durban

and the correspondent in Johannesburg deemed it

expedient and necessary to attend court in Pretoria

whilst there was a senior counsel who was breifed to

17

oppose a postponement. In my view, this is an abuse of

the system which regrettably resulted in extremely

exorbitant fees being allowed. Undoubtedly this was an

unnecessary duplication of legal services. This, in my

view, is an aspect which, if properly raised with the

Taxing Master, can significantly reduce the taxed bill.

3.3. It is clear that the Taxing Master considered himself bound

by the 'Mandate and Agreement' entered into by the parties.

Inasmuch as the Taxing Master has a duty to honour such

an Agreement which is properly and freely concluded by all

parties, the Taxing Master has a duty to ensure that the fees

taxed are justified, fair and reasonable. I do not think that the

existence of the 'Mandate and Agreement' should be

construed as giving any attorney a carte blanche to charge

and levy whatever fees he or she wishes to charge. It

remains an established and salutary principle of our judicial

system that attorneys irrespective of status or the nature of

the cases which they handle, are entitled to charge

reasonable fees for services rendered. Needless to state that

no attorney is entitled to over-reach his or her client under

the guise of a special 'Mandate and Agreement' concluded

18

with client. I regret to state that such a practice, if left

unchecked, would, without failure, open the doors wide for

abuse. No court can countenance such a practice which will

invariably precipitate the attorneys' profession into serious

disrepute. Needless to state that poor litigants would be left

unprotected and at the mercy and conscience of attorneys.

In my view, such a state of affairs cannot be countenanced. I

hold the view that the Taxing Master still retains a duty and

responsibility, notwithstanding any private agreement on fees

between attorneys and their clients, to determine, whether

the fees charged by attorneys are reasonable or not. For

very good and convincing reasons, various courts have

expressed serious concern and stern warnings against

allowing such a practice to flourish unchecked. This salutary

warning was more pointedly articulated by Van Dykhorst J in

Ben Macdonald Inc and Other v Rudolph and Other 1997 (4) SA 252 (1) at 258 C where he stated the following

" My approach that in attorney and own client

bills which have to be paid by the other party, the

attorney should not be given a free hand,

untrammelled by the frown of the taxing master, is

in conformity with the approach of the Appellate

19

Division in Nel v Waterberg Landbomers Ko­-

operatiwe Vereeniging 1946 AD 597and 608. The

Appellate Division, in placing its stamp of approval

on attorney and client costs, still insists that a

stricter approach, on taxation where the bill is

taxed against the losing party it is essential.........

to prevent injustice to the latter A court may

castigate a party in an award of, costs, but will not

countenance unjust treatment. "

Later at p 258 H Van Dykhorst J expressed the principle

more clearly and elegantly as follows:

"There is a further consideration. A court awarding

costs to be taxed on the basis of attorney and own

client, has in mind that such costs should be

reasonable and not unreasonable, exorbitant or

agreed upon collusively. It follows that even faced

with a written agreement between attorney and

client as to the work to be done, or fees to be

charged therefore, the taxing master is still

empowered to enquire into the reasonableness of

such agreement".

20

It is not without significance that in Cambridge Plan AG v

Cambridge (PTY) LTD and others 1990 (2) SA 574 (T) Swart

J, had reason to sound a serious warning in the following

clear but colourful terms­

" Any Agreement by the cost creditor to pay

his attorney at rates exceeding the tariff, and

particularly the reasons for such agreement, are

obviously relevant to

the question

whether

adherence to the tariff would be inequitable, and

due consideration must be given

to such

agreement and the reasons for making it. But, there

is, in my view, no rule for any general rule or

practice to the effect that any agreement that the

costs creditor may have made with his own

attorney to pay fees, at rates exceeding the tariff

must serve as the prime indicator, or principle (sic)

guideline, for determining what amounts to a

reasonable rate of remuneration to be paid by the

costs debtor. Any such rate or practice would

obviously be open to abuse and would facilitate the

unjust oppression of the debtor inconsistently with

Nel. "

3.4

3.5

21

I am satisfied on the facts of this matter that the Taxing

Master seriously erred, in considering himself bound by the

"Agreement and Mandate" in terms whereof the costs

creditor agreed to pay his attorneys at a much higher rate

than the one ordinarily allowed. Furthermore, I am satisfied

that the Taxing Master was improperly influenced to award

costs at a much higher tariff (3.5) by his acceptance of the

fact that this application for postponement was made

complex by the fact it related to a patent matter. It is

precisely as a result of this misdirection that the Master

accepted that the cost creditor was justified to be

represented during the application for a postponement by

two senior attorneys as well as senior counsel. I have no

doubt that if the costs debtor was represented during

taxation, these issues, which had a profound effect on the

ultimate bill, would have been debated with the Taxing

Master.

Based on the reasons adverted to above, I have no doubt

that there is a strong likelihood that should the bill be re­

considered,

it may be appreciably reduced.

In the

22

circumstances, and for the reasons adverted to above, I am

of the view that justice and fairness require that the allocatur

made by the Taxing Master in the applicants' absence be set

aside. In the peculiar circumstances of this matter, it have no

doubt that will be in the best interests of both parties that this

matter be remitted to the Taxing Master for proper

reconsideration where both parties will be afforded an

opportunity to debate whatever issues they may wish to raise

with the Taxing Master.

Having given this matter careful consideration, I hereby make

the following order:

1. The taxation of the bills of costs drawn on behalf of first

respondent together with the allocatur made by the

Taxing Master pursuant thereto are hereby set aside.

2. The matter is remitted to the Taxing Master to be re­

enrolled for a fresh taxation.

3. First respondent is ordered to pay the costs of this

application.

23

L.O BOSIELO

JUDGE OF THE HIGH COURT