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FORM A

FILING SHEET FOR SOUTH EASTERN CAPE LOCAL DIVISION JUDGMENT

PARTIES: AUDREY NORTIER (formerly ALBERTS)

AND

ROAD ACCIDENT FUND

• Case Number: 1877/06

• High Court: SOUTH EASTERN CAPE LOCAL DIVISION

DATE HEARD: 17/10/07

DATE DELIVERED: 01/10/07

JUDGE(S): Jones J,

LEGAL REPRESENTATIVES –

Appearances:

• for the Appellant(s): ADV: P. Frost

• for the Respondent (s): ADV: G. Scott

Instructing attorneys:

• Appellant(s): LE ROUX INCORPORATED

• Respondent(s): BOQWANA LOON & CONNELLAN

CASE INFORMATION -

• Nature of proceedings : DAMAGES

For circulation

In the High Court of South Africa

(South Eastern Cape Local Division) Case No 1877/06

Delivered:

In the matter between

AUDREY NORTIER (FORMERLY ALBERTS) Plaintiff

and

ROAD ACCIDENT FUND Defendant

SUMMARY: Trial – separation of issues – by agreement, parties going to trial on the merits only – trial on the merits settled on the basis of the plaintiff being entitled to 50% of her proved or agreed damages – whether plaintiff entitled to costs of the trial on the merits or whether such costs should be reserved – discretion on costs exercised in favour of an order reserving costs.

JUDGMENT

JONES J:

[1] On 24^th January 2005 the plaintiff sustained bodily injuries in a motor collision which give her a statutory entitlement to compensation from the Road Accident Fund in an alleged amount of R206 251.10. She brought a claim accordingly. The Fund denied liability on the merits and placed the quantum of damages in issue. The matter was set down for trial before me on 16 October 2007.

[2] When the matter was called counsel advised me that at the rule 37 pre-trial conference the parties had agreed to proceed to trial on the merits only, the issue of the quantum of damages to be postponed sine die. I was asked to make an order to that effect, which I did. I was further informed that the parties had reached a settlement on the issue of liability and applied for a declaratory order that defendant was liable to pay the plaintiff 50% of her proved or agreed damages. I shall make such an order in due course.

[3] All that remains for decision is the issue of costs. The plaintiff sought a costs order in her favour at this stage because she has been successful on this leg of the litigation. The defendant sought an order reserving costs on the ground that it may only be liable to pay costs on the magistrates’ courts scale once quantum is fixed.

[4] Counsel submitted on behalf of the plaintiff that I should make an order in this case along the lines of the order made in Brauns v Shoprite Checkers (Pty) Ltd 2004 (6) SA 21 (E); Beetge v Road Accident Fund, SECLD Case No 1970/03 24 October 2003; George v Lid van die Uitvoerende Raad, Department van Onderwys, Bisho, ECD Case No 3261/06; Gillard v Nelson Mandela Metropolitan Municipality SECLD Case No 2038/01. In these cases orders for costs were given in favour of successful plaintiffs at the conclusion of a trial on the merits only. Thus, the judgment in the Brauns matter supra held at 221B-222C:

Mr Ford argues that I should not make a costs order in favour of the plaintiff at this stage because of the possibility of an award of damages within the jurisdiction of the magistrates' courts. He submits that I should reserve the question of costs. This is a point not infrequently raised where issues of negligence and damages are dealt with separately. An award of costs is within my discretion. It is invidious for me to speculate on allegations in the pleadings about the likelihood or otherwise of damages being awarded which exceed what can be awarded in the magistrates' courts. Whatever damages are awarded, there are significant advantages to litigants to separate the issue of liability from that of quantum, not least a tremendous saving in time and expense if the issue of quantum either falls away or else is agreed once the issue of liability has been determined. The experience in the Courts is that this saving is made in the large majority of cases. It is but rarely that the parties go to trial on quantum after the merits have been determined. This kind of advantage cannot be advanced, and could possibly even be frustrated, if a plaintiff must wait for costs because they are reserved despite his or her success on the merits. A successful defendant does not have this disadvantage.

In Faiga v Body Corporate of Dumbarton Oaks and Another Joubert AJ puts the issue thus at 660E - I:

“Mr Bruwer, who appeared for first defendant, prevailed upon me to reserve costs in the event of first defendant being held liable for plaintiff's damages. The substance of the argument is that the Court deciding the issue of quantum of damages would be better suited to decide the proper scale of costs. There exists a prospect, so the submission went, that the amount of damages might turn out to be so low that costs should be ordered on the magistrate's court scale. The argument is not without attraction. Other considerations, however, bear greater weight. The issues raised in these proceedings were not without difficulty; both factually and in law. Some of the answers in law had to be found without the guiding light of precedent. These considerations tend to support this matter having been brought in the Supreme Court. Then there is the principle of finality. A separation of issues in terms of the provisions of Rule 33(4), by its very nature, fragments a hearing. This undesirable feature is counterbalanced by the prospective advantage of a saving in costs. One of the great advantages of the Rule is that in matters of delict, depending on the outcome of the hearing on the merits, the issue of quantum might never arise. Also, in those instances where the plaintiff succeeds on the merits, the matter of quantum is often settled. Reserved costs orders cannot bolster this advantage, but might detract from it. Evidence and argument in this matter lasted eight days. It is in my judgment time to bring the curtain down on this part of the proceedings and not to have decisions on costs left in abeyance.”

It cannot be said of this case that the legal or factual issues are so complicated or difficult that they warrant the attention of the High Court. But the other points made by the learned Judge are weighty and they apply generally in cases where issues are separated and a trial is fragmented. In my view, a plaintiff whose entitlement to damages is established in these circumstances should ordinarily be awarded his or her costs of the proceedings to date, unless the reservation of costs is pertinently dealt with in the agreement to separate the issues. In this case it was not. The pre-trial conference minute records instead an agreement that the case should not be referred to another court. The parties in effect accepted that they should go to trial on the merits in the High Court. I think that in these circumstances the costs of the trial which have already been incurred should follow the event and should be on the ordinary scale of the court in which they were heard’.

[5] The Brauns judgment does not lay down a general rule that it is always appropriate to award costs to a plaintiff who has been successful in a separated hearing on one issue only. It is no more than an application of the overriding principle that costs are awarded at the discretion of the court, which should be exercised in a manner which is fair to both parties (Kruger Bros & Wasserman v Ruskin 1918 AD 63, 69; Intercontinental Exports (Pty) Ltd v Fowles 1999 (2) SA 1045 (SCA) 1055F-1056E). In the context of the costs of a separated issue Leach J put it thus in Van der Spuy v Minister of Correctional Services 2004 (2) SA 463 (SE) at 477F:

‘The relevant question here is whether a costs order should issue at this stage of the proceedings. Where the merits of a dispute are decided as a separate issue at the outset with the issues relevant to the quantum of the damages standing over, the Courts have, in appropriate cases, issued a costs order in favour of the plaintiff who succeeds on the merits - see, for example, Baptista v Stadsraad van Welkom 1996 (3) SA 517 (O), Faiga v Body Corporate of G Dumbarton Oaks and Another 1997 (2) SA 651 (W) at 669 and Grootboom v Graaff-Reinet Municipality 2001 (3) SA 373 (E) at 381 - 2. However, this is not an inflexible rule, and the facts of each case must be taken into account to consider whether it is appropriate in any given case for a costs order to issue at this stage. One of the relevant factors to be taken into account is whether the plaintiff will ultimately recover costs on the High Court scale and it would certainly be grossly unfair to the defendant to award the plaintiff High Court costs at this stage of proceedings when there is the possibility of the ultimate award falling within the jurisdictional limits of the magistrate's court’.

[6] In the present case the plaintiff was obliged to come to trial on the merits because that issue was settled only at the doors of the court. She was successful and is unquestionably entitled to a costs order. Frequently, the courts will try to do justice to her by not making her wait for her costs, especially in a case such as this where, on the face of it, she would appear to have suffered a diminution in earning ability and is not a person of means easily able to carry the costs of litigation, and especially where the parties agreed to go to trial in the High Court on the issue of liability. On the other hand, it is unfair to the defendant to order it to pay costs on the High Court scale where there is a real possibility, and not merely a notional possibility, that it will be able to argue successfully at the end of the trial that costs should be confined to the magistrate’s court scale because of the amount of damages which the plaintiff is able to prove and recover. The plaintiff’s claim is for R206 251-10. Even if she proves it in full (including the full amount of a claim for general damages and the full amount of an estimate for impaired earning capacity), her damages will be limited to 50% of the claim, which is very little more than the award which can be made in a magistrate’s court. While the defendant did not, when agreeing to separate issues at the pre-trial conference, pertinently reserve the question of the scale on which costs should be awarded, it clearly indicated its desire to raise the point in due course by recording its view that the matter should be transferred to the magistrates’ courts. In these circumstances, considerations of fairness to the plaintiff do not outweigh the unfairness to the defendant were I to prevent it from raising the point by ordering it to pay part of the costs on the higher scale at this stage. In my opinion it is therefore proper to let the matter of the costs of proceedings thus far stand over for decision pending a determination of the quantum.

[6] There will be the following order:

1. A declaratory order will issue that the defendant is liable to pay the plaintiff 50% of the amount of her proved or agreed damages.

2. The costs of the trial on the merits will be reserved for decision once the quantum of damages has been determined.

RJW JONES

Judge of the High Court

30 October 2006

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