South Africa: Free State High Court, Bloemfontein

IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Case number:   630/2017

In the matter between:

ONE TIME DREAM TEAM PROMOTIONS  AND EVENTS

MANAGEMENT CC                                                                                                   Plaintiff

And

MANGAUNG METROPOLITAN MUNICIPALITY                                                  Defendant

HEARD ON:                30 JANUARY 2018

JUDGMENT BY:          MATHEBULA, J

DELIVERED ON:        31 JANUARY 2018

[1] Sometime in January 2017 the plaintiff issued summons against the defendant claiming inter alia payment of the amount of R1 199 620.35 plus interest a tempore morae on the aforesaid amount  calculated from the 1ih November  2016  until date of  final payment.  The claim was based on a written agreement entered into by and between the parties. The defendant in defence raised a special plea alternatively denied that the plaintiff complied with its obligation.

[2] On the day of trial to wit 30 January 2018, the parties approached me  in chambers and requested to engage each other with a view to settle the matter. This was generously granted. Around tea time they emerged and informed me about the progress that they were making and that only few issues were outstanding. After lunch time they presented me with a draft order and beseeched that it be made an Order of Court. They  further informed  me that they could not agree  on the costs aspect. This is the bone of contention and what I am called upon to adjudicate on.

[3] The question to award costs or not lies in the discretion of the court. This principle was succinctly stated in Union Government v Heiberg 1919 AD 477 at 484 per Solomon AJ in the following manner:-

“The ordinary practice is, of course, that costs follow the event but that is subject to the general rule of our law that costs - unless expressly otherwise enacted - are in the discretion of the Judge…”

[4] The discretion referred to should not be exercised in a vacuum. In Ward v Sulzer 1973 (3) SA 701 (A) at 706 G the court pointed out that:-

“In awarding costs the Court has a discretion, to be exercised judicially upon a consideration of all the facts; and, as between the parties, in essence it is a matter of fairness to both sides. See Gelb v Hawkins,  1960  (3)  SA  687  (A.D.)  at  page  694  A;  and  Graham v Odendaal, 1972 (2) SA, 611 (A.D.) at page 616. Ethical considerations may also enter into the exercise of the discretion; see Mahomed v Nagdee, 1952 (1) SA 410 (A.D.) at page 420 in fin”.

[5] Counsel for  the  plaintiff  argued  that  the  defendant  must  bear  the costs because the plaintiff has substantially succeeded in its  claim  and that the defendant has accepted liability. The submission of the counsel for the defendant is essentially that the plaintiff was not prepared to proceed with the trial to finality hence the settlement that part of the claim stand over still to be determined at a later stage.

[6] Clause 10 of the written agreement between the parties provides that parties must engage in mediation processes during any dispute before  embarking  on “normal   legal  procedures”.    This can  only  be done before issuing  summons.   The plaintiff issued summons  on  the 8^th February 2017.   It appears that the plaintiff attempted mediation

only three (3) months  later as  shown in the communication   between parties around the 8^th May 2017. This clause cannot be interpreted to mean that dispute would be declared when the plea was served and filed. In that scenario the parties would have reached litis contestatio  of the "normal legal procedures". The plaintiff in my view, brought the matter before court prematurely and cannot blame any other party for incurring costs

[7] The argument  about  substantial  success  is also misplaced.    At  the moment the parties have an agreement on approximately 28% of the claim.  The substantial portion of it still has to be agreed upon at  a later stage when proper documents are on hand and the parties are ad idem on every line item.

[8] The defendant, on the other hand, appears to have been playing for time and contributed to the delay in the finalisation of this matter. Initially the basis of the defence was a denial that the plaintiff has not performed as per the written agreement. Through engagement the defendant accepted liability and agreed to  make  payment  of R350 000 and almost the entire claim at a later stage. It is undesirable that a public entity should conduct business utilising public purse in such a flippant and truant manner. The time has come that the court should hold public officials engaged in this practice personally liable for legal costs. Again it appears that the defendant was correct not to pay over the money to the plaintiff without proper basis. Even at this late stage the plaintiff has not provided such documents or given cogent reasons regarding their unavailability.

[9] In this matter, I was not privy to the discussions culminating in the settlement agreement. In the exercise of my discretion and taking all relevant considerations into account, I remain unconvinced that any party should be ordered to pay the costs. It will be unjust and inequitable to do so.

[10] Accordingly, I make the following order:-

10.1 Each party to pay its own costs.

_________________

MATHEBULA, AJ

On behalf of Plaintiff:               Adv. WA van Aswegen

Instructed by:                           McIntyre van der Post

                                                    Bloemfontein

On behalf of Defendant:          Adv. ND Khokho

Instructed by:                           Maduba Attorneys

                                                    Bloemfontein

/roosthuizen