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THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION, MIDDELBURG LOCAL SEAT

CASE NO: A121 / 2018

In the matter between:

LUKE JIM                                                                                                                    APPELLANT

and

ACTIVE POWER (PTY) LTD                                                                                 RESPONDENT

 

J U D G M E N T

 

RATSHIBVUMO AJ:

Civil law and Procedure – Dismissal of summary judgment application – Applicant ordered to pay costs on attorney and client scale – Costs to be paid in terms of Rule 14 (10) Respondent granted leave to defend – whether a decision refusing summary judgment is appealable.

Held – on appeal – that a decision refusing summary judgment is an interlocutory ruling and cannot be appealed against.

Held further – that the costs order is appealable – that a costs order has to be in line with Rule 33 (3) of the Magistrates Court Rules unless a good cause is shown.

1. This is an appeal against the order granted by the magistrate for the district of Msukaligwa sitting at Ermelo, in which it refused an application for summary judgment by the appellant, granting the respondent leave to defend. The magistrate also ordered the appellant to pay costs on attorney and client scale in terms of Rule 14 (10). In this appeal the appellant argues that summary judgment should have been granted and as such, this court should set aside the ruling by the court a quo, and grant summary judgment in its favour. It is further argued by the appellant that the costs order granted by the court a quo is incompetent and should be reversed.

2. The respondent contended that a decision granting leave to defend was not appealable and that the costs order was justified in that the appellant knew or should have known that the respondent had a valid defence. It was contended therefore that the appeal court should not interfere with the findings of the court a quo.

3. As a general rule, an order refusing a summary judgment is not appealable for reason that it is an interlocutory order that does not have the effect of a final order.[1] The court a quo however went further to grant the punitive costs order against the appellant which is not normal at that stage of proceedings. When summary judgment is refused and leave to defend is given, the usual order for costs is that costs should be costs in the cause.[2] Rule 14 (10) of the Magistrates Court Practice however provides an exception to this practice. Rule 14 (10) provides,

“The court may at the hearing of an application for summary judgment make such order as to costs as it deems fit: Provided that if—

(a) the plaintiff makes an application under this rule, where the case is not within the terms of subrule (1) or where the plaintiff, in the opinion of the court, knew that the defendant relied on a contention which would entitle him or her to leave to defend, the court may order that the action be stayed until the plaintiff has paid the defendant's costs, and may further order that such costs be taxed as between attorney and client;”

4. Whereas the order granting the respondent leave to defend the action is not appealable, the costs order is appealable.[3] The purpose of Rule 14 (10) is to discourage parties from applying for summary judgments in circumstances that can be regarded as obviously unjustified or baseless. The question as to whether the costs order was fair or not is a matter of determining if the application for summary judgment was hopelessly baseless or not. It would therefore be apposite to consider the reasons furnished for the judgment. When asked for reasons for judgment, the magistrate was very brief:

“This is an application for summary judgment by Mr. Nkosi on behalf of the applicant wherein the respondents raised points in limine. The matter came before court for arguments on points in limine raised by the respondent. On the date of argument, Mr. Nkosi applied for a postponement and informed court that he only received the file the day before the court date and he is not ready to proceed with the application. The respondent opposed the application and applied that leave to defend be granted. Mr. Nkosi in response informed court that if leave to defend is granted, it will only delay the matter. The court was not satisfied with the reasons advanced by the applicants in their application for a postponement and by the reasons advanced by the applicant when opposing the application by the respondent. Leave to defend was then granted with costs of which costs order was not opposed by the applicant.”

5. There is nothing advanced by the magistrate that justifies the costs order she made against the appellant. In fact it appears from the reasons advanced that at the time of writing the reasons, she may have forgotten the nature of costs order she had made. This is manifested by the magistrate averring that “leave to defend was then granted with costs…” This statement suggests that costs were awarded on party and party scale.[4] But the order made was costs on attorney and client scale which were to be paid by the appellant before the matter could be reinstated. The closest that the magistrate came to advancing reasons for the costs order is a statement she made to the effect that the appellant did not oppose the costs applied for by the respondent. It is also noteworthy that while the respondent had indeed asked for costs on attorney and client scale, there was no application by the respondent for the proceedings to be stayed until the costs are paid. This was ordered by the court mero motu.

6. The mere fact that costs were applied for and not opposed is not enough reason to award costs. The party seeking punitive costs order needs to justify the need for the same. Failure to oppose the applications for punitive costs does not entitle the applicant to be awarded the same and it does not take away the court’s discretion to refuse or award costs. In Rowan v AF Noxaka & Company & another In re: AF Noxaka & Company & another v Rowan,[5] court refused to grant a costs order on scale requested irrespective of the respondent not opposing the same and in exercising its discretion, it ordered the costs on Magistrate Court scale in view of the fact that the matter could have been enrolled in the Magistrates’ Court. I am of the view that where the court exercises its discretion and awards the costs on scale not applied or in punitive manner as in casu, without any such request; then the court should have solid reasons for doing so. No such reasons appear from the reasons advanced and they do not appear from the record.

7. The usual costs order preferred when summary judgments are refused referred to in Ebrahim v Khan[6] should not be departed from lightly. In Tredoux v Kellerman[7] an application for summary judgment by attorney and advocate based on legal work performed on behalf of the respondent was dismissed with costs since the legal work was not a liquid document. On appeal, the court found that the appellant should have known that legal work would require evidence on the kind of work done, the fees charged and the seniority of counsel which made it hopelessly baseless to apply for summary judgment. The court however did not grant a punitive costs order or order that the proceedings be stayed until costs are paid as was done in casu.

8. It follows from the above that the appellant had applied for a summary judgment in circumstances which cannot be categorised as hopelessly baseless in that it was based on a liquid document. It also appears from the affidavit presented by the respondent in opposing the summary judgment that the appellant could not have known that the respondent had a valid defence. There is therefore no justification for departing from the normal practice referred to in Ebrahim v Khan[8]. In respect of the order granting the respondent leave to defend, we cannot interfere with that ruling for the reasons advanced above. We however find that the costs order was unjustified.

9. Consequently, the following order is made:

1.1 Appeal is upheld in respect of the costs order.

1.2 The order of the court below in respect of the costs is reversed and replaced with the following: “Costs of this application shall be costs in the cause.”

1.3 The appellant is awarded costs for this appeal.

 

 

          _____________________

                                                              TV RATSHIBVUMO

                                   ACTING JUDGE OF THE HIGH COURT

 

 

I agree.

 

_____________________

MB LANGA

ACTING JUDGE OF THE HIGH COURT

           

 

FOR THE APPELLANT                : MR SEEPAMORE

INSTRUCTED BY                          : SG SEEPAMORE INCORPORATED MBOMBELA

FOR THE RESPONDENT             : MR. VAN RENSBURG

INTRUSCTED BY                          : KMG & ASSOCIATES INCORPORATED ERMELO

DATE HEARD                                : 07 JUNE 2019

JUDGMENT DELIVERED          : 21 JUNE 2019

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