The Sunday Mail
Legal Matters with Arthur Marara
If you have been in court before, you will understand the concept of costs of suit. What differs is the scale of costs. If you have seen pleadings parties are always asking these, and for those who are represented, they are usually asking for these costs on an attorney-client scale.
As a business you need to be alert to these costs in litigation as you may end up paying your own attorneys and also the attorneys for the other party should the court order you to do so. These costs can be quite significant. Some people lose property to costs of suit. I have seen several firms being wiped clean by costs of suit.
The general principle of law is that costs follow the cause. A costs order is punitive in nature notwithstanding the scale or level of a costs award. The order is punitive because costs are invariably awarded against the losing party. (Dhokotera v ZIMRA HH 301/21). The usual question that arise is that of scale of costs. Most lawyers would seek costs of suit on an “attorney-client scale”. These are punitive.
Parties seek to protect themselves in future cases of litigation from incurring costs. A typical clause in a lease agreement is phrased like this;
“The Lessor shall pay the municipal rates and other charges for the premises and the Lessee shall refund the Lessor the amount paid on account of such rates and other charges upon request and against proof of payment being furnished. Should the issue of refund involve the Lessor’s lawyers, the Lessee shall be liable for any legal costs, collection commission and other charges incurred by the Lessor.”
The question that we want to deal with this week is, in what instances can costs on an attorney-client scale be ordered.
Balancing of interests
The courts’ approach to determining the issue of costs is guided by the trite principle that the award of costs is in the discretion of the court. In this regard, note should be taken of s 69 (3) of the Constitution. The provisions of that section provide that, “Every person has the right of access to the courts, or to some other tribunal or forum established by law for the resolution of any dispute.” Costs awards should, therefore, be made in the context of promoting and fulfilling the right of access to court and other institutions established by law which perform the role of dispute resolution. (Dhokotera v ZIMRA HH 301/21).
The award of costs is left to the court to determine in its discretion taking account of the circumstances of each individual case in which the issue of costs must be determined. The determination of costs should, therefore, not be based upon the sole consideration that the loser is mulcted with an order of costs. People may be discouraged to approach the court for fear of costs orders being made against them.
The role of courts is paramount in promoting human rights and the interests of justice and safeguarding them.
Courts must remain open and accessible institutions for every person to seek a determination of his or her rights and for the person sued to feel free to defend a claim made against him or her without fear of ending up insolvent on account of costs of litigation having to be paid by order of the very same courts which hold its doors open to every litigant. The rules of court however provide for what is considered a reasonable tariff of court costs as well as party and party costs.
The default position must, therefore, be to award party and party costs where an award of costs is made. There must therefore be special cause established by a litigant who claims costs at a more punitive level that such level of costs is deserved or justified.
Costs on a higher scale are not granted just at the asking. Such costs being punitive in nature must be justified. The lack of a bona fide defence per se would not be adequate to justify costs on the punitive scale. Court is expected to exercise its discretion on a case by case basis. The question of costs is ultimately within the discretion of the Court. Like every exercise of discretion, it must be judiciously exercised taking into account all relevant facts and always guided by the general principle that costs ordinarily follow the event unless circumstances of the case justify a deprivation of costs or award of punitive costs.
In the case of Ferreira v Levin N.O and Others 1996 (2) SA 984 (CC) it is stated at p 1012 as follows-
“The Supreme Court has over the years developed a flexible approach to costs which proceeds from two basic principles, the first being that the award of costs, unless expressly otherwise enacted is in the discretion of the court and the second that a successful party should, as a general rule, have his or her costs. Even the second
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Costs of suit explained
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principle is subject to a large number of exceptions where the successful part is deprived of his or her costs.
Without attempting either comprehensiveness or complete analytical accuracy depriving successful parties of their costs can depend on circumstances such as for example; the conduct of the parties, the conduct of their legal representatives, whether a party achieves technical success only, the nature of the litigants and the nature of the proceedings.”
In Nel v Waterberg Landbouwers Ko-operatieve Vereeniging 1946 AD 597 at 607 TINDALL JA aptly noted that: “The true explanation of awards of attorney and client costs not expressly authorised by Statute seems to be that, by reason of special considerations arising either from the circumstances which give rise to the action or from the conduct of the losing party, the court in a particular case considers it just, by means of such an order, to ensure more effectually than it can do by means of a judgment for party and party costs that the successful party will not be out of pocket in respect of the expense caused to him by the litigation.”
In National University of Science and Technology v National University of Science and Technology Academic Staff & Others 2006 (1) ZLR 107 (H) at 107G-H court held that: “Where an applicant’s conduct and behaviour is one of dishonesty which causes unnecessary financial expense to the respondents, justice dictates that they should not be put out of pocket because of limitations inherent in the usual party and party costs. In such circumstances, it is appropriate to award costs against the applicant on the scale of attorney and client scale.”
Further in J L Robinson Agencies (Pvt) Ltd t/a Amalgamated Motor Corporation v Danford Chamwarura & Another HH 322/2014 at page 7 MUREMBA J considered the issue of costs on a higher scale and concluded thus: “To register my disapproval and displeasure of both the first respondent and his legal practitioner’s conduct throughout the proceedings, I granted the applicant’s request for punitive costs. Litigants and their legal representatives ought to be candid with the courts. Deliberately making untruthful statements in affidavits should never be condoned. This is a case where if the applicant had asked for costs de bonis propriis against the first respondent’s legal practitioner I would have granted them without any hesitation.”
A perusal of case authorities shows that the circumstances in which attorney and client costs may be awarded include where a litigant is found guilty of: persisting with frivolous and vexatious proceedings; dishonesty or fraud of litigant; reckless or malicious proceedings; deplorable attitude towards the court; and other circumstances the court may deem appropriate. The court must, however, exercise its discretion with circumspection and reluctance so as not to act as a hindrance to parties in the pursuit of justice. See Wholesale Manufacturers and Overseas Trading Company (Pvt) Ltd v Rhodesian Barter and Export (Pvt) Ltd 1973(1) RLR 348. See also the reasoning of the Court in Midlands State University V Zimbabwe Insurance Brokers Limited HH HH 367-16 where the Court awarded punitive costs.
LEGAL DISCLAIMER: The material contained in this post is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the article/post. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.
Arthur Marara is a corporate law attorney practicing law in Harare, Zimbabwe. He is also a notary public and conveyancer. He is also passionate about labour law, commercial, and family law and promoting legal awareness and access to justice. He writes in his personal capacity. You can follow him on social media (Facebook Attorney Arthur Marara), or WhatsApp him on +263780055152 or email [email protected]
