Written by Marc Gevers, Candidate Attorney, checked by Lauren Squier, Associate and released by Maike Gohl, Partner at Schindlers Attorneys
23 August 2021
Background
This case deals with an application for leave to appeal against a costs order, which was made when the Applicant’s application to be admitted as a legal practitioner and enrolled as an advocate of the High Court was dismissed by the court a quo.
The primary issue raised by this appeal is whether an application for leave to appeal against a costs order only is precluded by the fact that the order on the merits does not form part of the appeal, and, further, what criteria should be used to determine whether leave to appeal should be granted.
The applicant contended that the appropriate costs order would be for each party to pay their own costs, whereas the respondents contended that costs on the attorney and client scale would be appropriate due to the element of vexatious litigation present. Accordingly, the second issue raised was whether punitive costs should be awarded where litigation, despite lacking the intent, has the effect of being vexatious.
Of note to this case is section 16(2)(a) of the Superior Courts Act 10 of 2013 which provides:
(i) When at the hearing of an appeal the issues are of such a nature that the decision sought will have no practical effect or result, the appeal may be dismissed on this ground alone; and
(ii) Save under exceptional circumstances the question whether the decision would have no practical effect or result is to be determined without reference to any consideration of costs.
By referring to case law, including Tebeila Institute of Leadership, Education Governance and Training v Limpopo College of Nursing and Another 2015 (4) BCLR 396 (CC) and Logistic Technologies (Pty) Ltd v Coetzee and Other 1998 (3) SA 1071 (W), it was expressed that appeals on costs alone are very rarely countenanced, and are often discouraged unless the applicant can evidence the existence, or reasonable existence, of exceptional circumstances. An example of such exceptional circumstances would be the failure to exercise judicial discretion in the awarding of the costs order.
Once the hurdle of section 16(2)(a) has been passed, the court can only then consider sections 17(1)(a) and (b) of the Superior Courts Act. Where sections 17(1)(a) and (b) provide that leave to appeal may be granted where the court is of the opinion that the appeal itself would have reasonable prospects of success, or there exist compelling reasons as to why the appeal should be heard and that the decision being appealed does not fall within section 16(2)(a).
The applicant in casu failed to provide any argument to persuade the court that an appeal court would find exceptional circumstances.
Court Held
It was confirmed by the Court that a court is not precluded from considering an appeal directed only at costs, and section 16(2)(a) provides the court discretion to decide whether exceptional circumstances exist to warrant the hearing of such an appeal.
The Court held that, due to section 16(2)(a)(ii), a court will not grant an application for leave to appeal against a costs order only, unless the applicant can satisfy the court that an appeal court would reasonably find that exceptional circumstances exist to warrant such leave to appeal. Further, the Court held that where such exceptional circumstances, such as failure to exercise judicial discretion, are absent there would be no reasonable prospect of success, and as such no leave to appeal should be granted.
Furthermore, the court held that in determining an appropriate cost order judicial discretion must be exercised to ensure a fair result. The court further held that where an application has the effect, but not the intent of being vexatious, an order as to costs should also be granted, however, that in doing so the court must be mindful to not restrict access to justice.
Accordingly, the court held that, in the circumstances, there existed no appropriate reason for a punitive costs order, however, that it would not be fair either for each party to have to carry its own costs, due to the litigation having the effect of being vexatious without intent. The court found that the general principle, that costs follow the event, should apply.
It was thus ordered that the appeal be dismissed, with costs on the party and party scale.
Value
This decision clarifies the application of section 16(2)(a) and confirms that while an application can be made to appeal against a costs order only, it is necessary for exceptional circumstances to be present. Further, this decision clarifies the position of the court in granting of costs orders for litigation which has the effect, if not the intent, of being vexatious.
