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In the High Court of South Africa

(South Eastern Cape Local Division)

(Port Elizabeth High Court) Case No 565/07

Delivered:

In the matter between

HILMER WALTER OSTLING N.O. Plaintiff

and

ROAD ACCIDENT FUND Defendant

SUMMARY: Costs – order sought for the qualifying fees of an expert witness who was not called as a witness – the plaintiff intended going to trial in respect of an amended claim for past and future loss of earning capacity – the amendment arose from the expert’s opinion – the injured party died shortly before the trial and her executor was substituted as plaintiff – on the day before the hearing the plaintiff decided (a) to abandon the amended claim and to proceed with the claim as originally formulated; (b) not to call the expert; and (c) to settle the claim – plaintiff was held to be entitled to the qualifying fees of the expert because they were incurred at a time when the employment of the expert was reasonably necessary for the proper conduct of the litigation.

JUDGMENT

JONES J:

[1] This is an action for damages for personal injury brought against the Road Accident Fund in terms of the Road Accident Fund Act No 56 of 1996. On the morning of the trial I was advised that the parties had reached agreement on all but one of the issues in dispute. I was asked to make an order by agreement for payment of damages to the plaintiff in terms of paragraphs 1, 2, 3 and 4 of a draft order, and to resolve the remaining issue.

[2] The disputed issue is whether or not I should include in my order an order in terms of paragraph 5 of the draft order, which provides as follows:

‘Defendant is further ordered to pay the costs and reasonable qualifying expenses, if any, of the following expert witness: Dr Richard G Holmes, Psychologist’.

Dr Holmes’s evidence was foreshadowed in a medico-legal report prepared on behalf of the plaintiff. The intention was that he would testify primarily about the plaintiff’s claims for damages for loss of earning capacity, past and future. Neither party led evidence on the disputed issue, but both of them referred to documents which formed part of the record or which were handed in by consent.

[3] By way of background I must explain that the plaintiff is the executor in the estate of the late Sharon Anne Swart who was injured in a motor collision in Port Elizabeth on 24 January 2004. Ms Swart sustained a whiplash type injury to the neck. She claimed damages from the Road Accident Fund in consequence. The Fund denied liability. Ms Swart issued summons. By the second half of 2007 preparations for trial had reached quite an advanced stage. Of present relevance to the history and the time frames is that in the course of preparing for trial Ms Swart was re-examined by her expert neurosurgeon Dr Keeley during August 2007. After that, the parties held a pre-trial conference on 28 September 2007 and the plaintiff’s attorneys applied for a trial date. On 5 December 2007 the registrar notified the parties of the allocation of a trail date, 23 April 2008.

[4] In the course of his supplementary medico-legal report dated 27 August 2007 Dr Keeley commented that Ms Swart’s condition had deteriorated since he last saw her in August 2006, that excessive amounts of medication were now required to control pain and to enable her to function, and that

‘this situation is untenable and she will not be able to persist for much longer before her health is seriously affected because of the medication she is forced to take, or before her employment comes into frank jeopardy and she is forced into a situation where she is no longer able to support herself or her family’.

This led her attorneys to reassess her claims for damages for loss of income, which at that point included a claim for past loss in the sum of R69 300-00 and a claim for future loss in an amount of R567 000-00. To this end, the attorneys engaged the services of Dr Holmes who is an industrial psychologist, who conducted an examination of Ms Swart with reference to her impaired earning capacity, and who filed a report dated 13 December 2007. As a result of the contents of this report and consultations with counsel on 13 January 2008, Ms Swart’s attorneys advised her to change the basis of her claim for past loss of earnings and to include an increased claim for payment of R280 000-00 for lost income, and/or lost earning capacity, and/or lost earning ability in the past. They gave notice of Ms Swart’s intention to call Dr Holmes as an expert witness. He was also to testify on the issue of future loss of income, the claim for which, as I understand it, was also to be increased.

[5] On 19 January 2008, before any amendments were made, Ms Swart died. This caused the further conduct of the litigation to come to a halt until the appointment of an executor and his substitution as plaintiff in terms of rule 15. This occurred on 17 March 2008, about a month before the scheduled trial date. The executor had no alternative but to abandon the claim for damages for future loss of earning capacity. The need for an amendment to that claim fell away, and also the need for an expert witness to give evidence about it. Other claims also fell away. In addition, Ms Swart’s untimely death had the effect of eliminating those parts of the claims for general damages which sought compensation for future pain and suffering and future loss of amenities. The result was a notice of intention to amend the plaintiff’s pleadings which was quite different from that envisaged before Ms Swart died. The revised notice of amendment was filed on 11 April 2008, a few weeks before the trial. It dealt with the substitution of the executor as plaintiff and the abandonment of claims which could no longer be pursued. It persisted, however, with the plaintiff’s intention to increase the claim for past loss of earnings. Dr Holmes’s evidence remained relevant for this purpose. This part of the case, however, caused snags. Because the amendment was late, the Fund indicated in correspondence that it would require a postponement of the trial to enable the amended claim to be investigated and answered.

[6] At that time, settlement negotiations were in progress. On the day before the trial the Fund filed an offer of settlement in terms of rule 34. The plaintiff took stock of his position. Confronted with the uncertainty of whether the amendment to the claim for past loss of earnings and earning capacity was worth having to pay the costs of a postponement, he opted for retention of the original claim for past loss of earnings and abandoned that part of the amendment introducing the new claim. He then wrote to the Fund’s attorneys that he no longer would be calling Dr Holmes as a witness. This letter was dated 23 April 2008, the day before the trial was set down to commence. It noted that a postponement had become unnecessary.

[7] In the result, the plaintiff decided to accept the offer of settlement. It contained an offer to pay damages in a lump sum of R145 887-88, with ancillary orders for interest and costs. With regard to costs, the offer recorded a tender to pay

‘the plaintiff’s taxed costs as between party and party to the date of the service of this notice, including one necessary consultation with the plaintiff to discuss this offer in settlement and costs attendant upon the obtaining of payment . . . , and the qualifying expenses (the amount of such expenses to be fixed by the taxing master) of such witnesses as to which it may consent, and failing such consent, as may be ordered by the above Honourable Court’.

The plaintiff wanted the costs to include the costs and reasonable qualifying expenses of Dr Holmes, as well as those of the two other medical experts, Dr Keeley and Dr A Du Preez. The Fund agreed that it should pay the qualifying fees of Dr Keeley and Dr Du Preez. But not those of Dr Holmes. This is because Dr Holmes’s opinion in respect of the amended claim for past loss of earnings had become irrelevant. It was not pursued and neither was the claim for future loss of earning capacity. The plaintiff had indicated unequivocally on the day before the hearing that Dr Holmes was not to be called as a witness, that the claim for future loss of earnings was not to be proceeded with, and that the plaintiff now confined himself to the claim for past loss of earnings as originally pleaded.

[8] In considering the validity of the Fund’s reasons for excluding Dr Holmes from the list of experts covered by the costs tender, the first point is the distinction drawn by Mr Paterson for the Fund between the ordinary costs of Dr Holmes as a witness, on the one hand, and the fees incurred by the plaintiff to enable Dr Holmes to qualify himself as an expert witness, on the other. He drew the distinction because the wording of paragraph 5 of the draft order provides for an order awarding ‘the costs and reasonable qualifying expenses, if any’ of Dr Holmes. The distinction is well made. The question whether a litigant is reasonably entitled to the costs of a witness, and the amount to be allowed for his costs, is a matter for the taxing master. It is regulated by the law and practice of the taxation of costs, and by the applicable tariffs. Normally, the trial judge will not give directions in this regard, except where called upon to declare a party a necessary witness. In the absence of special circumstances, it is for the taxing master, not the trial judge, to determine whether the costs attendant upon subpoenaing and calling witnesses in the ordinary course were reasonably and properly incurred by a litigant, and the amount thereof. The qualifying fees of an expert witness are another matter. These fees are not ordinarily recoverable and the taxing master has no power to allow them. This is because rule 70 (schedule D5) of the uniform rules lays down that the preparation fees of a witness shall not be allowed on taxation without an order of court or the consent of the parties. See also Stauffer Chemical Co v Safsan Marketing and Distribution Co (Pty) Ltd 1987 (2) SA 331 (A) 355C-F; and Community Development Board v Katija Suliman Lockhat Trust 1973 (4) SA 225 (N). The court held in The Government v The Oceana Consolidated Co 1908 TS 43 that the trial judge will make an order for the costs to include the qualifying fees, if any, of the expert witness only if satisfied that those fees were reasonably necessary. If a special order is made, the practice is to leave it to the taxing master to fix the amount. Qualifying fees are confined to the costs incurred for the purpose of enabling the expert witness to acquaint himself with the facts, circumstances and peculiarities of the particular case before him so as to equip himself to express his expert opinion on the issues in that case. These are the preparation fees to which the rule refers. Unless there is good reason to the contrary, the trial judge will not concern himself with the same witness’s ordinary costs as a witness because these have no bearing on the need to prepare himself to express an expert opinion. I shall therefore make no order in respect of the ordinary costs of Dr Holmes as a witness.

[9] The Fund’s objection to the qualifying fees of an expert witness who is not called to give evidence is understandable. But in my view its argument in support of its objection is not validly applicable to the facts of this case. I accept that it may be unreasonable, and indeed unjust, for an unsuccessful defendant to be mulcted in costs in respect of the qualifying expenses of an expert witnesses who is not called as a witness because, for example, his opinion turns out not to advance the plaintiff’s case. But there are authorities which hold that in the light of the prevailing facts and circumstances the decision not to call an expert witness does not necessarily give rise to an inference that his qualifying fees were not reasonably necessary, and does not necessarily deprive a successful plaintiff of being awarded the expert’s qualifying fees as part of his party and party costs. Some of the authorities are referred to above and will be discussed further below. Mr Frost argued for the plaintiff that this is one of those cases. I believe that his argument is sound. It is in accordance with the general principles upon which costs orders are made, and is in my opinion justified by the facts of this case.

[10] The purpose of a costs order, including a special order for the qualifying fees of an expert witness, is to compensate the successful party for the reasonable expenses he or she incurs by being obliged to go to the courts to enforce or defend legal rights. This purpose gives recognition to the underlying rule that a successful litigant is ordinarily entitled to his or her costs. The courts apply this rule within the framework of judicial discretion. The discretion on costs must be exercised properly and judicially in the light of the facts of the particular case in order to achieve a balanced result which is fair and just to both parties. This is trite. See the summary and discussion of the principles in Cilliers Law of Costs (3^rd ed) paragraph 1.03, 1.04, 1.05 and 1.08 and the authorities collected there. Is it fair and just to both parties that Dr Holmes’s qualifying fees be part of the costs in this case? Such an order is in accordance with the application of the general rule that the reasonable and ordinary costs of litigation follow the event. In my view, there is nothing about the facts and circumstances of this case to indicate that these fees were not reasonably necessary in the ordinary conduct of the litigation.

[11] Dr Holmes was brought in as an expert as a direct result of Dr Keeley’s opinion that Ms Swart’s condition had deteriorated to the point that her capacity to earn a living and to support herself and her family was about to become compromised in a degree more serious than had hitherto been believed to be the case. That opinion was expressed in August 2007. At that point the decision to involve Dr Holmes was a reasonable decision which any prudent attorney would have taken in the circumstances. The professional competence of Ms Swart’s attorneys would probably have been questioned if they had not taken it, and in my opinion there would not have been any excuse for not taking it. At that time, the trial date had not been set. There was plenty of time to deal with changed circumstances without prejudice to the defendant. Ms Swart’s attorneys attended to the matter without delay. Dr Holmes was consulted forthwith, and he filed a report by mid December 2007. It was a comprehensive professional report, the contents of which justified a re-assessment of Ms Swart’s claim. By mid December 2007, however, the matter was becoming urgent. The trial date had now been fixed and was some 4 months away. The attorneys consulted with counsel early in the New Year – on 13 January 2008. The upshot was a decision to amend the claim, and to give notice of Ms Swart’s intention to rely on Dr Holmes’s expert opinion at the trial. All of this was done responsibly and with expedition. In the ordinary course, the plaintiff’s entitlement to the qualifying costs of Dr Holmes would not in my opinion have been debated.

[12] Ms Swart died on 19 January 2008, six days after the consultation with counsel. This placed the conduct of the litigation under pressure. The trial was now imminent. It was necessary to appoint an executor to Ms Swart’s estate and to substitute him as plaintiff before any further decisions could be taken. That was done promptly. On 21 February 2008 the executor was appointed, and was substituted as plaintiff 17 March 2008. He was then in a position to take decisions about which claims could and should be pursued, which claims required re-assessment, and the effect of Dr Holmes’s report on those claims. This was all done. An amendment to the pleadings was also necessary. Further, the plaintiff was required to consider how to manage the complication of an amendment to increase the claim for damages to a significant extent and the probability of this leading to liability for the wasted costs of a postponement. The plaintiff was presented with a formal offer of settlement on the day before the trial. This was the factual complex within which the plaintiff’s decision was taken not to persist with the amendment to the claim for past loss of earnings, and his concomitant decision not to rely on the opinion of Dr Holmes. In my view it was a proper decision in the circumstances. It was conveyed to the Fund’s attorneys. The draft order recording acceptance of the tender is dated on 23 April 2008, the day before the trial. All of these steps were taken reasonably as part of the conduct of the litigation.

[13] Mr Paterson argued (a) that the reasonableness of the plaintiff’s decision to abandon, as he put it, Dr Holmes’s evidence is irrelevant to whether or not the Fund should have to pay his qualifying expenses; (b) that it matters not that this was a direct result of Ms Swart’s untimely death at a late stage in the litigation; and (c) that, in principle, the Fund should not have to pay for Dr Holmes’s qualifying expenses once the decision was deliberately taken not to call him as a witness and not to proceed with a claim for relief based on an acceptance of his evidence, regardless of the motivation for that decision.

[14] In the first place, there is no principle which denies a costs order for qualifying fees in the plaintiff’s favour because he ended up not calling the expert. Cilliers, Law of Costs (3^rd ed) paragraph 13.31, citing, inter alia, Stauffer Chemical Co v Safsan Marketing and Distribution Co (Pty) Ltd 1987 (2) SA 331 (A) 355C-F, 355E-H, and Cassell & Benedick v Rheeder & Cohen [1991] ZASCA 25; 1991 (2) SA 846 (SA) 853E-I, puts it thus:

‘There is apparently no authority for the proposition that normally the court will not make an order in respect of qualifying fees paid to persons not called as witnesses. The contrary seems to be the case. The fact that the person concerned was not called as a witness is merely a factor to be considered, in the context of all the other relevant circumstances, in determining whether the payment of his qualifying fees by the party applying for the order was reasonably necessary.’

That statement correctly re-states the principle set out in the authorities.

[15] Secondly, Mr Paterson’s argument looks at the facts from the perspective of the exact science of hindsight. That is inappropriate. It is necessary to consider the plaintiff’s decision to incur Dr Holmes’s qualifying fees at the time they were incurred, and not at the time when the position had changed radically by reason of Ms Swart’s death. In this context there is no better starting point than the dictum of Colman J in Gouws v Montesse Township and Investment Corporation (Pty) Ltd 2 1964 (3) SA 609 (T) 610A-E, which, though it deals with the issue of necessary witnesses, is applicable to the matter in hand:

‘Before I turn to the facts relevant to this application it will be useful to say something about the principle which governs it. The use, in the section which I have quoted, of the expression 'necessary witness' does not mean, in my view, that an order like the one now sought can be granted only if the party concerned was a necessary witness in the sense that his testimony was a causa sine qua non of his success in the action. It can often be seen, after judgment had been given in favour of a party who has testified, that he would have succeeded even if his own evidence had not been placed before the Court.

But, in my view, the question whether he was a necessary witness, within the meaning of sec. 49 of the Proclamation, is not to be decided by the application of such wisdom after the event. To adopt that criterion would, in my judgment, be to add an unreasonable hazard to litigation and to impose an unnecessary burden upon those charged with the conduct of trial actions. The question should be looked at, in my view, through the eyes of counsel at the time when he was advising on evidence and at other stages up to the time when the witness was brought to Court. If it appears that, at any such stage, it was reasonable for counsel to regard the party for whom he was acting as a person who should be put into the witness-box, and if that party was brought to Court for that purpose, he was, in my judgment, a necessary witness within the meaning of the section. When these conditions have been satisfied the party should, in my view, be declared a necessary witness even if it has ultimately turned out that his testimony was not essential to the success of his cause.’

I have no doubt that, through the eyes of Ms Swart’s counsel and attorneys when they took the decision to consult Dr Holmes, to incur his qualifying fees, and to call him as a witness, it was a reasonable and necessary step in the conduct of the litigation. I can see no reason why these fees should not be allowed on taxation even though it turned out that Dr Holmes’s testimony was not to be a reasonably necessary element of the plaintiff’s ultimate success in his cause. See also Cassell & Benedick v Rheeder & Cohen supra.

[16] The thrust of Mr Paterson’s argument was that this case is different from the cases of Stauffer Chemical Co and Cassell & Benedick supra. His argument was that in those cases the decision not to call the witness was not based upon the abandonment of the entire basis of a particular part of the case. Here, he contended, the case developed in such a way that the expert evidence became entirely irrelevant, and that part of the case to which it referred was settled as if the expert had never been involved. This case is indeed different from the Stauffer Chemical Co and Cassell & Benedick cases supra, where the need to call an expert was eliminated by the issues becoming narrowed as a result of the effect of the evidence given by another expert. But in my view the difference is not one of kind. In this case, the opinion of Dr Holmes’s remained in issue, and was as pertinent when the parties were at the doors of the court as it had been from the outset. There is no suggestion here that Dr Holmes was not called because his opinion could not be justified on the facts. There was no question of abandoning his evidence in that sense. It materially affected the quantum of Ms Swart’s loss, and that position persisted throughout. The plaintiff did not call his expert because he decided to compromise Ms Swart’s claims. He did so solely because she had died. Were it not for the compromise, made at the last moment, Dr Holmes’s opinion remained an important element of the case. It was only eliminated as an issue because of the settlement. The concurrence of material events on the day before the trial is significant. The documents evidencing (a) the offer of settlement, (b) the decision to abandon the amendment, not the call Dr Holmes, and to avoid a postponement, and (c) the acceptance of the offer of settlement, all saw the light of day on 23 April 2008. I believe that the policy of the administration of justice in the civil courts should not be to penalize a litigant by denying him costs to which he would otherwise be entitled because he took a responsible and sensible decision to give up part of his claim in order to achieve a reasonable settlement. On the facts of this case, therefore, there is every justification for ordering that Dr Holmes’s qualifying fees be part of the taxed party and party costs of suit.

[17] The result is that I make an order incorporating the provisions of paragraphs 1, 2, 3 and 4 of the draft order which I have identified by signing it and marking it ‘X’, and a further order that the costs will include the qualifying fees, if any, of Dr Holmes. Neither party asked for an order for the costs of the argument relating to this issue. I assume that this was because the costs of the day are already included in the settlement.

RJW JONES

Judge of the High Court

30 April 2008

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