Phillips NO obo Makheta v Beukes (GSJ) (unreported case no 2013/27925, 27-11-2014) (Sutherland J)

By Emma Powell and Merlita Kennedy

In anticipation of trial, it is common practice for the defendant to place the plaintiff on risk by offering a tender in terms of r 34 of the Uniform Rules of Court. In considering an appropriate costs order, there are three salient factors that will guide the court in exercising its discretion:

• the timing of the tender;

• the time taken to consider and uplift or reject the tender (the spatium deliberandi); and

• the conduct of the parties in the interim.

The point of controversy in this matter was specifically what amount of time should be considered reasonable for the plaintiff to accept the ‘without prejudice’ offer. In short, was the spatium deliberandi taken reasonable in the circumstances?

The Beukes decision

The plaintiff, a curator acting on behalf of Musoliwa Makheta, instituted action for payment in the region of R 35 million against the defendant. The trial proceeded only in respect of quantum and the argument that was to be heard related to the future medical and related expenses, being the only remaining head of damage in dispute.

The defendant in this case served his tender on the first day of trial, after due consideration of the plaintiff’s articulated case. The tender was uplifted after six days of trial. Sutherland J noted that the turning point in the eyes of the plaintiff, which caused the tender to be swiftly uplifted, was confirmation of the patient’s neurological state by way of an EEG depicting little regenerative ability. This prognosis was critical to the degree of care and treatment, which the patient required and therefore directly relevant to the amount to be awarded for future medical and related expenses.

The purpose of r 34 is to limit the costs incurred by a defendant at trial. Ordinarily, the court will order the defendant to the pay the plaintiff’s costs incurred up to the date of the offer, and the plaintiff to pay the defendant’s costs thereafter. This general proposition does not, however, cater for the scenario, as in this case, where the tender is served just before or at the commencement of trial and the plaintiff continues to rake up costs while he considers the offer. In such an instance, the extent of the spatium deliberandi allowed will depend on the particular circumstance of the case, the stage at which the offer is made and the reasonableness of the plaintiff’s conduct thereafter, especially where the plaintiff’s conduct is such that he delays unreasonably in accepting or rejecting the tender.

It is noteworthy that the plaintiff raised the argument that all relevant factors should be taken into account when determining what constitutes a reasonable period of consideration. In the view of the plaintiff, all relevant factors include the defendant’s conduct prior to and during trial. To this argument, the court acknowledged that while there is no temporal limit to what factors are to be considered when it makes its decision, the important consideration is relevance. Sutherland J held that ‘the question of costs of litigation must self-evidently be related to the conduct of litigation and not concern itself with considerations outside of that realm’.

The defendant acknowledged that while the plaintiff is entitled to a spatium deliberandi to consider the offer made in settlement of the matter, r 34 does not permit the plaintiff to keep the defendant waiting to an extent where costs continue to be incurred. The defendant argued, using the judgment of Henry v AA Mutual Insurance Association Ltd 1979 (1) SA 105 (C), that where the trial has progressed there should be no reason for the plaintiff to ‘dally for more than a day’ before accepting or rejecting a tender. In light of this, the defendant argued that waiting six days to accept the tender was protracted and a more appropriate time to consider the tender would be two days. The defendant contended that the plaintiff should therefore be awarded costs up to two days after the tender was served and the defendant should be awarded costs for the four days thereafter.

In contrast, the plaintiff argued that he ought to be awarded costs for the full duration of trial, taking into account all relevant factors. The court, however, found that arguments such as the defendant being a metaphorical Goliath and those relating to the conduct of the defendant prior to trial did not bear any weight. Sutherland J further noted that the late appearance of the EEG was not a tactical move by the defendant, but rather a confirmation of the defendant’s case, to which the plaintiff was privy.

While Sutherland J did express disapproval for the tender only being made on the first day of trial he ordered an ‘equal division of the spoils’, where each party is awarded costs for three days of trial.

The judgment handed down by the court clearly brings to the fore that the most important consideration that a court must take into account when determining a cost order is timing, not only of acceptance or rejection of a tender, but also the timing of the tender itself. In the same train of thought, the conduct of the parties during the interim period is the important factor in relation to a costs order, and not the conduct outside of the bounds of trial, which is more relevant to a determination on liability. The decision made is, however, a fact-specific inquiry.

It is, therefore, clear from this case that the strategy related to serving a tender extends beyond considerations on the part of the defendant. Not only does the defendant want to place the plaintiff on risk in an attempt to settle the matter, but the plaintiff too has a duty to timeously consider the tender and not dally in making a decision. The time taken to deliberate a tender must be reasonable in the given circumstances. A tender offered by the defendant is not a proverbial safety net that the plaintiff can hold onto until such point that he realises the trial is not going as anticipated but rather it is an offer that must be given the appropriate consideration.

Emma Powell BA LLB (Wits) is a candidate attorney and Merlita Kennedy BA LLB (Stell) is an attorney at Webber Wentzel in Johannesburg.

• Ms Kennedy acted for the defendant in the above matter.

This article was first published in De Rebus in 2015 (April) DR 47.