FHP Zimbali residence No. 5B Shareblock Company (Pty) Ltd v Studio Investments CC [2023] ZAGPJHC 933 (21 August 2023)

The case involves an appeal against a cost order granted by Magistrate Jansen in the Randburg Magistrates’ Court. The appeal was lodged following the hearing of six interlocutory applications that were subsequently settled. The decision being appealed against is primarily related to costs, as it is argued that exceptional circumstances warrant the appeal due to a perceived misdirection by the presiding Magistrate.

The appeal is made under section 83(b) of the Magistrates’ Courts Act, 32 of 1944, and the Superior Courts Act, 10 of 2013. Section 16(2) of the Superior Courts Act states that an appeal may be dismissed if the decision sought will have no practical effect or result, except possibly in relation to costs, and exceptional circumstances are required to justify interference on appeal.

The judgment references previous legal interpretations regarding discretionary rulings on costs, emphasizing that an appeal court should only interfere if the lower court's decision was capricious, based on a wrong principle, not reached by unbiased judgment, or lacked substantial reasons. The judgment also highlights the importance of exercising judicial discretion appropriately and the reluctance of appeal courts to substitute their decisions unless there was a clear misdirection by the lower court.

The specific facts of the case involve the scheduling of the six interlocutory applications before the Magistrate on 29 November 2022. The appellant filed an answering affidavit on the same day as the hearing, leading to a postponement of the applications and a cost order against the appellant. The Magistrate's decision to postpone and order costs was based on the exercise of discretion and the conduct of the litigation proceedings.

The judgment concludes that the Magistrate's discretion was properly exercised and not capricious or based on a wrong principle. It also states that there were no exceptional circumstances to consider costs in determining the practical effect of the Magistrate's order. As a result, the appeal is dismissed, and the appellant is ordered to pay costs on the scale as between attorney and client.

The core legal principle underlying the decision is that an appeal court should be reluctant to intervene in a cost order made by a lower court unless the decision was capricious, based on a wrong principle, not reached by unbiased judgment, or lacked substantial reasons. The judgment underlined the importance of exercising judicial discretion appropriately and the need for exceptional circumstances to justify interference on appeal, particularly in cases where the decision sought will have no practical effect or result, except possibly in relation to costs. The court also highlighted the principle of appellate restraint and the reluctance to substitute its decision unless there was a clear misdirection by the lower court.

The court referenced the case of Public Protector v South African Reserve Bank 2019 (6) SA 253 (CC), where Khampepe J and Theron J discussed the exercise of true discretion in relation to costs orders. The court in this case emphasised that an appeal court should not interfere with the exercise of a true discretion unless it is satisfied that the discretion was not exercised judicially, was influenced by wrong principles, or a misdirection on the facts. The court also highlighted the need for a material misdirection on the part of the lower court for an appeal court to interfere, especially in cases involving costs orders.