Court Rulings
The Taxing Master has to give effect to a Court Order or an Agreement
The Taxing Master has to give effect to an order of court or agreement between the parties and may not make such an order by proceeding with a taxation without a court order.
Hugo v Hugo 1947 (1) SA 325 (O) at 329 – An order for costs in a divorce action does not include the costs of the interlocutory applications, such as applications for maintenance pendente lite or an application for a contribution towards costs (unless of course the costs of the proceedings were made costs in the cause.
In the same sense, the court has to specifically order what is to happen to the wasted costs of a postponement.
The principle therefor is the court has to give the Taxing Master directions by way of a court order) as to what is to happen with the costs. The Taxing Master has no discretion in this regard.
Rule 70 Amendment - Notice to Tax a Bill of Costs - How it is applied in practice
VAT Explained on party and party costs
The issue of claiming VAT on fees and disbursements in your bill depends on the question whether you will be out of pocket or not.
The scenario is as follows:
A. You are a VAT vendor, you receive a tax invoice for R100-00 +VAT, you pay the VAT and claim it back, you are out of pocket with R100-00 – you claim the R100-00 in the bill, it is taxed and R100-00 is refunded to you (or a % thereof) – it is not income for which you have supplied goods or services, you have not issued a tax invoice so you do not have to declare it and pay any VAT on it to SARS. The unsuccessful litigant pays R100-00 in terms of the taxed bill - no claim for VAT against SARS. SARS received R14-00 from the supplier of goods or services and paid it back to you – not out of pocket.
B. You are not a VAT vendor, you receive a tax invoice for R100-00 +VAT, you pay the VAT but cannot claim it back, you are out of pocket with R114-00 – you claim the R100-00 + VAT in the bill, it is taxed and R100-00 + VAT is refunded to you (or a % thereof) – it is not income for which you have supplied goods or services, you have not issued a tax invoice so you do not have to declare it and pay any VAT on it to SARS, you receive no benefit, your out of pocket expenses (R100-00 + VAT ) or a portion thereof is merely refunded. The unsuccessful litigant pays R114-00 in terms of the taxed bill but has no claim for VAT against SARS, because there is no tax invoice, no goods sold or services rendered. SARS received R14-00 from the supplier or goods and/or services – not out of pocket.
VAT issue on party and party bills of costs.
The difference between party and party costs and attorney and client costs are becoming a problem.
PARTY AND PARTY COSTS
Party and Party costs are those costs recoverable from the other side provided there is a costs order or agreement to pay the costs. The following also constitutes only Party and Party costs and nothing more:
Party and party bill of costs.
The use of the tariff simply as a guide is restricted to non-litigious matters.
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