Civil Procedure Settlement Offers PDF

CHAPTER 15: SETTLEMENT OFFERS OR SETTLEMENT TENDERS, SECURITY FOR...

CHAPTER 15: SETTLEMENT OFFERS OR SETTLEMENT TENDERS, SECURITY FOR OFFERS OR COSTS AND MEDIATION TENDERS CIVIL PROCEDURE L AW S 3 0 4 5 A 2 INTRODUCTION COMMON LAW OFFERS GENERAL RULE: A dispute between parties may be settled at any time prior to  Any settlement is essentially an offer made by a debtor-offeror, (i.e. the defendant) judgment.  which must be accepted by a credit–offeree (i.e. plaintiff)  Offers of settlement can be made at any stage of litigation, but certain rules must be Based on common-law contractual principles; observed Common law Settlement offers/acceptance (debtor–offeror- debtor who makes offer) & (credit-offeree -creditor who accepts offer) An offer is made within the contractual principles of offer and acceptance Settlement procedures A debtor-offeror may make an offer at any stage of proceedings to a creditor-offeree with the intention of settling the claim by agreement (i.e. a part or the whole of the Settlement offers/tenders based on the rules of dispute) Rules court HCR 34; MCR 18 A common-law offer of settlement is usually made before litigation commences since prior to the commencement of litigation the Rules of Court are not applicable. The offer may be withdrawn at any time before acceptance, and acceptance must be made within a reasonable time period. 3 4 This study source was downloaded by 100000807224022 from CourseHero.com on 07-19-2024 06:14:03 GMT -05:00  COMMON LAW OFFERS COMMON LAW OFFERS (1) An unconditional offer of payment made animo solvendi ABSA Bank Ltd v Van de Vyver NO 2002 4 SA 397 (SCA) With the intention by the debtor-offeror of clearly acknowledging debt for a part or the whole of the – The Offer creditor-offeree’s claim: The debtor’s offer of payment made: “I admit liability for my debt and offer you the whole amount in full settlement of your claim”  With the intention of entering into a contractual compromise: or animus contrahendi or (offer of a compromise without prejudice) “I admit liability for only part of your claim and will pay this amount but deny the rest of your claim”.  With the intention of paying unconditionally: or animus solvendi (offer of unconditional payment) (2) An offer of compromise without prejudice made animo contrahendi With the intention by the debtor-offeror of entering into a new compromise agreement based on an amount less than the original claim: (eg, claim is R150 you offer a compromise R75) “I offer you R 75 in full and final settlement of your claim”. 5 6 DIFFERENCES HCR 34 – HIGH COURT OFFER OR TENDER There are several differences between a common-law settlement offer and an offer or Written offer or tender tender made in terms of HCR 34 or MCR 18. HCR 34(1), defendant’s offer: (a) The defendant may unconditionally admit liability, either in part or in whole, and the Common law plaintiff may accept the written offer.  A common-law offer may be withdrawn at any time before acceptance -  When the defendant’s admission is one of partial liability, the plaintiff may accept before creating a contractual nexus between the parties the partial offer and thereafter proceed to claim the balance at trial.  A common-law offer must be pleaded if the creditor-offeree intends to rely on it for protection against an order of costs (b) When the defendant makes an offer of compromise without prejudice, and the plaintiff accepts, the plaintiff’s claim is extinguished, the action ceases and there can be HCR 34 or MCR 18 no future recourse against the defendant. (the claim is now res judicata) A settlement offer or tender in terms of the Rules allows the plaintiff only a limited time period in which to accept and the defendant a limited period in which to pay or HCR 34(2) the defendant’s tender, perform. The defendant offers either unconditionally or conditionally without prejudice, to The defendant may not withdraw from the offer or tender except with the permission of perform the obligation due to the plaintiff (such as the transfer of immovable property or the court. the delivery of movable property, the performance of a service, ejectment, etc). An offer or tender made without an admission of liability in terms of the Rules may not NOTE: a tender is an offer of specific performance instead of money be disclosed to the court prior to judgment 7 8 This study source was downloaded by 100000807224022 from CourseHero.com on 07-19-2024 06:14:03 GMT -05:00  HCR 34 – HIGH COURT OFFER OR TENDER COST ORDERS The procedural differences between HCR 34 unconditional Adverse costs order: offer/tender & a conditional offer/tender without prejudice: The plaintiff runs the risk of an adverse costs order in the circumstance where he/she refuses a defendant’s original conditional offer or tender made without prejudice and Disclosure to court: proceeds to trial and the court grants judgment in favour of the plaintiff but for a smaller amount than was originally offered or tendered by the defendant No reference to a conditional offer or tender made without prejudice may be disclosed to the court at any time before judgment in a trial action and no reference to it may appear in the court file. The court may refuse to grant the plaintiff any legal costs incurred after the offer or There is no similar prohibition attached to an unconditional offer or tender, and this tender was turned down because the plaintiff should have accepted the larger offer type of offer or tender may be brought to the notice of the court at any time. when it was originally made before trial instead of incurring the additional costs of a trial process. The fact that a conditional offer or tender was made may be brought to the attention of the court only after judgment as long as it is relevant to the issue of costs. Any party, who contrary to HCR 34, discloses such an offer or tender to the The court will be liable for an adverse costs order. A court may penalise a plaintiff who has refused an offer or tender made without prejudice before court. 9 10 THIRD PARTY JOINDER HCR 34 & HCR 13 OFFER OR TENDER TO SETTLE IN MC  MCR 18 provides for unconditional tenders & tenders without prejudice. When a defendant seeks to join a third party to the action.  MCR 18 is the same as HCR 34 HCR 34(3) & (4) allows a third party from whom relief is being claimed in terms of HCR 13 (third party joinder) to make a written offer of contribution or When the tender is conditional & indicated as “without prejudice”, the plaintiff may indemnity. accept it in relation to the part of the claim to which it relates but continue with the The offer is made to a defendant who has taken steps to claim a contribution or action in relation to the remainder of his/her claim. indemnity owed to the defendant by a third party by way of an HCR 13 notice of third-party joinder. The granting of a cost order in relation to the subsequent litigation will usually be The offer by the third party may be made unconditionally or determined by the success of that litigation; conditionally without prejudice. Should the plaintiff succeed in proving the remainder of claim, a cost order is generally made in the plaintiff’s favour; Bloom v General Accident & Life Assurance Co Ltd 1967 (2) SA 116 (D). Should plaintiff not succeed with the remainder of the claim, a cost order should be granted in favour of the defendant. 11 12 This study source was downloaded by 100000807224022 from CourseHero.com on 07-19-2024 06:14:03 GMT -05:00  PROCEDURE SETTLING A MATTER BY CONSENT TO JUDGMENT The plaintiff may within 15 days after receipt of the notice in terms of HCR 34(6) accept the defendant’s (ie.debtor - offeror’s) tender  Consent in the High Court Acceptance is usually made by handing in a notice of acceptance to the registrar. Alternatively, the plaintiff may reject the offer or tender and the action proceeds as usual. HCR 31(1)(a) & (b) Upon acceptance the litigation ends and is a bar to any future action based on the same legal The defendant may at any time consent/confess in part or in whole to the cause (res judicata) plaintiff’s claim in the summons. Generally the court has wide discretion in the awarding of costs accruing to an offer procedure, and the amount will usually depend on: The defendant “confesses” to the plaintiff’s claim by signing a written confession to  the plaintiff’s acceptance or rejection of the defendant’s offer or tender, judgment, which is witnessed by the defendant’s attorney & delivered to the  the time at which the offer or tender is made, and plaintiff.  whether or not the judgment amount awarded to the plaintiff is smaller than the The plaintiff in turn applies in writing through the registrar to a judge in chambers original offer or tender. for judgment in terms of the “confession”. The defendant is obliged to pay or perform in terms of the offer or tender within 10 days of its acceptance: The written confession has the same status as a court-issued judgment.  failing which the plaintiff may apply, on five days’ notice to the defaulting party, through the This procedure is an easy way to obtain a judgment, which is also capable of registrar to a judge in chambers for judgment against the defendant in accordance with the enforcement through a section 65 debt collection procedure (see ch 23). settlement terms 13 14 CONSENT IN MAGISTRATES’ COURT (MCR 11) S 57 MCA: ADMISSION OF LIABILITY S 57 stipulates that on receiving a written demand or a summons wherein payment of a The defendant may voluntarily consent to all types of claim including debt is claimed, a defendant may, in writing: unliquidated claims:  except for action for relief in terms of the Divorce Act, or nullity of a  Admit liability to the plaintiff for the amount of the debt and costs as claimed marriage – only a court may dissolve a marriage/union  Offer to pay the above amount in instalments or otherwise Consent may be given before or after entering an appearance to defend.  Undertake to pay the collection fees for which the plaintiff is liable in respect of the Consent may be in whole or in part and if in part the defendant may still collection of the instalments proceed to defend against the balance of the plaintiff’s claim.  Agree where he/she fails to comply with the offer, the plaintiff will be entitled, without notice to the defendant:  The purpose of the consent procedure is to limit costs and save court time.  to apply for judgment for the outstanding balance of the amount for which the  Consent to judgment allows the defendant to avoid paying judgment defendant has admitted liability, and for a court order for payment of the judgment costs. debt & costs in instalments or otherwise.  The plaintiff accepts the defendant’s offer in writing by registered letter.  Should the defendant thereafter fail to comply with the payment terms of the offer the plaintiff may apply in writing to the clerk/registrar of the court 15 16 This study source was downloaded by 100000807224022 from CourseHero.com on 07-19-2024 06:14:03 GMT -05:00  T E R M I N AT I N G J U D G M E N T S S58 OF MCA: CONSENT TO JUDGMENT D E FA U LT J U D G M E N T (c h 1 2 ) S U M M A R Y J U D G M E N T (ch 13) CONSENT T O J U D G M E N T (ch 15)  S 58: a defendant on receiving a written demand or a summons wherein payment of a debt is Plaintiff’s appli ca t i o n Defendant’s Plaintiff’s application M a g istra t e s’ High based on: application based claimed may consent, in writing, to an unconditional judgment in favour of the creditor. Debt/or liquidated on: based on:  a liquid d o c u m e n t ’ or courts: MCR 11 Court amount; Plaintiff’s failure  liquidated a m o u n t  The consent is for the amount of the debt and costs claimed in the demand or  apply to to deliver a of mo n ey , or S 57 (admission of) H C R 31(1) declaration after summons. registrar/clerk Illiquid a m o u n t ; receiving Def’s  delivery of movable property, (liability) S 58 notice of intention  On receipt of the written consent, the creditor (plaintiff) makes an application to  apply to court to d efen d in or (Consent to) (judgment) response to a  ejectment the clerk/registrar of the court. simple s ummons  The clerk/registrar of the court will grant judgment in favour of the plaintiff for the amount of D e fen d a n t Defendant Notice of motion Written ‘consent’ the debt & costs as agreed to by the defendant. does not enter enters notice of signed by defendant & notice of intention to Affidavit confirms: witnessed intention defend but  cause of action & does not to defend a mount claimed,  The plaintiff may use the ss 57 or 58 procedure as an easy & cost-effective method of plead  defendant has n o bona fide defence’ obtaining a judgment against the defendant.  defendant’s appearance Plaintiff Plaintiff N o notice Plaintiff Defendant to defend entered solely of bar serves for purpose of delay applies to applies for serves notice required notice of of bar on clerk/ judgment bar Plaintiff registrar for via the To avoid judgment the judgment registrar t o a NOTE: A summary of ss 57 & 58 is an obligatory inclusion in a summons d e fe n d an t m a y either: ju d ge in chambers If n o Plaintiff fails response to to deliver notice of bar declaration Satisfy court within 5 days within 5 days P rovide by me a ns of security a n affidavit setting out a b o n a fide 17 D E FA U LT J U D G M E N T defence 17 SECURITY FOR COSTS OF LITIGATION  A defendant may request a plaintiff to furnish security for the costs of a trial proceedings in High Court/ Mag’ Court especially where:  There is reason to believe that the other party will be unable to pay the costs of the litigation should an adverse costs order be granted.  The request for security for costs is made by way of an application.  A court may order a plaintiff or applicant to give security for the costs to be incurred SECURITY FOR by the defendant or respondent in the following situations:  where the plaintiff is a foreign peregrinus; COSTS  where the plaintiff is an unrehabilitated insolvent;  where the plaintiff is a limited liability company or body corporate;  in certain exceptional circumstances - where the plaintiff is a person of straw or a vexatious litigant 19 20 This study source was downloaded by 100000807224022 from CourseHero.com on 07-19-2024 06:14:03 GMT -05:00  SECURITY IN THE HIGH COURT SECURITY IN THE HIGH COURT Peregrini In a High Court action a foreign peregrinus defendant who counterclaims may be The foreign peregrinus plaintiff who sues by way of an action or application may, at ordered to furnish security for the costs of claim in reconvention but not for plaintiff’s court’s discretion, be ordered to furnish security for costs of the litigation, claim in convention.  subject to the exception that no security need be furnished where the foreign peregrinus owns immovable property within the court’s jurisdiction.  The foreign peregrinus who is unsuccessful in court and takes the An application for the furnishing of security for costs is brought against the foreign court’s decision on appeal/review must furnish security for costs: peregrinus before litis contestatio but:  but the foreign peregrinus as the successful party in court cannot be compelled to  may be brought at any stage of the proceedings. give security where the unsuccessful incola decides to take the court decision on The onus is on the defendant (the applicant in the application for security) to show that appeal/review. plaintiff (the respondent) is a foreign peregrinus. Where foreign peregrinus plaintiff commences an action and incola defendant  NOTE: S 25 Superior Courts Act: a local peregrinus plaintiff is not obliged to provide counterclaims, the foreign peregrinus may be compelled to furnish security for the costs security merely because the plaintiff resides outside the jurisdiction of a division in of both the claim in convention & the counterclaim (i.e. claim in reconvention). which the civil proceedings is commenced. A foreign peregrinus defendant in an action commenced by an incola plaintiff is not required to furnish security for costs. 21 22 UNREHABILITATED INSOLVENTS COMPANIES  The court will not order security where s 23 of the Insolvency Act expressly reserves a right of action to the insolvent plaintiff. Former Companies Act:  In all other matters not reserved by Act but related to the insolvent’s estate, the  S 13 of former Companies Act (1973) - when company/other body corporate sues as court may order security. a plaintiff or respondent, the court may, at its discretion, order the company to furnish sufficient security for the defendant’s costs, but only when there were reasonable  Especially where the action, brought by the unrehabilitated insolvent is reckless or grounds for believing that the company would be unable to pay vexatious.  S 8 of Close Corporations Act same provision about security.  The court will examine the merits of the application for security & circumstances of the action before deciding, in its discretion, whether or not to order an unrehabilitated Present Companies Act: insolvent to provide security.  Present Companies Act does not contain a provision similar to s 13 of repealed 1973  i.e where the insolvent plaintiff commences an action on behalf of the estate & Companies Act. where the trustee of insolvent estate refuses to do so, the court may order  It is submitted - in the absence of a statutory provision, the courts should develop security. common law principles relating to security for costs where the interests of justice demand it.  When an unrehabilitated insolvent as an unsuccessful litigant appeals to the SCA, the insolvent may be compelled to provide security. 23 24 This study source was downloaded by 100000807224022 from CourseHero.com on 07-19-2024 06:14:03 GMT -05:00  PROCEDURES OTHER CIRCUMSTANCES PROCEDURE (HCR 47)  A party claiming security for costs must deliver a request as early as is practicable after the  The court may order security costs where party has no substantive interest in the commencement of the proceedings by the delivery of a notice to the other party setting out the grounds proceedings or is a person of straw for requesting security for costs.  The court may order costs where plaintiff institutes vexatious litigation.  S 21 of the Arbitration Act makes provision for the ordering of security.  Party from whom security is demanded may - give security as requested - dispute the amount of security – dispute his/her liability to give security  Rules of High Court read with Superior Courts Act & Mag’ Courts Act may make it necessary for the court to order security for costs:  Where the party merely disputes the amount of security the matter is referred to the registrar - in terms of  i.e. when defendant in the Mag’ Crt requests removal of the action to a division of HCR 47(2) the registrar will fix the amount and such a decision is final High Court, security must be provided for the payment of the plaintiff’s claim, if successful, and for the costs involved in the transfer (see ch 6 para 6.8.5).  Where a party disputes liability for security or fails to give security in the amount fixed by the registrar, the  A party proceeding in High Court, funded by a recognised legal aid board, is normally party who requests security can apply to court, on notice to the defaulting party, for an order granting not compelled to give security but may in certain circumstances be ordered to do so by the furnishing of security and that the proceedings be suspended until the order has been complied with. the court.  The notice must be brought within 10 days of the request to furnish security or within 10 days after the  In a civil appeal from a Mag’ Crt the appellant must give security for the registrar has fixed the amount. respondent’s costs of appeal. Security for costs in Magistrates’ Courts  Security for costs in Magistrates’ Courts is provided for by MCR 62. 25  Same grounds as in the High Court. 26 MEDIATION BASIC PURPOSE: To achieve accessible and quality justice for all by way of a voluntary dispute resolution system of mediation This mediation system is meant to complement the formal civil justice system of litigation The purpose is to provide parties with an alternative route to an early MEDIATION settlement without the necessity of a time-consuming and costly formal trial process 27 28 This study source was downloaded by 100000807224022 from CourseHero.com on 07-19-2024 06:14:03 GMT -05:00  MEDIATION MEDIATION PROCESS MCR 70: 1. At any stage of civil proceedings prior to judgment by way of a written referral - the parties may voluntarily/consensually agree to mediation by signing a ‘mediation agreement’ setting out the conditions for the mediation The purpose of the rules in this Chapter is — a) to provide for the parties to litigation the opportunity to submit the dispute to mediation, either of 2. During the mediation process the rules/time limits of all action/notice/application proceedings in the court with jurisdiction their own accord or upon enquiry by the court; over the dispute are suspended pending the conclusion of the mediation. b) to regulate the referral to mediation where parties agree to submit the dispute to mediation; and 3. Where the mediation is successful a settlement agreement is agreed between the parties assisted by the mediator - c) to regulate the further conduct of litigation where the dispute is referred to mediation. this settlement agreement may be enforced in the same manner as any other legal agreement. 4. The settlement may also be made an order of court and can be enforced through the sheriff in the same manner as any other HCR 41A (1) and MCR 71 both define mediation as: court order. 5. Where the mediation is unsuccessful the parties may resume litigation proceedings. “mediation” means a voluntary process entered into by agreement between the parties 6. Some disputes are by their factual and legal nature not appropriate for mediation but a large number of contractual disputes, to a dispute, in which an impartial and independent person, the mediator, assists the claims for delictual damages and certain types of family disputes may be successfully resolved in mediation. parties to either resolve the dispute between them, or identify issues upon which agreement can be reached, or explore areas of compromise, or generate options to  The mediation process must be completed within 30 days subject to a reasonable extension by a court order on good cause resolve the dispute, or clarify priorities, by facilitating discussions between the parties shown. (HCR 41A(3)(d) and MCR 74(2))  An advantage of the mediation process is that it can be successfully managed through an online process thereby further and assisting them in their negotiations to resolve the dispute. alleviating the court system of its heavy roll burden 29 30 APPLYING FOR MEDIATION APPLYING FOR MEDIATION Referral notice (both HC and MC)  HCR 41A(3)(a)/ MCR 73(1) - parties may agree to mediation at any A plaintiff in action proceedings or an applicant in motion proceedings must serve a referral notice together with the summons or notice of motion initiating proceedings. stage of proceedings before judgment subject to the condition that once the trial or opposed application has commenced the parties must  The notice informs the defendant or respondent that the plaintiff or applicant agrees request leave of the court in order to proceed. to or opposes a referral of the dispute to mediation.  The reasons for agreeing to or opposing mediation must be clearly set out in the  HCR 41A(3)(b) / MCR 73 (2) - A judge, or a case management judge, referral notice. (judicial officer- MC) or the court itself where proceedings have  In turn the defendant or respondent when delivering a notice of intention to defend must also serve on the plaintiff or applicant a referral notice setting out his/her commenced, may at any stage before judgment direct the parties to agreement or opposition to mediation with reasons. consider mediation  Such notice may be served at any time prior to the delivery of the plea or answering affidavit.  These referral notices are made without prejudice and are not filed with the registrar in order to prevent premature disclosure to a trial judge of the parties’ views on mediation. 31 32 This study source was downloaded by 100000807224022 from CourseHero.com on 07-19-2024 06:14:03 GMT -05:00  Cl VOLUNTARY SUBMISSION BY PARTIES TO COURT-ANNEXED MEDIATION (HCR 41A and MCR 70-79) (MEDIATION REQUEST) (annexure 6) (to be served with all High Court summons & motion applications’)  Alternative route to early settlement without a time consuming & costly trial process HCR 41A(2)(a) – requires all High Crt PURPOSE  Allows a quick & cost effective consensual resolution to a dispute summons (including motion FORM 27  Provides litigants with solutions not in the power of the formal courts – (i.e. restorative justice remedies) NOTICE OF AGREEMENT OR OPPOSITION TO MEDIATION applications) to include an attached IN THE HIGH COURT OF SOUTH AFRICA Referral  Summons or notice of motion served together with a referral notice in which Pl/App indicates agreement or opposition to mediation referral notice (FORM 27) indicating (………. DIVISION)  Intention to defend delivered together with a notice in which Def/Resp indicates agreement or opposition to mediation prior to agreement or opposition to court trial  Mediation notice made without prejudice – not filed with registrar or clerk In the matter between: annexed mediation. Plaintiff  Parties deliver joint signed minute of election to mediate to registrar & enter into agreement – setting out date, time of mediation and  All procedures & time limits are suspended for duration of mediation Defendant Referral  Mediation must be completed within 30 days from the signing of joint minute – may be extended by court on good cause MCR 72(1) – requires that a notice procedures  In proceedings with multiple parties – some parties may proceed to mediation despite the objection of other parties Please take notice that the Plaintiff/Defendant agrees to/opposes the referral of this matter to  In proceedings with multiple issues – some issues may be referred to mediation and remaining issues may continue in litigation agreeing to or opposing mediation mediation. together with the summons or NOM be  Parties must obtain leave of court before proceeding to mediation served on the defendant or respondent The Plaintiff/Defendant/ does so for the following reasons: Referral  Note: judge or case management judge may at any stage before judgment direct parties to consider mediation ----------------------------------------------------------------------------------------------------------------------------------------- The notice shall be substantially in during trial  Note: all communications & disclosures made during mediation are confidential & inadmissible as evidence in court accordance with Form 60A or Form 60 B  Note: no settlement offer/tender without prejudice made during mediation may be disclose to court before judgment is given of Annexure 1 Dated at on this day of  Facilitates settlement between parties assisted by legal representation  Impartially encourages discussion between parties & assists them in negotiating a solution Plaintiff Attorney address Mediation  Assists parties to identify issues upon which agreement may be reached – explores possible compromises – generates options for resolving dispute Defendant Attorney address  Mediator’s fees borne jointly by parties To: The Registrar of the above Honourable Court  Parties obliged to inform registrar of mediation conclusion Settlement  Parties & mediator file a joint minute with registrar indicating full or partial settlement or complete failure of mediation 7 This study source was downloaded by 100000807224022 from CourseHero.com on 07-19-2024 06:14:03 GMT -05:00 Powered by TCPDF (www.tcpdf.org)