THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

Reportable
Case no:
477/2002

In the matter between:

MICHAEL DE VILLIERS, N.O.

First Appellant
BRIAN BASIL NEL, N.O.

Second Appellant
and
BOE BANK LIMITED

Respondent
_______________________________________________________

Coram:
Howie P, Streicher, Navsa JJA and Van Heerden

AJA

Date of delivery: 28 November 2003

Summary:
Application to alter costs order after judgment ─ principles

discussed and applied.

_______________________________________________________
J U D G M E N T
_______________________________________________________

NAVSA JA:
[1] This application for the amendment of a costs order follows on
a judgment of this court on 26 September 2003. The applicants, BOE
Bank Limited (‘the bank’) instituted action in the South Eastern Cape
Local Division against the respondents, joint liquidators of Intramed
(Pty) Ltd (in liquidation). The claim, which was the subject of the
appeal in this Court, was based on three loan agreements each of
which contained clauses entitling the bank in the event of litigation to
recover costs on an attorney and client scale.
[2] An area of dispute between the parties was the question of
whether the loan agreements and the underlying securities had been
authorised by Intramed (Pty) Ltd (Intramed). The court below held
that the liquidators were liable to the bank on the three loan
agreements and that the bank’s claims were secured by underlying
securities. An order in those terms was thus made. This Court whilst
agreeing that the agreements and the underlying securities had been
authorised, held (Heher JA dissenting) that the loan agreements had
lapsed because of non-fulfilment of a suspensive condition in each of
the loan agreements. We held that the bank was entitled to the
restitution of monies advanced in pursuance of the now lapsed

agreements and made an order to that effect. The practical effect of
the order was that the amount due to the bank was less than the
amount that would have been due in terms of the loan agreements.
[3] In making the related costs order this Court recorded the
following in paragraphs [82] and [84] of its judgment:
‘[82]
The cost order made by the Court below was based on the terms of
the loan agreements which provided for attorney client costs against the party in
breach. The lapsing of the agreements renders the provisions in question
inoperative.
. . .
[84] The degree of success attained by the appellants is insufficient in the
overall picture to carry costs of appeal. It was not argued that it should…’
[4] In respect of the underlying securities the following was stated
at paragraph [83]:
‘It has not been suggested that, in the event that the underlying securities were
held to be authorised, the liquidators would not be bound by them.’
The documents constituting the securities were part of the record and
featured during the trial and the appeal.
[5] Because the Court below had held the liquidators liable on the
loan agreements it had ordered them to pay the bank’s costs on the
attorney client scale. For the reason set out in para [82] of our

judgment referred to above we set aside that costs order and
substituted it as follows:
‘The defendants are ordered to pay the plaintiff’s costs of suit including the costs
of two counsel.’
[6] The bank now applies to have the costs orders in this Court and
in the Court below amended to include costs on an attorney client
scale. The bank contends that, since the documents constituting the
underlying securities provide that, in the event of it exercising its
rights in terms thereof, it shall be entitled to recover any costs
incurred on an attorney client scale, it is entitled to costs in those
terms. The bank contends further that had the relevant clauses in the
security documents been brought to the attention of this Court, costs
would have been awarded on the scale now contended for. It is
submitted that the issue of costs on this basis was not dealt with in
argument and that it is proper for this Court to alter or supplement its
order. In this regard reliance is placed on the decisions in Estate
Garlick v Commissioner For Inland Revenue 1934 AD 499 at 503,
Firestone South Africa (Pty) Ltd v Gentiruco A.G. 1977 (4) SA 298 (A)
at 306G-308A, Thompson v South African Broadcasting Corporation
2001 (3) SA 746 (SCA) and Mostert N.O. v Old Mutual Life

Assurance Co (SA) Ltd 2002 (1) SA 82 (SCA). In the Mostert and
Thompson cases the principles enunciated in the Firestone case
were discussed and applied.
[7] The general well-established rule is that once a court has duly
pronounced a final judgment or order, it has itself no authority to
correct, alter or supplement it - it becomes functus officio.
[8] In the Firestone case at 306H-308A, after a reference to the
Estate Garlick case, four exceptions to the rule are spelt out and dealt
with.
I repeat them and consider their applicability:
(i)
The principal judgment or order may be supplemented in
respect of accessory or consequential matters, for example,
costs or interest on the judgment debt, which the court
overlooked or inadvertently omitted to grant.
This exception does not apply as the question of costs was
considered and dealt with. When the fourth exception is dealt with the
extent to which the parties made submissions on the issue of costs in
their heads of argument and in oral argument will become clear.
(ii)
A court may clarify its judgment or order, if, on a proper
interpretation, the meaning thereof remains obscure,

ambiguous or otherwise uncertain, so as to give effect to its
true intention, provided it does not thereby alter the ‘sense
and substance’ of the judgment or order.
This exception is clearly inapplicable. The relevant orders and the
motivations for these are unambiguous.
(iii)
A court may correct a clerical, arithmetical or other error in
its judgment or order so as to give effect to its true intention.
Again this exception does not apply. The order does not contain an
error of the kind envisaged. This Court’s true intention is clear from
the terms of the order and as set out in its motivation.
(iv)
Where counsel has argued the merits and not the costs of a
case but the Court, in granting judgment also makes an
order concerning costs, it may thereafter correct, alter or
supplement its order. The reason for this exception is that, in
such a case, the court is always regarded as having made
its order with the implied understanding that it is open to an
aggrieved party subsequently to be heard on the appropriate
order.
In order to decide the applicability of this exception the facts set out in
the paragraphs that follow deserve closer scrutiny.

[9] In its heads of argument in the appeal the bank stated the
following (at para 73):
‘[If] the Court was to find for the plaintiff on the basis that the loan agreements
lapsed and the parties were obliged to restore to each other what they received
the only difference in the relief sought would be in respect of the amounts to be
paid and the time from which interest would run. . .’
This paragraph would seem to imply that costs should also be
awarded on an attorney client scale as this was the basis on which
costs were sought in the event of the loan agreements being upheld.
However, two paragraphs later, in the ultimate paragraph of the
bank’s heads of argument entitled ‘Conclusions’, the following
appears:
‘75.
In the circumstances we submit that the appeal should be
dismissed with costs on the scale as between attorney and client, including the
costs consequent upon the employment of two counsel. The loan agreements
provide that costs are payable on this scale.’
(emphasis added).
[10] In this paragraph the bank does not rely on the provisions of the
underlying securities. It relies solely on the loan agreements in
support of its contention that it is entitled to costs on the scale as
between attorney and client. The liquidators adopted the position that

the
loan
agreements
and
the
underlying
securities
were
unauthorised. They thus submitted, in the final paragraph of their
heads of argument, that the appeal should be upheld with costs,
including the costs of two counsel, and that the appropriate order in
the Court below would be that the plaintiff’s claim be dismissed with
costs including the costs of two counsel.
[11] During oral argument in the appeal the Court enquired from
senior counsel for the liquidators whether he conceded that in the
event it was held that the loan agreements had lapsed, the bank
would be entitled to restitution of amounts paid over by the bank.
Counsel for the liquidators responded by conceding that the bank
would be entitled to an order in those terms plus costs. When later
referred to this concession counsel for the bank confirmed that this
would be the appropriate order. He did not submit that the bank
would be entitled to costs on a higher than the usual scale.
[12] In the Thompson case the fallacy that unless something is dealt
with during oral argument, the matter can be reopened and the court
can amend its judgment in respect thereof was dealt with. At 749H-I

the following appears:
‘The Court is entitled to base its judgment and to make findings in relation to any
matter flowing fairly from the record, the judgment, the heads of argument or the
oral argument itself. If the parties have to be forewarned of each and every
finding, the Court will not be able to function.’
[13] As shown, the question of costs, whether in relation to the loan
agreements being upheld or in relation to a finding that they had
lapsed, was addressed. That it may not have been addressed as
elegantly or as impressively as counsel might, with hindsight,
consider desirable is of no consequence for present purposes.
[14] In the Firestone case the following appears at 307H-308A:
‘But, of course, if after having heard the parties on the question of costs, either at
the original hearing or at a subsequent hearing …the Court makes a final order
for the costs, there can be no such “implied understanding” and such an order is
immutable (subject to the preceding exceptions) as any other final judgment or
order. . .’
[15] There can be no doubt that the question of costs on the basis
that the loan agreements had lapsed was addressed.
[16] Against this background there can be no question of an implied
understanding that, subsequent to the hearing, an aggrieved party
could approach this Court to be heard on an appropriate order as to

costs. In these circumstances we are functus officio and our order is
immutable.
[17] Counsel for the liquidators submitted that the application should
be dismissed with costs including the costs of two counsel. This is not
a matter that warrants the costs of two counsel.
[18] In light of the conclusions reached I make the following order:
The application is dismissed with costs.

_________________
MS NAVSA
JUDGE OF APPEAL

CONCUR:

HOWIE

P
STREICHER
JA
VAN HEERDEN
AJA