Winlite Aluminium Windows & Doors (Pty) Ltd v Pyramid Freight (Pty) Ltd t/a UTI

In September 2005, Pyramid Freight (Pyramid) sued Winlite Aluminium Windows & Doors (Winlite) in the Cape of Good Hope Provincial Division (exercising Admiralty Jurisdiction) for payment of R755,675.32 for fees and disbursements as a clearing and forwarding agent, R10,000 for storage and preservation expenses, together with interest. Winlite defended the action and counterclaimed for R131,243.01 in damages relating to guarantees allegedly wrongfully withheld by Pyramid. The trial commenced on 14 March 2007 before Cleaver J and continued over several days. On 14 March 2007, Winlite made a secret tender in terms of Uniform Rules 34(1) and (5) offering R250,000 in full and final settlement of all claims including costs. On 11 October 2007, Cleaver J granted judgment against Winlite for R212,745.30 plus interest and R9,120, and ordered Winlite to pay Pyramid's costs. The total amount payable including accrued interest by the date of tender exceeded the tender amount by at least R20,000.

• Whether a trial court properly exercised its discretion in determining costs when a tender under Uniform Rules 34(1) and (5) was made
• Whether the trial court was correct in concluding that the plaintiff was not justified in proceeding with the trial when the tender exceeded the capital awarded but was less than the sum of capital and accrued interest at the date of tender
• The effect of a secret tender on costs allocation under rule 34(12)
• Whether interest accrued to the date of tender should be included when assessing if a tender beat the amount awarded

The appeal was dismissed with costs. The order of the Full Bench was upheld, which had the effect of restoring the original costs order of Cleaver J that Winlite (defendant) pay Pyramid's (plaintiff's) costs of the proceedings including costs of postponement and counterclaim.

When determining the effect of a secret tender made under Uniform Rules 34(1) and (5) on the allocation of costs, the court must compare the amount tendered with the total amount due to the plaintiff at the date of tender, including all accrued interest and other components of the claim, not merely the capital element. Where a tender is worded as being 'in full and final settlement of all the plaintiff's claims', it must be taken to include whatever liability might be determined for all elements of the claim including interest accrued to the date of tender. If, when properly assessed, the plaintiff obtained an award exceeding the tender amount, the plaintiff was entitled to reject the tender and proceed to trial, and having 'faced the risk successfully', is entitled to costs in accordance with the general principle that costs follow the event.

The court observed that as a matter of practice when deciding costs, courts ought to consider whether unnecessary evidence was led by the successful party and should disallow costs in relation to severable issues in respect of which that party did not succeed (citing Gentiruco AG v Firestone SA (Pty) Ltd 1972 (1) SA 589 at 668H-669C). However, the court noted that such discretion should be exercised when the original costs order is considered, not when reconsidering costs under rule 34(12) following notification of a tender. The court also noted that the position might have been different if the tender had been so worded that it covered only the successful claims rather than being expressed as settling 'all the plaintiff's claims'.

This case provides important guidance on the proper approach to determining costs when a secret tender has been made under Uniform Rule 34. It establishes that when assessing whether a tender has beaten the amount awarded, courts must consider the total amount due at the date of tender, including all accrued interest and other components of the claim, not merely the capital element. The judgment clarifies that a tender made 'in full and final settlement of all claims' must be taken to include all elements of liability, including accrued interest. It also confirms the limited nature of the court's discretion under rule 34(12) when reconsidering costs after a tender has been made - the primary consideration is whether the tender beat the total amount awarded. The case reinforces the principle that a party who rejects a tender and proceeds to trial 'faces the risk' but if successful (by obtaining an award exceeding the tender), is generally entitled to costs in accordance with the general rule.