Summary of Judgment

Introduction

The proceedings were an application for leave to appeal heard in the North Gauteng High Court, Pretoria. The applicants were the Law Society of the Northern Provinces and its Secretary. The respondents were Peter Arthur Dykes, Cheryl Ramsamy, Phasundi Doctor Segogoba, and Johan van Heerden.

The application for leave to appeal arose from an earlier urgent application, heard during the December 2009 recess, in which the respondents (as applicants in that earlier matter) sought an order compelling the Secretary of the Law Society (the third respondent in the earlier proceedings) to issue each of them with a fidelity fund certificate in terms of section 42 of the Attorneys Act 1979, for the period 1 January 2010 to 31 December 2010. Sapire AJ granted that relief and later furnished reasons.

The general subject-matter of the dispute concerned the Law Society’s refusal to issue fidelity fund certificates to practising attorneys on the basis that the Law Society had decided to institute proceedings for their suspension or striking-off, and whether such a decision justified withholding certificates that would otherwise enable the attorneys to practise.

Material Facts

It was common cause that the respondents had brought an urgent application seeking an order compelling the issuance of fidelity fund certificates for the 2010 calendar year, and that the court granted the order and the certificates were ultimately issued and remained current at the time of the leave-to-appeal judgment.

The court recorded that, in the earlier judgment, it had incorrectly required that the certificates be issued by the second respondent rather than the third respondent (the Secretary). The court considered that little turned on this error because the certificates had in fact been issued and remained valid.

A further fact regarded as significant by the court was that the practical importance of the specific 2010 certificates had diminished with time, because applications for certificates for the following year would need to be made shortly. However, the court emphasised that the reasoning underlying its earlier decision remained important because it would affect future applications, including those of the same respondents and others against whom the Law Society might decide to pursue suspension or striking-off.

On the merits of the refusal, the court treated as decisive that there was no evidence that the Secretary was not satisfied, or had any reason not to be satisfied, that the respondents had complied with the requirements relevant to the issuance of certificates (in particular, the discharge of liabilities to the Law Society in respect of contributions and compliance with lawful requirements). The court identified the sole reason for withholding the certificates as the Law Society’s determination to take steps against the attorneys, with an application for striking-off still pending.

Legal Issues

The central legal question was whether, properly construed, section 42 of the Attorneys Act 1979 entitled or required the Secretary of the Law Society to withhold a fidelity fund certificate from an attorney who otherwise met the statutory and lawful requirements, merely because the Law Society had decided to institute (or had instituted) proceedings to have that attorney suspended or struck off.

This issue was primarily one of law, namely the interpretation and application of section 42, coupled with an application of law to fact in determining whether the refusal reason advanced (pending disciplinary proceedings) constituted a lawful basis to withhold the certificates.

A further issue relevant to leave to appeal was whether there was sufficient reason to grant leave given that the judge’s views were, to some extent, in conflict with observations made in other matters in the same court, and given the potential broader importance of the interpretation for future certificate applications.

Court’s Reasoning

Sapire AJ approached the matter by articulating an understanding of section 42 as imposing an obligation on the Secretary to issue a fidelity fund certificate forthwith once a properly presented application was made, provided the Secretary was satisfied that the applicant attorney had discharged liabilities to the Law Society in respect of contributions and had complied with any other lawful requirement of the Law Society.

On the facts as the court accepted them, the judgment emphasised the absence of evidence showing that the Secretary lacked the requisite satisfaction regarding compliance. The court therefore treated the refusal as resting solely on the Law Society’s decision to pursue striking-off proceedings, rather than on non-compliance with the statutory or lawful preconditions to issuance.

The court held that withholding a certificate for that reason was invalid and contrary to section 42, because it effectively prevented an attorney from practising on their own account in circumstances where, in the court’s view, only a court could prevent practice by ordering suspension or striking-off. The reasoning was that refusal of a fidelity fund certificate in these circumstances would pre-empt the court’s role in determining whether the attorney should be suspended or struck off.

Sapire AJ further reasoned that if there were reasons warranting immediate restriction on an attorney’s ability to practise, an appropriate course would be to bring an urgent and properly motivated application to court for such relief, rather than administratively achieving the same effect by withholding certificates.

In deciding the leave-to-appeal application, the court acknowledged that its views were, to some extent, in conflict with observations made in other unreported matters in the same division suggesting that certificates should not be issued when the Law Society had decided to pursue suspension or striking-off. The court also noted that, although a subsequent judgment in Viljoen aligned with its own approach, it remained unconvinced by the contrary views but nevertheless granted leave to appeal out of deference to the existence of conflicting judicial observations and the broader importance of the issue.

Outcome and Relief

The High Court granted the applicants leave to appeal to the Supreme Court of Appeal against the judgment and order dated 30 April 2010.

The costs of the application for leave to appeal were ordered to be costs in the appeal.

Cases Cited

Setshogoe v The Law Society of the Northern Provinces (Case No 28677/2008) (North Gauteng High Court, Pretoria) (unreported).

The Law Society of the Northern Provinces v Setshogoe (Case No 5273/2008) (North Gauteng High Court, Pretoria) (unreported).

Viljoen v The Law Society of the Northern Provinces (Case No 745/2010) (North Gauteng High Court, Pretoria) (unreported).

Legislation Cited

Attorneys Act 1979, section 42.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that, on its understanding of section 42 of the Attorneys Act 1979, the Secretary of the relevant Law Society is obliged to issue a fidelity fund certificate upon a properly presented application where the Secretary is satisfied that the applicant has discharged required liabilities and complied with lawful requirements, and that the mere fact that the Law Society has decided to bring (or has pending) suspension or striking-off proceedings is not a valid basis to withhold such a certificate.

The court further held that because its reasoning conflicted to some extent with earlier observations in unreported matters in the same court (despite later support in an unreported decision), the matter warranted consideration by the Supreme Court of Appeal, and leave to appeal was accordingly granted with costs reserved for determination in the appeal.

LEGAL PRINCIPLES

Section 42 of the Attorneys Act 1979 was applied on the footing that a fidelity fund certificate must be issued when the statutory and lawful prerequisites for issuance are met, and that an administrative refusal may not be grounded on considerations extraneous to those prerequisites.

The judgment applied the principle that only a court may prevent an attorney from practising by ordering suspension or striking-off, and that withholding a fidelity fund certificate to prevent practice in anticipation of such proceedings constitutes an improper pre-emption of judicial determination.

Where immediate restriction on practice is said to be necessary, the proper course is to seek urgent judicial relief rather than to achieve the same result indirectly through withholding a fidelity fund certificate.