About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2020
>>
[2020] ZAGPPHC 110
|
|
Rensburg and Others v South African Legal Practice Council (69359/2019; 69360/2019; 69361/2019; 69362/2019) [2020] ZAGPPHC 110; 2024 (1) SA 510 (GP) (16 January 2020)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA DIVISION,)
(1)
REPORTABLE: YES/
NO
(2)
OF INTEREST TO OTHER JUDGES: YES/
NO
(3)
REVISED.
DATE:
16/1/2020
SIGNATURE:
L
D RENSBURG
Applicant 69359 / 2019
M
PATEL
Applicant 69360 / 2019
J
NlCOLSON
Applicant 69361 / 2019
L
ESSOP
Applicant 69362 / 2019
and
THE
SOUTH AFRICAN LEGAL PRACTICE COUNCIL
JUDGEMENT
Before:
J HOLLAND-MUTER A/J:
[1]
These matters are all applications for the various Practical
Vocational Training Contracts
(PVTC) entered into by the applicants
to be registered by the Legal Practitioners Council (LPC). The LPC
was established in terms
of Section 4 of the Legal Practice Act No 28
of 2014 (LPA or the "Act"), a body corporate with full
legal capacity and
exercises jurisdiction over all legal
practitioners as contemplated in the LPA, and came into effect 1
November 2018.
[2]
It was decided that, in the interest of the four (4) applications
because they are
basic the same but for the individual different
facts, to be heard together to prevent unnecessary duplication and to
provide future
guidance on this issue. It is the first application on
this specific Rule under the new LPA dispensation and it may be
helpful
to analyze the legal position.
[3]
One of the primary objectives of the LPA is to create a single
unified statutory body
to regulate the affairs of all legal
practitioners.
[4]
Candidate attorneys are by virtue of the LPA required to enter into a
written Practical
Vocational Training Contract ("PVTC" or
"contract") with the attorney who will become the candidate
attorney's
principal. This has been a requirement under the previous
acts preceding the LPA. See Section 21(1) and (2) of the Attorneys,
Notaries
and Conveyancers Act 23 of 1934 and Section 9 (1) and (2) of
the Attorneys Act, 53 of 1979. The parties are ad idem on this
requirement.
It is also not in dispute that the written contract has
to be registered with the LPC (and its predecessors) within two (2)
months
from entering into the PVTC.
[5]
The four applicants each entered into a written contract with Bowmans
Attorneys at
the beginning of 2019 and submitted these PVTC to the
LPC for registration thereof. I will deal with each application below
regarding
the facts.
[6]
The LPC declined to register the contracts because it holds the view
that the four
applicants were required to obtain the LPC's written
consent prior the entering the PVTC with the principals because the
applicants
did not comply with Rule 22.1.5 of the LPC Rules published
in terms of Sections 95 and 109 of the LPA. Although the Council did
not oppose the applications, it opted to assist the Court by
participating in the application and filed an explanatory affidavit
and addressed the Court during the hearing of the applications.
[7]
Rule 22.1.5 provides as follows:
"(1)
A candidate attorney shall not have any pecuniary interests in the
practice and service of an attorney, other than in
respect of bona
fide remuneration for his or her services as a candidate attorney,
and shall not, without prior written consent
of the Council, hold or
occupy any office in respect of which he or she receives any form of
remuneration, directly or indirectly,
or engage in any other business
other than that of candidate attorney,
where
holding that office or engaging in that business is likelv to
interfere with the proper training of the candidate attorney
.
(The underlined provision is new to the current Rules and was not
part of any of the previous Rules. The impact of this new inserted
portion will be discussed below).
(2)
If any candidate attorney contravenes the provisions of Rule 22.1.5.
the contract concerned shall be void ab initio and service
rendered
thereunder shall be ineffective unless the court on good cause shown
otherwise directs. "
[8]
The four applicants and the LPC exchanged several letters to resolve
the issue without
success. The LPC obtained a legal opinion but this
opinion was never made public to the applicants or to the court.
[9]
The applicants are of the view that their respective engagement in
other businesses
will not likely interfere with their proper training
and therefore no con sent was necessary from the LPC. The LPC
holds a
different view. It contends that whether or not the
engagement by the applicants in other businesses is likely to
interfere with
their respective training is for the LPC and not the
applicant to be assessed.
[10]
In order to assess the situation, the position of the Council and the
provisions of Rules applicable
needs attention.
10.1
The Council regulates all candidate legal practitioners (Section 5(d)
of the Act);
10.2
The Council is to promote high standards of legal education and
training and post-qualification professional
development of legal
practitioners (Section 5(h) of the Act);
10.3
The insertion of
"where holdings that office or engaging
in that business is likely to interfere with the proper training of
the candidate attorney”
has to be considered where
applicable. The question is by whom? Is it the LPC or does a
candidate attorney have the right to decide
on this?
[11]
It is a basic Rule of interpretation that every word in a section in
legislation or rule in sub-legislation
ought to be given the ordinary
meaning of the word in the context used and that the legislator (or
LPC in this matter when promulgating
the Rule), had a specific
intention with the specific word.
[12]
It is therefore necessary to determine why the new portion was
included in the new Rule and how
does it differ from the previous
dispensation when such provision did not exist? It is also necessary
to subject the new Rule for
interpretation to determine what is
required from a candidate attorney who may be subject to the
provisions of the new Rule.
[13]
In my view the new Rule provides for two (2) different scenarios
namely in the first instance
an absolute prohibition to have any
pecuniary interest in the attorney practice where the candidate
attorney renders the candidate
attorney services and (ii) the holding
of any other office, whether for remuneration or not, provided such
holding of office will
not likely interfere with the proper training
of the candidate attorney.
2
SCENARIOS:
(i)
A candidate attorney shall not have any pecuniary interest in the
practice and
service of an attorney
other
than in
respect of bona fide remuneration for his/her services as a candidate
attorney; or
(ii)
A candidate attorney shall not, without prior written consent of the
Council, hold
or occupy any office of which he/she receives any form
of remuneration, directly or indirectly; or engage in any other
business
other than that of candidate attorney, where holding that
office or engaging in that business is likely to interfere with the
proper
training of the candidate attorney.
[14]
To try and divide scenario (ii) into (a) the situation where
remuneration is received for holding
such office but that the holding
of the office will not likely interfere with the proper training of
the candidate attorney and
(b) where the holding of the office
without any remuneration will most
likely not interfere
with the proper training of the candidate attorney, is in my view
artificial.
[15]
The crux of the prohibition is whether the holding of such office may
interfere with the proper
training of the candidate attorney. The
receiving of remuneration in scenario (ii) is mere incidental to the
likelihood of interference
with the proper training of the candidate
attorney. When drafting the Rule it was deemed necessary to
distinguish between (1) the
absolute prohibition of any pecuniary
interest in the attorney practice where the candidate attorney is
subject to training and
(2) the receiving of remuneration from other
sources other than the attorney practice
on condition
that the holding of such office does not interfere with the proper
training of the candidate attorney
and on condition
that prior written consent from the Council be obtained. There can in
my view be no other interpretation of the Rule in question.
[16]
In my view it is clear that a candidate attorney shall not have any
pecuniary interest in the
practice and service of an attorney other
than the remuneration for his/her services as candidate attorney.
This is an absolute
prohibition and the
Council
may not give written consent in this regard. Scenario (i) above.
[17]
In scenario (ii) provision is made for a candidate attorney to occupy
any office for remuneration
or to engage into any other business with
the prior written consent of the Council provided that the holding of
such office in
not likely to interfere with the proper training of
the candidate attorney. My italics.
[18]
The question is, with reference to scenario (ii) above, to determine
whether the occupying of
such office or engaging into any other
business is likely to interfere with the proper training of the
candidate attorney? Is it
for the candidate attorney, the principal
of the candidate attorney or the Council to make this determination?
In my view it can
only be the Council. The candidate attorney or the
principal is not authorized in the Rule to take the decision. To hold
otherwise
will defeat the object of the Rule. The Council as the
guardian of all legal practitioners in the country, has to decide the
issue
and no one else.
APPLICATION
OF THE RULE ON THE FACTS:
[19]
RENSBURG:
Rensburg,
while still at university, became a director of a non-profit company.
The company has been active since 2017 but Rensburg
has since
September 2018 played no further role in the company although he
remained a director. He claims not to have earned any
remuneration
from his directorship of the company. He signed his PVTC on 16
January 2019 and delivered an affidavit to the Council
on 31 January
2019 disclosing his directorship but failed to state that the company
was inactive. The PVTC was lodged with the
Council o 4 March 2019
(within the required two months after the signing thereof). The
Council informed him on 22 March 2019 that
it was prima facie of the
view that there was a non-compliance with the Rule in question.
Rensburg will not be able to write the
coming admission examinations
during February 2020 if the PVTC is not registered by the Council.
Rensburg, like the other applicants,
could not resolve the matter
with the Council and approached the Court in terms of Rule 22.1.5.2
for relief.
[20]
PATEL:
Patel
was a director of a company before entering into the PVTC with the
attorneys on 25 January 2019. He ceased earning any remuneration
from
the company or being active in the company since November 2018. He
disclosed his directorship in the company "
TIE UP N BE
TIERRIFIC (Pty) Ltd
on 10 January 2019 and that the company
did not have any other directors. The company's goal was to supply
university students
with low cost formal attire to dress
appropriately for job interviews and employment. It seems that the
company ceased operations
but was not deregistered since November
2018. He was aware that under the repealed Act it was necessary to
apply for such consent
prior to entering into a training contract. He
however held the view that it was not necessary to obtain prior
consent because
of the fact that the company no longer operated and,
in his view, would not interfere with his proper training. It is with
respect
not for him to decide whether it will interfere with his
training. He was also not able to resolve the dispute with the
Council
and he will also not be able to sit for the examination
during February 2020 should the matter not be resolved.
[21]
NICOLSON:
Nicolson
started to provide administrative assistance to his mother's property
company, (Debbie Nicolson, sole owner of Debbie Nicolson
Properties
(Pty) Ltd) while still at university. The company operates
exclusively in Cape St Francis in the Eastern Cape. He provided
administrative assistance to this company after hours in exchange for
a monthly payment of R3 000,00 towards his outstanding student
loan.
He stated that he did not receive any payments during 2019. He
considered the payment as his parents' assistance towards
his studies
and that should he continue to provide this administrative
assistance, he will spend approximate 2-3 hours a week on
this,
normally over weekends and that this will not interfere with his
training as candidate attorney. The Council also refused
to register
his PVTC although it was lodged within two months after entering into
on 17 January 2019. He will also miss the coming
examinations during
February 2020 should his PVTC not be registered in time.
[22]
ESSOP:
Essop
was a student when she became a director of a company. She did not
receive any remuneration for her role and ceased to be
active in the
company from March 2018. She signed her PVTC on 15 January 2019 and
it was lodged within two months thereafter with
the Council. She was
a director of "
The Consulting Academy (Pty) Ltd,
a
company completely student run. The company was incorporated during
2017 with the aim to provide youth based insights and solutions
towards companies, employed fellow students at the University of the
Witwatersrand, students showing potential as industry leaders
in
their respective fields of study. The aim was to assist students to
become competitive in the economy and to address the high
level of
unemployment amongst youths. The company also entitled students to
source an income to assist with their study fees. When
it was clear
that the Council viewed this as a contravention of the particular
Rule, she resigned as director on 14 June 2019.
She stated that she
did not earn any income from the company but it was solely to provide
assistance to other students. She is
in a similar position with
regard to the coming examinations as the other applicants for the
February 2020 exams should her PVTC
not be registered.
RELIEF
SOUGHT:
[23]
All four applicants seek similar relief from the Court. Their main
relief is that the Court find
that they were not required to obtain
prior written consent from the Council under Rule 22.1.5.1 and that
the Council be directed
to register their respective PVTC
("contracts") with effect from the date of signature
thereof, in Rensburg's application
on 25 January 2019; in Patel's
application on 25 January 2019; in Nicolson's application on 17
January 2019 and in Essop's application
on 15 January 2019. In the
alternative and in the event of the Court not granting the primary
relief, all four applicants requested
the Court to grant the relief
as provided for in Rule 22.1.5.2, being condonation in terms of
sub-rule (1) and direct the Gauteng
LPC to register the individual
contracts of the four applicants with the effective dates as set out
above.
[24]
I have indicated above that it remains the LPC's prerogative to
decide whether an individual
applicant has to obtain prior written
consent in terms of the applicable Rule in regard of the second
scenario set out in par [13]
above. The purpose of the relevant Rule
is to ensure that a candidate attorney does not occupy any other
office other than that
of candidate attorney or engaging in any other
business that is likely to interfere with his/her proper training as
candidate attorney.
The new insertion is to make it possible for an
applicant to approach the Court on good cause shown that the
non-compliance with
Rule 22.1.5.1; and that it does not interfere
with the envisaged training and that the PVTC ("contract")
be declared
valid and the service rendered be effective. Failure to
obtain the necessary prior written consent of the Council renders the
contract
ab initio void
and the service
ineffective.
[25]
I am of the view that the wording in Rule 22.1.5.1 is clear and that
a candidate attorney must
obtain prior written consent to hold such
office and/or to receive remuneration as set out in the Rule. It is
not for the candidate
attorney to decide whether the holding of such
office is likely to interfere with his/her training. If that was
allowed, there
will be no norm to be applied what is meant with
"likely to interfere with the training of the candidate
attorney"
and it will defeat the purpose of the Rule. The
purpose of the Rule is clearly to guard against candidate attorneys
becoming involved
in other business whilst under-going the proper
envisaged training as a candidate attorney.
[26]
A candidate attorney aggrieved by the refusal of his/her application
in this regard by the Council
has the relief set out in sub-rule (1)
to approach the Court for a declaratory order. It is not condonation
which is sought but
a declaratory order on good cause shown why the
Court should direct otherwise after the Council has considered the
initial application
and found against the applicant candidate
attorney or as in these applications where the candidate attorneys
failed or neglected
to obtain prior written consent from the Council.
[27]
What constitutes good cause is a factual question to be answered in
every individual application.
What
good cause
is ought
to be established on the facts of each case. It is not possible to
formulate a definition what good cause is but in each
case the court
has to examine the circumstances to find whether a valid and
justifiable reason exists why the non-compliance can
be condoned. See
General Accident Insurance Co of SA Ltd v Zampeli
1988 (4) SA 407
at 410- I
. In cases of flagrant breaches or non-compliances of a
rule a Court may refuse such relief where it would defeat the purpose
of
the Rule. See
Tshivhase Royal Council & Another v Tshivhase
& Another
1992 (4) SA 323
SE at 329 C-D
. These cases did not
deal with the present Rule debated before the Court but are handy
guidelines as to what may constitute good
cause. The Court is given a
discretion in the sub-rule to consider good cause. A further aspect
to consider is whether there is
any prejudice to any party when
deciding the issue.
See The Civil Practice of the Supreme Court of
South Africa by Herbstein & Van Winsen 4th ed p 560-561
.
Again, it is to find guidelines to apply this new Rule.
[28]
When applying the above on the facts of each of the applicants. I am
of the view that all four
were obliged to obtain prior written
consent from the Council to remain engaged in their respective prior
offices/businesses before
entering into the respective PVTC
("contracts"). The Council cannot consider the applications
after the contracts were
entered into and the contracts are rendered
ab initio void and the service rendered is also ineffective.
[29]
When considering whether the applicants have shown good cause why
this court should direct otherwise
(as in Rule 22.1.5.2), I am
satisfied that none of the four applicants' training will be
interfered with as envisaged in the Rule
and therefore find that the
applicants have all shown good cause for the Court to grant the
required relief. There is no indication
whatsoever how the
applicants' training will be interfered with. The Council did not
oppose the individual applications but participated
in the
proceedings to obtain guidance for future reference.
ODRER:
[30]
Having read the papers and hearing council on behalf of the parties,
the following order is made:
The
Gauteng Legal Practice Council is directed to register the individual
Practical Vocational Training Contracts of the four applicants
on the
respective dates when lodged as set out above. The registration must
be made in time to allow the applicants to participate
in the
examinations set for February 2020. No order with regard to costs is
made.
[29]
I want to thank both parties for the helpful heads of arguments and
the professional manner in which the application was dealt
with.
J
HOLLAND-MUTER A/
Acting
Judge of the Pretoria High Court
January
2020.
Heard
on 11 December 2019.
Judgement
handed down after the recess on 16 January 2020.
On
behalf of the applicants:
BOWMAN
GILFILLAN ATTORNEYS
C/O
FRIEDLAND HART SOLOMAN & NICOLSON REF: T VAN STRAATEN
012-
424 0200 / 011-6699560 (Jane Andropoulos)
(Adv
K D ILES)
072
312 2559
On
behalf of the Legal Practitioners Council:
ROOTH
& WESSELS INC
REF:ABLOEM
012-452
4000