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[2018] ZASCA 130
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Sooklal v Thales South Africa (Pty) Ltd (866/2017) [2018] ZASCA 130 (27 September 2018)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 866/2017
In
the matter between:
AJAY
SOOKLAL APPELLANT
and
THALES
SOUTH AFRICA (PTY)
LTD RESPONDENT
Neutral
Citation:
Sooklal
v Thales SA (Pty) Ltd
(866/2017)
[2018] ZASCA 130
(27 September 2018)
Coram:
Navsa,
Tshiqi, Dambuza and Van der Merwe JJA and Nicholls AJA
Heard:
28
August 2018
Delivered:
27
September 2018
Summary:
Arbitration
award made order of court purportedly in terms of
s 31
of the
Arbitration Act 42 of 1965
– award denying attorney’s
claim for fees in execution of a mandate and ordering him to pay
costs of the arbitration
– opposition to the award being made
an order of court based on facts not raised before arbitrator or
appeal tribunal –
alleged unlawful conduct on the part of
client unconnected to the mandate and its execution – award not
tainted by untested
allegations.
ORDER
On
appeal from:
The
Gauteng Local Division of the High Court, Johannesburg (Mokhari AJ
sitting as court of first instance).
The
appeal is dismissed with costs, including the costs of two counsel.
JUDGMENT
Navsa
JA (Tshiqi, Dambuza and Van der Merwe JJA and Nicholls AJA
concurring):
[1]
This appeal by Mr Ajay Sooklal, an attorney, is directed against an
order of the Gauteng Local Division of the High Court, Johannesburg
(Mokhari AJ), in terms of which, at the instance of the respondent,
Thales South Africa (Pty) Ltd (the company), an award by an
arbitration appeal tribunal was made an order of court, purportedly
in terms of
s 31
of the
Arbitration Act 42 of 1965
.
[1]
The appellant’s case, as will become apparent is, to say the
least, an unusual one.
[2]
At the outset, for reasons that will become clear, it is necessary to
record the following. The company is a subsidiary of the
South
African arm of a French based company that is involved in the
aerospace, space, defence, security, and transportation industries
and employs tens of thousands of people. The French company is a
recognised major international supplier of armaments. During 1998
the
group of which the company formed part, played an important role in
the South African Defence Force’s arms acquisition
process. The
arms acquisition process became popularly known as ‘the Arms
deal’. The group was awarded a contract worth
R2,6 billion by
the State. The contract was executed but it has since then been mired
in litigation and controversy in the public
eye. It was in the midst
of investigations into alleged criminal conduct on the part of the
company and associated high ranking
persons and entities, including
its South African subsidiary, Thint (Pty) Ltd, in relation to the
arms deal, that Mr Sooklal was
engaged as an attorney to represent
the company. More particularly, his services were required in
relation to an impending prosecution
and related litigation within
and beyond our borders. According to Mr Sooklal, he was also engaged
to market the company’s
services and products.
[3]
During 2011 Mr Sooklal instituted action in the Gauteng Local
Division of the High Court, Johannesburg, against the company,
claiming professional fees in excess of R50 million in relation to
the services referred to in the preceding paragraph. The action
was
based on an oral agreement concluded between the parties during
September 2003, in terms of which Mr Sooklal was required to
render
the aforementioned services. From time to time Mr Sooklal engaged the
services of counsel to perform work on the company’s
behalf.
More, later, about the details concerning the nature and extent of
the work claimed to have been done by Mr Sooklal on
the company’s
behalf.
[4]
The company defended the action. After the close of pleadings the
parties agreed to have the dispute adjudicated by an arbitrator.
Arbitration proceedings commenced and were completed before retired
Judge Levinsohn.
[5]
The arbitrator was impressed by Mr Sooklal’s testimony, stating
that he had created a ‘very favourable impression’.
He
took the view that Mr Sooklal had a brief from the company, largely
in line with his pleadings, and had executed it. The brief
was
described as having to leave no stone unturned in an endeavour to
have criminal charges against the company and related entities
withdrawn. Judge Levinsohn also looked favourably on Mr Sooklal’s
assertion concerning his entitlement to a ‘success
fee’.
He rejected the company’s contention that the fees that were
the subject of Mr Sooklal’s claim were excessive
and calculated
to overreach.
[6]
Judge Levinsohn held that Mr Sooklal was entitled to a daily retainer
equivalent to a daily fee charged from time to time by
senior counsel
in KwaZulu-Natal. The daily fee had, over time, increased from R18
000 to R33 000. The arbitrator held it against
the company that it
had not called witnesses to rebut Mr Sooklal’s version and to
support the contentions set out in its
plea.
[7]
In its plea, the company accepted that Mr Sooklal had done work on
its behalf. Before the arbitrator, the company contended
that much of
his evidence in relation thereto was in response to leading
questions. That submission was rejected. Judge Levinsohn
accepted the
activity report presented by Mr Sooklal setting out the work done and
containing calculations by his accountant. He
accepted that Mr
Sooklal, by using the said documentation and relying on his memory,
properly reconstructed his activities in relation
to the brief by the
company. Judge Levinsohn accepted that the daily fee would be
applicable, irrespective of the number of hours
worked.
[8]
In its plea and before the arbitrator, the company had also taken the
point that Mr Sooklal was not entitled to any payment
because of the
provisions of s 41 of the Attorneys Act 53 of 1979 (the Act), which
precludes a practising attorney from recovering
a ‘fee, reward
or disbursement while practising on his own account without being in
possession of a fidelity fund certificate’.
It is common cause
that, at all relevant times, Mr Sooklal was not in possession of such
a certificate.
[9]
Mr Sooklal, in his original particulars of claim, had claimed the
fees both in his personal capacity and in his capacity as
cessionary
of rights by attorney Shaminder Rampersad who, it was stated, had
ceded to Mr Sooklal his right to the payment of fees
by the company.
Somewhat confusingly, the fees were claimed on the basis of Mr
Sooklal being the company’s attorney, representing
it and
related persons and entities
and
on the basis of him being a cessionary of rights. In the first
amendment to his particulars of claim Mr Sooklal changed tack, in
response to the point taken by the company concerning his lack of a
fidelity fund certificate, he asserted that he was claiming
the fees,
not in his capacity as an attorney, but in his personal capacity. He
later claimed that at material times he was acting
as a consultant to
attorney Rampersad, and was thus not required to be in possession of
a fidelity fund certificate. He also alleged
that he had a
contractual arrangement with Mr Rampersad in terms of which he was
personally entitled to the fees earned by him
in executing the brief
referred to above.
[10]
During proceedings before the arbitrator Mr Sooklal delivered yet
another amendment to his particulars of claim. This time
he stated
that his monetary claim included an amount of approximately R8
million, earned while he was a consultant to Karodia attorneys,
but
serving the company. He went on to state, however, that he had not
taken cession of the claim which that firm had against the
company
and, thus conceded that his overall claim fell to be reduced
accordingly.
[11]
In dealing with the company’s defence that the fees could not
be claimed because of the lack of a fidelity fund certificate,
Judge
Levinsohn held that the words in s 41 of the Act, ‘on his own
account’ meant that the practitioner concerned
must have the
status of proprietorship of the entity engaged by the client. He
found that Mr Sooklal had not practised on his own
account and that
his claim was thus not obstructed by his lack of a fidelity fund
certificate.
[12]
In respect of Mr Sooklal’s claim for a success fee, Judge
Levinsohn found that his version that there had been an agreement
in
relation thereto was inherently probable, given that the company, in
resisting a claim for summary judgment in the court below,
had stated
that if Mr Sooklal was successful in carrying out his mandate it
might have been possible for him to have motivated
for a bonus.
Counsel on the company’s behalf also contended before the
arbitrator that the alleged success fee amounted to
a contingency fee
agreement, which, in terms of the
Contingency Fees Act 66 of 1997
,
was excluded in relation to criminal proceedings. Judge Levinsohn
held that Mr Sooklal’s mandate extended to ancillary
applications and that Mr Sooklal had testified that normal fees would
be charged and, in addition, a success fee was agreed which
did not
fall within the definition of a contingency fee agreement. Judge
Levinsohn concluded that the
Contingency Fees Act did
not apply.
[13]
On 18 May 2015 Judge Levinsohn, having reached the aforementioned
conclusions, rendered an award in terms of which he directed
the
company to pay Mr Sooklal:
(1) R37 471 00
in respect of work done as an attorney, R399 000 comprising
non-attorney work (plus VAT on both amounts)
and R3 983 300
as a success fee;
(2) Interest on those
amounts; and
(3) Costs, including the
costs of two counsel, the arbitrator’s charges, the costs of
hiring the arbitration venue, the costs
of the transcription of the
evidence, and all costs that were reserved or stood over.
[14]
The arbitration agreement made provision for an appeal to an appeal
tribunal. The company sought to appeal the award by Judge
Levinsohn
and the parties consequently agreed to an appeal panel of three
retired judges, two of the Supreme Court of Appeal, namely
Judges
Brand and Malan and the third, Judge Southwood of the Gauteng
Division of the High Court, Pretoria.
[15]
Before the arbitration appeal tribunal Mr Sooklal was less fortunate.
The appeal tribunal swiftly disposed of Mr Sooklal’s
claim for
non-attorney work. It took into account that in that regard he had
received an amount from the company in excess of the
amount claimed.
In rejecting this claim and upholding the appeal in relation thereto,
the tribunal recorded that counsel on his
behalf did not contend it
should conclude otherwise.
[16]
In relation to Mr Sooklal’s claim for a success fee the appeal
tribunal did not consider it necessary to decide conclusively
whether
the
Contingency Fees Act 66 of 1997
applied to an arrangement such as
alleged by Mr Sooklal, but stated that if indeed it was so covered it
would not be enforceable,
because it had not, in terms of that Act,
been reduced to writing, containing the detail required in terms of s
3(3)
(b)
thereof.
[2]
Furthermore, the
tribunal, with reference to
Goolam
Mahomed v Janion
(1908)
29 NLR
304
,
went on to hold as follows: ‘The simple fact is that the
agreement is and was unenforceable at common law’. The tribunal
stated that the
Contingency Fees Act provided
the only exception to
the common law rule that contingency fee arrangements are
unenforceable, regardless of the nature of the
work performed and,
whether or not they relate to litigation. It upheld the company’s
appeal in respect of Mr Sooklal’s
claim.
[17]
In relation to Mr Sooklal’s main claim for attorney’s
work done on the company’s behalf, en route to a conclusion
that the claim was barred in terms of s 41 of the Act for lack of a
fidelity fund certificate, the appeal tribunal nevertheless
considered it necessary to comment extensively on Mr Sooklal’s
credibility. The material parts of the comments are set out
hereafter.
[18]
The tribunal recognised that the company had not adduced evidence
challenging Mr Sooklal’s testimony, but went on to
state that
it did not follow that where evidence is
un-contradicted
it must be accepted. It
appreciated that a trial judge has advantages over an appeal
tribunal, particularly in relation to observing
the demeanour of
witnesses and reminded itself of the caution often sounded, that an
appeal tribunal should be slow to upset the
findings of a trial
court, but went on to refer to the following dictum from
R
v Dhlumayo & another
1948 (2) SA 677
(A) at 706:
‘
There may be a misdirection on
fact by the trial Judge where the reasons are either on their face
unsatisfactory or where the record
shows them to be such; there may
be such a misdirection also where, though the reasons as far as they
go are satisfactory, he is
shown to have overlooked other facts or
probabilities.
The appellate court is then at large
to disregard his findings on fact, even though based on credibility,
in whole or in part according
to the nature of the misdirection and
the circumstances of the particular case, and so come to its own
conclusion on the matter.’
The
tribunal referred further, in the same vein, to the decision of this
court in
Santam
Bpk v Biddulph
2004 (5) SA 586
(SCA) para 5:
‘
Whilst a Court of appeal is
generally reluctant to disturb findings which depend on credibility
it is trite that it will do so where
such findings are plainly wrong
. . . This is especially so where the reasons given for the findings
are seriously flawed. Overemphasis
of the advantages which a trial
Court enjoys is to be avoided, lest an appellant’s right of
appeal “become illusory”
. . . It is equally true that
findings of credibility cannot be judged in isolation, but require to
be considered in the light
of proven facts and the probabilities of
the matter under consideration.’
Having
cited these authorities the tribunal proceeded to scrutinise the
relevant parts of Mr Sooklal’s evidence.
[19]
The tribunal stated emphatically that it disagreed with the
conclusion reached by Judge Levinsohn that Mr Sooklal was a good
and
credible witness. It considered his evidence on the details of his
mandate to be vague and contradictory. It found that material
parts
of his activity report in relation to his mandate had not been
satisfactorily explained. It held it against Mr Sooklal that
working
papers that were supposed to form the basis of the report had not
been produced by him.
[20]
A number of ‘incorrect statements’ in Mr Sooklal’s
activity report, were referred to by the tribunal which
it said did
not inspire confidence. It referred to entries in relation to work
supposedly done over a number of successive months
being in identical
terms. The tribunal said the following in relation to statements that
work was done every day, including over
weekends and public holidays:
‘
A moment’s reflection is
sufficient to reject the statement that in the month of December the
claimant worked 31 days as set
out in the Activity Report. Statements
in the Activity Report such as these are simply not credible, and
fall short of the detail
a client of an attorney is entitled to. Be
that as it may, the arbitrator found the claimant to be a good and
credible witness.
We disagree. The claimant’s evidence
concerning the terms of his remuneration is not credible and hardly
“satisfactory”.’
[21]
In relation to Mr Sooklal’s evidence concerning his rate of
remuneration the tribunal was unimpressed by how his particulars
of
claim had changed after cross-examination. It held that there was no
basis to hold, as Judge Levinsohn did, that he had been
engaged on a
daily retainer. Mr Sooklal was aware, so the tribunal stated, that
senior counsel charged both an hourly and daily
fee, yet his claim
was based entirely on a daily fee. It was improbable, so the tribunal
reasoned, that there would have been an
agreement in those terms
early on, when Mr Sooklal was first engaged, especially since it was
contemplated that he would himself
further employ the services of
counsel.
[22]
In para 38 of the tribunal’s award the following appears:
‘
As we have already pointed out,
the claimant’s Activity Report is based entirely on a daily
fee. He claimed for thousands
of days’ work, regardless of the
fact that he did not always work a full day. His contention was that
the said rate had been
agreed upon in September 2003 and again in
March 2004. The claimant amended his particulars of claim in January
2015 to allege
that he was entitled to the daily and/or hourly rate
charged by senior counsel . . . But his evidence was that he was
entitled
to a daily rate: “Mr Moynot and I had an agreement
that this work demanded a daily rate and he and I agreed on our daily
rate and I did work on a daily rate as my evidence in chief would
testify”. The hourly rate became irrelevant. The claimant
had
to concede that his pleaded case was in conflict with his evidence.
The claimant was adjusting his evidence, as counsel suggested,
fluctuating between counsels’ fees and a daily rate, and when
this was put to him he answered that he had been guided by
counsel in
relation to his pleadings.’
[23]
The criticism did not end there. The tribunal went on to state the
following, at para 39 of its award:
‘
The claimant did not on any of
his invoices including the final one charge fees on any of the
alleged or pleaded bases. He claimed
an amount per day, even in
respect of days where he worked only for 1 hour on a particular day,
not on the basis on which senior
counsel charged. He even claimed the
daily fee of a senior counsel when he was on holiday. To suggest that
he could go on all-expenses
paid holiday cruises, with wife and
family, and still be paid a daily rate is absurd. No such agreement
was ever pleaded. Nor did
Moynot, even on the claimant’s
version, agree to remunerate him during these holidays. The pleaded
case was that he worked
for each of the days set out in the Activity
Report. This is clearly untrue and cannot be accepted. If his fees
were based on senior
counsel’s fees, his pleaded case, he had
to prove how many hours he worked on each of the days in question.
The final statement
that his fees were in the nature of a retainer
was not pleaded and emerged only belatedly under cross-examination.
It is significant
that this was not stated in any correspondence
prior to the institution of the action in the High Court when the
quantum of the
fees was in contention. At that stage the claimant had
not even attempted to quantify his claim.’
[24]
Three more paragraphs of criticisms followed in relation to Mr
Sooklal’s evidence concerning his remuneration, before
the
tribunal turned its attention to his assertion that he had been
acting as a consultant to attorney Rampersad and was therefore
not
barred from claiming fees due to the lack of a fidelity fund
certificate. The tribunal took into account that at no stage,
between
2001 and the middle of 2005, which formed part of the period during
which Mr Sooklal claimed to have done work for the
company, did he
act in any way on behalf of or in the name of Mr Rampersad. The
tribunal noted that the first invoices sent to
the company were in
the name of the Sooklal Trust. The tribunal had regard to the fact
that it was only when litigation was imminent,
in 2004, that Mr
Sooklal required the infrastructure of an attorney’s office in
Durban. He first chose attorney Karodia,
whose offices he used for
the delivery of documents and whose letterhead he utilised. There was
no evidence that he had informed
the company that he was a consultant
with that attorney. There was no explanation by him of what the
concept meant, or why there
were fees due to that firm. The tribunal
considered that he continued to bill the company for services
rendered in the name of
the Sooklal Trust. No mention was ever made,
up to November 2005, of attorney Rampersad.
[25]
Even as late as May 2008 he continued to invoice the company in the
name of the Sooklal Trust and received monies into his
own bank
account. After evidence had been led before Judge Levinsohn, Mr
Sooklal amended his particulars of claim, inserting attorney
Karodia
into the narrative. At the end of para 44 of the tribunal’s
award the following appears:
‘
But, more importantly, the
claimant never established the contractual basis for the defendant’s
liability, first, to Rampersad,
then to Karodia and then again to
Rampersad.’
[26]
At para 46 of the award the tribunal said the following:
‘
The defence concerning the
claimant’s lack of standing is that the agreements with the
defendant were concluded with the claimant
personally, and not with
Rampersad. It follows, if this contention is correct that Shaminder
Rampersad had nothing to cede to the
claimant. In advancing the
argument the defendant relied heavily on the formulation of the
claims by the claimant in his different
sets of particulars of claim
as well as on his evidence where he referred to himself rather than
to Rampersad as the contracting
party.’
[27]
The tribunal went on to examine the provisions of s 41 of the
Attorneys Act 53 of 1979, which read as follows:
‘
Possession of fidelity fund
certificates by practitioners practising on own account or in
partnership –
(1) A practitioner shall not practise
or act as a practitioner on his or her own account or in partnership
unless he or she is in
possession of a fidelity fund certificate.
(2) A practitioner who practises or
acts in contravention of subsection (1) shall not be entitled to any
fee, reward or disbursement
in respect of anything done by him or her
while so practising or acting.’
Against
these provisions the tribunal carefully considered Mr Sooklal’s
particulars of claim, where he stated that he was
a qualified
attorney who acted as a consultant to the two attorneys referred to
above and that in that capacity he was not required
to be in
possession of a fidelity fund certificate. It disagreed with the
conclusion by Judge Levinsohn that the requirement of
a fidelity fund
certificate extended only to a practitioner who has the status of
‘ownership or proprietorship of an entity’.
It said the
following:
‘
We do not agree with the
arbitrator’s construction of the words “not practise or
act as a practitioner on his own account
or in partnership”. A
“practitioner” is “any attorney, notary or
conveyancer” and “practise”
means “practise
as an attorney or a notary or conveyancer” and “practice”
has a corresponding meaning (s
1). Section 41(1) does not require the
practitioner to have the status of ownership of any entity. The
prohibition is directed
at the
conduct
of the practitioner in the defined circumstances. He may not
practise
or
act
as a practitioner on
his own
account
or in partnership
without being in possession of a fidelity fund certificate.’
(Emphasis in
original.)
It
went on to state the following:
‘
The term “consultant”
is not defined in the Attorneys Act, nor in the applicable rules of
the KZN Law Society. Nevertheless,
a consultant cannot, by relying on
some or other consultancy agreement avoid the requirement that he
must hold a fidelity fund
certificate when practising on own account.
If he desires to practise on his own account he must comply with all
the applicable
legislative and professional requirements. He cannot
escape the requirements of the Act by practising under the “umbrella
of another firm”, as counsel for the defendant put it, using
its infrastructure, letterheads, address for service etc, but
still
debit his own fees and incur his own expenditure. This, we will show,
is what happened in this case.’
[28]
The tribunal took into account that none of the expenses incurred by
Mr Sooklal had passed through the books of attorney Rampersad.
On his
own version of events, Mr Sooklal had therefore not been in
compliance with the provisions of the Act or the Rules of the
Law
Society. Furthermore, he had not accounted to either attorney Karodia
or Rampersad for moneys received from the company. The
tribunal held
that the fact that Mr Sooklal practised for his own account in terms
of an arrangement with attorney Rampersad did
not preclude a finding
that he had acted in contravention of s 41. On this aspect, the
tribunal ultimately concluded as follows:
‘
We find that he was practising
or acting as a practitioner on his own account without being in
possession of a fidelity fund certificate.
As such he is not entitled
to any fee, reward or disbursement in respect of anything he had done
while so practising or acting
(s 41(2) of the Attorneys Act). It
follows that the appeal must succeed on this ground as well.’
[29]
After scrutinising Mr Sooklal’s particulars of claim and
referring to material parts of his evidence and the related
documentation, the tribunal held that it was clear that Mr Sooklal
had rendered services to the company for his own benefit and
account.
At paragraph 59 it said the following:
‘
To practise on one’s own
account would therefore mean to practise on one’s own
responsibility and, in the context of
the legislation, as a
principal, for one’s own financial benefit.’
[30]
The appeal tribunal published its award on 18 November 2015,
upholding the company’s appeal, which resulted in Mr Sooklal’s
claim being dismissed with costs.
[31]
The company subsequently, as it was entitled to, applied in the
Gauteng Local Division of the High Court, Johannesburg, for
the award
to be made an order of court.
[32]
In resisting the application in the court below Mr Sooklal did not
challenge any of the tribunal’s findings of fact or
conclusions
on points of law. Mr Sooklal, for the first time, contended that the
award sought to be made an order of court, was
one tainted by
illegality, and it was thus against public policy for the court to do
so.
[33]
In opposing the company’s application to have the tribunal’s
award made an order of court, Mr Sooklal, in vague
and generalised
terms referred to his testimony before Judge Levinsohn, concerning
corruption on a grand scale involving the company
and a former
President of the Republic and other high-ranking government officials
as well as prominent members of the ruling party.
In his affidavit,
Mr Sooklal for the first time accused the company of ‘resorting’
to arbitration proceedings ‘to
throw a cloak of anonymity’
over its illegal activities.
[34]
Mr Sooklal also referred in his affidavit to his extensive
interaction with officers of the company and government officials.
He
alluded to ‘various investigations related to the arms
procurement process’ and a report of the standing committee
on
public accounts in which there were serious allegations of corruption
on the part of the company in relation to that process,
pointing to
them as corroboration for his accusations of corruption on a grand
scale, which he said the company and associated
entities were
involved in.
[35]
It was alleged by Mr Sooklal that at the time that he was executing
his mandate he was required to play a role in getting the
company
closer to high-ranking persons within the ruling party and, in
particular, the Minister of Defence. He described how he
had
interacted with officials and members of the ruling party to that
end. He was also aware of representations that resulted in
the
withdrawal of charges against the company.
[36]
In his affidavit, Mr Sooklal made reference to the judgment of this
court in
S
v Shaik & others
[2006] ZASCA 105
;
2007 (1) SA 240
(SCA) where certain payments made by the company were
referred to. Mr Sooklal contended that there could have been no
lawful basis
for the payments referred to in that case, suggesting
that they could only have been made with a corrupt motive.
[37]
Mr Sooklal also referred to what he regarded as an associated case,
involving government corruption, in relation to a contract
for the
issuing of drivers’ licences. Furthermore, he also referred to
several payments made by or on behalf of the company
to a former
President of this country which, he said, were part of the company’s
corrupt activities. He suggested that government
officials had been
bribed by officials of the company.
[38]
In his opposition to the arbitration award being made an order of
court, Mr Sooklal rejected claims by the company that he
had breached
the confidentiality of the arbitration agreement by leaking parts of
his testimony before Judge Levinsohn to the media.
He charged the
company with such a breach, on the basis that an officer of the
company had testified before the Arms Procurement
Commission relating
to his (Mr Sooklal’s) testimony before Judge Levinsohn in
breach of the confidentiality agreement.
[39]
The affidavit went on to complain that he had been refused an
opportunity to testify before the Arms Procurement Commission
and to
state that he had instituted proceedings in the high court to have
the Commission re-opened to hear his testimony. Mr Sooklal’s
affidavit also referred to the seizure of documents in Mauritius and
other parts of the world that he said implicated the company
and
associated entities in corruption.
[40]
Mr Sooklal’s affidavit, when viewed as a whole, is not entirely
coherent. As best as can be discerned, Mr Sooklal’s
opposition
to the award being made an order of court was based mostly on
generalised statements and sometimes vague averments.
Much of what
others and the company were accused of, was gleaned from reports and
court cases. Mr Sooklal, for obvious reasons,
stopped well short of
alleging that in rendering services to the company in execution of
his mandate, he was party to any of the
unlawful conduct he had
accused the company of.
[41]
In the court below it was submitted on behalf of Mr Sooklal, that
even though the submission concerning corruption, which he
claimed
had an effect on the validity of the arbitration award had not been
raised before, it was nonetheless properly resorted
to, in that it
was a point of law that could be raised even at that late stage.
Mokhari AJ dealt with that submission as follows:
‘
I agree with this submission
that this is a point of law which can be raised at any stage of the
proceedings. However, the determination
of this law point cannot be
determined in the abstract, but must be determined with reference to
the facts of the case. The respondent’s
allegations in the
opposing affidavit is that the applicant was engaged in illegal
activities and was determined to do anything
possible even if it was
illegal to get the criminal charges against the applicant withdrawn
including attempts to bribe senior
government officials, Minister and
the President (who at the time was the Deputy President). What the
respondent does not say in
the answering affidavit is that he was
involved in the illegal activities himself and that the agreement he
concluded with the
applicant was an offshoot of corruption or other
illegal acts. What the respondent understood to be the terms of the
agreement
he concluded with the applicant has been pleaded in detail
by the respondent in the particulars of claim and there is simply
nothing
illegal about what he alleged to be the terms of the
agreement as set out in the particulars of claim.’
[42]
The court below went on to state the following:
‘
According to the respondent, he
was engaged by the applicant in order to represent the applicant in
his capacity as attorney and
consultant in order to assist the
applicant to have criminal charges withdrawn against the applicant.
There is nothing illegal
about an attorney taking instructions to
represent an accused person even if the evidence against the accused
is overwhelmingly
against the accused. In fact, the duty of a lawyer
is to represent anybody who require the services of a lawyer and to
do so without
fear, favour or prejudice. The respondent’s
counsel referred me to authorities in the heads of argument and other
authorities
not cited in the heads of argument. My attention was
particularly drawn to the Constitutional Court judgment of
Cool
Ideas 1186 CC v Hubbard and another
2014 (4) SA 474
(CC). In
Cool
Ideas
supra
,
the Court was confronted with a contract between a consumer (home
buyer) and unregistered builder contrary to the provisions of
the
Housing Consumer Protection Measures Act 95 of 1998 which requires
that home builders must be registered. The National Home
Builders
Registration Council is responsible for the registration of
homebuilders and to monitor their performance in terms of
the
structural integrity of the houses they build. The Housing Consumer
Protection Measures Act prohibits any payment to an unregistered
home
builder. An award which was issued in favour of an unregistered home
builder against a consumer was illegal as it was in contravention
of
the Housing Consumers Protection Measures Act and therefore contrary
to public policy. The Constitutional Court dismissed the
appeal and
declined to make the award which was illegal an order of Court
because it would have been contrary to public policy.’
[43]
As to Mr Sooklal’s reliance on
Cool Ideas
, Mokhari AJ
said the following:
‘
None of the authorities
referred to me by the respondent is of assistance to the respondent.
In fact Cool Ideas
supra
is
at opposite poles with the facts of this case because in this matter
the agreement that is alleged by the respondent to have
been entered
into between the respondent and the applicant was for the respondent
to render professional legal services in his
capacity as an attorney
and consultant and to assist the applicant to get the charges
withdrawn. There is nothing illegal about
such an instruction because
any litigant who engages the services of a lawyer would want his or
her lawyer to represent him or
her successfully including if it is a
criminal matter to get the charges withdrawn, or that he or she be
acquitted at the end of
the trial.
The Cool Ideas
supra
dealt with a statutory
prohibition whereas in this case there is no statutory prohibition.
In this case, the award issued by the
single arbitrator in favour of
the respondent was overturned by the appeal panel of arbitrators
which found that the respondent
was not entitled to the fees he was
claiming from the applicant because he did not have a fidelity fund
certificate at the relevant
time. There is nothing illegal about an
award of this nature.’
[44]
The court below concluded that Mr Sooklal’s defence to the
company’s application to have the award made an order
of court
was without merit and that the requirements of
s 31
of the
Arbitration Act 42 of 1965
had been met. It made the following order:
‘
The arbitration award rendered
by the tribunal consisting of the retired Supreme Court of Appeal
Judges Brand and Malan and retired
High Court Judge Southwood dated
18 November 2015 is made an order of Court.
The respondent is ordered to pay the
costs of this application and such costs to include the costs
consequent upon the employment
of two counsel.’
It
is against that order and the conclusions on which it was based that
the present appeal, with the leave of the court below, is
directed.
[45]
There was never any question before the arbitrator, the appeal
tribunal or, indeed, in the pleadings in the court below where
the
claim was first instituted, that the arbitration agreement related to
Mr Sooklal’s mandate was tainted, either because
of the nature
of the services rendered by Mr Sooklal or in any other manner. This
is why there was no reference thereto by either
the arbitrator or the
tribunal in their awards. Mr Sooklal’s case, in all of the
above fora, simply put, was that he had
performed in terms of his
mandate and his claim was one of enforcement of its terms.
[46]
The application in the court a quo entailed the enforcement of the
arbitration agreement. That agreement was not tainted with
illegality
in any respect. The arbitration agreement was not one unilaterally
imposed by the company, nor could it have been. Aided
by legal
representatives, including senior counsel, the parties agreed in
writing to have the pleaded issues determined by arbitration.
They
agreed that either party would be entitled to make the award an order
of a competent court. They agreed on the arbitrator
and later on the
composition of the appeal tribunal. Mr Sooklal did not complain when
the arbitrator ruled in his favour. Counsel
on his behalf conceded
that, had there not been an appeal to the tribunal, his client would
have been content to accept the benefit
of the ruling in his favour
by the arbitrator.
[47]
Even though skirting close to his own involvement in the nefarious
conduct attributed to the company, Mr Sooklal studiously
avoided
incriminating himself in relation thereto. The reason is fairly
obvious. If he had done otherwise his claim would have
been
obstructed by the
par delictum rule
. In
Afrisure CC &
another v Watson NO & another
[2008] ZASCA 89
;
2009 (2) SA 127
(SCA) para 39,
Brand JA explained, in clear terms, the rule of our law encompassed
by the maxim taken from Roman law and Roman-Dutch
law
pari delicto
potior est conditio defendentis
, which was popularly abbreviated
to the ‘
par delictum rule
’:
‘
The principle underlying the
par delictum
rule is that, because the law should discourage illegality, it would
be contrary to public policy to render assistance to those
who defy
the law.’
In
Afrisure
,
this court referred to the seminal judgment in
Jajbhay
v Cassim
1939 AD 537
, in which the court, while affirming the considerations
of public policy underlying the rule, decided that it could in
appropriate
circumstances be relaxed in order to do ‘simple
justice between man and man’. In the present case, having
regard to
the degree and extent of criminal conduct in relation to
the State, one can rightly imagine the difficulties that Mr Sooklal
would
face to persuade a court to relax the rule in his favour.
[48]
When what is set out at the end of the preceding paragraph was put to
counsel representing Mr Sooklal, he rightly recognised
the
difficulty, but, incredulously, postulated that his client, faced
with the costs order awarded by the tribunal, had no other
choice but
to resort to the accusations of unlawful conduct on the part of the
company. That submission is indicative of the desperation
of the
defence latterly raised by Mr Sooklal.
[49]
Cool
Ideas
is
of no assistance to Mr Sooklal. That case dealt with the statutory
prohibition which prevented a building contractor from claiming
any
consideration in terms of any agreement with a housing consumer in
respect of the sale or construction of a home, registered
as a home
builder. The Constitutional Court, having regard to the scheme of the
Housing Consumers Protection Measures Act 95 of 1998
and, more
specifically,
s 10(1)
(b)
thereof, held that the contractor was barred from receiving payment
and that having regard to the purpose of the Act, the question
of
fairness did not intrude. In regard to the arbitration award there
concerned, it held that the arbitral award, which had found
in favour
of the building contractor had wrongly subverted the purpose of that
Act and was unenforceable. In that case, the arbitration
award had
violated a statutory prohibition backed by a criminal sanction and
was therefore contrary to public policy and unenforceable.
In the
present case, as stated above, Mr Sooklal’s claim was in
respect of work he had performed as an attorney, ostensibly
within
the parameters of what an attorney could lawfully do in representing
a client’s interests.
[50]
In the present case, the arbitration mandate was limited to an
enquiry as to whether Mr Sooklal was entitled, within a professional
regulatory framework, to the fees he had claimed in relation thereto.
The arbitration was conducted and decided within the parameters
of
the pleadings as amended. I agree with the conclusions reached by the
court below, that
Cool
Ideas
is
of no assistance to Mr Sooklal.
[51]
In
Daljosaphat Restorations (Pty) Ltd v Kasteelhof CC
2006 (6)
SA 91
(C), the court, having regard to
s 31
of the
Arbitration Act,
and
with reference to D Butler and E Finsen
Arbitration in South
Africa: Law and Practice
(1993) 1 ed at 273, said the following
about what an applicant for an order in terms of that section has to
show.
‘
The applicant . . . must prove
that there was a valid arbitration agreement covering the award, that
the arbitrator was duly appointed
and that there was a valid award in
terms of the reference.’
In
the present case, the company met the criteria.
[52]
On the other hand, the challenge by Mr Sooklal to the award being
made an order of court was severely lacking in substance.
Much of
what was stated in Mr Sooklal’s affidavit were conclusions
drawn from court cases and reports. An opportunity was
not afforded
to the range of parties accused of unlawful conduct to contest his
averments. The generalised
and
specific averments made by Mr Sooklal were untested and unconnected
to his claim for fees and were not issues that the court a
quo in
which his claim first served, or the arbitrator, or the tribunal,
were asked to adjudicate. As stated at the commencement
of this
judgment, the appellant’s case is unusual. It is also
contrived, opportunistic and entirely without merit.
[53]
On the admissible and acceptable evidence I can see no reason why the
company was not entitled to have the award of the tribunal
made an
order of court. In essence, the ultimate conclusion of the court
below cannot be faulted.
[54]
The following order is made:
The appeal is dismissed
with costs, including the costs of two counsel.
__________________
M
S Navsa
Judge
of Appeal
Appearances:
For
the Appellant:
R S Willis (with him E H Tugh)
Instructed by:
Dev Maharaj &
Associates Inc., Bryanston
Honey Attorneys Inc.,
Bloemfontein
For
the Respondent
C M Eloff SC (with him H A van der Merwe)
Instructed by:
Fluxmans Attorneys,
Johannesburg
Lovious Block,
Bloemfontein
[1]
Section 31
reads:
‘
(1) An award may, on the
application to a court of competent jurisdiction by any party to the
reference after due notice to the
other party or parties, be made an
order of court.
(2) The court to which application is
so made, may, before making the award an order of court, correct in
the award any clerical
mistake or any patent error arising from any
accidental slip or omission.
(3) An award which has been made an
order of court may be enforced in the same manner as any judgment or
order to the same effect.’
[2]
Section 3(1)
(a)
of the
Contingency Fees
Act 66 of 1997
provides:
‘
(1)
(a)
A contingency fees agreement shall be in writing and in the form
prescribed by the Minister of Justice, which shall be published
in
the
Gazette
,
after consultation with the advocates’ and attorneys’
professions.’
Section
3(3)
(b)
reads as follows:
‘
(3) A contingency fees
agreement shall state –
. . .
(b)
that,
before the agreement was entered into, the client –
(i) was advised of any other ways of
financing the litigation and of their respective implications;
(ii) was informed of the normal rule
that in the event of his, her or it being unsuccessful in the
proceedings, he, she or it
may be liable to pay the taxed party and
party costs of his, her or its opponent in the proceedings;
(iii) was informed that he, she or it
will also be liable to pay the success fee in the event of success;
and
(iv) understood the meaning and
purport of the agreement.’