Brief Summary

Legal Profession — Attorneys — Interdict against former attorneys — Respondents struck off the roll of attorneys and subsequently operating a close corporation providing legal services — Applicant sought interdict to prevent respondents from practising as attorneys or holding themselves out as such — Court found that respondents continued to perform duties reserved for attorneys, thus infringing on the applicant's rights to protect the profession — Interim order confirmed, but the scope of the interdict was narrowed to avoid infringing on respondents' constitutional rights to freedom of trade and occupation.

Comprehensive Summary

Summary of Judgment

Introduction

The proceedings were an application brought by the Law Society of the Free State (the applicant) against Fusi Stephen Macheka (first respondent) and Molise Cecil Chabane (second respondent). The application sought, firstly, confirmation of an interim interdict restraining the respondents from practising as attorneys or holding themselves out as such and, secondly, declaratory relief that they were in contempt of court of earlier striking-off orders, together with committal relief.

The matter followed prior disciplinary proceedings in which each respondent had been struck off the roll of attorneys by the Free State High Court, Bloemfontein, on different dates and under different case numbers. Those striking-off orders included directions requiring the respondents to deliver their practice records and files to a curator appointed under the relevant orders.

Procedurally, the present application resulted in the issue of a rule nisi by Jordaan J on 5 November 2010, returnable on 9 December 2010, with interim interdictory relief operating pending the return day. The rule was extended on multiple occasions at the instance of the respondents, with costs reserved by agreement.

The dispute concerned whether the respondents, despite having been struck off, were continuing to practise or holding themselves out as attorneys, and whether they had acted in contempt of the earlier court orders. A further dimension to the dispute was the respondents’ reliance (particularly by the second respondent) on the constitutional right to freedom of trade, occupation and profession, and the appropriate breadth of interdictory relief in that context.

Material Facts

It was common cause that the first respondent and second respondent had formerly practised as attorneys until they were struck off the roll on 29 July 2010 (first respondent) and 11 June 2009 (second respondent) respectively. It was also common cause that each striking-off order included provisions for the appointment of a curator and for the delivery to the curator of the respondents’ books of account, records, files, and documents relating to their erstwhile practices.

On 6 May 2010, the respondents registered a close corporation, Macheka Chabane Legal Services, with its registered office at the address from which the first respondent had previously practised. Both respondents were members of this close corporation, and its registered principal business was the provision of legal services. The operation of this close corporation became the factual trigger for the present application.

The applicant relied materially on the close corporation’s letterhead, which described services such as civil and criminal litigation, conveyancing, and divorce matters, and on the presence at the close corporation’s premises of files and court processes. The applicant also relied on the first respondent’s acknowledgement that certain files at the premises were files of clients who did not wish to migrate to other attorneys, and files of clients whose mandates had been completed but who were indebted to him.

The respondents disputed that they were practising as attorneys, holding themselves out as attorneys, or rendering impermissible legal services. The first respondent, in relation to the curator-file-delivery obligation, contended that he had complied and relied on affidavits from former clients and staff. He further contended that he had transferred certain files to the close corporation at a time when it began operating before he could be served with the striking-off application, and that this occurred after he had informed clients that his position as an attorney was precarious.

The court recorded certain additional undisputed contextual points. The second respondent conceded that civil and criminal litigation are traditionally associated with advocates and attorneys, and that he knew of no-one other than an attorney who could be admitted and practise as a conveyancer. The court also noted a concession by counsel for the applicant that an interim order restraining the respondents from rendering legal services for a fee, gain or reward was too wide, although the applicant maintained that regulation of professional practice was constitutionally permissible.

Legal Issues

The central issue for purposes of final interdictory relief was whether the respondents, as persons whose names had been struck off the roll, were continuing to practise as attorneys or were holding themselves out as attorneys, including by rendering legal services for a fee, gain or reward in contravention of the Attorneys Act 53 of 1979. This required the court to evaluate both factual inferences (from the letterhead and documents) and the application of statutory prohibitions to that conduct.

A further legal issue concerned the proper scope of interdictory relief in light of section 22 of the Constitution of the Republic of South Africa, 1996, which protects freedom of trade, occupation and profession while expressly permitting regulation by law. The question was therefore not purely factual: it involved the application of constitutional and statutory principles to determine whether the interdict sought was overbroad and, if so, how it should be qualified.

In relation to contempt, the court had to determine whether the respondents were in civil contempt of the striking-off orders. This required determining whether the applicant had established (i) the existence of the orders, (ii) service, and (iii) non-compliance, and thereafter whether non-compliance was wilful and mala fide beyond reasonable doubt. This aspect involved both factual findings and value judgments about intention and the drawing of inferences.

Finally, the court had to determine an appropriate costs order, including whether punitive costs on the scale as between attorney and own client were justified.

Court’s Reasoning

On the interdict, the court applied the statutory framework in section 83(1) of the Attorneys Act, which prohibits any person other than an attorney from practising or holding themselves out as an attorney or creating the impression that they are an attorney. The court also relied on section 83(8)(a), which criminalises the preparation or drawing of certain documents for a fee, gain or reward by persons who are not attorneys, including documents “relating to or required or intended for use” in civil proceedings as described in section 83(8)(a)(v).

The court then applied the requirements for final interdictory relief, namely a clear right, an injury actually committed or reasonably apprehended, and the absence of an alternative remedy. On the evidence, the court accepted that the close corporation’s letterhead would probably create, in the mind of a reasonable person, the impression that the respondents (as members or “directors” of the close corporation) were attorneys entitled to conduct civil and criminal litigation and conveyancing. The court further found on a balance of probabilities that the respondents had prepared or drawn up documents such as a request for default judgment and warrants of execution in expectation of a fee, gain or reward through the close corporation, and that this constituted performance of work traditionally reserved for attorneys.

In rejecting aspects of the respondents’ defence, the court reasoned that the statutory prohibition focuses on the preparation or drawing up of documents for reward, not on whether such documents were ultimately issued by the clerk of the court or on the specific capacity in which the respondents signed them. The court regarded features such as the insertion of “Costs” amounts in execution documentation as reinforcing the conclusion that the conduct was associated with attorney involvement.

On that basis the court held that the respondents invaded the applicant’s clear right, derived from its statutory mandate to protect the interests, prestige, status and dignity of the profession (with reference to section 58 of the Attorneys Act). The court further held that no ordinary remedy would provide equivalent protection where the profession’s interests and dignity were being compromised on an ongoing basis.

However, the court accepted the applicant’s concession that an interdict restraining the respondents from rendering all legal services for fee or reward was too general and infringed section 22 of the Constitution, because not all legal services are reserved for attorneys. The court therefore adopted an evaluative limitation: the proper order was one that prohibited only the rendering of legal services reserved for attorneys in terms of the Attorneys Act and other applicable law, thereby accommodating lawful regulation without an unconstitutional overreach.

On contempt, the court applied the principle that contempt consists in the unlawful and intentional disobedience of a court order, and that the breach must be deliberate and mala fide. It applied the burden-shifting approach described in contempt proceedings involving committal: once the order, service, and non-compliance are established, the evidentiary burden shifts to the alleged contemnor to raise a reasonable doubt as to wilfulness and mala fides; the ultimate standard is proof beyond reasonable doubt.

Regarding the allegation that the first respondent failed to surrender all files to the curator, the court held that the applicant’s proof rested on the later discovery of files at the close corporation’s offices after the striking-off order. The first respondent’s explanation was that he disposed of the relevant files in favour of the close corporation before the order was made. Applying the criminal-law standard that an accused is entitled to an acquittal if their version is reasonably possibly true, the court held that this explanation was reasonably possibly true and that there was no evidence proving the files were transferred after the order. The court also reasoned that the order operated prospectively and applied to files in the first respondent’s possession or under his control as an attorney as at 29 July 2010.

The contempt enquiry did not end there. The applicant also alleged contempt based on continuing to practise as attorneys or holding themselves out as such. The court approached this by considering whether, in contempt proceedings, the inference to be drawn from the proven facts was the only reasonable inference. Although the respondents suggested they merely provided preparatory “referral” assistance before handing work to practitioners, the court considered the presence of costs claimed as if attorneys were involved and the wording in the court processes (including direction to pay to “Execution Creditor’s Attorneys”) to be inconsistent with the benign explanation.

The court concluded that it was not reasonably possibly true that the respondents lacked wilful and mala fide intention in presenting the letterhead claims and preparing processes that claimed attorney-associated costs. It therefore held that contempt had been proved beyond reasonable doubt. The court also explained the basis for the second respondent’s culpability by reference to the close corporation’s letterhead reflecting him as a “director” and his identification with, and defence of, that letterhead in his affidavit.

As to sentence for contempt, the court accepted the submission that it lacked sufficient information to impose sentence immediately and agreed to postpone the matter for the filing of written representations on sentence.

On costs, the court declined to award punitive costs as between attorney and own client, reasoning that such costs require special circumstances, which were not advanced. Given that postponements were attributable to the respondents and no equitable or legal basis existed to depart from the ordinary rule, the court ordered party-and-party costs including wasted costs.

Outcome and Relief

The rule nisi was confirmed in material respects, with a qualification limiting the interdict so that the respondents were prohibited from rendering legal services reserved for attorneys in terms of the Attorneys Act 53 of 1979 and any other applicable law.

The court found the respondents guilty of contempt of court based on their continued practice as attorneys or holding themselves out as such, but postponed the imposition of sentence to allow for the filing of written representations by the respondents and answering representations by the applicant, with provision for replies.

The respondents were ordered to pay the costs of the application, including wasted costs, jointly and severally, on the party-and-party scale.

Cases Cited

Setlogelo v Setlogelo 1914 AD 221.

V & A Waterfront Properties (Pty) Ltd and Another v Helicopter & Marine Services (Pty) Ltd and Others 2006 (1) SA 252 (SCA).

S v Beyers 1968 (3) SA 70 (A).

Fakie NO v CCII Systems (Pty) Ltd [2006] ZASCA 52; 2006 (4) SA 326 (SCA).

S v Van der Meyden 1999 (2) SA 79 (W).

S v Shackell 2001 (4) SA 1 (SCA).

R v Blom 1939 AD 188.

Snyman v Sentraboer 1988 (3) SA 919 (O).

Bovungana v Road Accident Fund 2009 (4) SA 123 (E).

Legislation Cited

Attorneys Act 53 of 1979, including section 58, section 83(1), and section 83(8)(a)(v).

Constitution of the Republic of South Africa, 1996, section 22.

Rules of Court Cited

No specific rule of court was cited in the judgment, aside from procedural reference to the issuing and extension of a rule nisi.

Held

The court held that the close corporation’s letterhead and the preparation of litigation-related court documents created the impression that the respondents were entitled to act as attorneys and that they performed work reserved for attorneys in expectation of reward, thereby justifying final interdictory relief. The court held further that an interdict prohibiting all “legal services” would be unconstitutionally wide, and therefore limited the prohibition to legal services reserved for attorneys by the Attorneys Act and other applicable law.

On contempt, the court held that contempt was not proved beyond reasonable doubt insofar as it rested on the allegation that the first respondent had failed to surrender all files to the curator, because his explanation that files had been transferred before the striking-off order was reasonably possibly true. The court nevertheless held that contempt was proved beyond reasonable doubt on the basis that the respondents’ conduct and documentation demonstrated wilful and mala fide continuation of practice as attorneys or holding themselves out as attorneys. Sentence was postponed for further submissions. Costs were awarded against the respondents jointly and severally on the party-and-party scale, including wasted costs.

LEGAL PRINCIPLES

The judgment applied the principle that a final interdict requires proof, on a balance of probabilities, of a clear right, an injury committed or reasonably apprehended, and the absence of an alternative remedy, as articulated in Setlogelo v Setlogelo 1914 AD 221 and V & A Waterfront Properties (Pty) Ltd and Another v Helicopter & Marine Services (Pty) Ltd and Others 2006 (1) SA 252 (SCA).

It reaffirmed the statutory principle that persons who are not attorneys may not practise as attorneys or hold themselves out as attorneys, and that certain categories of legal work—particularly the preparation or drawing up of specified documents for reward—are reserved for attorneys under section 83 of the Attorneys Act 53 of 1979. The court treated the statutory prohibition as directed at the act of preparation for reward, rather than subsequent procedural steps such as the issuing of process by court officials.

The judgment applied section 22 of the Constitution of the Republic of South Africa, 1996, on the basis that freedom of trade, occupation and profession may be regulated by law, and used this to justify regulation of attorney-reserved work while rejecting an interdict framed so broadly that it would prohibit the rendering of all legal services irrespective of statutory reservation.

On contempt, the judgment applied the principle that contempt of court consists of unlawful and intentional disobedience of a court order (S v Beyers 1968 (3) SA 70 (A)) and that, in civil contempt proceedings, the breach must be wilful and mala fide (Fakie NO v CCII Systems (Pty) Ltd [2006] ZASCA 52; 2006 (4) SA 326 (SCA)). It also applied the approach that where an alleged contemnor’s explanation is reasonably possibly true, contempt is not proved beyond reasonable doubt (S v Van der Meyden 1999 (2) SA 79 (W); S v Shackell 2001 (4) SA 1 (SCA)).

The judgment further applied the principle that inferential reasoning in contempt proceedings must satisfy the standard that the inference of guilt is the only reasonable inference from the facts (R v Blom 1939 AD 188), and it treated the content of documents and claimed attorney-associated costs as central to the inference that the respondents acted wilfully and mala fide in holding themselves out as attorneys.

Finally, on costs, the judgment applied the principle that punitive costs on the scale as between attorney and own client require special circumstances, which must be shown to exist (Snyman v Sentraboer 1988 (3) SA 919 (O); Bovungana v Road Accident Fund 2009 (4) SA 123 (E)).

Law Society of Free State v Macheka and Another (5528/2010) [2011] ZAFSHC 86; 2011 (5) SA 591 (FB) (23 June 2011)