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[2014] ZAWCHC 164
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Grancy Property Limited and Another v Law Society of the Cape of Good Hope and Others (3698/2014) [2014] ZAWCHC 164 (5 November 2014)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
(WESTERN CAPE
DIVISION, CAPE TOWN)
CASE
NO: 3698/2014
DATE:
05 NOVEMBER 2014
In the matter
between:
GRANCY PROPERTY
LIMITED
............................................................
First
Applicant
MONTAGUE
GOLDSMITH AG IN LIQUIDATION
..........................
Second
Applicant
And
LAW SOCIETY OF
THE CAPE OF GOOD HOPE
.............................
First
Respondent
D P SMITH
N.O
............................................................................
Second
Respondent
N B NYATI
N.O
...............................................................................
Third
Respondent
C LOUBSER
N.O
..........................................................................
Fourth
Respondent
DINES CHANDRA
MANILAL GIHWALA
.....................................
Fifth
Respondent
JOHN ROGERS
N.O
.....................................................................
Sixth
Respondent
COUNCIL OF THE
LAW SOCIETY OF
THE CAPE OF GOOD
HOPE
..................................................
Seventh
Respondent
Court: Justice J
Cloete
Heard: 14
October 2014
Delivered: 5
November 2014
JUDGMENT
CLOETE J:
Introduction
[1] This is a review
application which has been settled between the applicants and the
first and seventh respondents, save for the
issue of costs. No relief
is sought against the second to sixth respondents, who did not
oppose.
[2] The applicants
seek a two-fold costs order against the first and seventh respondents
(for sake of convenience I will refer to
them collectively as ‘the
respondents’). Costs are now sought, jointly and severally, on
the scale as between party
and party until the date upon which the
respondents filed a notice of intention to oppose, and thereafter on
the scale as between
attorney and own client, in both instances
including the costs of two senior counsel.
[3] The respondents
contend that any costs award against them is unwarranted.
[4] It is necessary
to set out the background to the costs dispute in some detail.
Background
[5] This application
concerned a review of various decisions of the respondents’
Disciplinary Enquiry Committee (‘DEC’),
consisting of the
second to fourth respondents, in the context of a disciplinary
enquiry into the alleged professional misconduct
of the fifth
respondent. The applicants are the complainants in that enquiry which
is ongoing. The applicants have been, and still
are, embroiled in
litigation with, amongst others, the fifth respondent; and on the
papers it is common cause that they have played
a pivotal and active
role throughout the disciplinary proceedings which have been fraught
with various disputes of a technical
nature.
[6] By virtue of
their involvement in the disciplinary proceedings as well as the
ongoing litigation, the applicants sought permission
from the DEC, as
far back as April 2010, for their legal representatives to play an
active role in the disciplinary enquiry itself.
The DEC afforded them
the opportunity to make representations in this regard. Due to
various intervening disputes, the applicants
were only able to make
such representations during February 2013. They requested that their
legal representatives be permitted
to attend the enquiry, lead oral
evidence, advance oral and written submissions and question all
individuals who testified before
the DEC.
[7] During July 2013
(a month before the enquiry’s scheduled hearing over the period
19 to 23 August 2013) the DEC provided
the applicants with copies of
the answering submissions of the fifth respondent as well as the
sixth respondent (who is the pro
forma prosecutor in the enquiry) for
comment.
[8] The fifth
respondent adopted the position that the applicants’ request
should be refused. He contended that the DEC could
not lawfully
accede to the request for the following reasons. First, the
applicants’ proposed level of participation would
usurp the
functions of the pro forma prosecutor. It would thus amount to an
impermissible conferral of such powers upon the applicants’
legal representatives in circumstances where they would seek to
advance the applicants’ own cause against the backdrop of
continuing litigation with the fifth respondent.
[9] Second, the
proceedings before the DEC are regulated by the Attorneys Act 53 of
1979 (‘the Attorneys Act’) as well
as rule 15.11 of the
rules promulgated thereunder. There is no provision in either which
allows a complainant or witness to be
legally represented; and the
general provision in rule 15.11.3.1, namely that in the absence of
any specific provision, the DEC
is to be guided by the procedure
prevailing in High Court criminal trials, was equally of no
assistance to the applicants as complainants.
[10] Third, neither
the common law nor any of the recognised limited exceptions
permitting of legal representation found application.
[11] The sixth
respondent correctly adopted a more neutral approach but raised
similar concerns, while at the same time conveying
his willingness to
abide the decision of the DEC. He also pointed out that a material
procedural irregularity could render any
finding which the DEC might
ultimately make which was adverse to the fifth respondent vulnerable
to review at the latter’s
instance.
[12] On 24 July 2013
the applicants in response repeated their call for active
participation by their legal representatives in the
enquiry but
recorded that, should the DEC not be amenable, then in the
alternative a more limited role for their legal representatives
was
sought. The applicants provided reasons motivating both.
[13] The alternative
request was that their legal representatives be permitted to attend
the enquiry and participate therein only
to the extent of ensuring
that their rights were protected, and thus that ‘the extent of
any direct intervention would…
be limited to safeguarding our
clients’ interests and rights during the examination and
cross-examination of our clients’
representatives, should the
need to do so arise’. The applicants also sought permission to
be furnished with a transcript
of the proceedings at their own
expense.
[14] On 31 July 2013
the applicants also sought permission for their representative, Mr
Mawji, to testify by means of video link,
and simultaneously provided
the DEC with reasons for such request. The main reasons were that Mr
Mawji resides abroad and that
he feared for his safety.
[15] On 6 August
2013 the fifth respondent, in a letter from his attorneys, opposed
the video link request ‘in the strongest
terms’. He gave
various reasons, in particular that the prejudice which he stood to
suffer if video link testimony was allowed
would far outweigh any
convenience or saving of expenses to Mr Mawji. The prejudice, so it
was alleged, lay primarily in the contention
that his legal
representative would be severely hampered in his cross-examination of
Mr Mawji. In support of this contention the
fifth respondent referred
to S v F
1999 (1) SACR 571
(C). At 577f the court emphasised that a
presiding officer ‘should be careful not to make light of the
importance of having
a witness in the presence of the cross-examiner
and also under the constant gaze of the judicial officer’
(although it was
not this particular passage, but what immediately
followed thereafter by way of explanation, that was quoted in the
letter).
[16] On 8 August
2013 the applicants responded, providing further motivation for their
video link request.
[17] The DEC duly
considered all of the submissions made (it is not suggested otherwise
by the applicants) and on 15 August 2013
it handed down an order
refusing all of the applicants’ requests, save for that in
relation to video link testimony. It postponed
making any decision on
this issue on the basis that same would be considered ‘if and
when it is made during the course of
the disciplinary enquiry’.
[18] On 17 August
2013 the applicants informed the DEC of their view that the order was
unlawful and prejudicial to them. The applicants
requested reasons
for the order and these were provided on 5 September 2013. In its
reasons the DEC not only dealt with its refusal
of the applicants’
request for active participation, but also with its refusal of the
more limited participation which the
applicants had sought in the
alternative. The reasons reflect that all of the submissions made by
the applicants, the fifth respondent
and the sixth respondent had
been taken into account, and that ‘whilst not making a decision
on the matter, the DEC is prima
facie of the view that a proper case
appears to have been made [out] for the evidence of Mr Mawji to be
adduced through video conferencing’.
[19] The DEC had
decided however to postpone making any final ruling on this issue
until it had received submissions from both the
fifth and sixth
respondents, as well as further argument during the course of the
enquiry, as to how certain practical considerations
should be
addressed, such as the handing up of documents during Mr Mawji’s
testimony. The DEC’s explanation for adopting
this approach was
that:
‘The various
submissions were received by the DEC only shortly before the
scheduled commencement of the enquiry on 19 August
2013. The DEC is
aware that the Law Society has been directed to proceed with the
disciplinary enquiry without delay. Rather than
delaying the
disciplinary enquiry in order to hear further argument on the matter,
the DEC is of the view that the parties should
be afforded an
opportunity to make further comment and submissions during the course
of the disciplinary hearing should they wish
to do so.’
[20] The
disciplinary enquiry was postponed as a result of the applicants’
request for reasons for the DEC’s order.
[21] On 12 December
2013 the applicants wrote to the respondents advising them of their
view that, in light of further complaints
since lodged by the
applicants against the fifth respondent, the review of the DEC’s
decision would be premature at that
stage. The applicants proposed
that the disciplinary enquiry be consolidated with the enquiry in
respect of the further complaints,
and repeated its earlier requests
relating to participation and the like (which the DEC had refused).
It was the applicant’s
position that if the DEC effectively
reconsidered its decisions and acceded to their requests, as well as
to consolidation of the
two enquiries, a review of the DEC’s
order would be rendered unnecessary. The applicants made it clear
however that, insofar
as its active participation request was
concerned, this was now limited to the alternative request for less
active participation.
[22] On 19 December
2013 the respondents replied that the applicants’ proposal
‘will have to be conveyed to our Disciplinary
Committee for
directions’; that the fifth respondent had been requested to
provide answering submissions by mid-January 2014,
and that the
matter would be referred to the Disciplinary Committee (‘DC’)
as soon as possible thereafter. It was anticipated
that the referral
would take place in February or March 2014 ‘as it will take
some time to prepare the extensive documentation
for consideration’
by the DC.
[23] As a
consequence, on 14 January 2014 the applicants requested both the
respondents and the DEC to agree to an extension of
the statutory 180
day period under PAJA (i.e.
s 7(1)
of the
Promotion of Administrative
Justice Act 3 of 2000
) until 90 days after the DC’s decision.
The respondents provided a vague response through their attorney on
24 January 2014,
and on 3 March 2014 informed the applicants that the
DC had directed that the fifth respondent be afforded an extension
(at his
request) to respond to an earlier letter of the applicants as
well as an opportunity to respond on the proposed consolidation. The
applicants were also informed that the submissions of the fifth
respondent would be considered by the DC at its next meeting
scheduled
for 14 April 2014. Neither of these communications dealt
with the applicants’ request for an extension of the statutory
180
day period, which would have expired on 5 March 2014.
[24] Mr Mawji
deposed to the founding affidavit on 4 March 2014 and the review
application was launched on 5 March 2014. Annexed
to the founding
affidavit were the order of the DEC as well as its reasons for the
order.
The relief sought in
the notice of motion
[25] In their notice
of motion the applicants sought orders declaring the decisions of the
DEC to be unlawful, irrational, unreasonable
and / or procedurally
unfair; the setting aside of such decisions; and the substitution of
such decisions with orders in accordance
with their previous
requests.
[26] The applicants
also sought costs against the first respondent, as well as any other
respondent opposing the relief, jointly
and severally on the scale as
between party and party, including the costs of two counsel.
Sequence of events
subsequent to launching of review application
[27] On 11 April
2014 the respondents filed a notice of intention to abide. Annexed
thereto was an affidavit ‘for consideration
by the above
Honourable Court’ which was deposed to by Mr Nuku, a member of
the seventh respondent.
[28] The
respondents’ position as set out therein was that s 67(2) of
the Attorneys Act precludes the seventh respondent,
after having
assigned to the DEC the power to enquire into a complaint, from
amending or withdrawing any decision arrived at or
anything done by
the DEC in terms of the powers so assigned.
[29] This
notwithstanding, in the same affidavit, the respondents maintained
the stance adopted by them in December 2013, namely
that the DC (not
the DEC) would consider the applicant’s proposals at the
meeting scheduled for 14 April 2014. Although not
stated in express
terms, it is clear from a reading of the annexures referred to at
paragraph 4.1 of Mr Nuku’s affidavit
that this was the case.
The reference to annexure ‘KM19’ is to the letter from
the applicants’ attorney dated
12 December 2013. Paragraph 6 of
that letter contains the applicants’ proposals. The reference
to annexure ‘KM20’
is to the letter of 19 December 2013
in which the respondents had replied that the applicants’
proposals would have to be
conveyed to the DC for directions.
[30] On 25 April
2014 the fifth respondent deposed to an affidavit in which he stated
that: (a) he did not oppose the application
as he was of the view
that it is the responsibility of the first respondent and its organs
to defend their own decisions; (b) the
decision by the respondents
not to oppose the application caused him prejudice for the reasons
set out therein; and (c) the court
hearing the application was asked
to consider his submissions made in this regard.
[31] On 16 May 2014
the respondents confirmed that they would continue to abide the
decision of the court. They asked to be advised
of the date when the
matter was due to be heard, as they ‘may wish, as a courtesy to
the Court, to arrange to attend the
hearing through counsel’.
[32] On 9 June 2014
the respondents’ attorney however wrote to the applicants’
attorney as follows:
‘We have been
instructed to advise you that the council of the Law Society of the
Cape of Good Hope… at its meeting
of 26 May 2014 resolved that
in light of the recent judgment in Mtshabe v Law Society of The Cape
of Good Hope… it was incumbent
on the Law Society to set out
its position in respect of all of the relief sought by your clients,
including opposing where appropriate.
Accordingly, the Law
Society intends to file a full answering affidavit in the
application, supplemented by the necessary request
for condonation
for filing out of time. In the meantime, we shall be filing the
necessary notice of opposition, in substitution
of the earlier notice
of intention to abide.’
(I will return to
the Mtshabe judgment hereinbelow).
[33] The
respondents’ notice of intention to oppose was filed on 10 June
2014.
[34] On 24 June 2014
the applicants took issue with the stance now adopted by the
respondents, as also their interpretation of the
Mtshabe judgment.
The applicants pointed out that the respondents had already filed an
affidavit for the assistance of the court
simultaneously with their
notice of intention to abide. This was met with an abrupt response on
30 June 2014 in which the respondents
confirmed their decision to
oppose the application. The applicants thus proceeded to file a
supplementary founding affidavit dealing
with the record provided by
the respondents in terms of rule 53, as well as developments in the
litigation subsequent to the launching
of the application. The
supplementary founding affidavit was deposed to on 7 July 2014.
[35] The
respondents’ answering affidavit was deposed to by Mr Nuku on 7
August 2014. He explained therein that on 26 May
2014, at a meeting
of the seventh respondent, it resolved that the first respondent
should fully set out its position in respect
of the application and
the relief sought and, if appropriate, oppose. He also stated that
this resolution by the seventh respondent
was ‘prompted in
part’ by the judgment in Mtshabe. The respondents contended
that the applicants would not suffer any
prejudice should they be
permitted to file the answering affidavit and oppose the relief
sought where appropriate. Mr Nuku stated
that: ‘The Law Society
is acting in what it conceives to be the interest of the public, the
legal profession and the administration
of justice.’
[36] What is
noteworthy is that the respondents then conceded in the self-same
affidavit that:
35.1 because the
applicants had played an active role in the disciplinary proceedings
they might be afforded greater participatory
rights than is usually
the case. The nature and extent of any such entitlement was what had
to be determined; and further that
the applicants should be granted
the alternative relief (i.e. the more limited participatory role) in
the disciplinary enquiry;
35.2 the applicants
had indeed made out a prima facie case for Mr Mawji to testify by
means of video link; that it was appropriate
for the DEC to
reconsider its decision in this regard; that the respondents did not
‘in principle’ oppose the relief
sought in respect of
video link testimony; and
35.3 the applicants
should be furnished with a copy of the transcript subject to
appropriate confidentiality safeguards.
[37] The respondents
further emphasised that their opposition to the relief claimed was
confined to the applicants’ request
for active participation in
the disciplinary proceedings. The respondents sought costs against
the applicants only in the event
of them persisting with their active
participation request.
[38] On 4 September
2014 the applicants, in light of the concessions made for the first
time in the answering affidavit, proposed
that the respondents
consent to an order for the substantive relief and that they further
agree to pay the applicants’ costs
on the party and party
scale. It was recorded that this would put an end to the review
proceedings without further costs being
incurred.
[39] On 10 September
2014 the respondents agreed to the applicants’ proposal, save
for the issue of costs. They adopted the
position that each party
should bear their own costs.
[40] On 11 September
2014 the applicants persisted with their claim for costs on the basis
that:
‘But for the
Law Society’s belated volte face and opposition, our clients’
costs would have been significantly
curtailed. Moreover, at all
times, our clients have sought costs against the Law Society, as well
as any party electing to oppose
the application.’
[41] The applicants
further proposed that in the event of the respondents still not being
agreeable to paying their costs, same
be argued separately.
[42] On 17 September
2014 the respondents agreed to an order in respect of the substantive
relief and also agreed that the costs
issue be argued separately.
However, they nevertheless undertook to consider the issue of costs
at the next monthly meeting of
the seventh respondent scheduled for
29 September 2014, whereafter they would revert.
[43] The respondents
do not appear to have reverted as undertaken, and costs were thus
argued before me on 14 October 2014.
The arguments
presented
[44] The applicants
contend that they were forced to launch the review application. They
were also obliged to persist with the application
right up to the
point where the respondents ultimately conceded the substantive
relief. The respondents’ belated decision
to oppose the
substantive relief (which opposition was devoid of merit and in any
event based upon a misinterpretation of the Mtshabe
judgment) was
grossly unreasonable, irrespective of whether they acted in good
faith. The respondents have a duty, not only towards
their members,
but to the public at large (including the applicants) as well as the
administration of justice. Had the respondents
not belatedly decided
to oppose, virtually no costs would have been incurred thereafter.
Furthermore, their stance in persisting
with their refusal to pay the
applicants’ party and party costs after conceding the
substantive relief similarly demonstrates
their grossly unreasonable
attitude to the litigation. (Although the applicants put the
respondents on notice that a punitive costs
award from inception
would be sought at the hearing, this was effectively abandoned in
argument before me). The applicants submit
that the respondents
should be ordered to pay party and party costs to the date of
opposition as well as attorney and own client
costs from the date
upon which they took the decision to oppose, in both instances,
including the costs of two senior counsel.
[45] On the other
hand the respondents argue that they only took the decision to oppose
and to file an answering affidavit in pursuance
of what they
perceived in good faith to be their duty, namely to clarify their
view as to the relief sought and to place what they
considered to be
relevant information before the court. It was submitted that the
applicants’ response to these steps, namely
seeking punitive
costs, is unwarranted, if not opportunistic, given the nature of the
respondents’ functions. The fact that
the respondents filed a
notice of opposition, which may have been unnecessary in the
circumstances, must be considered in context
and its significance
should not be overstated. What should also not be overlooked is the
stance adopted by the fifth respondent,
namely that, while not
formally opposing, he challenged the appropriateness of the
substantive relief sought which he contended
would redound to his
prejudice. Furthermore, the relief ultimately agreed between the
applicants and the respondents in relation
to participation in the
disciplinary enquiry was not the main relief, but the alternative
relief sought. However, in the event
of the court seeing fit to award
costs, these should be limited to: (a) those arising out of the
respondents’ opposition;
(b) party and party costs; and (c) the
costs of one counsel only.
Applicable legal
framework and principles
[46] The first
respondent is a statutory body which derives its powers and duties
from Chapter 3 of the Attorneys Act. Section 60(1)
thereof provides
that the affairs of the first respondent ‘shall be managed and
controlled by a council [i.e. the seventh
respondent] which may…
exercise the powers of the society’ subject to certain limited
exceptions which are not relevant
for present purposes. Given that
the first and seventh respondents have to all intents and purposes
acted in unison in taking the
decision to oppose, I accept, for
purposes of this judgment, that both exercised such powers in their
dealings with the applicant.
It is for this reason that I
collectively refer to them as ‘the respondents’.
[47] In Law Society
of South West Africa v Orman 1933 SWA 68 at 71 it was held that a law
society is not in the position of an ordinary
litigant in
disciplinary proceedings concerning its members which serve before
the court:
‘… the
Law Society is not here prosecuting a right in the ordinary way. It
is performing a public duty… It is
merely assisting in the
maintenance of a standard of profession and cleansing the profession
where the need arises.’
[48] In Incorporated
Law Society v Taute
1931 TPD 12
at 15 the court highlighted the
distinction between a statutory body performing a public duty and the
position of an ordinary litigant:
‘If the Court
had been of the opinion that the Society was in the position of an
ordinary litigant, costs would have followed
the event as a matter of
course and there would have been no occasion to base the decision on
costs on a reason other than the
failure of the application.’
[49] In Law Society
of the Cape of Good Hope v Frank and Warshaw
1921 CPD 169
at 170 the
court, dealing with the approach adopted by the Law Society had the
following to say:
‘The Law
Society, which is a very necessary institution, created and
incorporated by an Act of Parliament, possesses very
wide powers. In
its effort to maintain proper discipline, and uphold the integrity,
honour and etiquette of the profession, it
is no doubt entitled to
look to the Court for support. But it is incumbent on the Society to
carry out its duties not only with
due regard to the interests of the
profession as a whole, but also to the interests of individual
members against whom it may receive
a report or be called upon to
act. If complaints of unprofessional conduct are made against any
particular attorney or attorneys,
it is the duty of the Society
carefully to investigate such complaints with proper regard to the
position of those who are affected
thereby.’
[50] Having
considered the facts in that matter, and having arrived at the
conclusion that the Law Society had not properly investigated
the
complaints in question, it was held at 171 that:
‘A
consideration of these circumstances, to which I have referred, leads
me to think that a little more care and discrimination
might and
should have been bestowed in examining into and formulating the
charges against the defendants… The result is
that judgment
must be in favour of the defendants with costs.’
[51] The court in
Frank and Warshaw thus found that a failure to properly investigate
complaints was sufficient to result in an
award of costs against the
Law Society (see also Incorporated Law Society v Buirski
(1908) 25 SC
843).
That there should be special circumstances to justify an award
of costs against a law society appears to have been followed
consistently
(see inter alia Randell v Cape Law Society
2012 (3) SA
207
(ECD) at para [28]), although what constitutes special
circumstances obviously depends upon the facts of each case and is
moreover
always subject to the trite principle that an award of costs
is a matter of judicial discretion.
[52] The decision in
Kwazulu-Natal Law Society v Davey and Others
2009 (2) SA 27
(NPD) at
paras [215] to [217] illustrates just how reluctant some of our
courts have been to award costs against the Law Society
in the past:
‘[215] Finally
I turn to the issue of costs. The respondents have been successful in
this application. In a normal civil case
they would have been
entitled to their costs. However, as pointed out above, these are not
civil proceedings. The principle is
embedded in our case law that a
law society being the custodian of the profession is entitled to act
as informant and to bring
to the notice of the court any conduct
which it believes to be unprofessional or unworthy. There has not
been one instance that
I have been able to find where a law society
was mulcted in costs, even though its application was unsuccessful.
(See, for example,
Vaatz v Law Society of Namibia
1991 (4) SA 382
(Nm)). The situation may be different if it were shown that there
were mala fides. However, that is clearly not the case in casu.
[216] Mr Ploos van
Amstel SC who appeared on behalf of the fifth respondent submitted in
his oral argument that the applicant should
at least bear a portion
of the fifth respondent’s costs. There is much to be said for
Mr Van Amstel’s argument. The
evidence clearly showed that the
fifth respondent played no role at all in the marketing and
advertising strategies devised by
the third respondent. Indeed, the
third respondent quite categorically in his affidavit took the
responsibility for all these decisions.
One would have expected the
applicant to have carefully investigated and then evaluated the fifth
respondent’s role in her
practice and whether she could be held
accountable for any alleged wrongdoing. Calling upon her to furnish
an explanation in regard
to the allegations would have in my view
been a fair process. Instead, she is joined as one of the respondents
in an application
where very serious allegations are made against
her. When she puts up her affidavit and gives a detailed explanation,
the applicant
persists in seeking relief against her. It was only at
the eleventh hour that counsel for the applicant conceded that a
strike-off
was not appropriate but they nonetheless sought her
suspension from practice. On the assumption that my above findings of
fact
are incorrect, I would nonetheless in the case of the fifth
respondent have completely exonerated her. I am in entire
disagreement
with the approach of the applicant in this regard.
Having said all
this, I am constrained by well-established precedent not to make any
order for costs in favour of the fifth respondent.
It may be that in
the future this issue could be reconsidered by the Supreme Court of
Appeal.’
[53] Subsequently
there has been occasion for the Supreme Court of Appeal to do so. In
Law Society of the Northern Provinces and
Another v Viljoen and
Others
[2011] 3 All SA 133
(SCA) at paras [21] to [22] the court,
while acknowledging the longstanding principle that a law society
should not be mulcted
with costs considering its status as a special
litigant acting in the public interest, held that the it was indeed
deserving of
an adverse costs order on the party and party scale,
considering that its initial decision had been based on bad judgment,
and
that it had pursued an appeal of the high court’s decision
which had clearly been correct:
‘[21] The
appellants argued against any costs being awarded against them. It
was contended that a law society is a special
litigant in the sense
that it does not come to court for its own interests. As a body with
statutory powers to administer the affairs
of its members, it has a
statutory duty to approach a court in any matter where it is of the
opinion that a practitioner is guilty
of conduct which impugns his or
her fitness to continue to practise. It was argued further that it
does this in the public interest
as well as that of the court. We
were further urged to consider the fact that there are conflicting
judgments on this aspect by
the North Gauteng High Court and the
appellants were justified to approach this court for clarity.
[22] I have no doubt
that in the circumstances of both cases, the appellants were not
entitled to refuse to issue fidelity fund
certificates to the
respondents. It is clear to me that the second appellant’s
decision was indeed misconceived. Furthermore,
even after the
appellants had lost both cases in the high court, they still
zealously pursued the appeal in this court, thus exposing
the
respondents to substantial legal costs. Notwithstanding the long
standing and salutary practice of not mulcting a Law Society
with an
adverse order of costs as it is a special litigant acting in the
public interest, I am of the view that it would be unfair,
given the
facts of this case, not to award costs to the respondents.’
[54] The decision in
Viljoen confirmed that the court’s discretion is not limited to
a finding of mala fides. It accepted
the respondents’ argument
summarised at para [20] that:
‘the
appellant’s decision to refuse to issue fidelity fund
certificates was flawed from the beginning on a bad judgment.
It was
argued that it would be wrong and unfair for the respondent to be
left out of pocket in circumstances where the respondents
have been
put to considerable financial loss due to some bad judgment on the
part of the appellants.’
[55] In Mtshabe v
Law Society of the Cape of Good Hope
2014 (5) SA 376
(ECM) at paras
[63] to [66] the Law Society was severely criticised for failing to
fulfil its statutory obligation to protect both
the interests of the
legal profession and the public. It had simply elected to abide the
decision of the court where a former attorney,
on parole after having
been incarcerated for fraud committed while still in practise, had
applied for his readmission:
‘[63] In the
light of these obligations and, in particular, in the light of the
respondent’s duty to protect both the
interests of the
profession and the public interest, it is extraordinary that the
respondent did not consider it necessary, notwithstanding
its
decision not to oppose the application, to appear at the hearing of
the matter and to advance submissions in relation to the
matter which
would assist the court in the exercise of its discretion. This is all
the more astonishing in the light of the fact
that this application
raised novel and potentially far-reaching and significant questions
of principle regarding the readmission
of an attorney who is still on
parole for a very serious offence.
[64] In my view the
law society failed in its statutory obligations, both to the public
and to this court, and its conduct in relation
to this application is
to be deprecated.
[65] Lest it be
misunderstood: it is not suggested that the respondent was obliged to
oppose this application. The respondent is
of course entitled to have
taken a decision not to oppose the application on the basis that it
was satisfied that the applicant
is indeed a fit and proper person to
be readmitted and enrolled. But then, in the light of the particular
circumstances of the
matter, it was obliged to justify that decision
and to place before this court appropriate submissions regarding the
readmission
of the applicant notwithstanding that he is a parolee. It
did not do so and in failing to do so it failed to comply with its
statutory
obligations.
[66] In the light
of the fact that the application is not opposed it is not necessary
to make any order as to costs. In the circumstances
I would make the
following order: The application is dismissed.’
[56] Given the
nature of the costs order sought by the applicants, it is also
necessary to briefly refer to the established principles
pertaining
to an award of punitive costs as well as an award of the costs of two
counsel.
[57] The approach to
an award of attorney and client costs was reiterated in Nkume v
TransUnion Credit Bureau and Another
2014 (1) SA 134
(ECM) at para
[12]:
‘It is trite
law that an award of attorney and client costs is not granted
lightly. Such order is granted by reason of some
special
considerations arising either from the circumstances which gave rise
to the action, or from the conduct of the losing party.
The list is
not exhaustive.’
[58] As to the costs
of two counsel, it was held in Davis v Caledon Municipality and
Another
1960 (4) SA 885
(CPD) at 887G-H:
‘Mr Levy, who
appeared on behalf of the excipient, has applied, firstly, that the
Court should order that the fees of only
one counsel for the
respondent should be allowed by the taxing master… In my view
there is no substance in the contentions
advanced by the excipient.
The exception did not raise any difficult legal questions, and had
this been the only issue between
the parties, I would probably have
ruled that only one counsel for the respondent would have been
justified. But inasmuch as this
is an interlocutory proceeding in an
action which appears to be one of importance and of substance I
cannot hold that two counsel
were not justified. In my view if the
main action justified two counsel then two counsel must be allowed in
all interlocutory applications.’
[59] This dictum has
been consistently followed in a number of subsequent cases and is
also said to reflect the practice in the
Cape: Trust Bank van Afrika
BPK v Van Jaarsveldt en ʼn Ander
1978 (4) SA 115
(O) at
126A-127B; Gorfinkel v Gross, Hendler & Frank
1987 (3) SA 766
(CPD) at 776G-H; Davies v Chairman, Committee of the Johannesburg
Stock Exchange
1991 (4) SA 43
(WLD) at 57G; Ex Parte Palmer NO: In re
Hahn
1993 (3) SA 359
(CPD) at 370B-C.
[60] Although in
Wanderers Club v Boyes-Moffat and Another
2012 (3) SA 641
(GSJ) the
court took a different approach, I have no difficulty in following
the practice in this division. I am also comfortable
in treating the
review application as an interlocutory one although, as will appear
from what is set out below, I do not believe
that argument on costs
alone should fall into this category.
Application of legal
principles to the facts
[61] As far back as
July 2013 the applicants had informed the DEC that they would accept
limited participation as an alternative
to active participation in
the disciplinary enquiry. They simultaneously asked to be furnished
with a transcript of the disciplinary
proceedings at their own
expense. A week later, on 31 July 2013, they sought permission for
their representative to testify by
means of video link.
[62] The DEC refused
these requests, save for deferring a decision on the video link
issue. They provided written reasons on 5 September
2013. The
applicants’ subsequent requests of 12 December 2013 for
consolidation of the two disciplinary enquiries and for
the DEC to
reconsider its decisions were entertained by the respondents, and it
was already made clear by the applicants at that
stage that the
request for limited participation (i.e. the alternative relief) was
all that was sought in respect of participation.
The respondents
ignored the applicants’ request made in January 2014 for an
extension of the 180 day period under PAJA until
90 days after the DC
had made its decision. The respondents failed to provide their answer
to the applicants’ requests within
the 180 day period. The
applicants thus had no option but to launch the review proceedings,
which they did on the last day of that
180 day period.
[63] After the
review application was served, the respondents took a decision to
abide and filed an affidavit for the assistance
of the court. In that
affidavit they informed the court that, given the provisions of s
67(2) of the Attorneys Act, they were effectively
precluded from
interfering with the decisions of the DEC which formed the subject
matter of the review. They submitted that they
had no reason to
believe that the DEC had not acted in good faith in reaching its
decisions but made no other submissions. However,
notwithstanding
that, according to them, they were precluded from interfering with
the decisions of the DEC, they stated that the
DC would nevertheless
consider the applicants’ proposals.
[64] This affidavit
was filed on 11 April 2014, two weeks before the fifth respondent’s
affidavit on 25 April 2014, in which
he complained that the
respondents had prejudiced him by not defending the decisions of the
DEC.
[65] At that point
the respondents must surely have considered the fifth respondent’s
complaint. They must surely also have
concluded that they had
nonetheless placed sufficient information before the court, because
subsequently on 16 May 2014, almost
a month after the decision in
Mtshabe, they confirmed that they would continue to abide. The first
respondent presumably received
a copy of the Mtshabe judgment almost
immediately after it was delivered on 17 April 2014, given that it
was a party to those proceedings.
[66] It was only on
9 June 2014 that the respondents informed the applicants that in
light of the Mtshabe judgment it was incumbent
upon them to set out
their position in respect of all of the relief sought, including
opposing such relief ‘where appropriate’.
[67] By filing a
notice of intention to oppose, and by refusing to consider the
applicants’ reaction to their volte face,
the respondents
compelled the applicants to draft and deliver a supplementary
founding affidavit. The respondents’ answering
affidavit which
followed effectively constituted a capitulation to the relief sought
by the applicants since almost a year prior
to the review proceedings
being launched. Although the respondents limited their ‘opposition’
to the applicants’
request for active participation in the
disciplinary enquiry, they had to have been aware that the applicants
had been agreeable
since July 2013 to more limited participation, and
had informed the respondents in December 2013 that they now only
sought such
limited participation. Not only were the applicants
agreeable to limited participation, but they had spelt out exactly
what the
nature of that limited participation would involve; and the
respondents ultimately consented to the terms of that alternative
relief.
[68] I cannot accept
that the respondents were motivated to oppose the application only
after consideration of the Mtshabe judgment,
even if only in part.
What was said by the court in Mtshabe about the respondents’
obligations to the court is nothing new.
This has always been the
position. What the court in Mtshabe did was to criticise the Law
Society for failing to fulfil a statutory
obligation of which they
must surely already have been well aware.
[69] However, if I
am wrong, then the respondents’ answering affidavit did not
attempt to defend the decisions of the DEC
or to place them in any
context for the assistance of the court. On the contrary, the
respondents, who on the one hand contend
that they are unable to do
anything about the decisions of the DEC, on the other in effect
agreed that the decisions of the DEC
were indefensible and then
proceeded themselves to consent to the relief sought.
[70] The question
that arises is why, in these circumstances, the respondents did not
agree from the outset that the decisions of
the DEC were wrong.
Whether or not they have any power to interfere in the decisions of
the DEC by virtue of s 67(2) of the Act
is not the issue. Their duty
was to assist the court. The point is thus that, had they properly
and timeously applied their minds
to the issue at hand, which they
should have done given that they were cited as parties to the
application, they could have informed
the court of their attitude at
a much earlier stage. It would thus have been entirely unnecessary
for the applicants to have incurred
any further costs from the date
upon which the notice of intention to abide was filed, save for those
attendant upon counsel moving
for an order on an unopposed basis,
given that neither the DEC nor the fifth respondent opposed.
[71] It is against
this backdrop that I am compelled to find that the respondents have
been to blame for the unnecessary costs which
have been incurred
since the notice of intention to oppose was filed. Following the
approach of the Supreme Court of Appeal in
Viljoen, I conclude, in
the exercise of my discretion, that it would be unfair, given the
particular facts of this matter, not
to award certain costs to the
applicants.
[72] That having
been said, I am not persuaded that the applicants are entitled to
costs from the date upon which the review application
was launched.
There is nothing to indicate that the DEC did not act in good faith.
Although the respondents must be criticised
for failing to respond
timeously to the applicants’ request for an extension of the
180 day period under PAJA, there is nothing
on the papers to indicate
that the applicants themselves took active steps to put the
respondent to terms on costs if they were
not given such an
extension. Furthermore, having informed the respondents in December
2013 that they would limit the participatory
relief sought to the
alternative relief, the applicants themselves did something of a
volte face by seeking active participation
as part of the main relief
in their notice of motion. Accordingly I am of the view that there
are no special circumstances warranting
an adverse costs order
against the respondents until the date upon which they filed their
notice of intention to oppose.
[73] I am also not
persuaded that a punitive costs order is warranted. An adverse costs
order on the scale as between party and
party is sufficient where
special circumstances exist, if regard is had to the authorities
which I have quoted above. To award
attorney and own client costs
would, in my view, doubly penalise the respondents.
[74] Insofar as the
costs of two counsel are concerned, I would have had no difficulty in
awarding same had the merits of the review
application been an issue
before me. However, the applicants were aware since 17 September 2014
(almost a month before costs were
argued before me) that the
respondents had consented to the substantive relief sought. Although
the applicants were entitled to
employ the services of two senior
counsel to address the issue of costs, this does not mean that it is
reasonable to expect the
respondents to pay for them both. As I
understand the practice in the Cape, the costs of two counsel are
awarded, in the ordinary
course, in respect of interlocutory or
subsidiary matters relating to the main proceedings, even where these
matters are not complex.
However, to my mind, if I were to apply the
same practice to argument which revolved only about the issue of
costs, I would be
taking it too far.
[75] During argument
I was urged by counsel for the applicants to order that the costs of
attendance of the applicants’ attorney,
including his travel
and accommodation costs (given that he practices in Johannesburg) as
well as those of one of the senior counsel
who appeared, and who
similarly practices in Johannesburg, be recoverable from the
respondents. However I believe that it is appropriate
to leave this
in the hands of the taxing master.
[76] Finally, having
considered the authorities where costs have been awarded against the
Law Society, I have not been able to find
any decision where the Law
Society’s Council was also ordered to pay.
Conclusion
[77] In the result
the following order is made:
1. By agreement
between the applicants and the first and seventh respondents, and in
respect of the disciplinary enquiry into the
alleged professional
misconduct of the fifth respondent, Dines Chandra Manilal Gihwala,
with reference number DISC/42923/PP/gb
(‘the Enquiry’):
1.1 the applicants’
legal representatives are entitled to attend the Enquiry and to
participate in the Enquiry, to the extent
necessary to ensure that
the applicants’ rights (including the rights of the applicants’
representatives) are protected;
1.2 the applicants
will be furnished with a copy of the transcript of proceedings of the
Enquiry on an ongoing basis during the
Enquiry, as soon as such
transcript becomes available; and
1.3 the applicants’
Mr K I Mawji is entitled to testify by means of video conferencing in
the Enquiry.
2. The first
respondent shall pay the applicants’ costs from the date upon
which the first and seventh respondents filed a
notice of intention
to oppose, on the scale as between party and party, including the
costs of two counsel where employed, save
that the costs of one
counsel only shall be allowed in respect of preparation for argument
on costs and the appearance on 14 October
2014.
J I CLOETE