NW Civil Contractors CC v Anton Ramaano Inc and Another (993/2016) [2018] ZALMPTHC 1 (14 May 2018)

IN THE HIGH COURT OF SOUTH AFRICA

LIMPOPO LOCAL DIVISION: THOHOYANDOU

CASE NO: 993/2016

Heard: 27 March; 24 April and 8 May 2018

Judgment handed down: 14 May 2018

BEFORE THE HONOURABLE MR JUSTICE AML PHATUDI

In the matter between of:

NW CIVIL CONTRACTORS CC APPLICANT

And

ANTON RAMAANO INC FIRST RESPONDENT

SHERIFF THOHOYANDOU SECOND RESPONDENT

JUDGMENT

AML PHATUDI J

[1] In this application, the first respondent seeks, in simpler terms, an order declaring the proceedings initiated by the applicant who was represented by an attorney who at the time did not have the Fidelity Fund Certificate be declared to have been null and void ab initio. He further seeks an order setting aside the ruling(s) and judgment(s)[1] that were handed down from such proceedings. The parties herein have been cited as in the main application. The citation of parties in this judgment will thus be cited as in the papers notwithstanding the fact that the first respondent is the applicant.

[2] The first respondent deposed to the founding affidavit wherein he states that on 06 September 2016, Mr Vhutshilo Licollin Nange, an attorney at law practising as such for his own account under the name and style Vhutshilo Nange Attorneys (the attorney), caused issue of an application by way of motion. The notice of motion was duly signed by the attorney. The said application was subsequently served by the sheriff on the first respondent. The matter came before this court on 13, 14, 19 and 22 September 2016 respectively. The attorney appeared for the applicant and moved the application before Kganyago AJ (as he then was) on the said days.

[3] The applicant admitted under oath the said allegations in its answer to the founding affidavit. The attorney, in his confirmatory

affidavit, confirms under oath the correctness of the contents of the answering affidavit as follows:

‘2.2 [I am] an Attorney of the above Honourable Court and practising at Thohoyandou under the style and name of Vhutshilo Nange Attorneys…

I have read the contents of the affidavit of Mphephu Matodzi Robert and I confirm the contents thereof in so far as same relate to me. He has also read the contents hereof and has confirmed the contents of this affidavit in so far as same relate to him.’

[4] The issue to be determined is whether an Attorney at law can practise as such without being in possession of a valid Fidelity Fund Certificate duly issued by the Law Society.

[5] Section 41 of Attorneys Act provides that a practitioner shall not practise on his own account unless he is in possession of a fidelity fund certificate.[2] The Supreme Court of Appeal through the pen of Maya DP (as she then was) held that the usage of the phrase “shall not practise” bars an attorney from practising for his/her own account without a fidelity fund certificate.[3] In addition thereto, Tuchten J penned that an attorney who practises without a valid fidelity fund certificate is a danger to the public… and that the public are in those circumstances deprived of the protection of recourse to the Fidelity Fund.[4]

[6] The respondent’s counsel submits that Mr Nange cannot be said to have been an attorney when he purported to have acted as such representing the applicant. He refers to the definition of an “Attorney” spelt out in the Attorneys’ Act[5] and in the Uniform Rules of this Court[6]. He quoted the definitions verbatim on record. In terms of the Attorneys’ Act, he says, an “attorney” means any person duly admitted to practise as an attorney in any part of the Republic;[7] and in terms of the Uniform Rules of this Court, an ‘attorney’ shall mean an attorney admitted, enrolled and entitled to practise as such in the division concerned[8].

[7] Counsel further submits that an attorney, who is the subject matter herein, was not entitled to practise as an attorney because he was not in possession of a valid Fidelity Fund Certificate issued in terms of section 42 of the Act. He submits that the words “shall not practise” spelt out in section 41(1) of the Act prohibited Mr Nange from practising from the moment he was not in possession of a valid Fidelity Fund Certificate. He submits that Mr Nange confirmed in his confirmatory affidavit in support of the applicant’s opposition to this application that he indeed practised without the said Fidelity Fund Certificate since the year 2011.

[8] Counsel for the applicant submits in rebuttal that the first respondent and the respondent’s counsel, both being attorneys

at law, “are clueless that an interim order cannot be set aside or appealed against unless the order brings the matter to its finality.” He further submits that the respondent’s counsel is lazy to read the Attorneys Act in that section 41(2) does not prohibit an attorney without Fidelity Fund Certificate from practice. He submits that such an attorney may practise but shall not be “entitled to any fee, reward or disbursement in respect of anything done by him while so practising or acting.”[9]

[9] It is common cause that ‘the attorney’ took instructions from the applicant. The applicant is a member of the public with little or no knowledge of the law. The attorney drew up documents, caused issue of the notice of motion and instructed the second respondent to serve same on the first respondent. It is further common cause that the attorney was not in possession of a valid Fidelity Fund Certificate at the time when he took and executed the applicant’s instructions as aforesaid. Put differently, the attorney practised without a valid Fidelity Fund Certificate at the time of executing the applicant’s mandate.

[10] There is no reason advanced by the attorney as to why he practised without a valid Fidelity Fund Certificate. All attorneys practising in South Africa were reminded during 2016 through an article published in De Rebus[10] to apply for their Fidelity Fund Certificates. Perhaps I should digress and mention that De Rebus is the South African Attorneys’ Journal published by the Law Society of South Africa distributed monthly to all admitted attorneys in South Africa.

[11] The attorney must have received or is reasonably expected to have received the De Rebus. The attorney must have read or is reasonably expected to have read the article. The article brought to the fore of the admitted attorneys what was expected of them in order to secure a valid Fidelity Fund Certificate. The article read:

‘Until 2015, a practitioner would complete an FFC application form, submit it to the law society, and the law society would issue the FFC should the applicant be compliant with all requirements. With effect from the 2016 year, the AFF provided an automated system to the law societies to administer the issuance of these FFCs. This system went live at the beginning of November 2015, and all applications for the 2016 period were processed through the online application…

We noticed, while attempting to utilize the information for our risk management initiatives that the information is not necessarily correctly captured. In anticipation of the next round of a peak season for issuance of the FFCs, we therefore felt it necessary to assist new and existing practitioners with how to complete the required financial information correctly…’

[12] As indicated earlier in paragraph [5] above, an attorney is barred from practising for his or her own account without a Fidelity Fund Certificate. Any attorney who practises or continues to practise without the Fidelity Fund Certificate commits an offence. Section 83(10) of the Attorneys Act provides that ‘[a]ny person who directly or indirectly purports to act as a practitioner or to practise on his or her own account or in partnership without being in possession of a fidelity fund certificate, shall be guilty of an offence and on conviction liable to a fine not exceeding R2 000 or to imprisonment for a period not exceeding six months or to both such fine and such imprisonment’.

[13] It is clear that the Act bars any practitioner (an admitted attorney) from practising without being in possession of the Fidelity Fund Certificate. The word “practise” means practise as an attorney or a notary or conveyancer, and “practice” has a corresponding meaning. The word practise in the context of the legal practitioner means to carry out or perform [11](or purports to act) or execute the mandate as instructed by his/her client. Legal practitioners’ clients are members of the public. Attorneys are entrusted with moneys deposited by members of the public in their trust accounts to be held as such until the mandate has been executed promptly. The law provides a stringent framework for the regulation of attorneys' trust accounts. The fidelity fund protects the funds deposited by members of the public against misappropriation of the money they have entrusted to attorneys[12]thus the importance of the Fidelity Fund Certificate. All such moneys entrusted to attorneys must be held by them in a separate trust account(s) which do not form part of the attorney's assets.

[14] Seeing that the attorney in casu confirmed that he practised as such without the Fidelity Fund Certificate notwithstanding being barred as provided for in terms of section 41 (1) of the Attorneys’ Act, the attorney’s work done in executing or purporting to execute the applicant’s mandate, was rendered a nullity ab initio. Put differently, all that which was done or performed or executed or purported to have been done or performed or executed by the practitioner is in my view, a nullity. The notice of motion drawn and signed by the attorney( Mr Nange) initiating the proceedings

forming the subject matter including the ruling(s) and judgments handed down must, in my view, be regarded as pro non scripto. In short, all that which the attorney did in the execution or performance of the mandate in this matter must be regarded as not

having been done. This translates in the notice of motion, the court’s ruling and judgments handed down pursuant thereto been set aside.

[15] Counsel for the applicant conceded that section 41(2) prohibits any practitioner from debiting any fee, reward or disbursement in respect of anything done by the practitioner while so practising. He however misconstrues the interpretation of the subsection. Section 41(2) supplements the provision of subsection (1). Subsection (2) simply provides that in the event an attorney had already acted or purported to have acted as an attorney without being in possession of a valid Fidelity Fund Certificate, such an attorney is not entitled to debit any fees. The subsection protects members of the public not to be mulcted with fees or to entrust any monies with such an “attorney”.

[16] I find it apposite to deal with the conduct of the applicant’s present counsel (Mr Makhani). He, throughout the course of the proceedings, adopted a certain attitude I find to have been disturbing. The applicant’s counsel displayed some arrogance against his colleague in court. He, at irregular intervals, pointed a finger at his colleague with utterance of some derogating words such as “this attorney is lazy” and “this attorney is clueless” among others. He did not show any remorse[13] on his arrogance notwithstanding a plea from counsel for the first respondent for retraction of his derogating and degrading comment(s).

What worries me is the lack of appreciation of the consequences of the utterance of such degrading words. I engaged the applicant’s

counsel and told him how sensible it would be of him to retract the said comments but to no avail. I immediately thereafter found myself reiterating the words penned by Motimele AJ (as he then was) when he said: “O tempora! O mores!”[14]

[17] It is trite law that costs follow the event. The first respondent is entitled to the costs occasioned by this application. The issue raised in respect of costs is whether the attorneys and counsel of record who represent the applicant are entitled to debit fees from their client. Poswa AJ (as he then was) pointed out that ‘a litigant [should] not be penalised for the ineptitude of its legal representative where it is clear that the [applicant is not responsible for the representative’s conduct]’[15]. Contrary thereto, it was held that ‘a litigant cannot escape the result of his attorney’s lack of diligence. (See Theron v AA Life Assurance Association Ltd [1995] ZASCA 61; 1995 (4) SA 361 (A).

[18] Patel J penned in Makuwa v Polson[16] that it was time for a stern warning against non-compliance with the Rules of Court and that those practitioners who let the practice and the administration of justice be undermined would incur the displeasure of the Court and an exemplary costs order. It was further

held that it would be unfair for the parties to carry the costs of their attorney’s negligent unreasonable conduct. The applicant

was ill advised and made to believe that there are prospects of success where the law is clear and had already been settled by the Supreme Court of Appeal that a practitioner shall not practise on his own account unless he is in possession of a fidelity fund certificate.[17]

[19] Why should the applicant be burdened with the fees of his legal representatives who ill advised him? I engaged both counsel on the issue. After having heard both counsel, I found that it will be unfair, in my view, to let the applicant be burdened with the fees of his legal representatives (specifically the present on record) who ill advised him in this matter. It has been submitted that some attorneys still believe that they can practise even when not in possession of a valid Fidelity Fund Certificate. Perhaps this judgment shall serve as the legal practitioners’ Mein Kampf[18]. Counsel for the respondent opined that this judgment should be used as practitioners’ guide with specific reference to all those who are or purport to be practising without a valid Fidelity Fund Certificate. I agree in as far as the consequences of non-compliance

are concerned.

[20] I in the result make the following order.

ORDER

20.1 The first respondent’s application is upheld

20.2 The proceedings initiated and executed by Vhutshilo Licollin Nange who practised or purported to have practised as such under the name and style Vhutshilo Nange Attorneys are declared null and void ab initio and are set aside.

20.3 All rulings and judgments handed down occasioned by the proceedings set aside in the order 20.2 above are declared null and void and set aside.

20.4 The applicant is ordered to pay the costs of this application including all reserved costs.

20.5 The applicant’s legal representatives of record including Counsel are precluded from levying and claiming any fees including Counsel Fees incurred from 24 April 2018 from the applicant.

AML PHATUDI

Judge of the High Court

APPEARANCES:

For the Appellant: N Makhani

Instructed by:

Nemaxwi and Sekgala Attorneys

211 High Court Chambers; Pretoria

C/o Negota K Attorneys; Thohoyandou

For the Respondent: V.M. Netshipale

Netshipale Inc

2 Mphephu Drive; Thohoyandou

[1] The ruling and judgments were handed down by Kganyago AJ (as he then was) on the 14 and 22 September 2016 respectively.

[2] 41. 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 own account or in partnership unless he is in possession of a fidelity fund certificate. (2) Any 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 while so practising or acting. (3) The provisions of this Chapter shall not apply in respect of any person admitted and enrolled as a conveyancer under Act No. 23 of 1904 (Natal).

[2] 41. 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 own account or in partnership unless he is in possession of a fidelity fund certificate.

(2) Any 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 while so practising or acting.

(3) The provisions of this Chapter shall not apply in respect of any person admitted and enrolled as a conveyancer under Act No. 23 of 1904 (Natal).

[3] See: Law Society of the Northern Provinces v Scalco (90063/2015) [2015] ZAGPPHC 907 (31 December 2015); Law Society of the Northern

Provinces v Le Roux (185/2015) [2015] ZASCA 168 (26 November 2015) para[15]

[4] Law Society of the Northern Provinces v Scalco (90063/2015) [2015] ZAGPPHC 907 (31 December 2015) paragraph [13]

[5] Attorneys’ Act 53 of 1959

[6] Uniform Rules as stipulated in Erasmus Superior Court Practice.

[7] Section 1 of the Attorneys’ Act 53 of 1959

[8] Section 1 of the Uniform Rules of the Court-[original service, 2015] page D1-9

[9] 41(2) Any 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 while so practising or acting.

[10] De Rebus online: Applying for a Fidelity Fund Certificate (August 29th, 2016). This article was first published in De Rebus 2016 (Sept) DR 15.

[11] Concise Oxford English Dictionary- Eleventh Edition-Oxford University Press; www.askoxford.com/oec

[12] Section 26(a)

[13] He did not have the appreciation of, inter alia: (i) what motivated him to utter the words; (ii) what has since provoked his change of heart; (iii) whether he did indeed have a true appreciation of the consequences of utterance of those words’. See S v Matyityi 2011 (1) SACR 40 (SCA) para[13]

[14] S v Mojaki 2006(2) SACR 590(T); Oh, the times! Oh, the custom! - The expression is used as an exclamation of despair at prevailing social norms.

[15] Ketwa v Agricultural Bank of Transkei [2006] 4 All SA 262(Tk) at 272

[16] 2007(3) SA 84(TPD)

[17] Law Society of the Northern Provinces v Le Roux (185/2015) [2015] ZASCA 168 (26 November 2015)

[18] Mein Kampf is a 1925 autobiographical book by Nazi Party leader Adolf Hitler. The work describes the process by which Hitler became

anti-Semitic and outlines his political ideology and future plans for Germany.