Referral rule of Attorneys Act not unconstitutional

July 23rd, 2015
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Noordien v Cape Bar Council and Others (WCC) (unreported case no 9864/2013, 13-1-2015) (Schippers J)

By Nomfundo Manyathi-Jele

Schippers J gave judgment dismissing Abubaker Noordien’s application for leave to appeal to a full Bench of the Western Cape division of the High Court, or the Supreme Court of Appeal (SCA) against a judgment handed down by the Cape High Court on 13 January 2015.

In that order the court dismissed, with costs, the application for declaratory orders that the referral rule and s 83(1) and 83(3) of the Attorneys Act 53 of 1979 are unconstitutional.

Background

The respondents to this matter were the Cape Bar Council; General Council of the Bar; Cape Law Society; Law Society of South Africa (LSSA); Minister of Justice and Constitutional Development and the Independent Association of Advocates of South Africa. According to the January judgment, the applicant is a former independent advocate. He was struck from the roll of advocates by the Cape High Court on 30 August 2013. The court found that he –

  • is not a fit and proper person to practise as an advocate because he lacks the necessary qualities of honesty and integrity;
  • had admitted that he was guilty of serious misconduct, more specifically, dishonesty, perjury and lying to a magistrate; and
  • had deliberately taken steps to circumvent the referral rule, which is an offence under s 9(2) of the Admission of Advocates Act 74 of 1964.

In the notice of motion the applicant, who appeared in person, sought 27 declaratory orders, which include orders declaring that –

  • all legal practitioners are equal before the law;
  • direct and indirect discrimination is prohibited;
  • the principle of legality, the interests of justice and the rule of law apply in this case;
  • the Constitution is the supreme law;
  • all public power is subject to the rule of law; and
  • the Constitutional Court ‘is charged with determining the boundaries when interpreting an Act of Parliament’.

The court process and striking off applications

In essence, the applicant sought an order in the following terms declaring that –

  • the court process in striking off applications is unconstitutional;
  • the referral rule is unconstitutional on the grounds that it is overbroad, discriminatory and uncompetitive;
  • s 83(1) and 83(8) of the Attorneys Act are unconstitutional on the basis that these provisions are unfairly discriminatory, and infringe the rights to dignity, freedom of trade, occupation and profession, and access to court.

In the January judgment Schippers J found that the founding affidavit made no mention about the respects in which the process in striking off applications is unconstitutional. He also found that the provisions of the Constitution, which that process allegedly violates, were also not identified and the respondents had to guess what features of the striking off process are allegedly unconstitutional and then speculate about which provisions of the Constitution might be implicated.

 

‘In addition, if the process followed in striking off applications limits any right under the Constitution, such limitation may be justifiable under s 36. The respondents would then be entitled to place facts before the court to show that the limitation is justified. However, they cannot do so because the applicant has laid no foundation in his papers for the challenge that the striking off process is unconstitutional,’ Schippers J stated in the judgment adding that ‘in short, there is no basis, factual or otherwise, for this challenge’.

The court held that it was clear from the applicant’s papers that his real complaint was that he should not have been struck off the roll. Schippers J added that the applicant had thus not made out a case to challenge the constitutionality of the process followed in a striking off application and the relief claimed on this ground must fail.

‘Aside from this, it is clear both from the papers in this case, and the judgment in the striking off application, that the applicant’s right to just administrative action under s 33 of the Constitution and the provisions of the Promotion of Administrative Justice Act 3 of 2000, as well as his right of access to court under s 34 of the Constitution, were not threatened at all, let alone infringed,’ the judgment reads.

The referral rule

In his January judgment, Schippers J stated that the Appellate Division and the SCA have held that the referral rule – that advocates may not take instructions directly from lay clients and can do so only with the intervention of an attorney – is fundamental to the advocates’ profession. He explained that the applicant admitted that he accepted R 1 500 directly from a member of the public to reinstate her son’s bail, without a brief from an attorney. ‘In the founding affidavit he challenges members of the Bar to render this service in the regional court for R 1 500 and says that it is worth at least R 10 000. Despite his acknowledgment that the sum of R 1 500 was a fee, he states, “I can never accept that the above R 1 500 can be seen as fees but rather, [an] affordable donation for the good deed that was agreed to by myself,”’ Schippers J stated.

According to Schippers J, the applicant said that the member of the Cape Bar who investigated the complaint against him, ‘had his own agenda’ and that he ‘orchestrated and concocted’ the allegations in the complainant’s affidavit, to justify the applicant’s removal from the roll of advocates. Schippers J added that the applicant said that the first respondent, ‘is using and abusing the referral rule to get rid of its competition and not really to help the public.’ With reference to De Freitas and Another v Society of Advocates of Natal and Another 2001 (3) SA 750 (SCA), ‘the applicant submits that the rule is overbroad because there are less invasive means to protect public money. He contends that the referral rule is not in the public interest because it deprives the underprivileged and previously disadvantaged citizens of direct access to the services of an advocate,’ Schippers J stated.

The court held that the purpose of the referral rule is to protect members of the public because advocates do not hold trust accounts. He added that it does so effectively and that it is not designed or implemented in order to deny disadvantaged citizens access to advocates or to courts. ‘Moreover, the referral rule applies regardless of whether the advocate is a member of an established Bar or the independent Bar,’ he states.

Schippers J said there were no facts to support the applicant’s claim that the first respondent had invoked the referral rule in order to eliminate competition, and ‘not really to help the public.’ ‘On the contrary, in the applicant’s case the rule was applied precisely to protect the public. The applicant informed the court in his striking off application that his modus operandi was this: He took money directly from members of the public (who were obviously unprotected because the applicant had no trust banking account). He then paid an attorney part of the money in order for the latter to pretend that he was the instructing attorney. In the case of both the complainants the attorney had not even met any of them. The attorney furnished an affidavit to the first respondent confirming that he did not instruct the applicant,’ the judgment states.

Section 83 of the Attorneys Act

Schippers J held that s 83(1) of the Attorneys Act provides that no person other than a practitioner (defined as an attorney, notary or conveyancer) shall practise or hold himself out as a practitioner or perform any act, which he is prohibited from performing in terms of any regulations made under s 81(1)(g). He added that s 83(8) makes it an offence for a person other than a practising practitioner to draw up certain documents such as agreements relating to immovable property and the dissolution of a partnership, wills, memoranda and articles of association of a company, and documents relating to proceedings in a civil court.

Schippers J further held: ‘It is difficult to determine from the founding affidavit upon what facts the applicant relies for the attack on s 83 of the Attorneys Act. He says that in criminal cases there is no need for two practitioners; that a divided Bar is not necessary to maintain the high standards in the legal services market; and that s 83(1) and (8) of the Attorneys Act is unconstitutional “because it discriminates against advocates and reserves jobs for attorneys,” as an advocate is not included in the definition of “practitioner” in the Attorneys Act. It thus appears that the basis of the challenge to the impugned provisions of the Attorneys Act is that they uphold the referral rule and prevent the applicant from doing certain work which attorneys may do.’

The third and fourth respondents accepted that there was differentiation between advocates and attorneys, adding that there is a rational basis for the differentiation – the need to regulate the legal profession and to protect the public.

‘The need to regulate advocates and attorneys is self-evident. Each group has its professional bodies which –

  • determine the rules by which members must conduct their practices;
  • take action to ensure that members adhere to the rules;
  • scrutinise and where appropriate, take action regarding applications for membership of the profession; and
  • generally see to the interests of members and the profession.

‘Broadly speaking, the advocate is a specialist in forensic skills and giving expert advice on legal matters and does not accept work directly from the client. The advocate has no direct financial dealings with the client and may not practise in partnership with another advocate. The attorney has more general skills and is often qualified in conveyancing and notarial practice, has direct links with the client, is allowed to practise in partnership and is responsible to keep trust funds,’ Schippers J stated.

In his answering affidavit former LSSA Co-chairperson, David Bekker, made on behalf of the third and fourth respondents, he stated that services rendered by advocates and attorneys are fundamentally different. ‘For example, advocates play no role at all in the following areas of law which are crucial to the economy: property transfers; negotiation and conclusion of commercial agreements; … and the establishment of intellectual property rights,’ Schippers J said.

‘[Mr] Bekker states that the organised attorneys’ profession unequivocally supports the retention of a divided Bar and the referral rule, not for historical reasons but because experience has shown that the division has a number of important benefits to the public. These include the emergence and development of a body of courtroom specialists in forensic skills, providing members of the public with expert advice across all areas of the law, promoting competition by providing access to such advice other than by establishing large firms, maintaining long-standing relationships with lay clients and ensuring the independence of the Bar,’ Schippers J noted.

The first, second, third and fourth respondents opposed the leave to appeal application. The fifth respondent said it would abide by the decision of the court and the sixth respondent was not represented neither did it file any papers in the main application.

Schippers J said s 17(1) of the Superior Courts Act 10 of 2013 states that leave to appeal may be granted only, inter alia, where the court is of the opinion that the appeal has a reasonable prospect of success or there is some other compelling reason why the appeal should be heard.

According to the court, the grounds of appeal are basically that the court erred in –

  • dismissing the applicant’s challenge that the referral rule is unconstitutional;
  • in finding that the attack on the impugned provisions of the Attorneys Act is unfounded; and
  • in holding that these constitutional challenges have become academic with the promulgation of the Legal Practice Act 28 of 2014.

‘In my opinion an appeal has no reasonable prospect of success; neither is there any compelling reason why an appeal should be heard’, he said.

The leave to appeal was refused and the applicant was ordered to pay the costs of the second, third and fourth respondents on the attorney and client scales, including costs of two council where so employed.

Nomfundo Manyathi-Jele NDip Journ (DUT) BTech Journ (TUT) is the news editor at De Rebus.

This article was first published in De Rebus in 2015 (Aug) DR 53.