Who can and cannot represent companies in South African courts?

October 1st, 2022
Investec Securities (Pty) Ltd v Corwil Investments Holdings (Pty) Ltd and Others (GJ) (unreported case no 2021/11126, 20-7-2022) (Wepener J)

Perhaps it will be helpful to begin with the 1960s case of Battle v Irish Art Promotion Centre Ltd 1968 IR 252 (SC), as a backdrop for this article. In the Battle case, the managing director of a company filed an ex parte application to be allowed to defend the company against the plaintiff’s claim. The Supreme Court of Ireland established the common law principle that stipulates that a company may only be represented in court or make an appearance as a party to legal proceedings through a solicitor or counsel. The Supreme Court of Ireland disallowed the managing director and majority shareholder from appearing in court on behalf of the firm personally. The term ‘Rule in Battle’ was invented, and it states that corporate entities may only be represented by lawyers who have a formal right of audience in court proceedings, not by non-lawyer directors or shareholders.

According to the Supreme Court of Ireland, this rule may be deviated from in ‘exceptional circumstances’ where the interests of justice require it. However, the court has noted that, for example, lack of available funds in a company to obtain legal representation does not constitute exceptional circumstances. The Rule in Battle is still in effect in Ireland and is recognised in other common law countries, such as the United Kingdom, Australia, and Canada.

In the South African Investec Securities case, Investec applied to the court for a declarator barring the third respondent, Mr Nathan Hittler, from acting on behalf of the first and second respondents (Corwil Investments) in any legal proceedings between Investec and Corwil Investments. Investec contended that because Mr Hittler was not an attorney or advocate, he cannot represent Corwil Investments. Furthermore, Mr Hittler was not director of Corwil Investments.

But this was not the first time the parties had a case heard on the similar subject. The other matter that was discussed previously heard by the court was in Corwil and Investec (Corwil Investments Holdings (Pty) Ltd and Another v Investec Securities (Pty) Ltd (GJ) (unreported case no 11126/2022, 5-4-2022) (Manoim J)), in which the court made it clear that Mr Hittler could not represent Corwil Investments as he was not an advocate or attorney. Despite the decision that was handed down on 5 April 2022, Mr Hittler continued to file papers ostensibly as a representative of Corwil Investments. Mr Hittler claimed that he acted as a representative or agent of Corwil Investments with the approval of its board. Mr Hittler also stated during the hearing that he planned to file additional documents on behalf of Corwil in the future.

The court ruled in favour of Investec once more and granted a declarator, effectively barring Mr Hittler from filing additional documents on behalf of Corwil in the future. The court also ruled that all of Mr Hittler’s actions, which purported to be taken on behalf of Corwil, were improper, as were all the documents he filed in that capacity.

The question here is whether a person – who is not qualified as an advocate or attorney – can represent a company in court? As previously stated, the Rule in Battle is still in effect in many other common law jurisdictions and in those jurisdictions, it is very clear that corporate entities may only be represented in court by legal practitioners with a formal right of audience, not by non-legal practitioner directors or shareholders. The South African courts appear to have followed suit and not deviated from the Rule in Battle.

The Manong and Associates (Pty) Ltd v Minister of Public Works and Another 2010 (2) SA 167 (SCA) case is one of the important South African cases on this issue, where the managing director of the company signed the heads of argument on behalf of the company and purported to represent it before the court. What is known as the right of audience on behalf of the company before it. The court then decided that the company cannot conduct a case before it except by the appearance of counsel on its behalf. However, what is interesting about the case is that it seems to open the door for the possibility in the future to relax this common law rule where administration of justice may require this. The court held that ‘superior courts have a residual discretion in a matter such as this arising from their inherent power to regulate their own proceedings’ (para 10). The court also contended that such a discretionary power is consistent with the Constitution. The court emphasised that discretionary audience should be regarded as a reserve or occasional expedient, because, given the increasing complexity of litigation, the rule may be as strongly required today as it ever was, and there may be circumstances in which ‘an unqualified and inexperienced person may do more harm than good to the corporate litigant that he purports to assist’ (para 13). The court refrained from developing a test for exercising the court’s inherent power because it believed that such cases could be confidently left to the good judgment of the judges involved. It did, however, hold that in each such case, leave must first be sought through a properly motivated, timely filed formal application demonstrating good cause why the rule prohibiting non-professional representation should be relaxed in that particular case.

The Supreme Court of Appeal in the Manong case did not really deviate from the common law rule. Like the Supreme Court of Ireland, it also pointed out that in the future it may deviate from this rule in exceptional circumstances where the interests of justice require it.

In conclusion, a company formed ‘under the Companies Act has its own legal personality’ and the authority to bring ‘legal proceedings in its own name’ (Garreth O’Brien, Frances Bleahene and Heather Mahon ‘Legal Proceedings: The Importance of Company Authorisation and Representation’ (www.mccannfitzgerald.com, accessed 4-9-2020)). Problems can arise, however, when legal action is taken on a company’s behalf, with or without the company’s formal authorisation, and the representative in the legal proceedings is neither an attorney nor an advocate. Despite the fact that the courts have decided to uphold the common law rule, they have left the door open for possible exceptions if the interests of justice so warrant.

The rule appears to be here to stay, and any deviation from it may necessitate the applicant demonstrating exceptional circumstances that justify the courts deviating. As the Supreme Court of Ireland pointed out, a lack of funds to pay a legal representative, for example, may not be considered an exceptional circumstance by the courts.

As a juristic person, the company cannot thus represent itself in legal proceedings.

Michael Kabai LLB (UNIN) LLM (UNISA) LLM (NWU) MBA (Regent) is a legal practitioner, adviser, and legal services manager at the South African National Space Agency (SANSA). The views expressed in Mr Kabai’s article are his own and do not reflect the views of SANSA.

This article was first published in De Rebus in 2022 (Oct) DR 28.