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IN THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
REPORTABLE
Case No 120/99
In the matter between
JOAQUIM
AUGUSTO DE FREITAS First Applicant
INDEPENDENT
ASSOCIATION OF
ADVOCATES OF SOUTH AFRICA Second
Applicant
and
SOCIETY OF ADVOCATES OF
NATAL First Respondent
NATAL LAW SOCIETY Second
Respondent
Before: HEFER ACJ, SMALBERGER ADCJ, NIENABER, CAMERON and MPATI JJA
Hearing: 15 February 2001
Delivered:
Professional misconduct —
breach of referral rule by advocate — still amounting to misconduct for so
long as advocates
not subject to trust fund protections applying to attorneys
JUDGMENT
CAMERON JA/....
CAMERON JA:
[1] I have had the benefit of reading the
judgment of Hefer ACJ. I agree that the application for leave to appeal lacks
merit
and must be dismissed. However, the reasons that compel me to this
conclusion are considerably narrower than those of Hefer ACJ,
and I therefore
propose to set them out briefly.
[2] The question that the application to
strike off the first applicant and the counter-application of the second
applicant, IAASA,
both raise is whether this Court should invoke its supervisory
jurisdiction over legal practitioners to enforce against all advocates
practising as such a rule that they may not act for a party without the
intermediation of an attorney. That the Court has a jurisdiction
to supervise
how legal practitioners conduct their practice, and that it is to be exercised
in the public interest, I take as self-evident.
More difficult, in my opinion,
is whether it should be engaged in the enforcement of a rule that the
“traditional Bars”
(for a want of a better term) seek to uphold,
and IAASA, the “rebel Bar”, seeks to challenge.
[3] That the
rule is not of unquestioned antiquity, nor of uncontested ambit, appears from
Attorney-General v Tatham 1916 TPD 160 at 168 - 9, where the Full Bench
of the Transvaal Provincial Division refused to regard as unprofessional the
conduct
of an advocate in advising a client without the intervention of an
attorney and charging a fee for this service. Indeed, the traditional
Bar (to
which I shall refer as “the Bar”) has itself been reconsidering
aspects of the referral rule since 1995, when
the Right of Appearance in Courts
Act 62 of 1995 extended to attorneys the right to appear in the superior courts.
This appears from
the papers and was confirmed to us during argument by counsel
for the Bar.
[4] That history and tradition, by themselves, cannot suffice
to justify the invocation of the Court’s power over legal practitioners
I
also take to be self-evident. Nor, of course, can the mere fact that the
established legal profession applies such a rule.
[5] The crisis in legal
services in this country is too acute, and the threat this represents to the
administration of justice too
grave, for the courts to enforce tradition without
there being compelling reason in the public interest to do so. Too many of the
rules for which the Bar once fought have been abandoned in the course of time
for us to accept without further ado that any rule
it now seeks to uphold must
routinely receive the imprimatur of judicial enforcement. One has but to
think of the two-counsel rule (in terms of which senior counsel were formerly
required to
appear only when briefed with a junior) and the rule that, until all
too recently, excluded academics not in full-time practice from
membership of
the Bar, to realise that features of practice defended today as intrinsic to the
proper constitution of the profession
and to the adequate rendition of services
to the public become tomorrow the abandoned relics of a developing and
forward-moving profession.
[6] To my mind, the referral rule is too
uncomfortably reminiscent of some of these rules to conclude in broad terms that
it is necessary
to uphold it in the public interest without precise and narrow
scrutiny of the basis for that claim. Indeed, the application to
strike off the
first applicant was brought on the premise that it is "a fundamental principle
of the advocates' profession as practised
in SA (and in all Commonwealth
jurisdictions where the division of the legal profession into Advocates and
Attorneys has been maintained)
that the Advocates' profession is a referral
profession and that Advocates do not accept briefs directly from members of the
public".
Shortly before argument, this Court requested detailed information
from the parties as to the position in comparable jurisdictions.
That
information showed that the averment in question was stated too broadly, and Mr
Wallis, who appeared for the Bar, disavowed
reliance upon it.
[7] The
information supplied to us from the United Kingdom and Australasia indicates
that in most areas where the division within
the legal profession is maintained,
the referral rule has been substantially adapted, so that, subject to strict
safeguards, specialist
litigation-practitioners are indeed now entitled to take
work directly from the public or sections of it. In this the Bar in our
country
appears to be behind its peers even in the United Kingdom where, at the English
Bar, detailed rules providing for direct
access in strictly circumscribed cases
now exist. That those jurisdictions have so adjusted the rule in the interest
of both the
public and the profession that serves it seems to me to be beyond
question; and it is for these reasons that I conclude that a claim
by a branch
of the legal profession that a professional rule or practice exists in the
public interest and should for that reason
be enforced by the courts must be
scrutinized to ensure that it is not loosely or over-broadly made.
[8] Where
a rule of professional practice is sourced in statute, any limitation of rights
that statute contains will of course have
to pass muster under the Constitution.
Regulation of professional practice will certainly have to be rational and
non-arbitrary to
pass constitutional scrutiny (S v Lawrence 1997 (4) SA 1176 (CC), at paras 34 - 35, per Chaskalson P). Where a rule of professional
practice is not sourced in statute it must, for the reasons
I have given, be
subjected if anything to even more exacting scrutiny. As is indicated in the
judgment of Hefer ACJ, the basis
of the courts’ power to enforce
professional rules is not a novel question in this Court. In the Transvaal High
Court, Innes
JP formulated a test that in my view still forms a sound basis for
distinguishing between conduct by a practitioner that is intrinsically
and
necessarily unprofessional, and conduct that may be unprofessional and
undesirable only because of the contingent conditions
of legal practice within
which it occurs. In Pienaar and Versfeld v Incorporated Law Society 1902
TS 11 at 16, Innes JP asked:
“Has [the Court] the power to prohibit conduct on the part of practitioners, which, though not in itself immoral or fraudulent, may yet in the opinion of the Court be inconsistent with the proper position of its practitioners and calculated, if generally allowed, to lead to abuses in the future?”
His answer was that the Court does possess
that power. As Innes JP indicated, if the conduct impugned is not “in
itself immoral
or fraudulent” it must pass a two-fold test for judicial
proscription as unprofessional: it must be (a) inconsistent with
the proper
position of a legal practitioner; and (b) calculated, if generally allowed, to
lead to abuses in the future.
[9] In my view, the mere fact that the
profession is divided into two in our country does not logically or necessarily
entail the
referral rule. Experience in those jurisdictions where groups of
specialist litigation-practitioners have voluntarily organised
themselves into
Bars without enforcing the referral rule against all other
litigation-specialists shows as much.
[10] I agree with Hefer ACJ that it
is in the public interest that there should be a vigorous and independent Bar
serving the public,
which, subject to judicial supervision is self-regulated,
whose members are in principle available to all, and who in general do
not
perform administrative and preparatory work in litigation but concentrate their
skills on the craft of forensic practice. It
is not, however, clear to me that
this desideratum is incompatible with some relaxation of the referral
rule and I do not understand the judgment of Hefer ACJ to suggest that it is.
I
do, however, consider that the Bar should be encouraged to investigate with
urgent speed whether accommodations of the referral
rule along the lines already
practised in comparable jurisdictions should not be introduced here as a means
of possibly enhancing
public access to legal services and reducing the cost of
at least some of those services.
[11] There is, in short, in my view nothing
intrinsically improper in a specialist corps of litigation-practitioners
operating without
the referral rule in its widest sense; nor, as experience in
comparable jurisdictions amply shows, would sensible adjustments to
the rule be
inimical to the continued flourishing of such a corps. From a public policy
point of view, the enactment of the 1995
statute indeed shows that the
Legislature considered that at least one branch of the profession —
attorneys — should
be permitted to offer all litigation services without
the necessity for being briefed by another practitioner. That does not show,
as
IAASA insupportably contended, that advocates should by reciprocal relaxation be
permitted to engage in all forms of attorneys’
work. But it does show
that the courts — before whom litigation-specialists who are attorneys are
entitled to appear without
the intermediation of another attorney — should
be meticulous in their scrutiny of the same rule when its enforcement is sought
against all advocates.
[12] However, as is explained in the judgment of
Hefer ACJ, there is a very particular, and contingent, reason for concluding
that
the “proper position” of advocates in this country, at least
for the present, entails the enforcement of the referral
rule since its
disregard, if generally allowed, would “lead to abuses in the
future”. That is the position with regard
to trust accounts. Because the
statutes regulating the two branches of the profession are, by and large,
premised on their division
into two branches, advocates are not required or
permitted to keep trust banking accounts for the receipt and retention of
client’s
money. If they purport to do so, a peculiarity of our law of
trusts precludes the arrangement from being effective to protect the
public
against appropriation and loss. This is because in our law (unlike most other
countries where the trust institution has developed)
a living person cannot by
unilateral act sequester a portion of assets and call them a “trust”
so as to create the founder
a trustee and render the assets immune from
creditors (Ex parte Estate Kelly 1942 OPD 265, 272; Crookes N O v
Watson 1956 1 SA 277 (A) 298, per van den Heever JA). An advocate of
necessity operates outside the statutory apparatus of s 79 of the
Attorneys Act
53 of 1979 and cannot by unilateral declaration create a trust. Indeed, for all
trusts except oral trusts, the Trust
Property Control Act 57 of 1988 has further
complicated the position by requiring the official sanction of the Master before
even
a properly created and appointed trustee can operate as such (Simplex
(Pty) Ltd v van der Merwe and others NO 1996 (1) SA 111 (W)).
[13] The
facts of the present matter illustrate the real and substantial danger to the
public that would result if advocates were
permitted to handle public money,
whether by dealing with their clients’ money or even by taking deposits on
fees in advance.
As shown in the judgment of Hefer ACJ, the first applicant
invited the payment into what he called his “business account”
of
what may have been a very substantial portion of the accumulated assets of a
married couple one of whom he was representing.
Had the invitation been
accepted, not only would there have been no protection against his creditors in
the event that he was sequestrated,
but there would have been no protection
against his disposal of that money, as its owner, since in law when it was paid
into his
account it became his.
[14] Such a situation the courts cannot
countenance. For so long as the statutory absence of trust fund protection
continues, it
provides in my view a compelling reason in the public interest for
the courts to enforce the referral rule. It follows at the very
least that the
first applicant in soliciting the payment in question acted unprofessionally and
improperly and rendered himself subject
to appropriate sanction by the
court.
[15] It is true that a small number of advocates may disavow the
intention ever to deal with the public’s money or even to
take any fees in
advance. Cases of this sort can be envisaged, and some advocates who have
committed themselves exclusively to pro
bono work no doubt practise on this
basis. But they constitute a tiny minority of the total in the profession; and
the rules enforced
by this Court must take practical account of what practices,
if generally allowed will (again in the words of Innes JP in the Pienaar and
Versfeld case (at 18)) be “obviously likely to lead to
abuse”.
[16] I therefore agree with the observation of Thirion J in
the Court below, in adjudicating on the applicants’ application
for a
certificate in terms of rule 18 of the Constitutional Court rules, that
“what the [applicants] are seeking to achieve
is a situation where the
advocate performs the functions of an attorney in all litigious matters without
being subject to the restrictions
imposed on an attorney”. In this, IAASA
asks this Court to accord its members a breadth of unregulated practice which
goes
beyond anything known to any of the jurisdictions comparable to ours.
E CAMERON
JUDGE OF APPEAL
Concur:
Smalberger
ADCJ
Nienaber JA
Mpati JA
SAFLII:
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