Court name
High Court
Case number
28 of 2012
Title

Van der Merwe v Director Law Society Namibia and Others (28 of 2012) [2012] NAHC 149 (06 March 2012);

Media neutral citation
[2012] NAHC 149
Coram
Van Niekerk J























REPUBLIC
OF NAMIBIA


IN
THE HIGH COURT OF NAMIBIA, MAIN DIVISION






CASE
NO. A28/2012


HELD
AT WINDHOEK






In
the matter between:


CAREL
JACOBUS WICHARD VAN DER MERWE ........................Applicant


and


THE
DIRECTOR OF THE LAW SOCIETY OF NAMIBIA
......1st
Respondent


THE
COUNCIL OF THE LAW SOCIETY OF NAMIBIA
........2nd
Respondent


THE
LAW SOCIETY OF NAMIBIA
.....................................3rd
Respondent


MARINDA
COLEMAN
......................................................4th
Respondent


THE
LEGAL PRACTITIONERS FIDELITY FUND
...............5th
Respondent


THE
LEGAL PRACTITIONERS FIDELITY FUND
...............6th
Respondent


BOARD
OF CONTROL






CORAM:
VAN NIEKERK, J






Heard:
2 March 2012


Delivered:
6 March 2012


________________________________________________________________________


REASONS
FOR JUDGMENT


VAN
NIEKERK, J:
[1]
On 27 February 2012 the applicant lodged a review application in
which he prays for,
inter
alia
,
an order in the following terms:



1. Calling upon the
first respondent and/or the second respondent and/or the third
respondent to show cause why –




    1. The
      decision
      taken on or
      about 7 December 2011 by the first respondent and/or the second
      respondent and/or the third respondent to the effect that the
      fidelity fund certificate issued by the first respondent to the
      applicant was to be valid only until 29 February 2012,










should not be reviewed and set
aside.









    1. The
      decision taken on or about 2 February 2012 and confirmed on 20
      February 2012 by the first respondent and/or the second respondent
      and/or the third respondent to the effect that –










At this stage no
permission or confirmation can be given to any of you
[being
the applicant and the fourth respondent]
with
regard to the use of the name of the present firm, the continuation
of the firm
[being a
reference to Van der Merwe Coleman],
fidelity
fund certificates and trust account or the names of a new firm(s) to
be established”








should not be reviewed and set
aside.









    1. Alternatively
      that the aforesaid decisions
      should not be declared to be –



      1. ultra
        vires
        the powers
        of the first respondent and/or the second respondent and/or the
        third respondent;


      2. in
        conflict with Article 18 of the Constitution of Namibia and
        Article 21(1)(j),






and accordingly null and void.









    1. Directing
      the first respondent to issue a fidelity fund certificate to the
      applicant in the firm Van der Merwe Coleman, to be valid from 1
      March 2012 to 31 December 2012;










Alternatively








Directing the first respondent
to extend the period of validity of the applicant’s fidelity
fund certificate practising in Van der Merwe Coleman to be valid from
1 March 2012 to 31 December 2012.”







[2]
On 2 March 2012 the applicant moved an urgent application in which he
prayed for,
inter
alia
,
an order that the relief sought in paragraph 1 as quoted above
operate as interim orders pending the final determination of the
review application.
In
the alternative he sought an order directing the first respondent to
issue a fidelity fund certificate to the applicant whilst practising
in the firm Van der Merwe Coleman, to be valid from 1 March 2012 to
31 December 2012, alternatively to the final determination of the
review application, should the review relief be refused or the
interim order be discharged. In the further alternative the applicant
claimed an order directing the first respondent to extend the period
of validity of the applicant’s fidelity fund certificate whilst
practising in Van der Merwe Coleman to be valid from 1 March 2012 to
31 December 2012, alternatively to the date of the final
determination of the review application, should the review relief be
refused or the interim order be discharged.


[3]
It should be noted that the applicant seeks no relief against the
fourth, fifth and sixth respondents, but cites them only in so far as
they may have an interest in the outcome of the proceedings.


[4]
The application is opposed by the first, second, third and fourth
respondents. The first, second and third respondents filed an
answering affidavit deposed to by the first respondent in which they
deal only with the urgent relief sought under part B of the notice of
motion.


[5]
After hearing the application I ruled on 6 March 2012 that the matter
was urgent and directed the first respondent to issue a fidelity fund
certificate to the applicant, without specifying the name of his
practice, to be valid from 1 March 2012 to 31 December 2012. I
further ordered that the parties shall each pay their own costs. The
reasons for these orders now follow.


The
facts


[6]
The facts in this matter are in many respects common cause. For
purposes of this judgment I shall not summarize them in any detail.
The applicant and the fourth respondent are admitted legal
practitioners, conveyancers and notaries public. Since March 2006
they were practicing in partnership under the name and style of Van
der Merwe Coleman. No written partnership was concluded. The partners
orally agreed to pool their resources and divide their profits
equally.


[7]
The applicant alleges that during August 2011 the fourth respondent
gave him notice of her intention to withdraw from the partnership.
The fourth respondent alleges that she gave notice of her intention
to dissolve the partnership and not to “withdraw” from
it. It is, however, common cause that on either version the
partnership would have to be dissolved. She later indicated that she
intended forming a new partnership with other legal practitioners to
be called Angula Coleman. From the outset the applicant indicated
that he wished to continue practicing under the name Van der Merwe
Coleman. The applicant’s case is that, although the fourth
respondent was initially opposed to the idea, she later conceded that
he could do so. He therefore relies,
inter
alia
,
on an oral agreement. The fourth respondent states that she initially
did not expressly address the issue. However, later she repeatedly
and consistently told the applicant that she would not consent to him
using her name after the dissolution of the partnership. She
expressly denies the existence of any agreement as alleged by the
applicant.


[8]
As legal practitioners usually do towards the end of each year, both
the applicant and the fourth respondent applied on 6 December 2011
for the annual renewal of their fidelity fund certificates, in this
case for the year 1 January – 31 December 2012. The application
form at the time required that one form be completed by all partners
and that their names and the name of their practice be furnished as
well. The applicant and fourth respondent did not give any indication
on the form that the partnership was to be dissolved. The form at the
time did not require that notification be given of any such
intentions. It is common cause that the fourth respondent orally and
by letter and email informed the first respondent on the same day
that the partnership would be dissolved on 29 February 2012 and that
she requested the first respondent to issue their fidelity fund
certificates only for the period 1 January - 29 February 2012. There
is a dispute on the papers about whether the applicant knew about
these requests and whether the correspondence, specifically her
letter dated 6 December 2011 (“CM6”), was addressed based
on any consensus reached between them. For purposes of this
application it is not necessary to determine the precise extent and
detail of the factual dispute or to attempt to resolve this dispute,
except to record that it is my understanding of the facts that the
applicant did not agree that the fourth respondent should request the
first respondent to issue a 2 month fidelity fund certificate in his
name.


[9]
During the second half of January 2012 the applicant received a copy
of his fidelity fund certificate, which had been issued by the first
respondent with effect from 7 December 2011 and which stated that it
was “for the year ending 29 February 2012”, instead of 31
December 2012.


[10]
On 23 January 2012 the fourth respondent informed the applicant in
writing that she would be commencing practice on 2 March 2012 under
the name Angula Coleman. She formally recorded her objection to him
continuing to use the name Van der Merwe Coleman for his firm. The
reasons she furnished were that the two names are too similar and
will cause confusion in the general public; that the name is
intimately connected with them personally as “attorneys”;
and that it has only existed for the 6 years of their partnership.


[11]
During January 2012 the applicant had several telephonic discussions
with various administrative officers of the third respondent
regarding the continued use of both the name and the trust bank
account of Van der Merwe Coleman after the dissolution and further
correspondence was addressed to the first respondent around these
issues. He also questioned the legality of a fidelity fund
certificate valid for two months only. It is not necessary to set
these out in any detail except to state that the applicant requested
to be furnished with reasons for any decisions taken.


[12]
On 2 February 2012 the first respondent wrote a joint letter to both
the applicant and the fourth respondent, setting out certain views on
the matters raised by both parties in the various telephonic
conversations and correspondence. The first respondent indicated that
“it has been standard practice when partnerships terminate that
the trust account is closed.” In this regard the applicant
points out that there is no requirement in the Act or the regulations
promulgated pursuant thereto which requires closure of the account in
such circumstances. He points out that he and the fourth respondent
have divided the various clients between them. He will act for his
clients in the firm Van der Merwe Coleman and the fourth respondents
will act for her share of the clients in her new firm. He points out
that all that has to happen is that the monies in the trust account
must be separated according to the division of the clients and the
fourth respondent’s trust monies must be transferred from the
account to the trust account of Angula Coleman. The fourth respondent
does not deny these contentions, while the first, second and third
respondents merely note them. I must say that, in the absence of
contrary indications, there does not appear to be any flaw in the
applicant’s reasoning regarding the trust account.


[13]
The first respondent further states in this letter:



As a general rule, the
fidelity fund certificates issued to the partners would therefore not
be regarded as valid after the dissolution of such firm, even if the
certificates were issued until 31 December because the LSN was
unaware of such dissolution. It is the practice of the Law Society to
insist on the return of invalid certificates to protect the Fidelity
Fund and the public.



In my view, fidelity fund
certificates are not issued solely for and linked to a particular
legal practitioner regardless of how he/she carries on practice. In
this regard I refer you for instance to the application form of
fidelity fund certificates and the certificate issued. In the premise
the fact that I have issued you with fidelity fund certificates which
will expire at the end of February 2012 will be bona fide and
legitimate.



The Director must evaluate and
monitor compliance with the lawful requirements of the Law Society.
In this regard I refer you to Section 68.



A change in status of a firm
and of its partners could have a direct bearing and/or negatively
impact on a possible claim against the fidelity Fund. It is for this
reason that Section 68 requires the Director to monitor compliance
with the lawful requirements of the Law Society upon receipt of an
application for a fidelity fund certificate.”






[14]
The first respondent further stated that consultations with various
persons on the legal position pointed to a generally held view that
“whenever there is a termination of partnership/dissolution of
a legal firm it would be possible for the remaining partner to keep
the name and the bank account number, but that this would
be
subject to an agreement
.”
However, the first respondent indicated that she still wished to
consult with the second respondent and seek the “input and
guidance of management” before taking any decisions on the
issues raised. She suggested that the two partners attempt to resolve
their differences amicably before the expiration of the fidelity fund
certificates and indicated that if they failed to do so by 15
February 2012, she would place the matter before the second
respondent to properly consider at its meeting on 20 February 2012.
The parties were further informed that “at this stage
no
permission or confirmation
can
be given to any of you with regard to the use of the name of the
present firm, the continuation of the firm, fidelity fund
certificates and trust account or the name if the new firm(s)to be
established.
You
shall be advised of the decision of Council in due course
.”


[15]
On 9 February 2012 the third respondent forwarded to the applicant a
new application form for a fidelity fund certificate for the year 1
January 2012 – 31 December 2012. This form differs from the
previous one in that additional information is required, namely,
details of any new practice. The applicant declined to complete this
form,
inter
alia
because
he was of the view that he is entitled to a certificate for the year
2012 based on the application dated 6 December 2012.


[16]
On 15 February 2012 the applicant’s lawyers wrote a letter to
the first respondent setting out fully their view of the legal
position regarding the issues in dispute. The purpose of the letter
was to make representations to the first respondent for tabling at
the second respondent’s meeting on 20 February 2012.


[17]
On 21 February 2012 the first respondent replied:



....................this
matter was placed before Council for consideration and to provide me
with guidance before I exercise my discretion to issue a fidelity
fund certificate as demanded.



An application for a Fidelity
Fund Certificate was submitted in December 2012 signed by the
partners of Van der Merwe Coleman Legal Practitioners (“the
existing partnership”). I subsequently received a letter from
one of the partners, Mrs Coleman informing me that the partnership
will dissolve on 29 February 2012 and that I should issue the
fidelity fund certificates only up to that date. I had no reason to
believe that Mrs Coleman did not have the authority to write this
letter and as a result issued the Fidelity Fund Certificate in the
manner requested. In fact, it could be wrong to allow a member to
practice under an old certificate which as a result of a change in
circumstances (factual or legal) no longer complies with the
provisions of the Act. I could not issue a Fidelity Fund Certificate
to any of the partners in respect of the existing partnership which
is effective beyond the date on which the partnership would dissolve.



I have since then not received
any application from your client to issue him with a Fidelity Fund
Certificate in respect of his new firm which he would be operating
after 29 February 2012, even though we furnished Mr van der Merwe
with such application form. Kindly advise your client that I will
consider his application upon receipt thereof.



I must however caution that
should he persist in using the name of the existing partnership and
there remains an objection by Mrs Coleman, I will not issue the
certificate until the parties have resolved the issue. The issue of
the use of the name of the partnership is an issue which should have
been catered for in a partnership agreement or an agreement regarding
the dissolution of the partnership. If the parties cannot come to an
agreement about the issue they should make use of the remedies
available instead of involving the Law Society in their dispute.



I trust this clarifies my
position.”


[18]
The applicant requested a copy of the minutes of the second
respondent’s meeting, but was informed that these would only be
available after approval at the next meeting to be held on 19 March
2012, i.e. after this application was heard.


[19]
In summary it may be said that the applicant complains that the first
respondent had regard to irrelevant considerations when she refused
to issue a fidelity fund certificate to him in the absence of as
dispute regarding the name of the firm; that she acted
ultra
vires
by
issuing the first fidelity fund certificate for only two months
instead of for the year ending 31 December 2012; and that she failed
to apply her mind to the matter; that she acted unfairly,
unreasonably, arbitrarily and capriciously; that she failed to hear
the applicant; and that she acted in a biased manner. For the reasons
stated below it is not necessary to deal with all these grounds for
review.


Urgency


[20]
The applicant set out in some detail why this application is urgent.
The gist of his allegations is that, without a fidelity fund
certificate he may not continue to practice as a legal practitioner
after 29 February 2012 without committing a criminal offence. He may
also not operate a trust account. The prejudice in terms of his
income, practice, staff, clients and pending and imminent
transactions is obvious. There is no need to repeat the detail here.
These facts are not disputed. Although the first, second and third
respondents on the papers disputed the urgency of the matter, it was
placed on record at the hearing that these respondents did not take
issue with urgency any longer.


[21]
Mr
van
Vuuren
on
behalf of the fourth respondent submitted that the applicant has not
made out a case for urgency. He submitted that the applicant already
knew since mid-January that the new fidelity fund certificate would
expire on 29 February and yet he took no action to lodge these
proceedings, but waited until 27 February when the lapsing of the
certificate and the dissolution of the existing partnership was
imminent. He argued that any urgency is self-created. I do not agree.
It is clear that very soon after becoming aware that the new
certificate would expire at the end of February, the applicant took
up the issue with the first and second respondent and also made
enquiries to establish the reasons for this state of affairs. As he
had been unaware of the request by the fourth respondent for a 2
month certificate, he also needed time to establish the facts
concerning her communications with the first respondent. By 31
January 2012 the applicant had addressed a number of oral and written
communications to all the relevant parties. The correspondence
between the fourth and first respondents only came to hand on 10
February. Most importantly, the first respondent in her letter dated
2 February 2012 suggested to the applicant and the fourth respondent
to attempt to settle the matter amicably and afforded them time until
15 February 2012. She further indicated that the matter, if not
resolved by the partners, would serve before the second respondent on
20 February. The applicant took the opportunity to make
representations for purposes of this meeting. I agree with Mr
Corbett’s
submission that it
was prudent in the circumstances of this matter for the applicant to
await the outcome of the meeting and the first respondent’s
reply. The time period between the reply of 21 February and the
lodging of the application on 27 February 2012 is reasonable in all
the circumstances.


[22]
Mr
van
Vuuren
further
contended that the matter is not urgent because the applicant is free
to apply for a fidelity fund certificate in his own name, which
certificate would probably be granted and he referred to the first
applicant’s invitation that the applicant should do so. This
contention cannot be upheld. The applicant is entitled to have the
question of urgency decided on the basis that he is entitled to the
relief sought on the merits of the application. (See
Twentieth
Century Fox Film Corporation and Another v Anthony Black Films (Pty)
Ltd
1982
(3) SA 582 (W) at 586G;
Bandle
Investments (Pty) Ltd v Registrar of Deeds and others

2001 (2) SA 203
(SE) at 213E-F; approved in
Mweb
Namibia (Pty) Ltd v Telecom Namibia Ltd and others

(unreported Full
Bench judgment delivered on 31 July 2007 in Case No. A91/2007). On
this assumption he is entitled to a fidelity fund certificate for the
year 1 January – 31 December 2012 based on the application of 6
December 2011 using the name of Van der Merwe Coleman. Instead, a two
month certificate was issued coupled with a persistent refusal to
issue a certificate for the remainder of the period. With the expiry
of the two months period looming, the matter is clearly urgent.


The
fourth respondent’s second, third and fourth points
in
limine


[23]
On the view I take of the matter it is convenient not to consider the
issues raised therein separately from the merits of this application.


The
relevant legislative provisions


[24]
The legislative regime applicable to this case is governed by the
Legal Practitioners Act, 1995 (Act 15 of 1995), and the rules and
regulations promulgated thereunder.


[25]
An application for a fidelity fund certificate is made in terms of
section 68 of the Act. It reads:



68 Application for
and issue of fidelity fund certificate



(1 A legal practitioner
practising or intending to practise on his or her own account or in
partnership shall, unless he or she is exempted in terms of section
67, apply in the prescribed form to the secretary of the Law Society
for a fidelity fund certificate.



(2) An application in terms of
subsection (1) shall be accompanied by the contribution, if any,
payable in terms of section 69.



(3) Upon receipt of the
application in terms of subsection (1), the secretary of the Law
Society shall forthwith issue to the applicant a fidelity fund
certificate in the prescribed form if he or she is satisfied that the
applicant-



(a) has discharged all his or
her liabilities to the Law Society in respect of his or her
contribution; and



(b) has complied with any other
lawful requirement of the Law Society.



(4) A fidelity fund certificate
shall be valid until 31 December of the year in respect of which it
was issued.



(5) A document purporting to be
a fidelity fund certificate which has been issued contrary to the
provisions of this Act shall be null and void and shall on demand be
returned to the Law Society.”


[26]
It is common cause that regulations 2, 3, 4, 5, 6 and 7 of the
Regulations under the Legal Practitioners’ Fidelity Fund Act,
1990 (this Act itself was repealed by Act 15 of 1995) under
Government Notice No. 135 of 11 November 1993 still apply
mutatis
mutandis
to
applications for a fidelity fund certificate. These regulations read
as follows (the insertions in square brackets are mine):



2. An application for a
fidelity fund certificate shall be substantially in the form as set
out in Annexure “A”.



3. (1) In order to facilitate
the annual applications of practitioners for fidelity fund
certificates in terms of section 19 [now section 68] of the Act, the
secretary [i.e. the Director] shall not later than the first day of
November of every year send by post or deliver or cause to be
delivered to every practising attorney –



(a) an application form
referred to in regulation 2; and



(b) a statement showing the
amount of the contribution, if any, which the practitioner concerned
is liable to pay in accordance with the provisions of section 20 of
the Act to obtain a fidelity fund certificate in respect of the
ensuing year.



(2) Every practitioner shall
return the application form, duly completed, together with the amount
of the said contribution, if any, to the secretary not later than the
first day of December of the year within which such application form
was sent or delivered to him or her in terms of subregulation (1).



(3) Subregulation (1) shall not
be so construed as to exempt any practitioner, who in terms of the
Act is required to obtain a fidelity fund certificate, from the
obligation to apply for such a certificate in a case where such a
practitioner has not received (irrespective of the reason therefor)
an application form and statement pursuant to the provisions of the
said subregulation.



4. An application for a
fidelity fund certificate may be made on behalf of a practitioner by
any other practitioner who qualifies to be issued with such a
certificate in terms of the Act.



5. The secretary may require
any applicant for a fidelity fund certificate to furnish, in addition
to the information disclosed on his or her application, such further
information as the secretary may consider to be relevant in relation
to the applicant’s application.



6. A fidelity fund certificate
shall be substantially in the form as set out in Annexure “B”
and shall be signed by the secretary.



7. The secretary may on
application and payment of the amount of N$1 issue to any
practitioner a duplicate of his or her fidelity fund certificate.”






[27]
In Annexure A the prescribed form is set out. It requires,
inter
alia
,
that the applicant legal practitioner states the “name under
which practice will be carried on”.


[28]
Annexure B to the regulations after modification
mutatis
mutandis
provides
for a fidelity fund certificate in this form:













LAW SOCIETY OF NAMIBIA



FIDELITY FUND CERTIFICATE



Pursuant to the provisions of
the Legal Practitioners Act, 1995 (Act 15 of 1995), I hereby certify
that
.......................................................................



................................................................................................................



of
............................................................................................................



has complied with the
provisions of section 68 and 69 of the said Act in respect of the
year ending 31 December
..................................................








Date:
..............................
.......................................



DIRECTOR”







[29]
It is common cause that in the blank space after “I hereby
certify that” the full names of the legal practitioner should
be inserted and that in the space after the word “of” the
name of the practice in which he or she practices should be inserted.


The
proper approach to the exercise of a discretion in terms of section
68


[30]
Counsel were
ad
idem
that
the first respondent has a statutory mandate and may only exercise
her powers within the ambit of the Act and the regulations. One of
the first respondent’s duties is to issue fidelity fund
certificates to practicing legal practitioners as provided for in
section 68(3) provided that she is satisfied as contemplated in
section 68(3)(a) and (b), the latter paragraph being of particular
importance in the context of this case, i.e. the first respondent may
only issue a certificate if she is satisfied that the applicant “has
complied with any other lawful requirement of the Law Society.”
It is on the question of how this provision should be applied that
the parties differ. I shall revert to this.


[30]
All counsel in this matter relied in argument on the case of
Law
Society of the Northern Provinces and another v Viljoen; Law Society
of the Northern Provinces and another v Dykes and others
2011
(2) SA 327 SCA. In this case the SCA dealt with section 42(3)(a) of
the Attorneys Act, 1979 (Act 53 of 1979), of South Africa, which is
almost identical to section 68(3) of the Namibian Act. In this case
the appellants were attorneys who applied for fidelity fund
certificates. The relevant Law Society refused to issue these
certificates based on its council’s resolution that such
certificates should not be issued to applicants in respect of whom
there were pending applications for suspension of membership or for
striking of their names from the attorney’s roll. In dealing
with the arguments before the Court, B
OSIELO
JA
stated
(at 330D-331G):



[10] It is common cause
that the resolution was not made public or distributed to the members
of the first appellant. This is notwithstanding the fact that the
resolution was essentially introducing a new element into the concept
of 'any other lawful requirement of the society' as it appears in s
42(3)(a) of the Act. Counsel were agreed that, although the
resolution does not amount to a suspension from practice of a legal
practitioner, the practical effect thereof is that a practitioner who
has not been issued with a fidelity fund certificate is not allowed
to practise on his own account or in partnership. It is trite that
any legal practitioner who practises without a fidelity fund
certificate is committing a professional misconduct.



[11] It was submitted on behalf
of the appellants that the courts below erred in their interpretation
of s 42(3)(a). The contention is that the council of the first
appellant has the authority, in terms of s 69 of the Act, to set up
whatever lawful requirement it might regard as proper and appropriate
to regulate the conduct of practitioners. It was argued further, that
the resolution was lawful and necessary, as it enabled the first
appellant to be careful regarding the issuing of the fidelity fund
certificates to its members, so that it can reduce or minimise the
risk to which the fidelity fund might be exposed in issuing fidelity
fund certificates to legal practitioners who are not fit to practise.
Counsel for the appellants submitted further, that the mere fact that
the resolution was not communicated to the respondents does not
necessarily mean that it is invalid. He submitted that it remained
valid, and, moreover, the respondents had been invited to make
representations to change the second appellant's decision not to
issue the certificates.



[12] Counsel for Viljoen
launched a two-pronged attack against the resolution. First, he
submitted that the resolution is so vague that it fails to inform
Viljoen of the exact nature of the complaint to which he was required
to respond. He submitted that the lawful requirements contemplated in
s 42(3)(a) are the payment of the required sum of money by an
applicant, and submission of an audited financial report. Secondly,
he contended that the requirement imposed by the resolution to the
effect that, where there are proceedings pending either for the
suspension or removal of a practitioner from the roll, such a
practitioner will not be issued with a certificate unless good cause
is shown, is not related to the legislative purpose of s 42(3)(a).
His contention is that the new requirement, if one might call it
that, tilts the scale more towards an enquiry into the ethical
fitness of an applicant to remain a practitioner, which is a function
of the courts, rather than an enquiry into his or her ability to
maintain the financial affairs of his or her practice properly and in
terms of the rules.



[13] Counsel for Dykes and his
partners supported the submission by counsel for Viljoen, that the
resolution does not amount to a requirement as envisaged by s
42(3)(a). In other words, it falls outside the ambit of the section.



[14] It is clear from s
42(3)(a) that the person who has the authority to issue fidelity fund
certificates is the second appellant (the secretary of the law
society). It is neither the council nor management committee of the
first appellant. The authority of the second appellant to issue
fidelity fund certificates is clearly circumscribed by s 42(3)(a).
This section sets out two requirements to be met by a legal
practitioner for him or her to qualify for a fidelity fund
certificate. The first requirement is that such a practitioner must
satisfy the secretary that he or she has discharged all his or her
liabilities to the society in respect of his or her contribution and,
secondly, that he or she has complied with any other lawful
requirement of the society. Once the two requirements have been met,
s 42(3)(a) compels the second appellant to forthwith issue the
fidelity fund certificate in the prescribed form to the applicant.



[15] The first appellant's
council purported to introduce an additional lawful requirement by
adopting the resolution of 22 June 2009. In the context of s 42, a
'lawful requirement' means one that:



(i) relates to the purpose
served by the issue of a fidelity fund certificate;



(ii) unequivocally informs the
practitioner what it is that the society requires of him or her;



(iii) the practitioner is
capable of complying with, since the section is designed to enable
the practitioner to carry on practice subject to satisfying the
requirement.”


[31]
Before me counsel were in unison that the interpretation given by the
SCA to the words “lawful requirement” in section 42(3)(a)
of the South African Act is sound and that section 68(3)(b) of the
Namibian Act should be given the same interpretation. I agree.


[32]
The question then arises, is it a lawful requirement that there
should be no dispute regarding the name of the practice which an
applicant legal practitioner uses before a fidelity fund certificate
may be issued to that legal practitioner? Or, to put it differently,
is the matter of the name of the practice and any dispute in regard
thereto related to the purpose for which the fidelity fund
certificate is issued?


[33]
Counsel for applicant pointed to the fact that, as in
Viljoen’s
case, the
requirement set by the first respondent is essentially introducing a
new element into the concept of ‘any other lawful requirement’
of the Law Society as it appears in section 68(3) of the Act without
any prior notification that such would in future be a requirement. In
any event, counsel further submitted, the requirement that no dispute
regarding the name must exist is not a lawful requirement in the
context of section 68(3) as it does not relate to the purpose for
which the fidelity fund certificate is issued.


[34]
In their heads of argument counsel for the first, second and third
respondents submitted (the insertions in square brackets are mine):



16. Once an application
has been received (section 68(1)) and the first respondent is
satisfied that the requirements of section 68(3)(a) [and] (b) are
complied with, she issues a fidelity fund [certificate] in the
“prescribed form” as follows:



Piet Pompies of
Pompies and Pretorius”
[by way of example] – the
latter being the name under which the individual applicant legal
practitioner practices law in Namibia.



17. Thus, when a fidelity fund
certificate is issued to an individual legal practitioner, the
prescribed
form”
in which
the certificate is issued, contains a reference to the trade name of
the practitioner, i.e. the manner in which he practices, be it on his
own for his own account or in partnership (see section 68(1)). Where
there is a pending dispute about the use of the trade name, and on
application of the law in such disputes, the first applicant could
not issue a certificate to the applicant
in
the prescribed form.”


[35]
The argument is developed further in the heads and during oral
submissions to essentially state that the legal position is that, in
the absence of an agreement, the applicant, being the one partner,
may not use the name of the fourth respondent, being the other
partner of the partnership, after the dissolution of the partnership
without her consent. As there is no agreement, (or as there is at
least a dispute of fact about the existence of such an agreement),
and there is no such consent, the applicant would be committing a
delict should he continue to use the fourth respondent’s name.
Further, the argument went, the first respondent cannot be expected
to assist the applicant in delictual conduct and therefore the first
respondent could not be satisfied that the applicant has complied
with a lawful requirement of the Law Society in terms of section
68(3)(b). The result is that the first respondent was not in a
position to forthwith issue a fidelity fund certificate “in the
prescribed form”. This part of the argument was only faintly
foreshadowed in the answering papers and does not appear to be the
basis of the first respondent’s decision as evidenced in the
correspondence. Be that as it may, there is no need to deal with it
for the reasons to follow.


[36]
In answering the question posed above I shall adopt the same approach
as the Court in
Viljoen’s
case when it
considered whether the council decision in that case met the three
criteria for a “lawful requirement”. The Court had regard
to the contents of the prescribed application form and stated (at
331H-332F):



[16] It is important to
bear in mind that a practitioner is enjoined by s 42(1) to apply for
a fidelity fund certificate in the prescribed form. A perusal of the
prescribed form makes it clear, from the questions that such a
practitioner has to answer, that the major focus is on the question
whether the practitioner is managing his trust accounts in strict
compliance with the rules of the society, and not whether he or she
is fit and proper to practise. This is underscored by the request to
a practitioner in the prescribed form to disclose the balances in his
or her trust account at the end of each quarter of the year.
Furthermore, this is bolstered by the requirement that such a
practitioner shall submit his or her audited financial statements. It
is clear to me that this enquiry is intended solely to assess any
risk attendant on the secretary issuing a fidelity fund certificate
so as to ensure that the Fidelity Fund is not overexposed.
Manifestly, this has nothing to do with issues of ethics or whether
such a practitioner is fit and proper to continue to practise. The
enquiry regarding the fitness of a practitioner to continue to
practise is the preserve of the courts.



[17] To my mind, the resolution
in issue is so vague and broad that it may encompass even
transgressions that have nothing to do with a practitioner's ability
and competence to manage his or her trust account properly in terms
of the rules. Clearly, it has no relation to the legislative purpose
contemplated in s 42(3)(a) regarding the issuing of a fidelity fund
certificate to a practitioner. Furthermore, it is so vague that it
fails to inform the applicant in clear and specific terms of what it
is that he or she is alleged to have done which justifies the refusal
by the secretary to issue the fidelity fund certificate. It follows
that it will be difficult for the applicant to respond to the
allegations if he or she does not know the precise nature of the
complaint against him or her. The invitation by the council to such
an applicant to make representations will thus remain an illusion.



[18] Counsel for the appellants
had difficulty explaining exactly what the council resolution is
aimed at, because it is couched in very wide and vague terms. It is
clear that the resolution creates a general ban against any
practitioner against whom there are proceedings pending either for
suspension or removal from the roll without reference to the exact
nature of the complaint.



[19] The fact that a
practitioner may avoid the full force of the resolution by advancing
'good reason' does not change matters. If the general prohibition
does not satisfy the test of 'a lawful requirement' it cannot be
saved by the opportunity to provide reasons why it should not operate
in any particular case. To my mind the resolution is fatally flawed.
It follows that both appeals must fail.”


[37]
Having regard to the prescribed application form under the Namibian
dispensation it is apparent that the application form completed by
the applicant on 6 December 2011 requires more information than the
prescribed form. Nevertheless, it is “substantially” in
the prescribed form as required by regulation 2. From the information
required to be filled in, the questions to be answered and the
documents to be attached, it is clear that the major focus here is
whether the legal practitioner or the partnership is strictly
complying with the provisions of sections 25 and 26 of the Act and
with Rules 17 and 18 of the Rules of the Law Society in keeping
proper trust books of account. Bearing in mind the purpose of the
Fidelity Fund as set out in section 54 of the Act, which is to
reimburse persons who have suffered losses as a result of theft by
legal practitioners of money or other property held in trust, this
makes perfect sense. As was found in
Viljoen’s
case, the “enquiry
is intended solely to assess any risk attendant on the
.....[Director] issuing a fidelity fund certificate so as to ensure
that the Fidelity Fund is not overexposed.” In my view the name
of the practice and the fact that there is a dispute regarding the
name manifestly has no bearing on these issues.


[38]
On behalf of the respondents it was repeatedly emphasized that the
applicable legislation requires the first respondent to issue a
fidelity fund certificate in the prescribed form, which requires
mention of the name of the firm or practice in which the practitioner
practices. Relying on this aspect, the first respondent in her letter
of 2 February stated that “fidelity fund certificates are not
issued solely for and linked to a particular legal practitioner
regardless of how he/she carries on practice.” None of the
respondents advanced any other compelling reason why the mention of
the name has any significance. The respondents further overlook that
the legislation requires that the certificate be issued
“substantially” in the prescribed form. As the name of
the practice and the existence of any dispute about it are not
related to the purpose for which the certificate is issued, it seems
to me that a fidelity fund certificate without any mention of the
name would be substantially in the prescribed form.


The
use of the name Van der Merwe Coleman


[39]
The applicant contended that the use of the name is a side issue and
irrelevant to the dispute between him and the first, second and third
respondents, but one on which the first respondent, in contradictory
fashion, seeks to rely, on the one hand, while she, on the other
hand, states that it is an issue for the applicant and the fourth
respondent to resolve. I agree that the issue of the use of the name
is a side issue and not one which needs to be resolved in this
application. Although the applicant would clearly prefer that any
fidelity fund certificate to be issued as a result of these
proceedings specifies the name of his practice as being Van der Merwe
Coleman, the gist of the application before me which requires urgent
relief is that he needs a fidelity fund certificate for the period 1
March 2012 to 31 December 2012. In my view he need not re-apply as
the application dated 6 December 2011 is still valid. I do not
understand the first respondent to have any issue with his
application apart from the name.


[40]
For the reasons given above, it is not necessary to specify the name
of his practice in the fidelity fund certificate and I see no reason
why it should not be issued to him without any reference to the name.
If the applicant continues to use the name Van der Merwe Coleman and
the fourth respondent persists in her objection thereto, this issue
may be dealt with in separate proceedings such as the parties might
elect to pursue.


Costs


[41]
The applicant was partly successful in that he succeeded in obtaining
a fidelity fund certificate for the period 1 March 2012 to 31
December 2012. He did not succeed in obtaining an order that the
certificate should specify the name Van der Merwe Coleman. As a
result of the stance he adopted, the fourth respondent was compelled
to participate in the urgent application, although the applicant
claims no relief against her. She took the position that the
applicant should apply for a fidelity fund certificate in another
name or in his own name so that it could be issued as such. The Court
held that the applicant need not re-apply and that the fidelity fund
certificate to which he is entitled need not specify the name of the
practice. It seems to me that each party was partly successful. In
view of this I thought it fair to make an order that they should each
pay their own costs.


[42]
As far as the first, second and third respondents are concerned, it
appears that there is a “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” (see
Viljoen’s
case at p333B) and
as the statutory professional body regulating and overseeing the
affairs of the legal profession. Unlike in the
Viljoen
case where an
adverse cost order was indeed made, the first, second and third
respondents have not had the advantage of court judgments on the very
issues to be adjudicated to serve as metaphorical red lights warning
them against the perils of continuing litigation and exposure of the
applicant to substantial legal costs. In light hereof I decided to
order that the applicant and these respondents bear their own costs
in respect of this application.






















___________________________


VAN
NIEKERK, J






























































Appearance
for the parties


For
the applicant: Mr A W Corbett


Instr.
by Fisher, Quarmby & Pfeifer






For
the 1
st,
2
nd
and 3rd
respondents: Mr R
Heathcote SC


(with
him Ms H Schneider)


Instr.
by Diedericks Incorporated






For
the 4
th
respondent: Mr A S
van Vuuren


Instr.
by Etzold-Duvenhage