Representation of companies in legal proceedings

25 November 2009

Contacts

This was recently reaffirmed by the Supreme Court of Appeal in Manong v Minister of Public Works & Other.

Some authors thought that this rule is based on “some misguided attempt to preserve an unjustified monopoly for legal practitioners”. The Court disagreed. Litigation is based on the adversary system and in determining a dispute a Court is dependent on the way in which the case is presented. Where a corporation instructs a legal practitioner, the law recognises that legal practitioner’s authority to bind the corporation for the purpose of litigation. A Court therefore need not concern itself about authority. Litigation would become very difficult if a Court had to be concerned at every step of the proceedings as to the authority of the person conducting the litigation to make decisions and admissions binding on the company. The Court was also concerned that corporate officers could cause impecunious companies to litigate hopeless causes without any fear of personal risk. A review of cases in other international jurisdictions showed that those courts, for pragmatic and policy reasons, have also refused to allow unqualified persons to present and conduct cases unless they were doing so on their own behalf as a natural person.

The Court was however prepared to accept that there could be a relaxation of the rule in appropriate circumstances. A Superior Court is entitled, in terms of its inherent jurisdiction, to grant such relaxation where doing so would best serve the administration of justice, although such permission would be rarely granted and the circumstances would have to be exceptional or at least unusual.

The Court did not wish to formulate a test for the exercise of the Court’s inherent power as that can be left to the good sense of the particular judge concerned. However it was emphasised that in each such instance leave had to be sought in advance by way of a properly motivated, timously lodged formal application showing good cause why in that particular case the rule prohibiting non-professional representation should be relaxed. It would be impermissible for a non-professional representative to take any steps in the proceedings, including the signing of pleadings, notices or heads of argument without prior leave of the Court.

An example given by the Court where it would make sense for the rule to be relaxed is where the person is in the position of being the controlling mind of a small corporate entity and could be expected to have as much knowledge of the company’s administrative and financial affairs as an individual would have of his or her own affairs. It would be unrealistic and illogical in those circumstances to allow a private person a right of audience in a Superior Court as a party to proceedings but denied that right when that person is in essence the governing mind of a small company which “is in reality no more than a business alter ego” of an individual.

Regarding the person’s entitlement to represent the company in Manong’s case, there was no suggestion that the representative could be regarded as the alter ego of the company and the Court was therefore hesitant to permit him a right of audience on behalf of the company. What weighed against that hesitation however was that he had previously been allowed to represent the company before the Court and by the time his entitlement to represent the company had been queried he had already prepared and signed the heads of argument on behalf of the company. Were he therefore to be prevented from representing the company the matter would have had to be postponed, occasioning delays and the incurring of additional cost by both parties. The Court therefore allowed him to represent the company at the hearing.

Circumstances like these are however the exception rather than the rule. Companies which choose not to employ legal practitioners to represent them in litigation in the Superior Courts may find themselves out in the cold when it comes to having, or attempting to have, their day in Court.

Written by Director Jeffrey Kron and Candidate Attorney, Daniel McConnell.

Norton Rose South Africa (incorporated as Deneys Reitz Inc) joined Norton Rose Group on 1 June 2011.