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Friday May 18, 2018

Court prohibits new conveyancing model

A company that deals with the day to day administration of property transfers, while the conveyancer attorneys perform the legal side of transfers, lost its bid for the court to give its blessing in this regard.

"Until the model is implemented, the court cannot postulate whether bond attorneys will be willing to co-operate with a third party who is not an attorney and a conveyancer," Gauteng High Court, Pretoria, Judge Elias Matojane said.

Newly-established Proxi Smart Services Pty Ltd turned to court for a declaratory order concerning the lawfulness of its business model for performing administrative and related services pertaining to property transfers.

It wants to take over the portion of the work that does not need the skill of conveyancers or legal practitioners.

The company said it understood there were some aspects of transfers that required legal skill and it did not plan on venturing on this terrain.

It argued there was ordinary day to day work associated with property transfers now done by either secretaries or clerks working for law firms, which they (Proxi) could handle.

But the legal profession is adamant it should be hands-off their conveyancing terrain.

Various legal bodies, including the Law Society of South Africa and the various law societies across the country, as well Justice Minister Michael Masutha, opposed the application.

Proxi asked a full bench (three judges) to declare its business model does not contravene the Attorneys Act or the Deed Registries Act.

The view of the Law Society of South Africa, the provincial law societies and the Attorneys Fidelity Fund, was that the proposal by Proxi could not be supported as the full conveyancing process was regarded as professional work. It should remain so in the interest of the public since the public is protected through the Fidelity Fund.

The law profession submitted that all work, of whatever nature associated with immovable transactions and transfers, formed part of a conveyancing practice.

This practice has developed over centuries, they argued, and because it called for a specific legal skill, it was exclusively reserved for conveyancers.

Judge Motajane said in its version, Proxi would be doing everything necessary to enable a conveyancer to, at the push of a button, have all prescribed documents populated by data its staff has collated and captured. Put differently, he said, the conveyancing process started with the signing of a deed of sale will be done by Proxi’s staff.

"The legislature has prohibited persons other than employees of the practitioner from preparing any documents on behalf of a practitioner."

The judge added that it was in any event impossible to know before the model was implemented, how it would work. He said the order asked by Proxy was also vague and unenforceable.

The Law Society of South Africa and its members have cautioned their members that if conveyancers participated in Proxi’s model, proceedings against such members would follow as they would be acting in contravention of the Attorneys Act, as well as against the rules of conduct of the law societies.

Judge Matojane, in turning down the application, said the court could not grant a declaratory order where the issue raised was hypothetical, abstract and academic, or where the legal position is defined by statute.

"The applicant seeks legal advice from the court about the permissibility of its proposed business model under circumstances where the model is hypothetical intended to gain entry into the conveyancing industry, which is not set out and liable to change."

Pretoria News


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