Company loses bid to deal with administrative aspects of property transfers

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A company which said it has a business model which could deal with the day to day administrative aspects of property transfers, while the conveyancer attorneys continued to perform the legal side of transfers, lost their 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 company Proxi Smart Services Pty Ltd turned to court for a declaratory order concerning the lawfulness of its business model for performing the administrative and related services pertaining to property transfers.





They want 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 which required legal skill and they did not plan on venturing on this terrain.





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





But the legal profession is adamant that it should be hands-off their conveyancing terrain. Various legal bodies, including the Law Society of South Africa (LSSA) 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 that their business model does not contravene the Attorneys Act and the Deed Registries Act.





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





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





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





Judge Motajane said on its version, Proxi will be doing everything necessary to enable a conveyancer at a push of a button to have all prescribed documents populated by data its staff has collated and captured. Put differently, he said, all the conveyancing processes that 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 is in any event impossible to know before the model is implemented, how it will work. He said the order asked by Proxy is also vague and unenforceable.





The LSSA and its members have cautioned their members that if conveyancers participated in Proxi’s model, proceedings against such members would follow as they will 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 cannot grant a declaratory order where the issue raised is hypothetical, abstract and academic or where the legal position is clearly 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 an abstract hypothetical intended entry into the conveyancing industry, which is not set out and is liable to change,” he said.



