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Letters to the editor

PO Box 36626, Menlo Park 0102 • Docex 82, Pretoria

E-mail: derebus@derebus.org.za • Fax (012) 362 0969

Letters are not published under noms de plume. However, letters from practising attorneys who make their identities and addresses known to the editor may be considered for publication anonymously.

Protection of candidate attorneys

I am a candidate attorney (CA) serving my articles of clerkship in KwaZulu-Natal. I am writing this as my colleagues and I who are doing our articles have been experiencing problems in our workplaces and no matter how much we complain, we are told by our law society that it does not intervene in internal conflicts between principals and CAs.

I feel voiceless and unprotected by our law society and so I am voicing my frustrations via another platform.

Periodically we encounter labour issues and give our clients the advice they require, yet no one is willing and/or able to assist us.

I wish to bring to readers’ attention the various abuses we have to endure under our principals:

• Exploitation in every sense imaginable. The amount of work we have to do versus the amount of pay we receive is appalling and shameful. I do not know how some CAs survive on a meagre monthly salary of between R 2 000 to R 5 000, yet the firm receives much more than that.

• Being denied any form of leave. When a CA asks for a day off because he is sick or for circumstances beyond his control, this is considered a ‘no-no’ by our principals. Being denied study leave or being denied pay for taking it is ridiculous. Then there is the usual line of ‘back in the days when I did articles ... .’

• No overtime. At times some of us have to work late or come in early and we do not get compensated for that time and if we complain we are told to ‘grin and accept the situation’.

• At times we are not prioritised as CAs by our principals in the sense that we do not receive our remuneration on time. Excuses are given and payment is received in dribs and drabs or we do not get salaries for months. Yet, we have to survive and make ends meet. This negatively affects us financially and we are not able to pay our debts on time. There was a time when I had debits bouncing and I owed my bank over R 1 000 in bank charges, for which I was not compensated.

If we stay away from work as a result of not having transport money due to not being paid, our salaries are docked and this is deemed abscondment. We thus put our articles on the line because our principals have the right to cancel our contracts.

• Another issue is that some of our principals are not particularly fond of us attending practical legal training (PLT), which is a requirement for qualifying as an attorney. Attendance of the course results in non-payment come month-end. When we inform the law society, we are told that they do not get involved in these matters, yet there is no way one can avoid PLT.

I am writing this because I am frustrated and stressed as I feel that we are being exploited by our principals and, no matter how many times we complain, those who should be helping us are shunning the issues and saying they do not have jurisdiction.  

I feel that our law society is a toothless tiger, a snake with no bite. It is a pity that things are the way they are because I have come to resent this profession and everything it stands for. 

I hope that this letter will be published or broadcast in some way so that other CAs who have to endure this will be encouraged to speak out, even though we know that absolutely nothing will get done about our issues.

Candidate attorney, Durban

• The author of this letter has asked to remain anonymous. The editor is satisfied as to the author’s identity.

KZNLS response

The letter from the ‘anonymous’ CA titled ‘Protection of candidate attorneys’ requires a response from the KwaZulu-Natal Law Society (KZNLS).

It is important to point out that in the last two years the society has registered 775 applications for articles of clerkship and less than 1% of CAs lodge queries and/or complaints with the society.

While ‘anonymous’ is entitled to her view of the society’s role pertaining to its regulatory function in respect of the contractual relationship between a CA and his principal, her further comments are completely unfounded and unwarranted in that, firstly, the society has never received this complaint and, secondly, had the society received such complaint on affidavit, the matter would have been dealt with in the following manner –

• the complaint would be referred to the Examining Committee for consideration;

• if the complaint relates to internal conflicts between the CA and the principal arising from the termination of articles, cession of articles, the obligation by the principal to sign the necessary affidavit to ensure that the CA is admitted as an attorney and the like, a decision will be taken to assist the CA and the principal to reach a resolution in the best interests of both members, provided that such decision is in compliance with the Attorneys Act 53 of 1979;

• in most instances, a mediation/conciliation meeting would be held to resolve the dispute (in all cases to date the society has been successful in doing so); and

• these disputes are always tabled at a council meeting of the society.

The society wishes to add the following points:

• Salary: Principals are encouraged to pay fair salaries, however this depends on the principal’s financial means. It may be that salaries in certain cases are deemed to be unfair, but in circumstances where the prospective CA is not satisfied with the salary offered by the principal, this being a purely contractual matter, it is up to the CA to decide whether or not to accept the salary and enter into the contract. The salary should not be the main concern of the CA; what should be of main concern is the training obtained during the period of articles. It is the principal’s obligation to provide the necessary training and mentorship to the CA to ensure that he is suitably qualified for admission as an attorney.

• Leave and PLT: In terms of s 7 of the Attorneys Act, a CA may not absent himself from office for more than 30 working days in any year.

It is unfair for a CA to be denied leave because of illness.

In every application for articles registered by the society it is pointed out to both the CA and principal that the CA must attend the compulsory PLT course. The principal is obliged to ensure that the CA attends such course. This attendance is not to be regarded as leave but as part of the CA’s service under articles. The society has never received any complaint or query in this regard in the past 12 years.

• Overtime and non-timeous payment of salary: A request from the principal to work beyond normal office hours is not unreasonable given the nature of the profession. Attorneys work long hours every day and a CA must be prepared to work beyond normal office hours in order to acquire the necessary training and be groomed into the discipline, values and ethics of the profession. Clearly this profession will not suit ‘clock-watchers’.

The issue of the late payment of salaries is a labour issue and if such a complaint had been brought to the attention of the society, the candidate would have been advised to seek remedies with the Department of Labour or the Commission for Conciliation, Mediation and Arbitration.

We trust that the above clarifies the position that the society takes in such matters and we invite the author of the letter to lodge a formal complaint with the society in order for it to deal with the matters of concern.

Richard Scott, President,
KwaZulu-Natal Law Society

• This letter has been shortened – Editor.

The LLB and a culture of mediocrity

I fully agree with Judge Phineas Mojapelo’s comments about the calibre of certain LLB graduates in the December 2012 issue of De Rebus (2012 (Dec) DR 54).

However, more can be said, especially about the lowering of the standards of education in South Africa. It seems that every second pupil in this country has now become a genius, obtaining at least seven to nine ‘A’s in matric.

A more plausible explanation for a drop in standards in education may be that provided by Professor Jonathan Jansen, vice-chancellor and rector of the University of the Free State, in a recent address in which he lamented South Africa’s seeming embrace of a culture of mediocrity (‘Matric results – sinking deeper into mediocrity’ www.ltl.co.za/colins-leadership-blog/matric-results-sinking-deeper-into-mediocrity, accessed 31-1-2013).

Hence the reason that in South Africa today we have people appointed as attorneys and prosecutors who cannot speak English. We also have people appointed as accountants who possess below average mathematics skills. These appointments are made in the name of redressing the inequality of the past.

We also have some of the previously disadvantaged made to pass university, who swell the ranks of unemployed university graduates.

The Employment Equity Act 55 of 1998 relates to the equitable representation of suitably qualified candidates from designated groups, not random appointments made merely to fulfil quotas.

Jacques Botha, attorney, Durban

Input tax and investing enterprises

I refer to the article ‘SCA unearths hard truths for VAT vendors’ (2012 (Nov) DR 57) and notice that the authors indicate that, based on the decision of Commissioner for the South African Revenue Service v De Beers Consolidated Mines Ltd [2012] 3 All SA 367 (SCA), a vendor would arguably be able to claim input tax if the vendor carried on an investing enterprise (ie, supply of shares).

I respectfully disagree as the relevant value added tax (VAT) legislation, in my view, provides that the supply of shares constitutes an exempt supply (s 2(1)(d) read with s 12(a) of the Value-Added Tax Act 89 of 1991 (the Act)). As exempt supplies are excluded from the definition of ‘enterprise’ (s 1 proviso (v)), any input tax relating thereto would not be deductible for VAT purposes.

In TCT Leisure (Pty) Ltd v Commissioner for South African Revenue Service 72 SATC 187 the Supreme Court of Appeal (SCA) dismissed the vendor’s submissions that the sale of points (a taxable supply) was incidental to the supply of shares and hence was exempt from the levying of VAT. It would thus follow that VAT incurred would not qualify as an input tax deduction.

It should also be noted that Southwood AJA at para 52 of the De Beers judgment, indicated that ‘where [the respondent] is not a dealer in shares, the holding of shares and receipt of dividends by [it] does not fall within the definition of “enterprise”’.

Thus, it seems to follow that a dealer in shares would carry on a VAT enterprise. However, proviso (v) to the definition of ‘enterprise’ excludes such activities (exempt activities – eg dealing in shares) from its ambit.

The judgment thus appears to support the view that a vendor who is a dealer in shares would accordingly be entitled to claim input tax.

However, such support would clearly be misplaced in the light of the word ‘enterprise’ as defined in the Act and reinforced, I believe, by the SCA’s decision in the TCT Leisure case.

In conclusion, it seems that both the South African Revenue Service (SARS) and the vendor should exercise caution when it comes to relying on the De Beers case to support the disallowance and claiming of input tax respectively.

Mike White, VAT specialist,
Pietermaritzburg

Response from the authors

The comment from the article referred to in Mr White’s query arises from a point set out in para 34 of the De Beers judgment. It alluded to the possibility that an investment company could fall within the ambit of an ‘enterprise’. But, even if it did, we agree with Mr White that there would be no possibility of a VAT input claim where VAT is not incurred to make taxable supplies (eg, on incurring VAT for exempt supplies such as financial services).

The key point of the article, which our above comment was intended to emphasise, however, is that SARS should not use the De Beers case as a blanket reason for disallowing all VAT claims for VAT incurred in respect of audit and legal fees.

Barry Ger and Susan McCready

Expose evildoers

Once again, I write to congratulate you on an excellent editorial ‘Lawyers’ lost scruples highlighted in RAF ruling’ in the January/February De Rebus (2013 (Jan/Feb) DR 3), but what is even more important is that it deals with a subject that desperately needs public exposure and action.

It is with regard to the element of exposure that I am gravely concerned. Throughout the trenchant editorial the evildoers must be smirking with relief as they skulk behind the anonymity you afford them. Why are we always so shy of naming evildoers? People complain about banks, supermarkets, professionals, etcetera without ever mentioning their names. 

I want to know their names so that if they cross my path I am forewarned. I also want society to know their names so that as many people as possible can know about the shameful things they have done.

So I am pleased that you dealt with the topic but frustrated by the lack of real exposure. What does the law society intend to do about these people? Will any sanctions be taken against them? Will De Rebus be keeping tabs on the matter, following it up and reporting on it in future editions to ensure that these people have a hard time? Otherwise we might as well put our heads back in the sand and ignore them and their abuses.

Roland Darroll, attorney, Cape Town

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