The South Gauteng high court hears the case of former home owners who are suing major banks that repossessed and sold their homes.
Image: Timothy Bernard / Independent Newspapers
The Gauteng High Court, Johannesburg, has granted a lifeline to homeowners pursuing a class action lawsuit against major banks, despite recent legal setbacks involving the long-time lawyer they trusted to secure justice.
The High Court's order allows the class action, brought by those who claim the banks caused them to lose their homes, to proceed.
The High Court agreed to postpone the long-awaited R60 billion class action between scores of mostly elderly people and banks such as Absa, Nedbank, Standard Bank, and First Rand.
This move by Judge Leonie Windell on Thursday followed despite objections by the banks, who, through their legal counsel, said that while they have sympathy for the people who counted on this application to have a class action certified, enough was enough.
Lawyer Douglas Shaw, who previously appeared for the hundreds of applicants in the R60 billion class action against banks, officially had his mandate cancelled.
Image: Timothy Bernard / Independent Newspapers
The parties blamed the applicants’ counsel, Douglas Shaw, for the predicament. While Shaw had been assisting them for about seven years to at last reach the court, a proverbial bomb was dropped on the first day of the proceedings when it emerged that he did not have a Fidelity Fund Certificate.
This document is a mandatory annual licence for legal practitioners (attorneys and certain advocates) in South Africa, confirming they are authorised to operate a trust account and handle client funds. It is issued by the Legal Practice Council (LPC) and protects the public against theft of funds.
In February, Judge Windell made it clear that without the certificate, Shaw must withdraw as counsel.
It emerged that while he has not issued a formal withdrawal notice, Lungelo Lethu Human Rights Foundation, which initiated the application seven years ago, terminated Shaw’s mandate only a few days ago.
Judge Windell pointed out that she told them in February already that Shaw can no longer appear in this case. At the time, the court was told that new counsel was ready to take over, but this did not happen.
At the time, the applicants all stood behind Shaw as their representative, and they were confident that he would receive his certificate in time to represent them.
However, Nkululeko Xhelithole, president of Lungelo Lethu, on Thursday told the court it appears that Shaw will not get his certificate soon.
In light of this, they terminated his services and got someone new to assist them. He urged the court to postpone the certification of the class action hearing.
Questioned by the court as to why they only now terminated his mandate and got new counsel, Xhelithole, in a passionate plea, said they are all lay and mostly elderly people and are pinning their hopes on this application.
They all believed Shaw would lead them in this. “We did not know he did not have a certificate. If you ask the people (applicants) what a certificate is, they won’t know,” Xhelithole told Judge Windell.
Advocate Azhar Bham for First Rand Bank, in opposing the application, said that while one has sympathy with the applicants, everyone has rights, including the banks.
He said one can understand that they trusted Shaw before February, when it came to light that he operated without a certificate. Everyone, including the applicants, was shocked when this emerged, but they must now face the consequences of their trust, Bham said.
Judge Windell stated that everyone's interests must be weighed up in allowing the postponement. But she pointed to the extraordinary circumstances of this case and the complexities of class actions, and concluded that the applicants cannot be expected to proceed with their case without a lawyer.
She earlier, during arguments, remarked that the applicants placed their trust in Shaw, and he clung to this case even after he was told he may no longer appear for the people. “They placed their trust in his hands,” she said.
The class action will now resume in August.
In February, the court called for a report from the LPC regarding Shaw’s Fidelity Fund Certificate woes. The LPC confirmed that the report has been filed with the court but declined to share it at this stage. The court did not deal with the report Thursday.
Cape Times