Ditsoane v ACWA Power Africa Holdings (Pty) Ltd [2023] ZACC 44

Does an attorney have the actual or implied authority to withdraw a client's case without the client's explicit instruction to do so.

Author

Ross Shepstone
January 16, 2024

Seipati Joyce Ditsoane was employed by ACWA Power Africa Holdings (Pty) Ltd and was dismissed on the grounds of retrenchment effective from November 30, 2016. Ditsoane considered her dismissal to be unfair and referred the dispute to the Commission for Conciliation, Mediation and Arbitration (CCMA), which was unable to resolve the matter.

Ditsoane then referred her unfair dismissal claim to the Labour Court on May 11, 2017, represented by Mulima Denga Attorneys (MDA). The respondent, represented by Cliffe Dekker Hofmeyr (CDH), raised issues with the statement of case and the timeliness of the referral. Ditsoane applied for condonation for the late referral, and the respondent filed an exception.

On October 24, 2017, Ditsoane sought a second opinion from Ndumiso Voyi Incorporated (NVI), who advised her that she had good prospects of success but needed to amend her statement of claim. Ditsoane instructed MDA to withdraw as her attorneys so she could appoint NVI. However, MDA misunderstood the instruction and filed a notice of withdrawal for the entire case on October 25, 2017.

NVI, unaware of MDA's action, wrote to CDH on October 26, 2017, indicating Ditsoane's intention to amend her claim and continue the case. CDH informed NVI of the withdrawal notice and stated that Ditsoane would need to apply to set aside the withdrawal notice and revive the case.

MDA acknowledged their error, and on November 3, 2017, the Labour Court ordered that Ditsoane had to explain why her case should be revived within 10 days, or it would remain withdrawn. Ditsoane was unaware of this order until January 18, 2018, and subsequently filed an interlocutory application to set aside the withdrawal notice on January 24, 2018.

The Labour Court's congested rolls caused significant delays, and it was not until October 20, 2022, that the interlocutory application was heard. The Labour Court dismissed the application, leading to Ditsoane's appeal to the Constitutional Court.

The ratio decidendi of the Constitutional Court's decision is that an attorney does not have the actual or implied authority to withdraw a client's case without the client's explicit instruction to do so. If an attorney acts contrary to the client's express instructions, such action is unauthorised and does not bind the client.

The Court found that the notice of withdrawal filed by Mulima Denga Attorneys (MDA) was done without Seipati Joyce Ditsoane's actual authority, as she had only instructed them to withdraw as her attorneys, not to withdraw her entire case. The Court also rejected the notion that the attorney had apparent or ostensible authority to withdraw the case, as the respondent (ACWA Power Africa Holdings) received mixed signals and was aware that Ditsoane intended to pursue her claim.

Furthermore, the Court held that any delay in the proceedings that occurred after the unauthorized withdrawal was not attributable to Ditsoane, as she acted promptly upon learning of the need to file an application to revive her case. The delays were largely due to the Labour Court's congested rolls and the respondent's opposition to the revival of the case.

The Court concluded that it would be unjust to bar Ditsoane from pursuing her claim due to the unauthorized withdrawal and the subsequent procedural delays. The Court emphasized the importance of the right to fair labour practices and access to justice, as guaranteed by the Constitution, and found that these rights would be prejudiced if Ditsoane were precluded from continuing her case.

"[37] Since MDA had neither actual nor apparent or ostensible authority to withdraw the applicant’s case, she was not bound by the notice of withdrawal. Although the Judge who dealt with the matter on 3 November 2017 may not have known that the notice of withdrawal was unauthorised, this was clearly established in the interlocutory application. Accordingly, the Labour Court should have found that, since the case was never withdrawn, there was no need to revive it. The applicant should not have been treated as a supplicant for an indulgence."

Justice Rogers

In essence, the ratio decidendi is that a legal action taken by an attorney without the client's authority is invalid, and a client is not estopped from challenging such action, especially when the client's constitutional rights to fair labour practices and access to justice are at stake.

In its reasoning process, the Constitutional Court of South Africa referred to the case of Kruizenga v MEC for Economic Affairs, Environment & Tourism: Eastern Cape [2010] ZASCA 58; 2010 (4) SA 122 (SCA); [2010] 4 All SA 23 (SCA). This case was cited to discuss the scope of an attorney's implied authority and the concept of estoppel in the context of an attorney acting beyond their mandate.

The Kruizenga case is significant because it addresses the issue of whether a client is bound by the actions of their attorney when those actions are taken without the client's knowledge and are contrary to the client's express instructions. The Supreme Court of Appeal in Kruizenga held that while attorneys generally do not have implied authority to settle or compromise a claim without the client's consent, the appointment of an attorney may constitute a representation that the attorney has the usual and customary powers associated with the appointment. However, the court also noted that estoppel is a rule of justice and equity, and it is open to a court to disallow reliance on estoppel if it would lead to injustice.