Johannesburg – Problems for law firm ENSafrica keep mounting as top business partners want the Legal Practice Council (LPC) to launch a probe into a possible breach of ethics against the company.
This is after business partners Mathews Phosa and Luda Roytblat told the North Gauteng High Court that the LPC should investigate ENSafrica for allowing its client, Umsobomvu, to try to obtain their mining company’s (Transasia) confidential documents in their application to appeal the mining rights license.
The information includes trading records, financial statements, and scientific and technical reports.
Phosa and Roytblat are business partners who entered into a Sale of Prospecting Agreement with Umsobomvu Coal in 2012.
Umsobomvu, which is owned by a local businessman, Hector Kunene, was to permit Transasia to take carriage of any applications pending in the Department of Mineral Resources (DMR) under section 11 (1) of the Mineral and Petroleum Resources Development Act of 2022 (MPRDA) or for the grant of mining, as agreed.
Kunene was obliged to submit the application, but after having received R14 million from Transasia, he failed to do so and created blockages for Transisia, the court heard.
Transasia, which is owned by Roytblat and Phosa, was entitled to the transferred mining rights for both Malonjeni and Cambrian mining projects in Kwazulu-Natal, in which they invested with a 0% contribution for Kunene.
However, in January this year, the DMR granted Transasia mining rights. But the decision aggrieved Umsobomvu, who challenged it in court.
In her affidavit filed at the Pretoria North High Court this week, Roytblat said on June 28, Umsobomvu sought and obtained an order directing the regional manager in compliance with Regulation 74 (8) of the MPRDA, to deliver all records required in terms of its Section 96 appeal. She said a copy of the order was granted by Judge Mngqibisa Thusi, but Transasia was not a joined party when the application was brought. Roytblat said that her company did not receive notice of the application.
“Transasia 444 was also not served, nor cited. Both of them were entitled to service of the application and to be cited as parties to the application. They are both clearly interested,” said Roytblat
Roytblat said the conduct of Umsobomvu legal representatives, ENSafrica, was also suspicious and should be referred to the LPC. She said as the attorneys of Umsobomvu they were aware that there was a long history of litigation between the parties, yet they brought proceedings without citing the parties, whom they know have a direct and material interest.
Roytblat added that the law firm then proceeded to cloud the issues by bringing a confidentiality regime instead of answering the rescission application in full.
“This shows me that their agenda was to lay their hands on the confidential documents of Transasia while being fully aware that they are not entitled to. These strategies should be referred to the LPC for investigation and possible breach of ethics by ENS attorneys involved in the matter,” said Roytblat.
Roytbalt said Umsobomvu brought the application to compel the delivery of documents without notice to Transasia Minerals, Transasia 1 (Pty) Ltd, and Transasia 444, even though these entities were interested parties who ought to have been joined as parties to the main application.
DMR director-general Pieter Alberts confirmed that the department received a court order directing the regional manager to deliver all records of Transasia Minerals. Alberts said DMR could not honour the court order after Transasia advised that it was intending to file a rescission application for the court order issued in favour of Umsobomvu to be set aside. The Transasia application was set for hearing on August 29, 2022.
In his ruling, Judge Anthony Millar said Thusi had no power to grant the impugned order at the insistence of Umsobomvu in the absence of an agreement between Transasia and Umsobomvu. Millar added that Thusi also erred when he ordered Transasia to pay the costs of two counsels during the hearing on July 15.
“In the event where Umsobomvu presented the honourable court with confidentiality regime, which regime the court accepted only on the date of the application on August 29, and while the application for rescission was not dealt with,” Millar said.
However, Roytblat said it has been submitted that Millar’s order was not valid. She said the only correct remedy that could be granted was to set Thusi’s order aside if the rescission application was brought and founded on good grounds. She said new proceedings could be instituted with proper notice if the order was rescinded.
Roytblat added that the fact that Millar’s order required that only attorneys and counsel to have access to the documents does not address the issue of notice.
“The Millar order was granted under circumstances where counsel for Transasia 444 did not consent to the Millar order being made an order of the court. Counsel for Transasia 444 sought an order rescinding Thusi’s order. There should have been a proper and fair hearing on the issue of rescission. It could not be replaced with a new substantive order which was not before the court.
“Although a judge is entitled to conduct proceedings at their discretion, this does not extend to including substantive orders which are not the subject of the litigation between the parties. The ‘tender’ by ENS to allow the confidentiality regime where there was no application before him along those lines, and the rescission remained undecided, could not substitute the requirements to decide the actual application which was before the court.
“For a range of reasons which will be addressed in due course, the decision to issue an order in respect of confidential documents belonging to a party which never got notice, was also substantively unjustified and incorrect. But these are issues which will be canvassed once the rescission is granted and the order which was granted has been found to be a nullity,” said Roytblat.