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[2010] ZAGPPHC 275
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Law Society of the Northern Provinces v Letlhaka (42111/08) [2010] ZAGPPHC 275 (17 June 2010)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG DIVISION)
Case
No 42111/08
DATE:17/06/2010
In
the matter between:
THE
LAW SOCIETY OF THE NORTHERN PROVINCES
(Incorporated
as the Law Society of the
Transvaal)
.....................................................
Applicant
and
SEGOGOBANE
NAPHTATI JOHN
LETLHAKA
...........................................................
Respondent
CORAM:
MATOJANE J et EBERSOHN AJ
DATE
HEARD: 11/6/2010
DATE
JUDGMENT HANDED DOWN 17/6/2010
JUDGMENT
EBERSOHN
AJ.
[1]
The applicant is the Law Society of the Northern Provinces. The
respondent is one Segogobane Naphtali John Letlhaka, an admitted
attorney of this Court. In the notice of motion the Law Society
originally sought an order that respondent be suspended in his
practice as an attorney of this Court but after considering the
approach by the respondent in his answering affidavit in which
he
attacked the Law Society and accused it of impropriety and of
improperly bringing the application, the Law Society in its replying
affidavit invited the Honourable Court in exercising its discretion
to consider an order that the name of respondent be struck
from the
roll of attorneys.
[2]
GENERAL PRINCIPLES:
2.1
The question whether an attorney is no longer a fit and proper person
to practise as such lies in terms of section 22(l)(d)
of the
Attorneys Act, no 53 of 1979 (hereinafter referred to as the
"Attorneys Act"), in the discretion of the Court.
See:
Law Society of the Cape of Good Hope v C. 1986(1) SA 616 (A);
Vassen
v Law Society of the Cape of Good Hope. 1998(4) SA 532 (SCA);
Jasat
v Natal Law Society. 2000(3) SA 44(SCA);
Law
Society of the Cape of Good Hope v Budricks. 2003(2) SA 11 (SCA).
2.2
The appropriate sanction, namely a suspension from practice or
striking from the roll, also lies within the discretion of the
Court.
See:
A v Law Society of the Cape of Good Hope. 1989(1) SA 849(A) at 851 A
- F;
Jasat
v Natal Law Society (supra).
2.3
The Court also has inherent jurisdiction to determine the fitness of
attorneys to practise over and above the provisions of
the Attorneys
Act.
See:
Prokureursorde van Transvaal v Klevnhans. 1995(1) SA 839(T) on 851 E
- F;
Law
Society of the Cape of Good Hope v C. (supra) 638 C - 639 F;
Law
Society of the Transvaal v Tloubatla.
[1999] 4 ALLSA 59(D)
at 63 G -
I; and
Law
Society of the Transvaal v Machaka and Others (No 2) 1998(4) SA 413
(TPD).
2.4
An application of this nature to the Court is in itself a
disciplinary inquiry and sui generis of nature and not a lis between
the Law Society and the practitioner.
The Law Society, as custos
morum of the profession, places facts before the Court for
consideration.
See:
Solomon v The Law Society of the Cape of Good Hope.
1934 AD 401
at
407;
Cirota
and Another v Law Society. Transvaal. 1979(1) SA 172(A) on 187 H; and
Prokureursorde van Transvaal v Klevnhans (supra) at
851 G - H.
2.5
From the nature of disciplinary proceedings it follows that a
respondent is expected to co-operate and provide where necessary
information to place the full facts before the Court to enable the
Court to make a correct decision.
Broad
denials and obstructionism have no place in disciplinary proceedings.
See: Prokureursorde van Transvaal v Klevnhans (supra)
op 853 G - H.
2.6The
facts on which a court exercises its discretion are to be established
on a balance of probabilities.
See:
Prokureursorde van Transvaal v Klevnhans (supra) on 853 I - J; and
Law Society. Transvaal v Matthews. 1989(4) SA 389(T) on
393 I - J.
2.7
The opinion or conclusion of the Law Society that a practitioner is
no longer a fit and proper person to practise as an attorney
carries
great weight with the court, although the court is not bound by it.
See:
Kaplan v Incorporated Law Society, Transvaal. 1981(2) SA 762(T) at
781 H; and Die Prokureursorde van die Oranie Vrvstaat v
Schoeman.
1977(4) 588(0) on 603 A - B.
2.8
It has been repeatedly stated by our courts that the failure to keep
proper accounting records is a serious contravention and
that an
attorney who fails to comply with this requirement is liable to be
struck off the roll or to be suspended from practice.
See:
Cirota and Another v Law Society. Transvaal. 1979(1) SA 172(A) at
193;
Law
Society. Transvaal v Matthews (supra) at 395;
Incorporated
Law Society. Transvaal v Visse and Others. 1958(4) SA 115(T);
Law
Society. Transvaal v Behrman 1981(4) SA 538(AD) on 559 E - F;
Prokureursorde
van Transvaal v Landsaat 1993(4) SA 807(T) on 814 E - G;
Holmes
v Law Society of the Cape of Good Hope and Another 2006(2) SA 130
(CPD) on 152 B - F.
2.9
Kirk-Cohen, R in Law Society, Transvaal v Matthews {supra) on 395
said the following regarding the keeping of proper accounting
records
by a practitioner:
"Failure
to keep proper books of account is a serious contravention and
renders an attorney liable to be struck off the roll
of practitioners
or liable to suspension; and the Courts have repeatedly warned
practitioners of the seriousness of such a contravention.
See Cirota
and Another v Law Society. Transvaal (supra at 193 F - G). The
seriousness is again underlined in rule 89 read with
rule 89(11) of
the applicant's rules which provides that it Is unprofessional or
dishonourable or unworthy conduct on the part
of the practitioner to
contravene the provisions of the Attorneys Act or the applicant's
rules".
See
also: Malan v The Law Society of the Northern Provinces
[2008] ZA SCA
90
(12 September 2008) at paragraphs [10] to [11].
[3]
MERITS
3.1
Points in limine raised by respondent
3.1.1
The respondent raised and argued three points in limine in the
matter. The first was that there was an irregularity in the
application in that Rooth &Wessels, the firm of attorneys who has
handled applications of this nature on behalf of the Law
Society for
decades, should not have been appointed by the Law Society as,
according to him, they in the past acted improperly
in matters
involving him. He in fact attacked the firm of attorneys in very
strong language. During argument in Court the respondent,
however,
conceded that there was no merit in this point and he abandoned it.
The second point in limine was that an affidavit attached
to the
founding papes was not properly before the Court as the day on which
it was sworn to and signed, was not filled in on the
affidavit. The
respondent in fact served a notice of an irregular process on the
attorneys of the Law Society and this omission
was rectified
timeously. During argument the respondent also conceded that there
was no merit in this point. The third point in
limine raised by the
respondent was the alleged failure on the part of the Law Society to
respond to the respondent's notice to
furnish it with certain
transcripts of proceedings and that there was not a proper quorum of
councillors present when it was resolved
to bring this application
against the respondent. During argument the respondent conceded that
there was no merit in either of
the two aspects and he abandoned this
point too. It must be stated in the respondent's favour that he was
absolutely candid with
this Court during the hearing of this matter
and he readily conceded that he erred and he expressed his regret in
this regard.
3.1.2
The Law Society in any case has replied to the points in limine in
full in the replying affidavit.
3.1.3
It was submitted by Mr. Lamey, who appeared on behalf of the Law
Society, that in general the respondent's answering affidavit
evidenced a lack of insight as to the seriousness and unacceptability
of his conduct. His answer also evidenced that he has no
respect for
his professional body and that his allegations regarding the Law
Society were contemptuous in the extreme, without
merit and
inappropriate in proceedings of this nature. This in itself, so went
Mr. Lamey's argument, forms an additional factor
and ground to
consider whether his name should not be struck from the roll of
attorneys instead of the initial relief sought namely
a suspension.
The Court has to agree with Mr. Lamey in this regard as it appears
that the respondent unfortunately did not grasp
the seriousnes of the
situation.
3.2
Other conduct
3.2.1
The respondent last filed his rule 70 auditor's certificate regarding
his trust
account
for the year ending 28 February 2006 and did not file such a
certificate for any subsequent year up to the present with
the Law
Society. He conceded in Court during argument that he was still
practising as an attorney and conceded that he was practising
without
a fidelity fund certificate. By failing to submit the rule 70
auditor's reports, respondent contravened the provisions
of rule 70
and in terms of rule 89.11 he made himself guilty of unprofessional,
dishonourable and unworthy conduct.
3.2.2
For this contravention he appeared before a disciplinary committee
and pleaded guilty to the charge. A fine in the amount
of R3 000.00
was imposed. The total fine of R3 000.00 was suspended for a period
of three years on condition that he was not found
guilty of a similar
charge during the period of suspension. All these averments were
admitted by respondent. After his appearance
before the Law Society
he, however, continued practising as an attorney without a fidelity
fund certificate.
3.2.3
Apart from the fact that respondent failed to submit his rule 70
auditors report for the year ending 28 February 2007, and
the
subsequent years, respondent was not issued with a fidelity fund
certificate for 2008 or any following year. Respondent continued
to
practise as an attorney without such fidelity fund certificate from 1
January 2008 and at the time of the bringing of the application
he
was still practising as such. These facts were admitted by the
respondent during argument in Court.
3.2.4 An inspection of
the accounting records of respondent by a forensic investigator
appointed by the applicant revealed that
respondent did not keep
proper accounting records in accordance with section 78 (4) read with
rules 68.1 and 68.2. Furthermore,
there was no proper system for the
transfer of fees in contravention of rules 69.3.3. The transfers from
the trust bank account
were not deposited in the business bank
account as required by rule 69.5.
3.2.5
The respondent withdrew funds from his trust banking account by way
of a bank card. This was admitted to the auditor appointed
by the Law
Society to investigate the books of the respondent, one van Rooyen,
during his investigation and he admitted this during
argument before
Court. Respondent's denial in his answering affidavit that he
contravened rule 69.5 thus not true and without substance.
3.2.6
Although respondent was found guilty by the Law Society for his
failure to submit a rule 70 auditors report, he did not subsequently
submit such a report after 2006. His explanation for his failure
during argument in Court was that he could not afford to pay an
auditor to do the work for him as they were expensive and wanted
payment up front. The legislation places the onus on the attorney
to
employ an auditor and not having the funds to pay an auditor is no
excuse for his failure to file his audiror's reports.
3.2.7
With reference to the averment of respondent that he replied to van
Rooyen's report in a letter addressed to applicant, although
he
attempted to challenge the findings of Van Rooyen, he did not do so
with reference to his own auditors. His challenge was therefore
unsubstantiated.
3.2.8
The Court was referred to the reply of the Law Society, namely that
with the
exception
of the withdrawal of monies by way of a bank card, respondent did not
deny any of Van Rooyen's findings in the letter.
[41
CONCLUSION
4.1
A proper case has been made out in the papers to the effect that
respondent is no longer a fit and proper person to continue
to
practise as an attorney. He persisted for several years practising on
his own, wilfully transgressing the applicable legislation,
and for
some unknown reason he did not join another firm of attorneys as a
partner or as a professional assistant to tide him over
his obvious
financial woes.
4.2
Taking into account the serious transgressions of the respondent and
the contents of his answering affidavit and the scandalous
allegations made therein, including referring to the Law Society as
corrupt, it is clear that the respondent is no longer a fit
and
proper person to continue to practise as an attorney and if this
Court does not strike the respondent's name from the roll
of
attorneys this Court would be failing in its duty.
4.3
The Court decided against a mere suspension for a few years as there
was no proof placed before the Court that the applicant
would
rehabilitate himself within the period of suspension and the public
cannot be placed at risk.
4.4
It is clear that the usual costs order should be made namely on an
attorney and client scale.
[5]
The following order is acordingly made:
1.
The name of SEGOGOBANE NAPHTALIJOHN LETLHAKAbe struck from the
roll
as an attorney of this Honourable Court.
2.
That respondent immediately surrender and deliver to the registrar of
this Honourable Court his certificate of enrolment as an
attorney of
this Honourable Court.
3.That
in the event of the respondent failing to comply with the terms of
this order detailed in the previous paragraph within two
(2) weeks
from the date of this order, the sheriff of the district in which the
certificate is, be authorised and directed to take
possession of the
certificate and to hand it to the Registrar of this Honourable Court.
4.
That respondent be prohibited from handling or operating on his trust
accounts as detailed in paragraph 5 hereof.
That
Johan van Staden, the head : members affairs of applicant or any
person nominated by him, be appointed as curator bonis (curator)
to
administer and control the trust accounts of respondent, including
accounts relating to insolvent and deceased estates and any
deceased
estate and any estate under curatorship connected with respondent's
practice as an attorney and including, also, the separate
banking
accounts opened and kept by respondent at a bank in the Republic of
South Africa in terms of section 78(1) of Act No 53
of 1979 and/or
any separate savings or interest-bearing accounts as contemplated by
section 78(2) and/or section 78 (2A) of Act
No. 53 of 1979, in which
monies from such trust banking accounts have been invested by virtue
of the provisions of the said sub-sections
or in which monies in any
manner have been deposited or credited (the said accounts being
hereafter referred to as the trust accounts),
with the following
powers and duties:
5.1
immediately to take possession of respondent's accounting records,
records, files and documents as referred to in paragraph
6 and
subject to the approval of the board of control of the attorneys
fidelity fund (hereinafter referred to as the fund) to sign
all forms
and generally to operate upon the trust account(s), but only to such
extent and for such purpose as may be necessary
to bring to
completion current transactions in which respondent was acting at the
date of this order;
5.2
subject to the approval and control of the board of control of the
fund and where monies had been paid incorrectly and unlawfully
from
the undermentioned trust accounts, to recover and receive and, if
necessary in the interests of persons having lawful claims
upon the
trust account(s) and/or against respondent in respect of monies held,
received and/or invested by respondent in terms
of section 78(1)
and/or section 78(2) and/or section 78 (2A) of Act No 53 of 1979
(hereinafter referred to as trust monies), to
take any legal
proceedings which may be necessary for the recovery of money which
may be due to such persons in respect of incomplete
transactions, if
any, in which respondent was and may still have been concerned and to
receive such monies and to pay the same
to the credit of the trust
account(s);
5.3
to ascertain from respondent's accounting records the names of all
persons on whose account respondent appears to hold or to
have
received trust monies (hereinafter referred to as trust creditors)
and to call upon respondent to furnish him, within 30 (thirty)
days
of the date of service of this order or such further period as he may
agree to in writing, with the names, addresses and amounts
due to all
trust creditors;
5.4
to call upon such trust creditors to furnish such proof, information
and/or affidavits as he may require to enable him, acting
in
consultation with, and subject to the requirements of, the board of
control of the fund, to determine whether any such trust
creditor has
a claim in respect of monies in the trust account(s) of respondent
and, if so, the amount of such claim;
5.5
to admit or reject, in whole or in part, subject to the approval of
the board of control of the fund, the claims of any such
trust
creditor or creditors, without prejudice to such trust creditor's or
creditors' right of access to the civil courts;
5.6
having determined the amounts which he considers are lawfully due to
trust creditors, to pay such claims in full but subject
always to the
approval of the board of control of the fund;
5.7
in the event of there being any surplus in the trust account(s) of
respondent after payment of the admitted claims of all trust
creditors in full, to utilise such surplus to settle or reduce (as
the case may be), firstly, any claim of the fund in terms of
section
78(3) of Act No 53 of 1979 in respect of any interest therein
referred to and, secondly, without prejudice to the rights
of the
creditors of respondent, the costs, fees and expenses referred to in
paragraph 10 of this order, or such portion thereof
as has not
already been separately paid by respondent to applicant, and, if
there is any balance left after payment in full of
all such claims,
costs, fees and expenses, to pay such balance, subject to the
approval of the board of control of the fund, to
respondent, if he is
solvent, or, if respondent is insolvent, to the trustee(s) of
respondent's insolvent estate;
5.8
in the event of there being insufficient trust monies in the trust
banking account(s) of respondent, in accordance with the
available
documentation and information, to pay in full the claims of trust
creditors who have lodged claims for repayment and
whose claims have
been approved, to distribute the credit balance(s) which may be
available in the trust banking account(s) amongst
the trust creditors
alternatively to pay the balance to the Attorneys Fidelity Fund:
5.9
subject to the approval of the chairman of the board of control of
the fund, to appoint nominees or representatives and/or consult
with
and/or engage the services of attorneys, counsel, accountants and/or
any other persons, where considered necessary, to assist
him in
carrying out his duties as curator; and
5.10
to render from time to time, as curator, returns to the board of
control of the fund showing how the trust account(s) of respondent
has/have been dealt with, until such time as the board notifies him
that he may regard his duties as curator as terminated.
6.
That respondent immediately deliver his accounting records, records,
files and documents containing particulars and information
relating
to:
6.1any
monies received, held or paid by respondent for or on account of any
person while practising as an attorney;
6.2
any monies invested by respondent in terms of section 78(2) and/or
section 78 (2A) of Act No 53 of 1979;
6.3
any interest on monies so invested which was paid over or credited to
respondent;
6.4
any estate of a deceased person or an insolvent estate or an estate
under curatorship administered by respondent, whether as
executor or
trustee or curator or on behalf of the executor, trustee or curator;
6.5
any insolvent estate administered by respondent as trustee or on
behalf of the trustee in terms of the
Insolvency Act, No 24 of 1936
;
6.6
any trust administered by respondent as trustee or on behalf of the
trustee in terms of the Trust Properties Control Act, No
57 of 1988;
6.7
any company liquidated in terms of the Companies Act, No 61 of 1973,
administered by respondent as or on behalf of the liquidator;
6.8
any close corporation liquidated in terms of the
Close Corporations
Act, 69 of 1984
, administered by respondent as or on behalf of the
liquidator;
6.9
respondent's practice as an attorney of this Honourable Court, to the
curator appointed in terms of paragraph 5 hereof, provided
that, as
far as such accounting records, records, files and documents are
concerned, respondent shall be entitled to have reasonable
access to
them but always subject to the supervision of such curator or his
nominee.
7.
That should respondent fail to comply with the provisions of the
preceding paragraph of this order on service thereof upon him
or
after a return by the person entrusted with the service thereof that
he has been unable to effect service thereof on respondent
(as the
case may be), the sheriff for the district in which such accounting
records, records, files and documents are, be empowered
and directed
to search for and to take possession thereof wherever they may be and
to deliver them to such curator.
8.
That the curator shall be entitled to:
8.1
hand over to the persons entitled thereto all such records, files and
documents provided that a satisfactory written undertaking
has been
received from such persons to pay any amount, either determined on
taxation or by agreement, in respect of fees and disbursements
due to
the firm:
8.2
require from the persons referred to in paragraph 8.1 to provide any
such documentation or information which he may consider
relevant in
respect of a claim or possible or anticipated claim, against him
and/or respondent and/or respondent's clients and/or
fund in respect
of money and/or other property entrusted to respondent provided that
any person entitled thereto shall be granted
reasonable access
thereto and shall be permitted to make copies thereof.
9.
That respondent be and is hereby removed from office as -
9.1
executor of any estate of which respondent has been appointed in
terms of
section 54(l)(a)(v)
of the
Administration of Estates Act. No
66 of 1965
or the estate of any
other person referred to in
section 72(1)
;
0in
; line-height: 200%">
9.2
curator or guardian of any minor or other person's property in terms
of
section 72(1)
read with
section 54(l)(a)(v)
and
section 85
of the
Administration of Estates
Act, No 66 of 1965
;
9.3
trustee of any insolvent estate in terms of
section 59
of the
Insolvency Act, No 24 of 1936
;
9.4
liquidator of any company in terms of
section 379(2)
read with 379(e)
of the Companies Act, No 61 of 1973;
9.5
trustee of any trust in terms of section 20(1) of the Trust Property
Control Act, No 57 of 1988;
9.6
liquidator of any close corporation appointed in terms of section 74
of the Close Corporation Act, No 69 of 1984.
10.
That respondent be and is hereby directed:
10.1
to pay, in terms of section 78(5) of Act No. 53 of 1979, the
reasonable costs of the inspection of the accounting records of
respondent;
10.2
to pay the reasonable fees of the auditor engaged by applicant:
10.3
to pay the reasonable fees and expenses of the curator, including
travelling time;
10.4
to pay the reasonable fees and expenses of any person(s) consulted
and/or engaged by the curator as aforesaid; and
10.5
to pay the costs of this application on an attorney-and-client scale.
11.
That ifthere are any trust funds available the respondent shall
within 6 (six) months after having been requested to do so by
the
curator, or within such longer period as the curator may agree to in
writing, shall satisfy the curator, by means of the submission
of
taxed bills of costs or otherwise, of the amount of the fees and
disbursements due to him (respondent) in respect of his former
practice, and should he fail to do so, he shall not be entitled to
recover such fees and disbursements from the curator without
prejudice, however, to such rights (if any) as he may have against
the trust creditor(s) concerned for payment or recovery
thereof;
12.
That a certificate issued by a director of the Attorneys Fidelity
Fund shall constitute prima facie proof of the curator's costs
and
that the Registrar be authorised to issue a writ of execution on the
stjejjgth of such certificate in order to collect the
curator's
costs.
P.
Z. EBERSOHN
--------
ACTING
JUDGE OF THE HIGH COURT
I
AGREE:
K.
E. MATOJANE
JUDGE
OF THE HIGH COURT
Applicant's
counsel:A.T. Lamey
Applicant's
attorneys:Rooth & Wessels
Tel:
(012) 452-4118
Ref: MrBloem/rr/B25729
Respondent in person Ref.
CIV.1/08
Tel/Fax
012-798 4736