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[2010] ZAGPPHC 640
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Law Society of the Northern Provinces v Letlhaka (42111/08) [2010] ZAGPPHC 640 (17 June 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG DIVISION)
Case No 42111/08
Not reportable
17 June 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 Cane 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 Kleynhans
(supra)
op
853 G - H.
2.6
The facts 011
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 bv
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.
[4]
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 LETLHAKA be 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.
5.
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 subsections 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,
ifany, 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:
6.1 any 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 the 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)
;
0.4
9in; border: none; padding: 0in; font-style: normal; font-weight: normal; line-height: 150%">
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 if there
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 strength 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 & VVessels
Tel: (012) 452-4118
Ref: Mr
Bloem/rr/B25729
Respondent
in person: R
e
f
CTV.1/08
Tel/Fax 012-798 4736