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[2013] ZASCA 125
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Mafokate v The Law Society of the Northern Provinces (786/12) [2013] ZASCA 125 (23 September 2013)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 786/12
In the matter between:
Not Reportable
JOHANNES TLHOALELA
MAFOKATE
............................................................
Appellant
and
THE LAW SOCIETY OF THE
NORTHERN PROVINCES
............................
Respondent
(Incorporated as the
Law Society of the Transvaal)
Neutral citation:
Mafokate v The Law Society of the Northern Provinces
(786/12)
[2013] ZASCA 125
(23 September 2013)
Coram:
Mthiyane
AP, Lewis, Shongwe and Wallis JJA and Zondi AJA
Heard:
20 August
2013
Delivered:
23
September 2013
Summary: Attorney –
misconduct – appropriate order – failure to account to
clients – absence of accounting
records – adequacy of
explanation – evidence presented to be subjected to proper
analysis – striking off order
does not follow as a matter of
course from the finding that the attorney is not a fit and proper
person to continue practice –
absence of exceptional
circumstances in favour of the appellant.
_______________________________________________________________________
ORDER
_____________________________________________________________________
On appeal
from
:
North
Gauteng High Court, Pretoria (Mavundla J and Goodey AJ, sitting as
court of first instance):
The appeal is dismissed
with costs, on the attorney and client scale.
_______________________________________________________________________
JUDGMENT
_____________________________________________________________________
Zondi AJA (Mthiyane
AP, Lewis, Shongwe and Wallis JJA concurring):
[1] This is an appeal
against the judgment and order of the North Gauteng High Court,
(Mavundla J and Goodey AJ) striking the appellant’s
name from
the roll of attorneys with costs on attorney and client scale and
granting certain ancillary relief. The appeal is with
the leave of
the court below.
[2] The appellant
practises in Johannesburg as a sole practitioner under the name of J
T Mafokate and Associates. He was admitted
as an attorney in November
1989. In November 2007 the respondent brought an application in the
court below in terms of s 22(1)(
d
) of the Attorneys Act 53 of
1979 for the striking of the appellant’s name from the roll of
attorneys. In the founding affidavit
by the president of the
respondent it was alleged that the appellant was guilty of
unprofessional, dishonourable and unworthy conduct
and was
consequently no longer a fit and proper person to continue to
practise as an attorney. This allegation was made on the
basis of two
complaints that the appellant had settled claims against the Road
Accident Fund (the Fund) but not accounted fully
and properly to his
clients for the proceeds of those claims. The appellant opposed the
application and filed an affidavit in which
he disputed the charges
against him. Alternatively, he submitted that if the charges were
established the court should not strike
his name off the roll of
attorneys, but should rather impose a lesser form of punishment.
[3] In view
of the fact that the court below, in its treatment and analysis of
the factual matrix for the purposes of deciding whether
or not the
appellant was a fit and proper person to continue to practise as an
attorney, did not evaluate the appellant’s
version as well as
his explanations, it is convenient to deal briefly with each alleged
contravention and the appellant’s
response thereto. The court
below should have subjected the evidence to analysis due to the
nature of the enquiry involved in the
proceedings under s 22(1)(
d
)
of the Act. As was pointed out by Harms DP in
Law
Society, Northern Provinces v Mogami
,
1
an application of this nature involves a three-stage
enquiry. First, the court must determine whether the alleged
offending conduct
has been established on a preponderance of
probabilities, which is a factual enquiry. The second enquiry is
whether the person
concerned is ‘in the discretion of the
court’ not a fit and proper person to continue to practise. The
exercise involves
the weighing-up of the conduct complained of
against the conduct expected of an attorney and, to this extent, is a
value judgment.
The third enquiry is whether in all the circumstances
the person in question is to be removed from the roll of attorneys or
whether
an order suspending him or her from practice for a specific
period will suffice.
2
The value judgment which the court must make in s
22(1)(
d
) of the Act
must be based upon the facts placed before it
3
and in my view must account for all the evidence.
[4]
This application to strike the appellant from the roll of attorneys
arose as a result of the alleged contraventions by the appellant
of
the respondent’s relevant rules uncovered by the respondent’s
legal official during an investigation of the appellant’s
practice. This investigation followed a complaint lodged with the
respondent against the appellant by Mr Samuel Muchanga also known
as
Piet Mabitsela, a client of the appellant. The complaint was that he
had instructed the appellant to lodge a third party claim
against the
Fund and that the appellant had failed to account to him for the
monies the appellant received on his behalf.
[5] As a result of
Muchanga’s complaint and the respondent’s legal
official’s report the respondent decided to
institute a
disciplinary enquiry against the appellant to answer certain charges.
The appellant duly appeared before the disciplinary
committee
constituted by the respondent. But Muchanga did not attend. Due to
Muchanga’s non-attendance the disciplinary committee
converted
the proceedings into an investigation to discuss Muchanga’s
complaint with the appellant. The disciplinary committee
was not
satisfied with the appellant’s explanations for his failure to
account to Muchanga. It referred the matter to the
respondent’s
council with a recommendation that the council should consider
bringing an application for the striking of the
applicant’s
name from the roll of attorneys or for his suspension from practice.
The present application ensued.
[6] It is common cause
that Muchanga instructed the appellant to lodge a third party claim
against the Fund on his behalf. The Fund
settled the claim in an
amount of R392 240 which was paid into the appellant’s
trust banking account on 2 February 1998.
[7] In January 2006
Muchanga complained to the respondent, alleging that the appellant
had failed to account to him for the amount
the appellant received
from the Fund and further that one of the appellant’s cheques
he issued to him was dishonoured by
the bank when he presented it for
payment.
[8] The appellant
admitted that he had received from the Fund the sum of R392 240
in settlement of Muchanga’s claim,
but blamed the delay in
furnishing Muchanga with a written statement of account and paying
the amount due to him on Muchanga’s
change of personal details.
The appellant alleged that when he initially received instructions
from Muchanga, the latter was then
known as Malesela Piet Mabitsela.
When he consulted with Muchanga on 8 May 1999 for the purposes of
paying the money due to him,
Muchanga requested him not to give him a
lump sum payment as he would not be able to open a bank account.
Muchanga informed him
that he had lost his identity document and had
applied for a new one. Muchanga requested the appellant to delay
payment to him
until he had obtained a new identity document and had
an opportunity to discuss payment details with a member of his
community.
Muchanga requested the appellant to give him R1000 in the
meantime, which the appellant did.
[9] In about March 2001
Muchanga informed the appellant that he was in possession of a new
identity document and requested the appellant
to finalise his
statement of account. The appellant said that when he perused the
identity document which Muchanga presented to
him, he observed that
Muchanga’s personal details in the new identity document
differed substantially from those reflected
in his old identity
document. In the new identity document Muchanga was identified as
Samuel Muchanga and no longer as Malesela
Piet Mabitsela. His country
of birth was no longer South Africa but had changed to Mozambique.
Furthermore his date of birth had
changed. The appellant suspected
that something was amiss and had to investigate the matter. He
requested Muchanga to furnish him
with a letter from the Department
of Home Affairs (Home Affairs) to confirm that it was aware of the
changes in Muchanga’s
personal details. Nothing happened until
December 2001 when Muchanga showed the appellant a letter from Home
Affairs confirming
the changes in Muchanga’s personal details.
The appellant said this letter looked suspicious to him. He decided
to verify
its authenticity. He contacted a certain Mr Mohlala of
Cullinan Home Affairs to verify claims that Muchanga’s personal
details
had been validly changed. Mohlala informed the appellant that
Home Affairs had ‘no record on computer which showed that
(Muchanga)
did apply to change his particulars.’ I should point
out that these allegations have not been confirmed by Mohlala.
[10] According to the
appellant, Muchanga’s identity document issue remained
unresolved at least until 26 August 2005 when
the appellant last saw
him. The appellant said during the period May 1999 to August 2005, he
had various interactions with certain
Home Affairs officials, the
purpose of which was to verify the authenticity of the identity
document which Muchanga gave to him
in March 2001, for the purposes
of releasing the balance due to him. The appellant alleged that
during this period he would from
time to time, at Muchanga’s
request, pay Muchanga various sums of money.
[11] The appellant
alleged further that by March 2005 ‘the total amount which was
due to Muchanga had … been fully
paid to him’ and in
support of this allegation he annexed to his answering affidavit a
payment schedule prepared by him in
which it is indicated that an
amount of R45 899.31 was paid to third parties on behalf of
Muchanga; R124 750 to Muchanga
and R178 158.63 debited as
fees respectively. Even accepting these figures at face value this
left an amount of some R50 000
unaccounted for.
[12] Muchanga denied that
the appellant’s delay in paying him and in furnishing him with
a statement of account was as a result
of the changes in his personal
details in his identity document. He alleged that he changed his
personal particulars in the year
2000 and that to his knowledge his
new identity document was valid. According to him he did not instruct
the appellant to investigate
the validity of his identity document.
[13] I proceed to deal
with the appellant’s explanation for the delay in finalising
Muchanga’s statement of account
and paying what was due to him.
That during the period May 1999 to August 2005 certain sums of money
were paid to Muchanga is not
in dispute. What is in dispute is the
amount paid to Muchanga and why payment was made intermittently. It
appears from a schedule
of payments made to Muchanga between May 1999
and March 2005 that some of these payments were made by cheque.
Between the period
6 June 2003 to 6 December 2003 three cheques were
issued by the appellant. These cheques were payable to either S
Muchanga or Piet
Mabitsela. The question is why would the appellant
issue cheques to Muchanga if Muchanga’s identity document
problem was
still an issue? In my view what these facts demonstrate
is that at a certain point in time Muchanga’s identity document
problem
ceased to be an impediment for the appellant to finalise
payment to Muchanga. Therefore, to the extent that the appellant
seeks
to rely on it as an excuse for not paying what was due to
Muchanga, such reliance is contrived and falls to be rejected.
[14] If the appellant’s
allegation is correct, that by March 2005 the total amount due to
Muchanga had been fully paid to
him, then there is no plausible
explanation as to why the appellant issued to Muchanga a trust cheque
in the sum of R24 000
on 25 August 2005, on which cheque he
subsequently put a stop payment notice. It is difficult to reconcile
the appellant’s
averment with the objective facts as set out in
one of the appellant’s accounting documents which indicates
that as at 29
February 2004 Muchanga’s trust ledger account had
a nil balance. This fact contradicts the appellant’s assertion
that
funds in Muchanga’s account were exhausted by March 2005.
In fact these records demonstrate that funds in Muchanga’s
account were exhausted much earlier than March 2005. In the
circumstances the fees which were generated by the appellant after
29
February 2004 could not have been debited to Muchanga’s trust
ledger account as at that stage it had a nil balance, unless
he
assumed that there were still funds available in Muchanga’s
account post 29 February 2004 which is not the appellant’s
case.
[15] I have given proper
and serious consideration to the appellant’s explanation
together with supporting documentary evidence
and I have come to the
conclusion that the appellant failed to account properly to Muchanga.
I find therefore that the respondent
has succeeded in establishing on
a balance of probabilities that the appellant’s delay in
paying, and accounting to, Muchanga
was without a lawful excuse and
he contravened rules 89.7 and 68.8 of its rules.
[16] I now turn to deal
with Busang’s complaint that the appellant failed to properly
account to him. It is common cause that
on 13 September 1995 Busang
instructed the appellant to prosecute on his behalf a third party
claim against the Fund. The claim
was settled in 2002 and the Fund
paid R60 000 into the appellant’s trust account. Later it
paid a further amount of
R41 999.35 in respect of costs. The
appellant denies the allegations against him. His explanation is the
following: On the
13 September 1995 he received instructions from
Busang to prosecute a third party claim on his behalf. On 7 October
1995 and 9
January 1996 respectively he lent two amounts, each of
R20 000 to Busang at the latter’s request. He said Busang
instructed
the appellant to deduct the sum of R40 000 from the
amount he expected to receive from the Fund. Since there are no
underlying
documents reflecting the loan and the payment of the two
advances of R20 000 each to Busang, the appellant presented
copies
of allegedly contemporaneous notes extracted from Busang’s
file as proof of the loan and payment of R40 000 pursuant
thereto. Upon settlement of Busang’s claim he sent to Busang a
letter dated 9 October 2002 enclosing a statement of account
confirming the receipt of R60 000 from the Fund. The statement
of account referred to in that letter indicated that there
was a
shortfall that he hoped would be covered by way of the recovery of
costs from the Fund.
[17] The appellant
claimed that as agreed with Busang, he deducted R40 000 and fees
and disbursements in the sum of R100 356.73
plus Vat of
R3 720.92 from the amounts received from the Fund. As the total
amount received from the Fund was insufficient
to meet the loan and
fees the result was that Busang still owed him R2 078.29. The
appellant alleged that he addressed a letter
to Busang on 9 October
2003 requesting Busang to come and see him. However, the letter did
not enclose an account or mention the
alleged shortfall. The
appellant said that when Busang failed to respond to his invitation,
he telephoned Busang and arranged an
appointment with him. During
their telephonic discussion, Busang told him that he went to see the
appellant but could not find
the place to which the appellant’s
firm had relocated. He told Busang where his firm was and arranged
another appointment
with him which Busang again failed to honour.
[18] Busang denied that
he received an advance of R40 000 from the appellant. He also
denied having received the appellant’s
letters of 9 October
2002 and 9 October 2003. In his complaint affidavit Busang alleged
that he received nothing from the settlement
amount paid by the Fund.
He said he made several appointments with the appellant, which the
appellant never kept. He further said
the appellant informed him that
he had moved his practice to a Bryanston address which according to
Busang does not exist.
[19] The appellant’s
version that he paid Busang R40 000 pursuant to a loan agreement
with him and the reason advanced
for the delay in accounting to
Busang, are rejected. First, there is no documentary proof to
substantiate the payment of R40 000
and the appellant does not
state how the two payments of R20 000 each were made. Second,
the circumstances in which these
payments were made raise some
serious doubt. The first one was allegedly made on 7 October 1995,
that is just a month after the
receipt of instructions to prosecute a
third party claim. At that stage the appellant had not even received
a police report which
could have served as a basis for conducting an
assessment of the merits of the claim. Moreover, when the second
payment of R20 000
was allegedly made a medical report
concerning the nature and extent of injuries sustained by Busang was
not available. In my view,
having regard to the amount of the alleged
loans, which is not insignificant, it is highly unlikely that the
appellant would have
advanced funds to Busang at a stage when he had
not satisfied himself as to the prospects of success of Busang’s
claim, which
he could not have done in the absence of a police report
and a medical report. As far as the appellant’s explanation is
concerned
regarding Busang’s failure to see him in October
2003, it is not clear from the documents filed, when exactly the
appellant
moved offices from Johannesburg to Bryanston. He claimed
that he had moved in September 2002. But the letterhead on which he
wrote
the letters of 9 October 2002 and 9 October 2003 respectively
indicate a different address. Busang’s allegation that he could
not find the appellant’s firm at the address at which the
appellant said it was, is much more probable having regard to the
inconsistencies and contradictions in the appellant’s
explanations. Accordingly, the high court’s finding that the
appellant was guilty of unprofessional, dishonourable and unworthy
conduct, cannot be faulted.
[20] The
next question is whether the appellant is a fit and proper person to
continue practising as an attorney. It was submitted
on behalf of the
appellant that there exists no basis for the finding that the
appellant is not a fit and proper person to continue
to practise as
there is no evidence that he deliberately stole money from the trust
account. In our view, this submission misses
the point. The question
is not that the appellant stole from the trust account, the question
is whether the appellant accounted
to Muchanga and Busang for the
moneys he had received on their behalf from the Fund. The evidence is
overwhelming that he failed
in this regard. The appellant’s
explanations in relation to Muchanga and Busang’s complaints
are replete with contradictions,
inconsistencies
and improbabilities and are so far-fetched that they have only to be
stated to be rejected. In my view the appellant
is guilty of
unprofessional conduct which in the circumstances of the matter
renders him unfit to continue to practise as an attorney.
This
finding does not, however, necessarily mean that the appellant’s
name should be struck from the roll of attorneys.
4
In other words, removal does not follow as a matter of
course. The appellant may be suspended from practice for a given
period if
upon consideration of all the facts the court finds that
after a period of suspension the appellant will be fit to practise as
an attorney.
[21] As
pointed out in the
Malan
and
Jasat
cases supra,
the
sanction is also a matter for the discretion of the court of first
instance. Whether a court will suspend or strike the attorney’s
name from the roll depends upon such factors as the nature of the
conduct complained of, the extent to which it reflects upon the
person’s character or shows him or her to be unworthy to remain
in the ranks of the profession, the likelihood or otherwise
of a
repetition of such conduct and the need to protect the public. In
relation to the sanction it was submitted on the appellant’s
behalf that if this court should find that there are certain
instances where the conduct of the appellant was questionable then
he
should be suspended from practice having regard to his age,
the fact that he has been an attorney for 24 years and
the effect the striking off order will have on his future prospects.
There
is no doubt in my mind that in determining what an appropriate
sanction will be in this matter one should not turn a blind eye to
the effect of a removal of the appellant from practice. It
constitutes a severe penalty as the appellant will be precluded from
practising his profession for a substantial period of time.
5
I have already pointed out that the judgment of the high
court contains no evaluation of the evidence which formed the basis
of
its finding that the appellant’s unprofessional conduct
rendered him unfit to continue to practise as an attorney. The clear
impression I have is that the matter was approached on the basis that
the striking off follows as a matter of course once a finding
is made
that the appellant was guilty of unprofessional conduct.
That
approach is not permissible.
6
This being the case this court is at large to reconsider
the sanction.
[22] It has been said
that the law exacts from any attorney
uberrima fides –
the
highest
possible
degree of good faith – in his or her dealing with his or her
clients which implies that at all times his or her submissions
and
representations to his or her clients must be accurate, honest and
frank.
7
The totality of evidence in the present matter reveals
that the appellant was less than transparent in his dealings with
Busang
and Muchanga. There was delay, which has not been
satisfactorily explained, in accounting to them. In relation to
Busang the appellant
was unable to produce proof of payment of
R40
000: providing such proof,
if
payment was indeed made,
would not have been
difficult. Similarly,
in relation to Muchanga,
because of the lack of proper accounting records for the
relevant period,
it is not easy to establish from
the documentation provided by the appellant exactly how much was paid
to Muchanga.
This is because some of the amounts
are duplicated and others inflated. For instance one schedule of
payments made to Muchanga indicates
that an amount of R1 500 was
made in March 2003 while the other indicates an amount of R15 000
having been made. These
are the disturbing features in the present
matter.
[23] I have
given serious consideration to the appellant’s personal
circumstances which,
it was submitted on his
behalf,
constitute sufficient basis for this
court to order suspension rather than the removal of his name from
the roll. In my view,
they do not constitute
exceptional circumstances to justify the imposition of a lesser
penalty.
8
The facts in the present case differ from those in
Law
Society of the Cape of Good Hope v Peter
,
9
in which exceptional circumstances were found in her
favour justifying imposition of a lesser sentence. There a suspension
order
was found appropriate because of the respondent’s frank
and full disclosure,
accepting responsibility for
her conduct and the short duration and limited nature of her
misconduct. In these circumstances there
exists no ground for this
court to assume that after the period of suspension the appellant
will be fit to practise as an attorney.
Accordingly
a suspension order is inappropriate. It follows that the court below
did not err in the exercise of its discretion.
[24] In the result the
appeal is dismissed with costs, on the attorney and client scale.
___________________
D H Zondi
Acting Judge of Appeal
APPEARANCES
For Appellant: J K
Wessels
Instructed by:
J T Mafokate,
Johannesburg;
Mabalane Seobe Inc,
Bloemfontein
For Respondent: J J Buys
Instructed by:
Stegmanns Inc, Pretoria;
Claude Reid, Bloemfontein
1
Law
Society, Northern Provinces v Mogami
2010 (1) SA 189
(SCA) para
4.
2
Jasat
v Natal Law Society
2000 (3) SA 44
(SCA);
Malan & another
v Law Society, Northern Provinces
[2008] ZASCA 90
;
2009 (1) SA 216
(SCA) para 10;
Botha & others v Law Society, Northern Provinces
2009 (3)
SA 329
(SCA) para 4.
3
Law
Society of the Cape of Good Hope v C
1986 (1) SA 616
(A) at
637D-G.
4
Malan
& another v Law Society, Northern Provinces
[2008] ZASCA 90
;
2009 (1) SA 216
(SCA) para 10.
5
Summerley
v Law Society of the Northern Provinces
2006 (5) SA 613
(SCA)
para 18.
6
See
Malan
, supra.
7
Law
Society, Transvaal v Matthews
1989 (4) SA 389
(T) at 396.
8
Law
Society of the Northern Provinces v Sonntag
2012 (1) SA 372
(SCA) para 19.
9
Law
Society of the Cape of Good Hope v Peter
2009 (2) SA 18
(SCA)
para 14.