About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, Port Elizabeth
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, Port Elizabeth
>>
2012
>>
[2012] ZAECPEHC 51
|
|
Eastern Cape Society of Advocates v Jacobs (2232/2011) [2012] ZAECPEHC 51 (20 August 2012)
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT
ELIZABETH)
Case
No.: 2232/2011
Date
heard: 23 March 2012
Date
delivered: 20 August 2012
In the matter between:
EASTERN
CAPE SOCIETY OF ADVOCATES
Applicant
and
LIONEL DUDLEY JACOBS
Respondent
JUDGMENT
DAMBUZA, J
:
This is an application to have the
respondent’s name struck off the roll of advocates in terms of
section 7(1)(d) of the
Admission of Advocates Act, Act 74 of 1964
(“the Act”).
The applicant is the Eastern Cape
Society of Advocates, a society of advocates as envisaged in section
7(2) of the Act. It brings
this application against the
respondent, an admitted advocate of this Court. The application is
brought on two grounds; firstly,
that the respondent was convicted
of theft by the Regional Court, Port Elizabeth and that on 12
October 2010, his appeal against
that conviction was dismissed by
Judges Pickering and Revelas of this Court. The respondent had
been convicted for theft of
R7,368.00 and had been sentenced to a
fine of R4 000,00 or two years imprisonment, together with a further
period of three years
imprisonment, the whole of which was suspended
for four years on certain conditions. In the appeal judgment, the
Registrar of
this Court was directed to deliver a copy of the
judgment to the secretary of the applicant. It is that order which
resulted
in this application. The second ground on which the
application is brought emanates from results of investigations
conducted
by the applicant which, according to the applicant, reveal
the respondent’s involvement in a “pyramid scheme”.
Criminal proceedings in which the respondent has been charged with
fraud relating to that pyramid scheme are pending before the
Regional Court, Port Elizabeth.
This application is opposed. The
respondent contends that the application was brought prematurely. He
states that he did communicate
his intention to petition the
President of the Supreme Court of Appeal regarding the refusal of
his application for leave to
appeal against the appeal judgment.
The record reveals that following the
dismissal of the respondent’s appeal on 12 December 2009 the
applicant resolved that
this application be brought against the
respondent. The application was launched on
2 September 2011 and
was served on the respondent sometime in October 2011. On 14
October 2011 the respondent filed a notice
of intention to oppose
the application, followed by his answering affidavit on 27 October
2011. It is in his answering affidavit
that the respondent stated
that he had expressed his intention to petition the President of the
Supreme Court of Appeal. In
that answering affidavit the respondent
also stated that he had already drawn his petition to the Supreme
Court of Appeal and
was in the process of drawing papers for an
application for condonation of the late filing thereof, which he
intended to file
with the Registrar of the Supreme Court of Appeal
during November 2011.
The respondent’s contention is
that this application should await the results of his petition to
the President of the Supreme
Court of Appeal. But when the matter
came before me on 22 March 2012 the respondent had not filed any
substantive application
for postponement of the application. There
was also no evidence that he had filed his petition with the
Registrar of the Supreme
Court of Appeal. In insisting before me,
that the application should proceed,
Mr Swanepoel SC
who
appeared on behalf of the applicant together with
Ms Zietsman
,
submitted that the respondent’s submissions regarding his
intention to petition the President of the Supreme Court of
Appeal
were only an attempt by him to delay the hearing of this application
and that, in any event, his opposition to the application
has no
merit.
The history preceding the application
coming before me on 22 March 2012 is that, after the respondent was
served with the papers
in this application in October 2011, he filed
his answering affidavit as already stated. The matter was then set
down for hearing
on 2 February 2012. On that day it was postponed to
22 March 2012 to afford the respondent to file his petition with the
Registrar
of the Supreme Court of Appeal. The applicant had, prior
to 2 February 2012, served on the respondent a notice in terms of
Rule
35(12) in terms of which it required the respondent to produce
for inspection his petition to the Supreme Court of Appeal and his
application for condonation of the late filing thereof. It was
common cause before me that the respondent had failed to produce
these documents. When the matter was postponed on 2 February 2012
the Court also ordered the respondent to file his Heads Of
argument
by 16h00 on 6 February 2012 and to reply to the applicant’s
notice in terms Rule 35(12) by the same day and time.
This was in
anticipation of the application being heard on 22 March 2012. The
terms of the court order of 2 February 2012 had
been agreed on
between the parties prior to that date. The respondent did not
comply with that order in that he did not produce,
to the applicant,
a copy of his petition to the Supreme Court of Appeal. On 1 March
2012 the applicant obtained another court
order in terms of which
the respondent was ordered to reply to the notice in terms of Rule
35(12) by 7 March 2012. He, again,
failed to comply with the order.
When the matter came before me
Mr
Swanepoel
insisted, on behalf of the applicant, that because the
respondent had, without explanation, repeatedly failed to file his
petition
with the Registrar of the Supreme Court of Appeal, the
application should be heard on that day. Ms Kerryn Lynne Watt, the
applicant’s
honorary secretary, had filed an affidavit in
which she stated that she had confirmed with the Registrar of the
Supreme Court
of Appeal, two days before the hearing of the
application (i.e. 20 March 2012) that the respondent had not filed
any petition
with that office. An email from the office of the
Registrar of the Supreme Court of Appeal confirming that no petition
had
been filed with that office forms part of the record. It was
also not in dispute that no such petition had been served on the
office of the Director of Public Prosecutions in Grahamstown; that
being the office that had represented the State in the criminal
trial and the subsequent appeal.
At the hearing of this application
the respondent, who appeared in person, still sought yet another
postponement. He explained
from the bar that the “documents”
had been faxed to the office of the Registrar of the Supreme Court
of Appeal and
that the delay in filing them and/or providing the
Court and the applicant with proper proof of service had been due to
inexperience
on his part. He stated that he had not been aware of
the court orders of
2 February 2012 and 1 March 2012 directing
him to produce a copy of the petition to the applicant.
I was persuaded that the respondent’s
plea for a further postponement was, indeed, a further attempt at
delaying the hearing
of the application. The respondent had
undertaken, as far back as in October 2011, to file his petition
with the Registrar of
the Supreme Court of Appeal in November 2011.
The appeal judgment had been handed down a year before he made the
undertaking.
He had furnished no explanation as to why the petition
had not been filed within the period prescribed by the Rules of
Practice
in this Court, or within a reasonable time thereafter.
There was also no explanation as to why he did not file the petition
in
November 2011 as he had undertaken. Further, the Rule 35 Notice
had been served on his attorneys of record on
13 January 2012.
The application to compel him to produce the petition was served on
the respondent’s attorneys on 27 February
2012. It was not in
dispute that on the 31 January 2012 the applicant’s attorney
Mr Michael Nunn had had several telephone
conversations with the
respondent during which it was agreed between the two of them that
on 2 February 2012 the application
would be postponed to 22 March
2012 and that the respondent would file his Heads of Argument as
well as his response to the Rule
35 Notice by close of business on 6
February 2012. It was also not in dispute that on 1 February 2012,
Mr Nunn had sent to the
respondent by email, the draft of the order
that the applicant would seek when the application came before court
on 2 February
2012. As I stated, the draft order provided that the
matter would be postponed to 22 March 2012; that the respondent
would file
his Heads of Argument and reply to the Rule 35(12) Notice
by 6 February 2012 and that the costs occasioned by the postponement
would be reserved. An email in which the respondent agreed to that
draft order being made an order of court is part of the record.
After the draft order had been made an order of court on 2 February
2012, a copy thereof was served on the respondent’s
attorneys
and another copy was sent to the respondent by email. And, indeed
the respondent did file his Heads of Argument on
6 February 2012.
On
10 February 2012 Mr Nunn sent an email acknowledging that the
respondent had filed his Heads of Argument as per court order of 2
February 2012, and drawing his attention to the failure to produce
the petition as ordered by court. He gave the respondent until
the
17 February 2012 to respond to the Rule 35 Notice. All these facts
were not in dispute before me. I could only conclude
therefrom that
the respondent’s explanation to me, that he had not been aware
that he had to comply with the Rule 35 notice,
was not true.
Further, apart from stating that his prospects of success on appeal
were good, the respondent did not set out any
reasons as to what
this contention was based on or which portions of the appeal
judgment were likely to be reversed by the Supreme
Court of Appeal;
nor did he respond pertinently to the allegations of involvement in
the pyramid scheme, apart from stating that
criminal proceedings in
respect of the fraud charges were pending in the magistrates court.
I was therefore of the view that
the respondent had not made out any
case for the postponement that he sought and that he had, in fact,
been grossly dilatory
in dealing with this application. For this
reason I ordered that the matter proceed on that day.
Regarding the merits of this
application section 7(1)(d) of the Advocates Act 74 of 1964 (“the
Act”), in terms of
which this application is brought, provides
that a court may , upon application, suspend any person from
practice as an advocate,
or order that the name of such a person be
struck off the roll of advocates “
if the Court is satisfied
that he is not a fit and proper person to continue to practice as an
advocate
”. According to Section 7(2) of the Act, the
Society of Advocates for the division which made the order for the
advocate’s
admission to practice as an advocate may bring the
application for the striking off.
It is common cause that the order
admitting the respondent as an advocate was made by this court. It
is also common cause that
at the time of the events from which the
charges against the respondent emanated, he had been practicing as
an advocate in Port
Elizabeth.
In
De Freitas v Society of
Advocates of Natal
2001 (3) SA 750
the court explained the
nature of the court’s authority in applications of this nature
as follows:
“
At
the outset it is necessary to remind oneself of the role of the
Courts in matters of this kind. Since Mr De Freitas is not a
member
of the Society of Advocates he is neither bound by the latter’s
rules nor subject to its internal disciplinary jurisdiction.
But it
is trite that the Courts have inherent disciplinary powers over
practitioners in cases of misconduct or unprofessional conduct……In
De
Villiers
at
456 Innes CJ said:
‘
The
interference of the court is clearly justified where there has been
gross mis-discharge of professional duty. So also where
the conduct
proved, whether criminal or not, is so morally reprehensible that the
person guilty of it is clearly unfit to become
or remain a member of
the profession. But when we leave the area of criminality, immorality
or actual misconduct the enquiry becomes
more complicated.
….............
In
the latter type of case interference by the Court is ultimately a
matter of judicial discretion…..In other words, it is
for the
Court to consider the propriety of the conduct proved and, if it is
found to be unprofessional, what the penalty should
be. In doing so
it must take account of all the circumstances of the case with due
regard to the demands of the proper administration
of justice, and
the interests of the profession and the public
”.
1
(my emphasis)
In
General Council of the Bar of
South Africa v Matthys
2002 (5) SA 1
Heher JA held that:
“
The
court has first to decide whether the alleged offending conduct has
been established on a preponderance of probability and,
if so,
whether the person is a fit and proper person to practice as an
advocate. Although the last finding involves, to some extent
a value
judgment, it is in essence one of making an objective finding of fact
and discretion does not enter the picture. But once
there is a
finding that he is not a fit and proper person to practice, he may,
in the court’s discretion either be suspended
or struck off the
roll”
2
With the approach set out in the
authorities referred to above in mind I turn to the facts in this
application. The respondent
was admitted as an advocate on 30 March
2000. On 17 October 2001 a provisional order was granted by this
Court declaring the
respondent to be insolvent. The order was
confirmed on 12 December 2001.
3
At the time of the hearing of this application he had not been
rehabilitated.
It is not clear from the papers when
it is that the respondent started practising as an advocate in Port
Elizabeth but it is not
in dispute that he was a member of the
Independent Bar and that he shared offices in his Port Elizabeth
practice with Bruce Bok
who also practised as an advocate and a
member of the Independent Bar. The respondent accepted moneys from
clients, but had
no bank account due to his estate having been
sequestrated. He therefore used Bok’s cheque account to run
his practice.
The respondent also had no bookkeeper and did not keep
proper books of account. The record reveals that at the criminal
trial
he admitted that neither his nor Bok’s accounting skills
were
“up to standard but we had some idea of what was paid
in what”.
He admitted that the moneys paid to him were not
administered correctly. At the time of the hearing of his
application he practiced
as an advocate in the Western Cape and was
a member of the Independent Advocate’s Association of South
Africa (IAASA).
He had never been a member of any of the constituent
Associations of the General Council of the Bar.
In the respondent’s appeal
against his conviction for theft the appeal court found that the
respondent’s conduct was
unprofessional. I agree. The danger
of advocates handling funds without safety nets such as those
provided by the Attorney’s
Act has been repeatedly highlighted
by the courts.
4
The following remarks made by Hefer ACJ (as he then was) in
De
Freitas
are appropriate:
“
There
is, moreover, a more obvious reason why an advocate should not
perform the functions of an attorney. It is that, unlike attorneys,
advocates are not required to keep trust accounts. In terms of the
Attorneys Act 53 of 1979 every attorney shall open and keep
a
separate trust banking account and deposit therein money held or
received by him on account of any person. No amount standing
to the
credit of such an account shall be regarded as forming part of the
assets of the practitioner or may be attached on behalf
of any of his
creditors; and, equally importantly, any shortfall in the account
may, in proper circumstances, be recovered from
the Fidelity Fund. A
client who does not employ an attorney and instructs an advocate
directly does not have the same protection
or any protection at all.”
It is common cause that in his
practice the respondent accepted instructions from members of the
public without the intervention
of an attorney or attorneys; he
accepted moneys directly from members of the public without keeping
a separate trust banking
account and without being in possession of
a fidelity insurance, or keeping proper books of account as obliged
to do so in terms
of sections 78 and 79 of the Attorneys Act 53 of
1979.
In the appeal judgment Pickering J
cited, with approval, the paragraph in
De Freitas
referred to
above. Reference to that judgment is made in the applicant’s
Heads of Argument. Yet when
Mr Swanepoel
made submissions
before me, relying on the judgment in
De Freitas
the
respondent responded by stating that he was not aware of the court’s
decision in
De Freitas
, a statement which, in my view,
reveals a serious lack of basic litigation and which is an
indication that the respondent is
not a fit and proper person to
practice as an advocate. In fact I can only conclude, from the
manner in which the respondent
conducted his own case in this
application, that he poses danger to members of the public who might
turn to him for assistance
with their legal affairs.
It is in this context that I formed
the view that the respondent’s expressed intention to lodge a
petition against the appeal
judgment was only an attempt to delay
the obvious outcome of this application. But even if the respondent
was
bona fide
in his intention to lodge such a petition there
are no reasonable prospects that the intended application to the
President of
the Supreme Court of Appeal will succeed. The common
cause or undisputed facts referred to above constitute evidence
which
proves gross unprofessional conduct on the part of the
respondent. Such conduct does not only relate to the general manner
in
which he conducted his practice but is proved in the conviction
for theft emanating from criminal charges laid by his erstwhile
client Mr Thyssen. Mr Thyssen, a builder, approached the respondent
during November 2001 seeking legal advice when certain of
his
workers laid complaints against him with the Industrial Bargaining
Council. The respondent quoted him a professional fee
of R2 000,00
to which Mr Thyssen agreed. From time to time commencing on 25
November 2001, Mr Thyssen paid moneys amounting
to R13 976,00 to the
appellant. The purpose of such payments was to enable the
respondent to negotiate with the Bargaining Council
concerning the
workers’ complaints and to pay to that Council such amounts as
were eventually agreed upon. It is common
cause that the Bargaining
Council refused to accept such lesser amounts as were tendered on
behalf of Mr Thyssen by the respondent,
and that none of the money
was paid over to the Council by the respondent. It is further
common cause that all the money paid
by Mr Thyssen to the respondent
was paid by the respondent into Mr Bok’s account.
At some stage Mr Thyssen terminated
the respondent’s mandate to represent him but did not receive
a full refund of moneys
that were paid by him to the respondent.
The charge of theft and the ensuing conviction relate to the portion
of the funds which
the respondent failed to refund to Mr Thyssen.
It is significant that it is not the
respondent case that Judges Pickering and Revelas erred by relying
on his admissions to unprofessional
conduct. He does not deny having
admitted during the criminal trial that his and Mr Bok’s
financial relationship was
“very unusual”
,
“very
unorthodox”
and
“totally unprofessional”.
He stated that
“all the money that we collected in,
there was a mixture of the monies and I am in full agreement of the
criticism, it was
not administered correctly”.
Explaining
how he kept track of the moneys that were paid to him in the absence
of any proper books of account he stated that
Mr Bok
“would
draft us a statement of account at the end of the month more or less
just to say what is our expenses and so forth”
. He also
stated that he
“could not bank at that stage because my
estate was provisionally sequestrated. So the bank froze all my
accounts”.
I am satisfied that the conviction of
theft and dismissal of the respondent’s appeal, sufficiently
proves misconduct on
the part of the respondent. But even if I were
to disregard the conviction, the underlying common cause facts
relating to the
manner in which the respondent dealt with funds
received by him from Mr Thyssen and his other clients shows a total
disregard
of basic rules of practice, a conduct which placed his
clients at great risk regarding their legal affairs. In fact it is
evident
that he should not have been accepting funds if he was
unable to run a bank account.
Regarding the respondent’s
allegation involvement in the pyramid scheme, at the time of the
hearing of this application,
criminal proceedings against the
respondent were still pending in the Regional Court, Port Elizabeth.
In that criminal case the
respondent is charged with 313 counts of
fraud relating to money lending business conducted by him and his
two co-accused under
the name “EP Consultants”. The
allegations in the charge sheet which forms part of the record in
this application
are that EP Consultants started as a money lending
business which was founded on financial contributions from various
persons.
The state alleges that the money lending business evolved
to a pyramid scheme as the business became unable to pay out monthly
interest to its investors. EP Consultants “collapsed” in
May 2001.
The criminal charges of fraud relate
to investors who remained unpaid after the collapse of the pyramid
scheme. The respondent
had pleaded “not guilty” to the
charges. In this application he responds to the allegations
contained in the founding
affidavit, by stating that he remains
innocent until proved guilty. However he admits his involvement in
EP Consultants and explains
that he suffered a great financial loss
as a result of his involvement in the business. He does not dispute
the nature of the
business conducted under EP Consultants. In an
affidavit which forms part of the record, Mr Bok states that the
respondent was
the person in charge of the operations of EP
Consultants. This allegation is not disputed by the respondent. The
undisputed allegations
once again become evidence and proof of
misconduct and unprofessional conduct on the part of the respondent.
Regarding the appropriate sanction, I
am satisfied that the respondent’s conduct merits that he be
struck off from the roll
of advocates. As I have stated, the
respondent’s conduct show a serious lack of appreciation of
basic rules of practice.
He conducted his practice in a manner that
placed his clients at great risk of financial loss whilst he had no
security in place
to reimburse or compensate them in case of loss.
He engaged in acts of blatant criminal conduct. His conduct brought
the legal
profession into disrepute. I am of the view that members
of the public need to be protected from him and that this can only
be
achieved by his removal from the realm of legal practitioners.
Consequently the following order
shall issue:
The respondent’s name is struck
off the roll of advocates;
The respondent is ordered to pay the
costs of the applicant’s attorneys.
_________________________
N.
DAMBUZA
JUDGE
OF THE HIGH COURT
GOOSEN,
J
:
I
agree.
_________________________
G.G.
GOOSEN
JUDGE
OF THE HIGH COURT
Appearances
:
For the applicant: Adv M.G. Swanepoel
(SC) and Adv T. Zietsman
Instructed by Whitesides Attorneys,
Grahamstown
For the respondent: In person
1
At 755
2
At 5
3
Master’s Reference E281/2001
4
De Freitas at 758F and 764H