About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2012
>>
[2012] ZASCA 137
|
|
Law Society of the Northern Provinces v Dube (874/11) [2012] ZASCA 137; [2012] 4 All SA 251 (SCA) (27 September 2012)
Links to summary
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 874/11
Reportable
In
the matter between:
THE LAW SOCIETY OF THE
NORTHERN
PROVINCES
.............................................................
Appellant
and
SIPHIWE
FREEMAN DUBE
.......................................................
Respondent
Neutral citation:
Law Society of the Northern
Provinces
v
Siphiwe Dube
(874/2011)
[2012] ZASCA 137
(27
September 2012).
Coram:
Mthiyane DP, Heher,Mhlantla, Pillay and
Petse JJA
Heard:
27 August
2012
Delivered: 27 September 2012
Summary:
Attorneys Act 53 of 1979 –
misconduct – appropriate order – suspension or removal
from roll – whether court
a quo misdirected itself in the
exercise of its discretion in relation to an appropriate sanction –
whether the general rule
relating to costs in matters involving the
law society should have been applied – acts of dishonesty not
so serious to warrant
removal from roll – attorney
conditionally suspended from practice – costs order altered.
_____________________________________________________________________
ORDER
_____________________________________________________________________
On appeal from:
North Gauteng High Court,
Pretoria (Mothle and Raulinga JJ sitting as court of first instance):
1 The appeal is dismissed save for paragraph 3 of the
order of the court below which is set aside and substituted with the
following:
‘
3. The respondent is ordered to pay the
costs of the application on an attorney and client scale.’
2 The respondent is ordered to pay the costs of the
appeal.
_____________________________________________________________________
JUDGMENT
_____________________________________________________________________
MHLANTLA JA (MTHIYANE DP, HEHER, PILLAY and PETSE JJA concurring):
[1] The appellant is the Law Society
of the Northern Provinces incorporated in terms of section 56 of the
Attorneys Act 53 of 1979
(the Act). The respondent is Mr Siphiwe
Freeman Dube, an attorney practising in the province of Gauteng. The
appellant launched
an application in the North Gauteng High Court,
Pretoria in terms of section 22(1)
(d)
of the Act and sought an order that
the respondent’s name be struck from the roll of attorneys.
Instead of granting the relief
sought, the court below (Mothle J,
Raulinga J concurring) suspended the respondent from practice for one
year. It further ordered
him to pay R80 000 to his former employer
and R15 000 to a former client. Other ancillary orders relating to
his employment were
made. The respondent was also ordered to pay the
appellant’s costs of the application on the party and party
scale. The appellant
appeals against two of the orders contending
that the respondent should have been struck off the roll and that a
punitive costs
order should have been issued against him. The appeal
is with the leave of the court below.
[2] Section 22(1)
(d)
of the Act provides
that a person who has been admitted and enrolled as an attorney may
on the application of the law society be
struck off the roll or
suspended from practice if he or she, in the discretion of the court,
is not a fit and proper person to
continue to practise as an
attorney.
[3] Regarding applications of this
nature, Harms DP stated in
Law
Society, Northern Provinces v
Mogami
:
1
‘
Applications for the suspension or removal
from the roll require a three-stage enquiry. First, the court must
decide whether the
alleged offending conduct has been established on
a preponderance of probabilities, which is a factual enquiry. Second,
it must
consider whether the person concerned is “in the
discretion of the court” not a fit and proper person to
continue to
practise. This involves a weighing-up of the conduct
complained of against the conduct expected of an attorney and, to
this extent, is a value judgment. And third, the court must enquire
whether in all the circumstances the person in question is to be
removed from the roll of attorneys or whether an order of suspension
from practice would suffice….’
[4] In
Summerley
v
Law
Society, Northern Provinces
,
2
Brand JA enunciated the test to be
applied during the third stage of the enquiry as
follows:
‘
The third enquiry again requires the Court
to exercise a discretion. At this stage the Court must decide, in the
exercise of its
discretion, whether the person who has been found not
to be a fit and proper person to practise as an attorney deserves the
ultimate
penalty of being struck from the roll or whether an order of
suspension from practice will suffice.’
[5] Before us there is no dispute between the parties
about the findings of the court below in respect of the first and
second stages
of the enquiry. The appeal concerns the third stage and
in that regard two issues arise for consideration in this appeal.
First,
whether the sanction imposed by the court below is appropriate
having regard to the respondent’s unprofessional conduct and
dishonesty. Put differently, the issue is whether the court
misdirected itself in the exercise of its discretion in relation to
an appropriate sanction. Second, whether the respondent should have
been ordered to pay the costs of the application on a punitive
scale.
[6] The application launched by the appellant in the
court below arose from the following factual background. The
respondent was
admitted as an attorney of the North Gauteng High
Court on 12 February 2007 at the age of 28 years. On 1 February 2008,
he was
employed by Maluleke Msimang & Associates, a firm of
attorneys in Pretoria, (the firm) as a professional assistant. On 7
October
2008, whilst still in the employ of the firm, unbeknown to
his employers and without their consent, the respondent approached
the
appellant and registered an attorney’s practice with the
latter under the name of Freeman Dube Attorneys. In his application
for registration, he advised the appellant that although he was
opening his own practice, he would still remain in the employ of
the
firm. The respondent commenced practising for his own account on 1
November 2008.
[7] The firm subsequently discovered that the respondent
had stolen some of its clients’ files. It was established that
in
certain instances the respondent’s practice was acting for
the firm’s clients. In one particular instance a conflict
of
interest had arisen when in the same matter he acted through his
practice on behalf of a claimant in a third party claim whilst
he
simultaneously acted on instructions of his employer and represented
the Road Accident Fund (RAF), a statutory insurer established
in
terms of the
Road Accident Fund Act 56 of 1996
.
[8] On 5 June 2009, the firm launched an application in
the high court and sought an interdict against the respondent for the
delivery
of its clients’ files. The application was settled on
the basis that the respondent would return the files and pay an
amount
of R80 000 to the firm, being the fees due to it upon receipt
of the proceeds of a third party claim from the RAF. On 3 July 2009
the respondent signed an undertaking to pay the R80 000 but failed to
do so. The firm lodged a complaint with the appellant. The
complaint
related to the respondent’s unprofessional conduct relating to
his failure to obtain its consent before registering
his practice,
the theft of the files as well as his failure to pay over to the firm
the amount of R80 000.
[9] The appellant, through its staff, conducted its own
investigation and uncovered further acts of misconduct and dishonesty
against
the respondent. These related firstly, to the respondent’s
failure to comply with
rule 70
of the appellant’s rules (the
rules), which required timeous submission of an auditor’s
report. In this regard, the
respondent was obliged to have submitted
an opening auditor’s report on or before 28 February 2009 and
an auditor’s
report for the period ending 28 February 2009 on
or before 31 August 2009. The respondent obtained unqualified audit
reports. These
were however only submitted on 27 October 2009 without
any explanation for the late submission. Secondly, the respondent had
simultaneously
acted on behalf of the plaintiff and the defendant in
a third party claim and when the matter was settled, had contravened
rule 68.8
in that he had delayed in making payment to a client or
misappropriated the funds. Thirdly, he had submitted a bill of costs
that
included false items to the RAF. In this regard, the respondent
had claimed fees for travelling from Pretoria to Limpopo and
attending
court when he in fact never did so. He further claimed
counsel’s fee of R13 750 when no advocate nor attorney attended
court.
[10] As a result of this discovery, the appellant
launched an application in two parts in the court below. Part A was
for an interim
order suspending the respondent from practice pending
the final determination of part B of the application to have his name
struck
off the roll. On 17 December 2009, Botha J granted the interim
order suspending the respondent. He referred the matter back to the
appellant to appoint a disciplinary committee to hold an inquiry into
the allegations of unprofessional conduct against the respondent.
[11] The appellant instituted the disciplinary inquiry.
The respondent faced several charges involving dishonesty,
unprofessional
conduct and non-compliance with the rules. Some of the
charges were withdrawn at the commencement of the inquiry. The
respondent
pleaded guilty and was found guilty of the late submission
of the auditor’s reports, conducting a practice for his own
account
without the consent of his employer, theft of three client
files from his employer and creating a conflict of interest when he
simultaneously acted for the plaintiff and the defendant in the same
third party claim.
[12] The inquiry was finalised on 9 June 2010 and after
consideration of all the evidence, the respondent was found not
guilty of
overcharging a client. He was in addition to the charges
referred to in para 11 above found guilty of the following charges:
(a) submitting an account to the RAF for payment which
included false items in a party and party bill of costs;
(b) misappropriating an amount of R15 000 from the
proceeds of a third party claim;
(c) practising as an attorney for his own account
without being in possession of a fidelity fund certificate in
contravention of
section 41(1) and (2) of the Act; and
(d) failing to honour an undertaking to pay an amount of
R80 000 to the firm on receipt of the proceeds of a third party claim
from
the RAF.
[13] After the conclusion of the disciplinary enquiry,
the appellant served a supplementary affidavit on the respondent
detailing
the investigations conducted by a firm of accountants
appointed by the appellant as well as the findings and recommendation
of
the disciplinary committee. The council of the appellant resolved
to launch an application for the respondent’s name to be
struck
from the roll of attorneys. The respondent did not file any affidavit
to contest the allegations in the supplementary affidavit.
[14] Part B of the application was
heard by the court below. It concluded that the respondent was not a
fit and proper person to
continue practising as an attorney as
provided for in section 22(1)
(d)
of the Act. The
court found that the respondent was naïve, immature, lacked
experience and insight and had as a result succumbed
to greed. It
accepted that the respondent had committed acts of dishonesty and
stated that he had come perilously close to having
his name struck
from the roll. It concluded that such a sanction was too severe and
was not suitable under the circumstances. The
court held that an
appropriate order would be one suspending him from practice for a
certain period and ordering him to repay his
ill-gotten gains. It
accordingly issued an order suspending the respondent from practice
for one year and imposed further restrictions
on him after the expiry
of the period of suspension. In this regard, he was precluded from
practising for his own account either
as a principal or in
partnership or in association with or as a director of a private
company for a period of two years after the
expiry of the period of
suspension. The court further ordered him to pay R80 000 to his
former employer and R15 000 to a former
client as well as the costs
of the application on a party and party scale.
[15] As I said earlier in this
judgment, the court below, in the exercise of its discretion,
declined to grant the order sought
by the appellant and suspended the
respondent from practice. It is trite that a court of appeal has
limited powers to interfere
with the discretion of a lower court. In
Law Society of the
Northern Provinces
v
Sonntag
,
3
Malan JA remarked that:
‘
The decision whether an attorney who has
been found unfit to practise should be struck off or suspended is a
matter for the discretion
of the court of first instance. That
discretion is a “narrow”one:
“
The consequence is that an appeal court
will not decide the matter afresh and substitute its decision for
that of the court of first
instance; it will do so only where the
court of first instance did not exercise its discretion judicially,
which can be done by
showing that the court of first instance
exercised the power conferred on it capriciously or upon a wrong
principle, or did not
bring its unbiased judgment to bear on the
question or did not act for substantial reasons, or materially
misdirected itself in
fact or in law. It must be emphasised that
dishonesty is not a
sine qua non
for striking-off.”’
[16] Before I deal with the main issue it is appropriate
that I dispose of the issues relating to the general acts of
misconduct
and breach of the rules by the respondent. These are the
non-compliance with rule 70 and the failure to honour an undertaking
to
pay his former employer.
Non-compliance with rule 70
[17] In this regard, it was submitted on behalf of the
appellant that the respondent breached rule 70 in that he had failed
to submit
the auditor’s reports and practised without the
fidelity fund certificate. The evidence revealed that the opening
auditor’s
report was submitted six months after its due date
whilst the annual report was two months late. Both reports were
unqualified.
The purpose of rule 70 is to satisfy the appellant that
the attorney’s accounting records are kept in accordance with
the
Act and the rules and that an attorney handles and administers
trust moneys properly and responsibly. The misconduct in issue here
related to the late submission of the reports. It seems to me that
the respondent was slack in the conduct of his practice and
compliance with the rules. That may have been due to the fact that he
had just commenced practising for his own account. It is
apposite to
state that in so far as the annual report for the period ending 28
February 2010 is concerned, an auditor’s certificate
was in
fact submitted on time and was unqualified. This, in my view, is an
indication that the respondent had learnt from his previous
experience. I consider that a warning would be an appropriate
sanction for a transgression of this nature.
Failure to honour the undertaking
[18] I turn to the respondent’s failure to honour
the undertaking. It is not in dispute that the respondent failed to
honour
the undertaking dated 3 July 2009. He only paid his former
employer on 24 March 2012. In this court, it was submitted on behalf
of the respondent that the evidence showed that on receipt of the
proceeds of the third party claim, Mr Msimang, a senior partner
of
the firm, had acceded to the respondent’s request to grant him
an extension of the period within which to pay the R80
000. No
evidence was presented on behalf of the appellant to contest this
explanation. In the result, we have to accept that the
respondent had
made prior arrangements with Mr Msimang in this regard.
Acts of dishonesty
[19] As regards the acts that involved an element of
dishonesty, the appellant’s legal representative submitted that
the sanction
imposed was too lenient and that the court misdirected
itself in the exercise of its discretion. It was contended that the
court
did not have regard to the general principles applicable where
an attorney is found guilty of a transgression involving dishonesty.
He argued that the transgressions by the respondent when viewed
cumulatively are so serious as to warrant the removal of his name
from the roll. Although this argument merits serious consideration, I
think it falls to be rejected. It is true that the respondent
made
himself guilty of certain serious transgressions. But every case must
be considered against the setting of its own peculiar
facts. In my
view, some of the complaints against the respondent lacked
particularity whilst the others varied in seriousness.
These are the
theft of three files, the misappropriation of an amount of R15 000,
the submission of an inflated bill of costs,
registration of the
respondent’s practice without his employer’s knowledge
and consent and the issue relating to conflict
of interests. I
propose to deal with each of these transgressions in turn.
Theft of files
[20] There is no doubt that the theft of client files by
an employee is a serious transgression. The respondent has to be
censured.
Misappropriation of funds
[21] Mr Motimele, an attorney in Limpopo, was involved
in a motor collision and sustained bodily injuries. The respondent
acted
for Mr Motimele in his third party claim. The matter was
settled and the RAF paid a lump sum of R15 000. The respondent
transferred
the entire amount to his business account and when
challenged about the transfer, stated that he had concluded an oral
loan agreement
with Motimele. The appellant did not provide any
evidence to contest the respondent’s explanation. It was not
shown that
the respondent was untruthful. Be that as it may, it is
irregular and unethical for an attorney to conclude a loan agreement
with
his or her client.
Submission of an inflated bill of costs
[22] The third act involving dishonesty relates to the
submission of a bill of costs to the RAF. As indicated earlier in
this judgment,
the respondent had claimed fees for travelling from
Pretoria to Limpopo and attending court when he in fact never did so
as well
as counsel’s fee when no legal representative attended
court. The respondent in his answering affidavit admitted submitting
the bill of costs with the false items and expressed remorse for his
conduct. He accordingly did not lie under oath. The RAF did
not
suffer any prejudice as the act of dishonesty was discovered before
the bill of costs was taxed. One must infer though that
the
respondent intended to mislead the RAF and has to be censured.
Registration of the respondent’s practice
[23] The issue of the registration of the respondent’s
practice was clarified by the appellant’s legal representative.
He informed us that an attorney may conduct a practice for his or her
own account whilst employed by another firm of attorneys
provided he
or she has obtained prior consent from his or her employer to
register the practice. He submitted that the respondent
committed an
act of dishonesty when he failed to disclose to his employer his
intention to register the practice. With that submission
I agree. He
further contended that the court below erred in failing to treat the
omission as dishonest but conceded that the respondent’s
failure did not of itself warrant an order for striking off.
Conflict of interests
[24] Counsel for the respondent conceded that it
bordered on dishonesty for the respondent to represent the plaintiff
and the defendant
simultaneously in a third party claim and fail to
disclose such fact to them. Be that as it may, the evidence against
the respondent
is far from satisfactory. The complaint against the
respondent was not adequately investigated. The evidence does not
indicate
whether the respondent had charged both parties or whether
either of the parties was prejudiced in any way. The matter was
settled.
Nothing flows from this complaint.
[25] To sum up the respondent was
young, immature and inexperienced. He stole three files. He was
guilty of other transgressions
that rendered him unfit to practise
his profession. It was irregular and unethical for him to borrow
money from a client, albeit
a colleague. He admitted his mistakes,
which indicates a measure of remorse. He has not attempted to deceive
the court. In
Law
Society of the Cape of Good Hope v C
,
4
Galgut AJA said with regard to the
implications of a striking-off order:
‘
The implications of a striking-off order
are serious and far-reaching. Such an order envisages that the
attorney will not be re-admitted
to practise unless the Court can be
satisfied by the clearest proof that the applicant has genuinely
reformed, that a considerable
time has elapsed since he was struck
off, and that probability is that, if reinstated, he will conduct
himself honestly and honourably
in the future.’
[26] Although each case stands against the setting of
its own facts and circumstances, it is necessary to have a look at
comparable
cases in determining whether the court below misdirected
itself in the exercise of its discretion.
[27] The first of these examples is
Kekana
v
Society
of Advocates of South Africa,
5
where the appellant had been
practising as an advocate for four years. He and his colleague had
appeared as pro deo counsel at Tzaneen
Circuit Court. After the
conclusion of the trial, they submitted inflated claims to the
Department of Justice together with their
pro deo claims (they had
apparently entertained women). On two separate occasions, they
claimed the cost of restaurant meals. The
accounts reflected two main
courses for each person per night. The bar council held an internal
enquiry and later launched an application
for the removal of their
names from the roll of advocates. The appellant in his answering
affidavit made a false statement and
denied the presence of the
female companions. He asserted that he and his colleague were very
hungry and each had consumed two
main courses on each night. He
repeated this statement in his oral evidence. The court rejected his
testimony as false. His name
was struck off the roll for perpetuating
the lies under oath (in his affidavit and in court).
[28] In
Law
Society of the Cape of Good Hope
v
Peter
,
6
the respondent decided to set up
practice as a sole practitioner shortly after her admission as an
attorney. She experienced financial
problems and in the process
misappropriated R20 000 to cover the expenses of her practice. The
court held that the theft was not
the result of a character defect
inherent in her but rather a moral lapse brought about by the
pressure she had been under. The
court confirmed the order of the
court of first instance suspending the respondent from practice.
[29] There is no doubt that the appellant in
Kekana
was a senior advocate with more experience and should have known
better. He committed perjury, whereas the respondent in this matter
admitted his transgressions and showed remorse. He provided plausible
explanations where necessary.
[30] Having regard to the sanctions imposed in the
above-mentioned cases as well as the respondent’s personal
circumstances,
the finding of the court below cannot be faulted. It
correctly set out the nature of the case, the substance of the
charges against
the respondent and the findings of the disciplinary
committee. After evaluating the evidence, it declared that the
respondent was
not a fit and proper person to practise as an
attorney. The court below thereafter proceeded to the third leg of
the enquiry. It
correctly identified three acts of dishonesty and
took into account the respondent’s personal circumstances and
that he had
been in practice for a relatively short period. In its
judgment, the court referred to
Peter
to show that the
respondent in that case was not struck off the roll notwithstanding
the fact that she was dishonest. It concluded
that the principle of
redemption should apply.
[31] The court set safeguards with regard to the
respondent’s future employment. It is common cause that the
respondent has
been suspended from practice since December 2009 when
the interim order was issued. He has accordingly been excluded from
the legal
profession for almost three years. He is furthermore
precluded from practising for his own account or either as a partner
or a
director for a period of two years upon the expiry of the
suspension period. It was conceded on behalf of the appellant that
there
is no evidence that the respondent may repeat the offences,
more so since the respondent will not practise for his own account.
There is a further precaution in that the respondent, should he elect
to practise for his own account after the expiry of all these
periods, will have to satisfy the court that he has redeemed himself.
In this regard the appellant has the right to present evidence
relating to the respondent’s fitness.
[32] The court below was very conscious that the
respondent’s conduct had brought him to the brink of striking
off. In concluding
that he should not be pushed over the edge it
looked not at the individual offences but at their cumulative effect
and it made
a value judgment on the rehabilitative prospects of the
respondent. The orders issued by the court below reveal that it
fairly
weighed all the relevant factors including its duty to protect
the public and the profession. I cannot conclude that it misdirected
itself in the exercise of its discretion. There is accordingly no
basis for this court to interfere. The appeal against the order
of
suspension falls to be dismissed.
[33] The final issue is costs. The general rule in
matters of this kind, is that the respondent has to pay the costs of
the law
society on an attorney and client scale. This is so because
the appellant is not an ordinary litigant as it performs a public
duty.
It is obliged to approach the court when a complaint, in
particular one involving an act of dishonesty, is lodged against an
attorney.
The appellant in this matter did not act on its own frolic.
It was accordingly entitled to an appropriate costs order. There was
no reason for the court below to depart from the general rule. In the
result, the court below erred and should have ordered the
respondent
to pay the costs of the application on a punitive scale. The
appellant is also entitled to its costs on appeal notwithstanding
the
fact that the order of the court below has not been set aside and
replaced with an order striking the name of the respondent
off the
roll.
[34] In the result, the following order is made:
1 The appeal is dismissed save for paragraph 3 of the
order of the court below which is set aside and substituted with the
following:
‘
3. The respondent is ordered to pay the
costs of the application on an attorney and client scale.’
2 The respondent is ordered to pay the costs of the
appeal.
_____________________
N.Z MHLANTLA
JUDGE OF APPEAL
APPEARANCES
:
For
Appellant: J Leotlela
Instructed by:
Rooth & Wessels Inc, Pretoria
Naudes Attorneys, Bloemfontein
For
Respondent: Q Pelser SC
Instructed by:
TT Hlapolosa Inc, Pretoria
Matsepes, Bloemfontein
1
Law
Society
,
Northern Provinces
v
Mogami
2010
(1) SA 186
(SCA) para 4.
2
Summerley
v
Law
Society
,
Northern
Provinces
2006 (5) SA 613
(SCA) para
2.
3
Law
Society of the Northern Provinces
v
Sonntag
2012 (1) SA 372
(SCA) para 14,
quoting
Botha v Law Society, Northern
Provinces
[2008] ZASCA 106
;
2009 (1) SA 227
(SCA) para
3.
4
Law
Society of the Cape of Good Hope v C
1986 (1) SA 616
(A) at
640C-D.
5
Kekana
v Society of Advocates of South Africa
[1998] ZASCA 54
;
1998 (4) SA 649
(SCA).
6
Law
Society
of the Cape of Good Hope
v Peter
2009 (2) SA 18
(SCA).