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[2023] ZAFSHC 43
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Legal Practice Council v Fourie (5806/2022) [2023] ZAFSHC 43 (10 February 2023)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case
No:5806/2022
Reportable:
NO
Of
Interest to other Judges: NO
Circulate
to Magistrates: NO
In
the matter between: -
LEGAL
PRACTICE
COUNCIL
Appellant
and
ZWANETTE
FOURIE
Respondent
CORAM:
MBHELE DJP,
J
et
BOONZAAIER AJ
JUDGMENT
BY:
BOONZAAIER, AJ
HEARD
ON:
19 JANUARY 2023 & 9 FEBRUARY 2023
DELIVERED
ON:
This judgment was handed down electronically by
circulation
to the parties` legal representatives by electronic mail. The date
and time for hand -down is deemed to have been at
14h00 on 10
th
February 2023
INTRODUCTION
[1]
This is an application in terms whereof the South African
Legal Practice Council, (the 'LPC') seeks an order to suspend
the Respondent, Zwanette Fourie from practising as a legal
practitioner of the High Court of South Africa pending her
compliance
with the
Legal Practice Act, 28 of 2014
, (the 'LPA'), for such
a period that the court deems fit. The Applicant also seeks
other ancillary relief, as will become
clear later in this judgment.
The application is not opposed.
[2]
The Applicant discharges its mandate through the application of the
LPA effectively succeeds the Law Society of South Africa
and its
provincial arms, (the Law Society). Briefly, the Applicant is
the custodian and repository of the rules of the conduct
of the legal
profession, it also plays an oversight role over the conduct of legal
practitioners.
[3]
The Respondent practised as a sole practitioner under the name of
Zwanette Fourie Attorneys, a firm conducting the practice
of
attorneys, in terms of the provisions of
Section 34(5)
(a)of the
LPA
at 23 Piet Retief Street in Clocolan, Free State Province
since 18
th
June 2007.
BACKGROUND FACTS
[4]
The Applicant alleges that the Respondent contravened several
provisions of the LPA and rules of the Law Society,
attorneys’ profession, legal
practice rules and
code of conduct in that:
[a] The
respondent has submitted her audit reports for 2019 and 2021, however
for both periods she received a qualified audit
finding. She has
failed to deal with the negative findings for those periods.
[b]
She practised without Fidelity Fund certificates from
01 January 2019 to date.
[c] She
failed to effect payment of her mandatory LPC annual membership
fees in respect of 2019 to 2022, totalling
R13 322.00,
(Thirteen thousand, Three Hundred and Twenty-Two Rand)
[5]
Furthermore, the Applicant dispatched letters to her in which, she
was reminded on several occasions of her failure to comply.
First, a
letter was sent to her postal address on 01 April 2022; another
letter was sent on 04 April 2022 from Risk Compliance
via her e- mail
address; a further registered letter was sent on 6 April 22. On 14
June 22 another letter was sent to inform the
practitioner that the
matter was referred to the Investigating Committee of the LPC.
[6]
On 18 August 22 a final reminder was sent to the practitioner to
remind her of her obligations to comply with the provisions
of the
LPC Act in particular with section
84(1);85(1)(b), 86(1) and
95(1).
She was informed that the Applicant will proceed with an
application to suspend her.
[7]
The Respondent recently dispatched a letter to the Director of the
LPC indicating that she has ceased practice and that she
is teaching
for the past two years and has no desire to practice ever again.
[8]
It seems that the Respondent is not practising since 2020/2021.She
further asserts that she has handed over her files to a colleague
from Ladybrand, who took over her practise.
ISSUES
TO BE DECIDED
[9]
The
crux
of the Applicant submits that the Respondent is no
longer a fit and proper person to practice as a legal practitioner
when viewed
in light of her aforementioned conduct in its entirety,
which conduct constitutes aberrant deviation from the standards of
professional
conduct set by the Law Society and its successor, the
LPC.
[10] This
Court is confronted with the following:
[a]
The task of making a judgment call whether as
a matter of fact, the offending conduct on
respondent's
part has been established;
[b]
In the event of the Court being satisfied that the offending
conduct has been established, a value judgment is required
to decide whether
respondent is not a fit and proper person to practice as an attorney;
and
[c]
If the Court decides that the Respondent is not a fit and proper
person to practice as an attorney, it must decide in the exercise
of
its discretion within all the circumstances of the case that the
attorney in question should be suspended from practice.
[11]
Based on the facts presented and before it, this Court has
a discretion in the decision. For this reason, such facts
must be
proven on a preponderance of probabilities. Such exercise of
discretion also calls for consideration of the
facts in their entirety; and each issue must be considered
on its own merits.
FACT
BASED INFRACTIONS OF THE RULES
The
respondent's repeated failure to comply with rule 70 auditor's report
[12] Notwithstanding
annual calls from the LPC, it is beyond argument that for an
uninterrupted period of 2 (two)
years, to wit, 2019 to
2020, respondent failed to submit her audit
reports.
Respondent's
failure to attend to the matter
[13] It
is common cause that respondent failed to attend to any
correspondence in this regard or to answer to allegations which
were
levelled against her. She however indicated in a letter (received 17
January 2023 at the LPC) that she did communicate with
the Council
via electronic-mails, where she indicated her intention not to
practice anymore.
Practising
without a fidelity fund certificate
[14]
Respondent has been practising without a
Fidelity Fund Certificate. An inference is
capable of being drawn without equivocation that the
Respondent was practising without a Fidelity Certificate
because she
did not submit her auditor's reports as alluded to. No
explanation was proffered by the Respondent for this
material breach of the rules. If it is accepted that she left
practice and transferred her practice’ files to another
attorney she did that without providing the winding up audit report
SURVEY
AND ANALYSIS
[15] The
requirement for and purpose of submitting annual audit reports is to
satisfy the LPC that an attorney's accounting
records are kept in
accordance with the provisions of Rule 70 and Rule 39.11 of the LPA.
This includes that attorneys are enjoined
to handle and administer
trust funds entrusted upon them by their clients in a manner
prescribed by the said Rules. Consequently,
a failure to submit these
reports constitutes a breach of rule 70 and Rule 39.11.
[16]
With the court having found that the offending conduct has been
established as evinced above, the court then exercises a value
judgment, to arrive at a decision whether the respondent is a fit and
proper person to practice as an attorney. The court has regard
to all
the circumstances of the case and proceeds to determine whether the
respondent should be suspended from practice for a specified
period.
[17]
In
Malan
& Another v Law Society of the Northern Provinces
[1]
, the SCA pronounced that this ultimately boils down to a question of
degree.
[2]
[18]
For present purposes, it is convenient to take cognizance of what the
judge found in the Malan- case:
“
The
nature of the conduct may be such that it establishes that the person
is not a fit and proper person to continue to practise.
In other
instances, the conduct may not be that serious and a law society may
exercise its disciplinary powers, particularly by
imposing a fine or
reprimanding the attorney (section 72(2)(a)). This does not, however,
mean that a court is powerless if it finds
the attorney guilty of
unprofessional conduct where such conduct does not make him unfit to
continue to practise as an attorney.
In such an event the court may
discipline the attorney by suspending him from practice with or
without conditions or by reprimanding
him”
[3]
[19]
First, in deciding on whichever course to follow the court is not
first and foremost imposing a penalty. The main
consideration is the protection of the public.
[20]
Second, logic dictates that if a
court finds that someone is not a fit and proper
person
to continue to practise as an attorney, that person must be
removed from the roll. However, the Act contemplates a suspension.
This means that removal does not follow as a matter of course. If the
court has grounds to assume that after the period of suspension
the
person will be fit to practise as an attorney in the ordinary course
of events, it would not remove him from the roll but order
an
appropriate suspension. In this regard the following must be borne in
mind:
"The
implications of an unconditional order removing an attorney from the
roll for misconduct are serious and far reaching.
Prima
facie
,
the Court which makes such an order visualises that the offender will
never again be permitted to practise his profession because
ordinarily such an order is not made unless the Court is of the
opinion that the misconduct in question is of so serious a nature
that it manifests character defects and lack of integrity rendering
the person unfit to be on the roll. If such a person should
in the
years apply for re admission, he will be required to satisfy the
Court that he is "a completely reformed character"
(
Ex
parte
Wilcocks
1920 TPD
243
at
245) and that his "reformation or rehabilitation is, in all the
known circumstances, of a permanent nature" (
Ex
parte
Knox 1962(1) SA 778 (N) at 784). The very stringency of the test for
re-admission is an index to the degree of gravity of the misconduct
which gave rise to disbarment. "
[21]
As shown in the Applicant's papers, Respondent has practised for a
period of at least 3 (three) years without submitting her
audit
reports; has practiced without a Fidelity Fund Certificate, she has
not proffered a semblance of explanation for her apparent
failures
under the Rules whose contravention she was answerable for; above
all, she did not file any opposition and affidavit in
answer to the
application against her.
[22]
The fact that Respondent acted unprofessionally does not lead to her
automatic removal from practice.
[23]
The legal profession is an honourable profession, which demands
complete honesty and integrity from its members. A legal
Practitioner is a person from whom the highest standard is expected
by the profession, the public and the Court.
[24]
The Respondent failed to adhere to this honesty and integrity. It is
well established that any legal practitioner who practices
without a
Fidelity Fund Certificate is committing a professional misconduct.
[25]
To sum up, the determination is consequently that the offending
conduct has been established on a balance of probabilities.
[26]
As a general rule the ultimate sanction of striking off is reserved
for attorneys who have acted dishonestly whilst transgressions
that
don’t involve dishonesty are usually visited with the lesser
penalty of suspension from practice as mentioned in the
recent case
of
Legal
Practice Council v Lielies
[4]
[27]
I am of the view that an order of suspension of the
Respondent with certain conditions is an appropriate order.
[28]
The Respondent is also not without a remedy. If her books are in
order and she is in a position in future to lodge unqualified
audit
reports for all relevant years, she may well seek relief by way of
a
mandamus
to direct the issuing of Fidelity Fund
Certificate and lifting of her suspension
[29]
In conclusion, the LPC has proven the offending conduct. There cannot
be any doubt that the respondent is not a fit and proper
person to
practise as an attorney in the prevailing circumstances.
ORDER
[30]
In the result, I make the following order: -
1)
Zwanette Fourie
is suspended prom the practice as legal
practitioner of the High Court of South Africa pending her compliance
with the
Legal Practice Act 28 of 2014
.
2)
She is directed to immediately surrender and deliver her certificate
of enrolment as an attorney to the registrar of this Honourable
Court;
3)
In the event the Respondent fails to comply with the terms of the
order in the preceding paragraph '2', within two weeks
from the
date of this order, the sheriff of the district in which the
certificate is, is authorised and directed to take possession
of the
certificate, and to hand it over to the registrar of this Honourable
Court;
4)
The Respondent is prohibited from handling or
operating on her trust banking accounts;
5)
The Director of the Free State Office of the Applicant is appointed
as
curator bonis
(curator) to administer
and control the trust accounts of the Respondent, including
accounts relating to insolvent
and deceased estates and any
estate under curatorship connected with
the respondent s practise as
an attorney
including , also the separate banking accounts opened and kept by
respondent at a bank in
the Republic of South Africa in terms of
Section 86
(I) and (2) of Act 28 of 2014 and or
any separate or interest bearing accounts as
contemplated by sec 86(3) or sec 86 (4)of Act 28 of 2014 in
which monies from such trust banking accounts have been invested
by
virtue of the provisions of the said sub-sections or in which monies
in any manner have been deposited or credited(the said
accounts being
hereafter referred to as “the trust accounts”), with the
following powers and duties:
(a)
Subject to the approval of the Board of Control of the Fund to sign
and endorse cheques and/or withdrawal forms and generally
to operate
upon the Trust account(s), but only to such extent and/or for such
purpose as may be necessary to bring to completion
current
transactions in which the Respondent was acting at the date of this
order;
(b)
Subject to the approval and control of the Board of Control of the
Fund to recover and receive and, if necessary in the interest
of
persons having lawful claims against the Trust account(s) and/or
against the Respondent in respect of moneys held, received
and/or
invested by the Respondent in terms of the aforesaid sections
(hereinafter referred to as “Trust moneys”), to
take
legal proceedings which may be necessary in respect of incomplete
transactions in which the Respondent may have been involved
and which
may have been wrongfully and unlawfully paid from the Trust
account(s) and to receive such moneys and to pay same to
the creditor
of the Trust account(s);
(c)
to ascertain from the Respondent’s book of account the names of
all persons on whose account the Respondent appears to
hold or to
have received Trust moneys (hereinafter referred to as “the
Trust Creditors”) and to call upon the Respondent
to furnish
her within 30 (thirty) days from the date of this order, or such
further period as he may agree to in writing, with
the names,
addressed of and amounts due to all Trust Creditors;
(d)
to call upon such Trust Creditors to furnish such proof, information
and affidavits as she may require to enable her, 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 moneys in the Trust account(s) and if so, the
amount of such claim;
(e)
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
creditors,
without prejudice to such Trust Creditors’ right of access to
the Civil Courts;
(f)
having determined the amounts which, she 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;
(g)
in the event of there being any surplus in the Trust account(s) after
payment of the admitted claims of all Trust Creditors
in full, to
utilize such surplus to settle or reduce, as the case may be,
firstly, any claim of the Fund in terms of section 86(5)(a)
of the
said Act in respect of any interest therein referred to and secondly,
without prejudice to the rights of creditors of the
Respondent, the
costs, fees and expenses referred to in this order, or such portion
thereof as has not already been separately
paid by the Respondent to
the 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 the
Respondent. If he is solvent,
or, if the Respondent is insolvent, to
the Trustee of his insolvent estate;
(h)
in the event of there being insufficient trust monies in the Trust
account(s) of the Respondent in accordance with the available
documentation and information, to pay the trust creditors on a pro
rata basis. –
i)
subject to the approval of the Board of Control of the Fund to close
the Trust account(s) and pay the credit balances to the
Fund and to
require the credit balances to be placed to the credit of a special
Trust suspense account in the name of the Respondent
in the Fund’s
books;
ii)
to refer the claims of all Trust Creditors to the Board of Control of
the Fund to be dealt with in terms of the provisions of
the said Act,
and
iii)
to authorise the Board of Control of the Fund to credit the credit
balances referred to in sub-paragraph i) above to its “Paid
Claims Account” when the Fund has paid, in terms of section 55
of the said Act admitted claims of the Trust Creditors in
excess of
such credit balances, provided that, notwithstanding the afore going,
the said Board shall be entitled in its discretion,
to transfer to
its “Paid Claims Account” the amount or amounts of any
claim or claims as and when admitted and paid
by it;
5.1
Subject to the approval of the Chairperson of the Board of Control of
the Fund to appoint nominees or representatives and/or
consult with
and/or engage the services of attorneys and/or counsel and/or
accountants and/or other persons, where considered necessary,
to
assist such Curator in the execution of the duties of the Curator,
and
5.2
To render from time to time, as Curator, returns to the Board of
Control of the Fund, showing how the Trust account(s) have
been dealt
with, until such time as the said Board notifies him that she may
regard her duties as terminated.
6. The Respondent is
directed to immediately deliver her said accounting records, records,
files and documents containing particulars
and information relating
to:
(a) any monies received,
held or paid by the Respondent for or on account of any person while
practising as an attorney;
(b) any monies invested
by the Respondent in terms of Section 86(3) and/or Section 86(4) of
the LPA;
(c) any interest on
monies so invested which was paid over or credited to the Respondent;
(d) any estate of a
deceased person or an insolvent estate or an estate under Curatorship
administered by the Respondent, whether
as executor or trustee or
Curator or on behalf of the executor, trustee or Curator;
(e) any insolvent estate
administered by the Respondent as trustee or on behalf of the trustee
in terms of the
Insolvency Act, No 24 of 1936
;
(f) any trust
administered by the Respondent as trustee or on behalf of the
trustees in terms of the Trust Property Control Act,
No 57 of 1988;
(g) any company
liquidated in terms of the
Companies Act, no 71 of 2008
, administered
by the Respondent as or on behalf of the liquidator;
(h)any close corporation
liquidated in terms of the
Close Corporations Act, 69 of 1984
,
administered by the Respondent as or on behalf of the liquidator; and
(i) the Respondent’s
practice as an attorney of this Honourable Court, to the Curator
appointed in terms of this order, provided
that, as far as such
accounting records, records, files and documents are concerned, the
Respondent shall be entitled to have reasonable
access to them but
always subject to the supervision of such Curator or his nominee.
6.1 Should the Respondent
fail to comply with the provisions of the preceding paragraph of this
order on service thereof upon her
or after a return by the person
entrusted with the service thereof that she has been unable to effect
service thereof on the Respondent
(as the case may be), the sheriff
for the district in which such accounting records, records, files and
documents are, is empowered
and directed to search for and to take
possession thereof wherever they may be and to deliver them to such
Curator.
6.2 Respondent is hereby
removed from office as –
(a) executor of any
estate of which Respondent has been appointed in terms of
section
14(1)
read with
section 54(1)(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)
thereof;
(b) Curator or guardian
of any minor or other person’s property in terms of
Section
72(1)
read with
Section 54(1)(a)(v)
and Section 85 of the
Administration of Estates Act, No 66 of 1965;
(c) trustee of any
insolvent estate in terms of Section 59 of the Insolvency Act, No 24
of 1936;
(d) liquidator of any
company in terms of Section 379(2) read with 379(e) of the Companies
Act, No 71 of 2008;
(e) trustee of any trust
in terms of Section 20(1) of the Trust Property Control Act, No 57 of
1988;
(f) liquidator of any
close corporation appointed in terms of
Section 74
of the
Close
Corporations Act, No
69 of 1984;
(g) administrator
appointed in terms of Section 74 of the Magistrates’ Court Act,
No 32 of 1944.
[7] The Curator is
entitled to:
(a) 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;
(b) require claimants to
provide any documentation or information which the Curator may
consider relevant in respect of a claim
or possible or anticipated
claim, against the Curator and/or Respondent and/or Respondent’s
clients and/or fund in respect
of money and/or other property
entrusted to the Respondent provided that any person entitled thereto
shall be granted reasonable
access thereto and shall be permitted to
make copies thereof;
publish this order or an
abridged version thereof in any newspaper he considers appropriate.
(c) close the
Respondent’s practice insofar it relates to the client files,
records and trust accounts;
[8] That the Curatorship
will terminate when the Curator receives a final written discharge
from such duties from the Applicant
consequent upon the Curator
filling with the Applicant a final report and account, together with
supporting vouchers, in respect
of the execution of the Curator’s
duties in terms of this Order.
[9] The Respondent is
hereby directed:
(a) to pay, in terms of
Section 87(2) of the LPA, the reasonable costs of the inspection of
the accounting records of the Respondent;
(b) to pay the
Curatorship fees determined at the rate of R710.00 per hour and
disbursements;
(c) to pay the expenses
relating to the publication of this order or an abbreviated version
thereof;
(d) within 1 (One) year
of her being requested to do so by the curator or within such longer
period as the curator may agree
to in writing, to satisfy the
curator by means of the submission of taxed bills of cost or
otherwise, of the amount of fees and
disbursements due to the
Respondent in respect of her former practice and should she fail to
do so,she shall not be entitled to
recover such fee and disbursements
from the curator without prejudice, however, to such rights, if any,
as she may have against
the trust creditors concerned for payment or
recovery thereof and;
(e) to pay the costs of
this application.
AS
BOONZAAIER, AJ
I
agree, it so ordered
NM
MBHELE, DJP
For
the Applicant: ADV. SETLAI
Instructed by:
MOROKA ATTORNEYS
[1]
(568/2007) [2008] ZASCA90;2009(1) SA 216(SCA); [2009]1ALL SA
133(SCA) (12 September
2008)
[2]
Ibid
Malan at paragraph 5 to 9
[3]
Law Society of the Cape of Good Hope v C
1986
(1J SA 616
(AJ
at 638l-639E; Law Society of the Cape of Good Hope v
Berrange
2005 (SJ SA 160
(C) at 1730-1,
(20061
1 AH SA
290
(C)
at 302
4.
1119/2020[2022] ZAFSHC18 (8 February 2022)