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[2023] ZAFSHC 177
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Legal Practice Council v Fourie (5806/2022) [2023] ZAFSHC 177 (10 February 2023)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case No:5806/2022
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)