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[2011] ZASCA 204
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Law Society of the Northern Provinces v Sonntag (189/2011) [2011] ZASCA 204; 2012 (1) SA 372 (SCA) (25 November 2011)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 189/2011
In
the matter between:
THE LAW SOCIETY OF THE
NORTHERN PROVINCES
...............................
Appellant
and
RACHEL FREDA SONNTAG
…...................................................................
Respondent
Neutral citation:
Law
Society v Sonntag
(189/2011)
[2011] ZASCA 204
25 November
2011)
Coram:
Harms AP,
Lewis, Malan and Leach JJA and Plasket AJA
Heard:
4
November 2011
Delivered: 25 November
2011
Summary:
Attorney
– removal from roll – attorney employing touts in third
party work – sharing both office and fees with
tout –
‘purchasing’ third party claims from touts –
conduct of attorney in defending application dishonest
–
attorney struck off – no exceptional circumstances shown to
justify lesser penalty.
___________________________________________________________________
ORDER
On appeal from:
North
Gauteng High Court, Pretoria (M F Legodi J and Kruger AJ sitting as
court of first instance):
1 The appeal is upheld
with costs.
2 The order of the court
below is set aside and replaced with the following:
‘
An
order is made in terms of prayers 1 to 12 of the notice of motion.’
___________________________________________________________________
JUDGMENT
MALAN JA (Harms AP,
Lewis, Malan and Leach JJA and Plasket AJA concurring):
[1] This is an appeal by
the Law Society of the Northern Provinces against the judgment and
order of the North Gauteng High Court
(Legodi J, Kruger AJ
concurring), suspending the respondent from practising as an attorney
for one year but suspending that suspension
for three years on
certain conditions, with no order as to costs. The appellant appeals
against both the order suspending the respondent
from practising as
well as against the failure to make an order as to costs, contending
that the respondent should have been struck
off the roll with costs.
The appeal is with leave of the court below.
[2]
Section 22(1)
(d)
of
the Attorneys Act 53 of 1979 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, in the discretion of the court, is not a fit
and proper person to
continue to practise as an attorney’. The section envisages a
three-stage inquiry:
1
‘
First, the
court must decide whether the alleged offending conduct has been
established on a preponderance of probabilities, which
is a factual
inquiry. Second, the court must consider whether the person concerned
“in the discretion of the court”
is 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. Third, the court must
inquire whether in all the circumstances
the attorney is to be
removed from the roll of attorneys or whether an order of suspension
from practice would suffice.’
Provision
is thus made for either the removal of an attorney who is not a fit
and proper person from the roll or his or her suspension.
As stated,
‘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.’
2
[3] The respondent
practised and still practises in Tzaneen under the name of Sonntag
Attorneys. She was admitted as an attorney
in 1999 and as a
conveyancer in 2003. At the relevant times she was a sole
practitioner but had a professional assistant, Mr Anton
Burger, a
candidate attorney and several staff members in her employ.
[4] As a result of
complaints against the respondent the appellant instructed a legal
official, Ms Magda Geringer, in the employ
of the Law Society’s
Monitoring Unit to investigate the respondent’s practice. A
report was filed on 21 May 2007 and,
following the recommendation by
the appellant’s disciplinary committee, the council of the
appellant resolved to bring an
application for the removal of the
respondent from the roll of attorneys.
[5] The respondent faced
several charges of unprofessional, dishonourable or unworthy conduct
but only five are relevant. First,
that the respondent in
contravention of rule 89.26 referred work, the performance of which
is reserved by law to an attorney, to
a person, Basie van Schalkwyk,
who was prohibited by law from performing such work, or assisted or
co-operated with him in performing
such work. Second, that the
respondent in contravention of rule 89.27 acted for or in association
with an organisation or person,
not being a practising attorney, the
said Van Schalkwyk, whose business consisted in making or prosecuting
claims resulting from
death or personal injury and who solicited
instructions to that end and who received payment or other
consideration in respect
thereof. Third, that the respondent in
contravention of rule 89.28 knowingly acted for a person introduced
or referred to her by
the said Van Schalkwyk. Fourth, that the
respondent in contravention of rule 89.2 shared an office with the
said Van Schalkwyk
who was not a practising member or in the employ
of a practising member. Fifth, that the respondent in contravention
of s 83(6)
of the Attorneys Act shared or divided fees with Van
Schalkwyk and Eugene Swanepoel who were not legal practitioners. At
the hearing
of the disciplinary committee held on 24 October 2007
pursuant to s 71 of the Attorneys Act the respondent pleaded not
guilty to
the charges.
[6] The respondent did
not attend the subsequent proceedings of the disciplinary committee
on 2 September 2008. She was, however,
represented by counsel who
advised the committee that she had reconsidered her plea of not
guilty and decided to plead guilty to
the five charges. Her
representative accepted the correctness of the report of Ms Geringer.
The respondent did not give evidence
before the committee. The
committee found her guilty on the five charges (and others which are
of no relevance to this matter)
and concluded that her conduct was so
serious as to warrant a referral to the council of the appellant in
terms of rule 101. A
report was submitted to the council on which the
respondent commented by way of affidavit. She also appeared before
the council
on 2 February 2009 when it was resolved to bring the
application for her striking off.
[7] The court below had
no hesitation in concluding that the respondent had correctly been
found guilty on the five charges. The
facts indeed bear this out. It
also rejected her explanation that she had pleaded guilty in error
and that she was emotionally
upset at the time and that she did so
because she had been promised a fine. I accept this finding. Implicit
in it is the conclusion
that the respondent was not a ‘fit and
proper person’ to practise as an attorney. It was not contended
otherwise on
appeal and Mr Buys, who appeared on behalf of the
respondent in this court, conceded that the facts relied on by the
appellant
in its application were not in dispute. What was submitted
on behalf of the respondent was that the court below was correct in
merely suspending the respondent and not removing her from the roll
of attorneys.
[8] The charges stem from
the involvement of the respondent with Van Schalkwyk from 2002 and
later with the latter’s son in
law, Swanepoel, as well. Shortly
after the respondent started her practice, Van Schalkwyk offered to
assist her in the handling
of third party claims. She made use of his
services but their relationship soured towards the end of 2005. When
she declined him
access to her offices, he and Swanepoel proceeded to
the Law Society and charged her with professional misconduct.
Litigation between
Van Schalkwyk and the respondent ensued. Van
Schalkwyk had an office in her chambers. But his involvement went
further: in an advertisement
the respondent had placed in the
Letaba
Herald
of 16 August 2002 a photograph of Van Schalkwyk, the
respondent and her staff members was published under the heading
‘Your
One Stop Legal Centre’. In this advertisement Van
Schalkwyk was described as someone with ’12 years’
experience
in third party claims’. He was a member of her
‘indispensable winning team’ (my translation). Van
Schalkwyk also
had a business card of the respondent’s firm
describing him as a ‘third party claims consultant’.
[9] The respondent said
that she had appointed Van Schalkwyk and, later, Swanepoel with
limited instructions: to visit accident
scenes, take photographs,
compile reports, and visit SAPS offices and hospitals to collect
documentation. As a single practitioner
she had difficulty in
obtaining information herself: often clients resided in rural areas
and had to be taken for medico-legal
examinations. Van Schalkwyk,
particularly after Swanepoel was appointed, became more office-bound
and dealt with queries from the
Road Accident Fund: he only answered
questions from the Fund and made inquiries. In other words, he
performed administrative work
only. His name, she admitted, sometimes
appeared on her letterheads. But, as the court below found, Van
Schalkwyk’s statements
of account suggest that he had been
engaged in work of a professional nature. One encounters claims for
work such as ‘merit
investigation travelling expenses’,
‘taking witness statements’, ‘advice on merits’,
‘determining
merits’, ‘instructions to commence
third party claim’, ‘consultation with RAF’,
‘calculation
of claim’ and ‘preparation of required
reports’ (my translations).
[10] The minutes of a
staff meeting of the third party department of the respondent’s
firm held on 5 October 2005 is revealing.
The following instructions
were given to the department: ‘When Van Schalkwyk or Swanepoel
give an instruction to Llandi (the
candidate attorney) it has to be
done on their forms and dated.’ It was further minuted that
‘Basie will assist Anton
[the professional assistant] with the
particulars of claim. Sonette will give Basie ‘skeletons’
on which he can work.
Anton will thereafter check the particulars of
claim . . .’ (my translation). Swanepoel was to assist Llandi
to keep her
‘prescription file’ up to date. It was
emphasised that the respondent, Van Schalkwyk and Burger were to
co-operate
when a matter proceeded to trial. Burger was generally to
negotiate with attorneys but Burger was to inform Van Schalkwyk when
the latter had to do so. These minutes show a far greater involvement
by Van Schalkwyk in the respondent’s professional work
than
that professed by her. He most certainly did not function in the same
way as a third party typist, collections clerk or conveyancing
typist, as the respondent suggested.
[11] The respondent
admitted that as the work increased Swanepoel was employed to be of
assistance in calling on police stations
and hospitals and in
transporting clients. Swanepoel’s remuneration, she said, was
limited to an amount of R1 500 per case
from which certain
disbursements were to be made. Any further payments to him were to
wait until the claim was paid. However, as
the court below found, in
a letter of 4 November 2005 addressed to Swanepoel the respondent
expressly referred to an amount of
R387 550 paid to him for
‘Monies paid in respect of claims purchased’. From this
sum an amount was deducted in
respect of ‘Monies received back
in respect of claims purchased’ and an amount was added
relating to travelling expenses,
dockets, hospital records and
medical expenses, leaving a total of some R442 595 owing to him.
Her evidence was that she pleaded
guilty on advice of her counsel
because she had used the words ‘claims purchased’ (’eise
gekoop’) in error
in this letter. Seen in the light of
Swanepoel’s evidence and the separate accounting in respect of
disbursements, her contention
that she did not ‘purchase’
claims was correctly rejected by the court below. It is also not
borne out by the schedule
of outstanding files attached to her letter
of 4 November 2005 which shows that amounts were paid to Swanepoel
without any payments
having been made by the Road Accident Fund.
Moreover, the respondent never during the disciplinary hearing
disputed that she had
‘purchased’ third party claims for
R1 500 per claim. In fact, her counsel at the hearing conceded it.
The letter also
shows that an amount of some R430 429 had been
paid to Van Schalkwyk but no further particulars of these payments
were supplied
by the respondent.
[12] The court below did
not specifically deal with the evidence supporting the charge that
the respondent shared fees with Van
Schalkwyk. To my mind her
repeated denials under oath that this was not so cannot be accepted.
In her affidavit responding to the
rule 101 report, she did not
address the evidence of Van Schalkwyk before the disciplinary
committee, nor the finding that they
had agreed on a 50:50 split of
the fee in every third party matter. She pleaded that she was
ignorant of the ‘Mandate and
Fee Arrangement’ Van
Schalkwyk presented to clients for signature and only became aware of
it after he had left. In this
document the client agreed that JM
Assessors, that being the name of Van Schalkwyk’s business,
would be entitled to collect
25 per cent of the capital amount from
the respondent’s firm on completion of the third party claim.
However, in a schedule
to her letter of 4 November 2005 reference is
made to a client’s file with the annotation that ‘Basie’s
mandate’
was the only document on file. Moreover, the
respondent, despite her denial of sharing fees with Van Schalkwyk,
stated in her answer
to the appellant’s replying affidavit
that, when she became aware that he had charged her 12,5 per cent of
the capital amount
of each claim, she had made enquiries with the
appellant, and was informed that she could charge 25 per cent of the
capital amount
as a fee. She obtained a copy of a draft contingency
fee agreement from the appellant on which she based her own agreement
with
clients. Because Van Schalkwyk had rendered good service she
continued to pay him 12,5 per cent of the contingency fee. She said
that she had continued to do so on condition that he delivered an
account to her. However, she stated that although Van Schalkwyk
was
not entitled to 12,5 per cent, she was nevertheless prepared to share
her fee with him. In some cases his fee was not enough
but in others
it was more than sufficient. Both of them were satisfied with the
arrangement. This places it beyond any doubt that
the respondent and
Van Schalkwyk had agreed to share fees and that they did in fact do
so. Individual payments made to him reflect
this arrangement.
[13]
It follows that all five charges against the respondent were proved.
The evidence shows that over a considerable period of
time, from 2002
until the end of 2005, the respondent touted for third party work,
referred work reserved for an attorney to Van
Schalkwyk and
Swanepoel, acted for clients who were introduced by them and shared
fees and an office with Van Schalkwyk. The court
below accepted that
the respondent was dishonest in circumventing s 19(
c
)
of the
Road Accident Fund Act 56 of 1996
and by touting and charging
clients for the fees of the touts. It implicitly found that she was
not a fit and proper person to
practice as an attorney. It then posed
the question whether the respondent was ‘so unfit and improper
a person to continue
to practice as an attorney as to necessitate her
removal from the names of attorneys?’ As I have said, however,
s 22(1)(
d
)
of the Attorneys Act envisages either the striking off or suspension
of the attorney in question. The court below for the reasons
referred
to below decided to merely suspend the respondent from practice for
one year and, moreover, suspended its order for three
years on
certain conditions. To my mind the court erred in making this order.
[14]
The decision whether an attorney who has been found unfit to practice
should be struck off or suspended is a matter for the
discretion of
the court of first instance. That discretion is a ‘narrow’
one:
3
‘
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.’
[15]
In coming to its decision the court below emphasised several
considerations. It relied on the fact that Van Schalkwyk had
approached the respondent and that she did not, as it was put in the
judgment, go ‘all out to look for touts’. Her books
of
account were also properly kept and there was no shortage in her
trust account. Nor had any allegation of misappropriation been
made.
She co-operated, the court said, with the investigator appointed. The
scale on which the respondent conducted the third party
work, the
court added, could not be compared with the extent of the wrongdoing
in
Malan’s
case.
4
Moreover,
her plea of guilty and the public humiliation suffered coupled with
the fact that the employment of the touts was terminated
justified
consideration. She had not, the court said, broken every rule ‘in
the book’ as had happened in
Malan’s
case.
She also practised since the investigation in 2005 without any
further disciplinary action against her. The court added that
Van
Schalkwyk was not impartial and could well have exaggerated his
version of events, and, in any event, there had been proper
oversight
over him although the extent of his work had not been proved. The
court also found that the instructions given to Swanepoel
were
limited to canvassing for clients, the obtaining of a power of
attorney and a copy of the client’s identity document.
Any
dishonesty by circumventing ss 19(
c
)
[and (
d
)]
of the
Road Accident Fund Act 56 of 1996
and by touting was limited.
Nevertheless, despite finding that the respondent had been dishonest,
the court below found that the
reasons set out constituted
exceptional circumstances, justifying a departure from the general
approach,
5
that
where dishonesty was involved removal from the roll should follow.
[16]
I
am of the view that the court below materially misdirected itself in
ordering the suspension of the respondent and not her striking
off
the roll of attorneys. It did so by comparing the matter
in
extenso
with
Malan’s
case
and deciding that, because the scale of wrongdoing in
Malan
was
so much greater, a lesser penalty in this case was justified.
Comparisons are odious and, as was stated by Harms ADP in
Malan
,
‘[f]acts are never identical, and the exercise of a discretion
need not be the same in similar cases. If a court were bound
to
follow a precedent in the exercise of its discretion it would mean
that the court has no real discretion.’
6
The
question is not whether this case is as serious as
Malan’s
but
whether, or if appropriate when, an attorney should be permitted to
continue in practice.
7
[17]
There are also other misdirections to which I will refer. But first a
word on the nature of the disciplinary process. In
Prokureursorde
van Transvaal v Kleynhans
8
Van
Dijkhorst J said that in that process the court is engaged in an
investigation of a disciplinary nature. It is a procedure
sui
generis
.
From this it follows that –
‘
van ‘n
respondent verwag word om mee te werk en die nodige toeligting te
verskaf waar nodig ten einde die volle feite voor
die Hof te plaas
sodat ‘n korrekte en regverdige beoordeling van die geval kan
plaasvind. Blote breë ontkennings, ontwykings
en obstruksionisme
hoort nie tuis by dissiplinêre verrigtinge nie.’
These
remarks were echoed in
Law
Society, Northern Provinces v Mogami & others:
9
‘
Very
serious, however, is the respondents’ dishonest conduct of the
proceedings. Instead of dealing with the issues they launched
an
unbridled attack on the appellant. It has become a common occurrence
for persons accused of wrongdoing, instead of confronting
the
allegation, to accuse the accuser and seek to break down the
institution involved. This judgment must serve as a warning to
legal
practitioners that courts cannot countenance this strategy. In itself
it is unprofessional.’
[18]
The conduct of the respondent in defending the charges brought
against her was wholly unsatisfactory. She attacked the appellant
for
referring to further complaints against her, accused it of
unprofessional and unethical conduct, and sarcastically questioned
its ability to distinguish between different kinds of offers of
settlement. This was uncalled for. But the matter goes further.
Far
from disclosing at the outset fully and openly all the circumstances
of her relationship with Van Schalkwyk and Swanepoel,
the truth
emerged only gradually. Initially she repeatedly denied that she and
Van Schalkwyk shared fees. It was only in her affidavit
responding to
the appellant’s replying affidavit that she admitted that this
had occurred. But her admission was not unconditional
but an attempt
to justify her actions in some or other way. She admitted to Ms
Geringer that Van Schalkwyk at some or other stage
had shared an
office with her. He did and indeed kept the third party files there.
In her answering affidavit, however, she emphatically
denied that
this had been the position. But she admitted in her affidavit
responding to Ms Geringer’s report that Van Schalkwyk
came and
went to her offices as he liked until she stopped him in 2005. The
minutes of the staff meeting of 5 October 2005 make
clear references
to Van Schalkwyk’s office. Her denials that he had an office
are simply not credible. The respondent denied
that she had
‘purchased’ third party claims. She denied that she had
advertised the services of Van Schalkwyk. She
denied, during her
interview with Geringer, that she had paid the touts employed by her.
All these denials have been shown to be
untruthful. She never
informed the court of the real extent of the third party work
undertaken by her firm, the fees earned and
amounts paid to her
touts. The fact that her trust account was properly kept is
irrelevant. Her plea of guilty does not assist
her for she attempted
to withdraw it. It has been observed that ‘[t]he attorney’s
profession is an honourable profession,
which demands complete
honesty and integrity from its members.’
10
The
various defences and the manner in which they were raised by the
respondent cannot be said to evince complete honesty and integrity.
The court below misdirected itself by not considering these factors.
[19]
All the charges should be considered together. They are all
interlinked. They show serious misconduct. Touting has always been
considered a serious form of misconduct: it is something that should
be eradicated.
11
The
respondent employed two touts, paid them for touting and allowed them
to do professional work. She shared her office and fees.
Some 300
cases were involved. Large amounts were paid to the touts, more than
R800 000. The continued denial by the respondent
of any misconduct
reveals a lack of understanding of her own conduct. This all
demonstrates that it cannot be assumed that she
will, after a period
of suspension, be a fit and proper person to continue practice as an
attorney. The only suitable sanction
is the removal of her name from
the roll of attorneys. No exceptional circumstances have been shown
to justify a lesser penalty.
[20]
The high court made no order as to costs and gave no reason for its
failure to do so. It failed to take into consideration
the
appellant’s statutory duty to approach the court. It did not do
so as an ordinary litigant. The general rule is that
it is entitled
to its costs, even if unsuccessful, and usually on the attorney and
client scale.
12
[21] In the result the
following order is made:
1 The appeal is upheld
with costs.
2 The order of the court
below is set aside and replaced with the following:
‘
An
order is made in terms of prayers 1 to 12 of the notice of motion.’
______________________
F R MALAN
JUDGE OF APPEAL
APPEARANCES:
For Appellant: A T Lamey
Instructed by:
Rooth & Wessels Inc
Pretoria
Naudes Attorneys
Bloemfontein
For Respondents: J J Buys
Instructed by:
Harris Edwards Inc c/o
Lacante Henn Klokow Inc
Pretoria
Van Pletzen Lambrechts
Attorneys
Bloemfontein
1
Botha
v Law Society, Northern Provinces
[2008] ZASCA 106
;
2009
(1) SA 227
(SCA) para 2;
Jasat
v Natal Law Society
2000
(3) SA 44
(SCA)
para 10;
Malan
& another v Law Society, Northern Provinces
[2008] ZASCA 90
;
2009
(1) SA 216
(SCA) para 4.
2
Malan
& another v Law Society, Northern Provinces
above
para 8.
3
Botha
v Law Society, Northern Provinces
[2008] ZASCA 106
;
2009 (1) SA 227
(SCA) para 3;
Malan
& another v Law Society, Northern Provinces
[2008] ZASCA 90
;
2009
(1) SA 216
(SCA) para 13.
4
Malan
& another v Law Society, Northern Provinces
[2008] ZASCA 90
;
2009
(1) SA 216
(SCA).
5
Summerley
v Law Society, Northern Provinces
2006
(5) SA 613
(SCA) para 21 and see
Malan
& another v Law Society, Northern Provinces
[2008] ZASCA 90
;
2009
(1) SA 216
(SCA) para 10.
6
Para
9.
7
Law
Society Cape v Peter
2009 (2) SA 27
(SCA) para 28.
8
Prokureursorde
van Transvaal v Kleynhans
1995 (1) SA
839
(T) at 853G-H.
9
Law
Society, Northern Provinces v Mogami & others
2010
(1) SA 186
(SCA) para 26.
10
Summerley
v Law Society of the Northern Provinces
2006
(6) SA 613
(SCA) para 21.
11
[zRPz]
Cirota
& another v Law Society, Transvaal
1979 (1) SA 172
(A) at
192C-D;
KwaZulu-Natal
Law Society v Davey & others
2009
(2) SA 27
(N) para 171.
12
Law
Society, Northern Provinces v Mogami & others
2010
(1) SA 186
(SCA) para 31.