Limpopo Provincial Council of the South African Legal Practice Council v Chueu Incorporated Attorneys and Others (6947/2021) [2021] ZALMPPHC 75 (25 October 2021)

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[2021] ZALMPPHC 75
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Limpopo Provincial Council of the South African Legal Practice Council v Chueu Incorporated Attorneys and Others (6947/2021) [2021] ZALMPPHC 75 (25 October 2021)

IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO DIVISION, POLOKWANE
CASE
NO:   6947/2021
In
the matter between:
LIMPOPO
PROVINCIAL COUNCIL OF THE
APPLICANT
SOUTH
AFRICAN LEGAL PRACTICE COUNCIL
and
CHUEU
INCORPORATED ATTORNEYS

1
st
RESPONDENT
CL
CHUEU

2
nd
RESPONDENT
THABO
MILTON CHUEU

3
rd
RESPONDENT
BKK
KOOPEDI
4
th
RESPONDENT
CK
TSOKU

5
th
RESPONDENT
S
TSETSEWA
6
th
RESPONDENT
PR
GWANGWA
7
th
RESPONDENT
PN
MATHIBELA
8
th
RESPONDENT
TSOKU
CHUEU INCORPORATED
9
th
RESPONDENT
JUDGMENT
NAUDÈ
AJ:
[1]
The Applicant approached this court on an urgent basis and sought
interim relief pending
an investigation in to the affairs of the 1
st
Respondent.  The Applicant applies,
inter alia
, for an
order for the suspension of the 2
nd
, 3
rd
, 4
th
,
5
th
, 6
th
, 7
th
and 8
th
Respondents from practicing as attorneys for a period of 18 months
pending the finalization of investigations into their conduct
and
disciplinary proceedings against them.
[2]
The 1
st
and 2
nd
Respondents did not oppose the
application for suspension, and filed an explanatory affidavit
wherein it was stated by the 2
nd
Respondent on behalf of
the 1
st
and 2
nd
Respondents in his capacity as
Managing Director of the 1
st
Respondent that the 1
st
and 2
nd
Respondents in principle consents to the
suspension, but it is the modalities of the order which an issue is
taken with.  The
1
st
and 2
nd
Respondents
prayed for an alternative order envisaging a balance between the
interest of the profession, and the continuity of the
1
st
Respondent.
[3]
Before dealing with the merits of the matter, I will deal with a
point in limine
raised by the 4
th
and 8
th
Respondents. The Applicant instituted this application by virtue of a
resolution taken by the Limpopo Provincial Council on 8 September
2021.  The resolution was only signed by the Chairperson of the
Limpopo Provincial Council, Mr. Mangena.  There were no
minutes
of the meeting held where it was resolved to institute the
proceedings attached, nor an attendance register.  The other
members of the Limpopo Provincial Council did not co-sign the
resolution either.
[4]
The 4
th
and 8
th
Respondents raised a
point
in limine
to the effect that the resolution was fatally
defective.  It was submitted by the 4
th
and 8
th
Respondents that from the Applicant’s founding affidavit, and in
particular paragraph 4.3 thereof, the Applicant consists of sixteen
(16) legal practitioners comprising of ten practicing attorneys and
six advocates, two teachers of law, one being a dean of a faculty
of
law at a university in the Republic and the other being a teacher of
law, three fit and proper persons designated by the Minister,
one
person designated by Legal Aid South Africa and a person designated
by the Legal Practitioners’ Fidelity Fund.
[5]
It was submitted by the 4
th
and 8
th
Respondents
that Rule 16.2 of the Rules of the Legal Practice Council states that
the Provincial Council shall compromise of 6 (six)
attorneys and 4
(four) advocates.  It was submitted that paragraph 4.6 of the
Founding Affidavit clearly states that the decision
to institute the
current proceedings was taken by the Limpopo Provincial Council but
in the same paragraph it is indicated that the
Management Committee
takes such decisions in-between the meetings of the Council.
[6]
It was submitted that the resolution attached as LPC1 clearly
indicates that LPC1 is
the resolution of the Limpopo Provincial
Council.  According to the 4
th
and 8
th
Respondents, it appears that, the responsibility to institute
applications against legal practitioners is the domain of the Limpopo
Provincial Council.  The resolution authorising the institution
of the current proceedings is signed by only one member of the
Provincial Council, being the Chairperson.
[7]
According to the 4
th
and 8
th
Respondents, the
Chairperson, and deponent to the Applicant’s founding affidavit
cannot usurp the powers of the Council unto himself
and perform
functions of the Limpopo Provincial Council to the exclusion of the
other members.  The other members further did
not confirm the
correctness of the application or founding affidavit brought on their
behalf.
[8]
In response to the
point in limine
raised by the 4
th
and 8
th
Respondents, the Applicant contends that the
locus
standi
challenge brought by the 4
th
and 8
th
Respondents is bad in fact and in law owing to the fact that by
virtue of the office held by the Chairperson of the Applicant, the
Chairperson is authorised to depose to affidavits in legal
proceedings by and against the Applicant, and in an instance wherein
the
Chairperson is indisposed, the deponent to the replying
affidavit, Adv. Tsatsi, is also authorised to act as the Chairperson
and
depose to affidavits on behalf of the Applicant.
[9]
It seems the Applicant’s response is misconceived.  The 4
th
and 8
th
Respondents did not in raising the aforementioned
point in limine
challenge the Chairperson’s authority to
depose to the affidavit, but rather whether this application was
instituted with the necessary
authority and not
ultra vires
.
The attack is not on the deponent whether or not he has the necessary
authority to act on behalf of the Applicant or not.
The attack
is premised on the fact that, the institution of the proceedings is
not authorized by Council.
[10]
Counsel for the 4
th
and 8
th
Respondents
referred me to
Griffiths & Inglis (Pty) Ltd v Southern Cape
Blasters (Pty) Ltd
1972 (4) SA 249
(CPD).
It was submitted
by the 4
th
and 8
th
Respondent’s counsel that
in
Griffiths & Inglis (Pty) Ltd
supra
the
Respondent raised an objection
in limine
that there was no
proper proof before court that the application had been duly
authorized by the Applicant.  The Applicant contended
that it
was implied in the affidavit of the managing director who was also
the majority shareholder.  The court rejected the
contention by
the Applicant and upheld the
point in limine
to the effect
that there was no proper proof that the application had been duly
authorised.
[11]
Corbett J
said the following in
Griffiths & Inglis
(Pty) Ltd supra at 252F:
“
In
the present case the founding affidavit makes no express mention of
authorization by the Company acting through its board of directors.
The question of authority has been challenged in the opposing
affidavit, and thus the onus is upon the applicant to show that the
application has been authorised by the directors of the company.
In as much as no contrary evidence had been placed before
the Court
by the Respondent, the minimum of evidence to use the words of
Watermeyer J in Malls’s case will suffice.”
[12]
Counsel for the 4
th
and 8
th
Respondent’s
submitted that
Corbett J
went on to raise some unanswered
questions at
255G-H of Griffiths & Inglis (Pty) Ltd
supra
,
to come to a conclusion that the proceedings by the Applicant were
not authorized:  “
if, as seems possible, no formal
resolution of the board of directors was taken, then in what way was
this application authorized?
And, if the board did purport to
authorize the application in some manner other than by formal
resolution, was such manner of authorization
in accordance with the
constitution of the applicant?”
Corbett J
concluded that
simply to aver that directors have authorized an application amounts
to an assertion of a legal conclusion rather
than a factual
allegation.
[13]
Counsel for the 4
th
and 8
th
Respondents’
argued that the same principle was demonstrated in a matter between
South African Broadcasting Corporation Ltd and Another v Mpofu
(A5021/08) 2009 ZAGPJHC 2
[2009] 4 All SA 169
(GSJ) at para 26
where
the court found as follows:-
“
Article
18.1 provides that subject to the statutes, a duly minuted resolution
in writing signed by all the directors shall be as valid
and
effectual as a resolution passed at a meeting of the Board duly
called and constituted.  Article 18.4 provides that a written
resolution which is not signed by all directors shall be inoperative
until confirmed by a meeting of the Board.”
[14]
In
Pretoria City Council v Meerlust Investments Ltd
1962 (1) SA
321
(AD) at page 325
it was stated as follows:-
“
The
question of authority having been raised, the onus is on the
petitioner to show that the prosecution of the appeal in this Court
has been duly autorised by the Council; that it is the Council which
is prosecuting the appeal, and not some unauthorized person
on its
behalf (cf. Mall (Cape) (Pty) Ltd. v. Merino Ko-operasie Bpk.,
1957
(2) S.A. 347
(C) at pp. 351-2).  As was pointed out in that
case, since an artificial person, unlike an individual, can only
function through
its agents, and can only take decisions by the
passing of resolutions in the manner prescribed by tis constitution,
less reason exists
to assume, from the mere fact that proceedings
have been brought in its name, that those proceedings have in fact
been authorised
by the artificial person concerned.  In order to
discharge the above mentioned onus, the petitioner ought to have
placed before
this Court an appropriately worded resolution of the
Council.”
[15]
In the case of
Mall (Cape) (Pty) Ltd v Merino Ko-operative Bpk
1957 (2) SA 347
(CPD)
the question as to the proof required
of authority to institute legal proceedings on behalf of an
artificial person such as
a company was fully considered by
Watermeyer J
, who stated as follows at at
page 351-352
:
“
I
proceed now to consider the case of an artificial person, like a
company or co-operative society.  In such a case there is
judicial precedent for holding that objection may be taken if there
is nothing before Court to show that the applicant has duly
authorised
the institution of notice of motion proceedings. (see for
example Royal Worcester Corset Co. v Kesler’s Stores,
1927 C.P.D.
143
; Langeberg Ko-operasie Beperk v Folscher and Another,
1950 (2)
S.A. 618
(C)). Unlike an individual, an artificial person can only
function through its agents and it can only take decisions by the
passing
of resolution in the manner provided by its constitution.
An attorney instructed to commence notice of motion proceedings by,
say, the secretary or general manager of a company would not
necessarily know whether the company had resolved to do so, nor
whether
the necessary formalities had been complied with in regard to
the passing of the resolution.  It seems to me, therefore, that
in the case of an artificial person there is more room for mistakes
to occur and less reason to presume that it is properly before
the
Court or that proceedings which purport to be brought in its name
have in fact been authorised by it.  There is a considerable
amount of authority for the proposition that, where a company
commences proceedings by way of petition, it must appear that the
person
who makes the petition on behalf of the company is duly
authorised by the company to do so (see for example Lurie Brothers
Ltd v
Archache,
1927 N.P.D 139
, and the other cases mentioned in
Herbstein and Van Winsen, Civil Practice of the Superior Courts in
South Africa, at pp. 37, 38).
This seems to me to be a salutary
rule and one which should apply also to notice of motion proceedings
where the applicant is an
artificial person.  In such cases some
evidence should be placed before the Court to show that the applicant
has duly resolved
to institute the proceedings and that the
proceedings are instituted at its instance.  Unlike the case of
an individual, the
mere signature of the notice of motion by an
attorney and the fact that the proceedings purport to be evidence
that the proceedings
have been properly authorized would be provided
by an affidavit made by an official of the company annexing a copy of
the resolution
but I do not consider that form of proof is necessary
in every case.  Each case must be considered on its own merits
and the
Court must decide whether enough has been placed before it to
warrant the conclusion that it is the applicant which is litigating
and not some unauthorized person on its behalf.  Where, as in
the present case, the respondent has offered no evidence at all
to
suggest that the applicant is not properly before Court, then I
consider that a minimum evidence will be required from the
applicant.”
[16]
In the present matter, the Applicant has failed to produce any
evidence that the other members of the
Applicant authorized the
institution of the proceedings. There is no explanation proffered why
only the Chairperson signed the Resolution,
when the Applicant’s
Council consists of at least 10 members.
[17]
The 4
th
and 8
th
Respondent’s assertion that
the proceedings are not authorized by Council is supported and
strengthened by the fact that, Council
members did not sign the
Resolution, no attendance register is attached, no confirmatory
affidavits are attached, to confirm the
correctness of the papers and
the Deputy Chairperson, being the deponent to the Replying affidavit
contradicts the Resolution which
purports to be a Council Resolution
by stating in the Replying Affidavit at paragraph 7.6.1 thereof as
follows:-
“
The
locus standi challenge brought by the Fourth Respondent on behalf of
himself and the Eighth Respondent is bad in fact and law
owing to the
fact that by virtue of the office held by the Chairperson of the
Applicant, the Chairperson is authorised to depose
to affidavits in
legal proceedings by and against the Applicant, and in an instance
wherein the Chairperson is indisposed, I am also
authorised to act as
the Chairperson, and depose to affidavits on behalf of the Applicant,
as I now do with regard to this replying
affidavit.”
[18]
In my view, the Applicant failed to prove that the Legal Practice
Council authorized the current proceedings
and therefore the
point
in limine
raised by the 4
th
and 8
th
Respondents should be upheld.
[19]
Despite the
point in limine
having been upheld, I now proceed
to deal with the merits of this matter as I deem it in the interest
of justice and the parties
concerned in this matter that this
application for suspension be finalized.  Also bearing in mind
that the 1
st
and 2
nd
Respondent’s conceded to
the order for suspension being granted and further bearing in mind
that the 3
rd
, 5
th
, 6
th
, 7
th
and 9
th
Respondents have not raised the issue of the
fatally defective resolution as the 4
th
and 8
th
Respondents’ have.
The
Background and Applicant’s submissions:-
[20]
The 2
nd
to 8
th
Respondents were all directors,
alternatively members, further alternatively salaried directors or
employees of the 1
st
Respondent.  The Applicant has
received various complaints from members of the public who at
different times had given instructions
to the 1
st
Respondent which was at the time of receipt of instructions
represented by its directors, to represent them in their separate
claims
for payment of compensation against the Road Accident Fund
(“the RAF”).
[21]
The Applicant submits that as per the Applicant’s standard
procedure, all the complaints were sent
to the Respondents using the
email addresses that are on record with the Applicant but none of the
Respondents responded thereto.
[22]
The Applicant then referred the complaints to the Investigation
Committee during May 2021 for consideration
of the Respondents’
conduct.  The Investigating Committee formulated charges against
the directors of the 1
st
Respondent.
[23]
The Applicant, upon recommendation of the Investigating Committee,
referred the complaints to the Applicant’s
Disciplinary Committee
for a hearing.  The matter served before the Disciplinary
Committee for a hearing on 22 June 2021.
On that day some of
the Respondents appeared, but the 2
nd
Respondent failed to
appear as he was unwell.  The matter could not proceed in the
absence of the 2
nd
Respondent and was consequently
postponed.  The Respondents were ordered to respond to the
correspondence from the Applicant.
[24]
The Applicant contends that the complaints that were received are now
more than 26 in number.  According
to the Applicant, the
Respondents have simply not cooperated with the Applicant and have
failed to provide their responses, client
ledgers or pleas in
response to these complaints.  It is submitted that due to the
Respondents’ failure to cooperate with
the Applicant, the process
of compliance with Section 38 of the Legal Practice Act, 28 of 2014
(“the Act”) has been affected
negatively and delayed.
[25]
The Applicant further submits that in addition to these complaints,
the RAF has submitted a complaint
to the Applicant’s sister office,
the Gauteng Provincial Office of the South African Legal Practice
Council.  The RAF’s
complaint is that the 1
st
Respondent owes the RAF a total amount of R29 043 606.64,
being money that was erroneously paid to the 1
st
Respondent as a duplicate payment.
[26]
On 2 September 2021, the Applicant addressed a letter to  ABSA
Bank, where the 1
st
Respondent’s trust bank account is
held, and asked for the signed transactions history of the said trust
account for the period
1 June 2021 to 2 September 2021.  On 3
September 2021, ABSA Bank furnished the Applicant with the requested
trust bank account
statements, as well as a trust account balance
statement as at 2 September 2021.  According to the trust bank
account statement,
the 1
st
Respondent’s trust account
balance was R5 545 013.84 on 1 September 2021.
[27]
It has furthermore also come to the Applicant’s attention that an
application for the liquidation of
the 1
st
Respondent is
pending under case number 4761/2021 before this court.
[28]
It further came to the Applicant’s notice that some of the payments
were made by RAF to the Sheriff
of this court.  The Applicant
has sought statements from the Sheriff reflecting payments received
from RAF and made to the 1
st
Respondent in respect of some
of the complaints.
[29]
The Applicant contends that the payments made by the Sheriff to the
1
st
Respondent add up to R2 327 077.09. This
amount is added to the RAF amount of R29 043 606.64 and
adds up to a
total amount of R31 370 683.73 that should be
in the Respondents’ trust account.  This shows a trust deficit
of
at least R25 825 669.89 as the trust bank balance as at
3 September 2021 was only R5 545 013.84.
[30]
The Applicant contends that the aforementioned facts point to the
fact that the 2
nd
to 8
th
Respondents have not
conducted themselves and their legal practice in a manner befitting a
legal practitioner and certainly did not
operate the trust account of
the 1
st
Respondent in the manner that attorneys are
required to operate their trust accounts.
[31]
According to the Applicant, the Applicant has carefully and
diligently considered all the facts available
to it concerning the
Respondents and have concluded that the Respondents have made
themselves guilty of unprofessional or dishonourable
or unworthy
conduct.  The Applicant submits that the 2
nd
to 8
th
Respondents reveals character defects which cannot be tolerated in a
legal practitioner or officer of the Court and does not meet
the
standard of behaviour and conduct which is required of an attorney
and member of the honourable legal profession.
[32]
The Applicant submits that the conduct and behaviour of the 2
nd
to 8
th
Respondents have damaged and affected the good
standing and reputation of the profession as a whole and they
continue to do so.
Consequently, it is submitted that the 2
nd
to 8
th
Respondents should be suspended from the practice
of law.
The
3
rd
, 5
th
and 9
th
Respondents:
[33]
The 3
rd
and 5
th
Respondents submitted in
opposition that the 1
st
Respondent, whilst the 3
rd
and 5
th
Respondents were involved, operated, primarily, as
a law firm specializing in personal injury law, more specifically RAF
matters.
The 1
st
Respondent had 4 (four) offices,
namely the Lephalale office, the Pretoria office, the Polokwane
office and the Mafikeng office.
These offices operated independently
from each other, and the day-to-day operations of each office was not
linked and/or related
to any other office.
[34]
The 3
rd
and 5
th
Respondents were only involved
in the running of the Pretoria and Mafikeng office, with the other
Respondents being responsible for
the Lephalale and Polokwane
offices.  The 3
rd
and 5
th
Respondents only
worked in, and received instructions, relating to RAF litigation,
more specifically, pre-trial and trial litigation,
i.e. they only
worked on RAF files within the Pretoria and Mafikeng jurisdictional
areas, once pleadings have closed. Most of the
instructions were sent
to the 3
rd
and 5
th
Respondents from the
Lephalale office.
[35]
As far as the relationship between the 3
rd
and 5
th
Respondents and the 2
nd
Respondent is concerned, the 3
rd
and 5
th
Respondents, submit that while technically
“partners” of the 2
nd
Respondent (pursuant to a
partnership agreement concluded on or about 2013) in the 1
st
Respondent, were never treated as such.  They were never
consulted in respect of any major decision affecting the 1
st
Respondent such as the taking out of loans.  The 3
rd
and 5
th
Respondents were not provided with the financial
information and/or financial statements of the 1
st
Respondent.
[36]
According to the 3
rd
and 5
th
Respondent, they
did not have any control and/or insight into the 1
st
Respondent’s trust account and never received any distributions
and/or profit-sharing from the business operations of the 1
st
Respondent.
[37]
The 3
rd
and 5
th
Respondents submit that when
they became involved in the 1
st
Respondent with the 2
nd
Respondent, it was on the basis that the 1
st
Respondent
would be a partnership.  Accordingly, the 2
nd
Respondent, 3
rd
Respondent, 5
th
Respondent and
6
th
Respondent entered into a partnership agreement.
[38]
During the course of 2014, and without the 3
rd
and 5
th
Respondents knowledge, the 2
nd
Respondent, unilaterally
decided to incorporate the partnership as an incorporated company. No
shareholder’s agreement was entered
into, and the 2
nd
Respondent simply issued them with shareholders certificates.
There were no shareholder’s meetings called by the 2
nd
Respondent, and the 3
rd
and 5
th
Respondents
were never involved in the running of the 1
st
Respondent.
The 3
rd
and 5
th
Respondents submit that for all
intents and purposes they were ordinary salaried employees of the 1
st
Respondent – they were treated as such by the 2
nd
Respondent.
[39]
The 3
rd
and 5
th
Respondents submit that this
relationship, however, imploded during the course of late 2020, early
2021 as a result of the disturbing
conduct of the 2
nd
Respondent.  During the course of December 2020/January 2021,
the 3
rd
and 5
th
Respondents received two
communications, one from ABSA Bank regarding an alleged loan taken
out by the 2
nd
Respondent on behalf of the 1
st
Respondent and one from RAF regarding an alleged duplicate payment.
[40]
Owing to the fact that the 3
rd
and 5
th
Respondents were completely unaware of the issues raised in the
aforementioned correspondences, the 3
rd
and 5
th
Respondents, as soon as possible called a partners meeting, which
took place on 7 January 2021.  The meeting was attended by
the
2
nd
, 3
rd
, 5
th
and 6
th
Respondents.
[41]
The 3
rd
and 5
th
Respondents submit that during
the meeting several issues were raised by the 3
rd
and 5
th
Respondents, none of which the 2
nd
Respondent could answer
satisfactorily or at all.  These issues included the double
payment made by RAF, the ABSA loan, complaints
by clients regarding
payments (which arose during October to December 2020) and the
financial information (and situation) of the
1
st
Respondent’s trust account, as well as the audited financial
statements of the Applicant from 2013 to 2020.
[42]
Owing to the fact that the 2
nd
Respondent could not
provide the 3
rd
and 5
th
Respondents with any of
the information sought and/or provide any reasonable explanations
regarding the questions posed to him, the
3
rd
and 5
th
Respondent formally resigned from the 1
st
Respondent on 1
February 2021 with immediate effect.
[43]
The 3
rd
and 5
th
Respondents submit that when
they left the 1
st
Respondent, they transferred the active
files which they were working on to a new firm established by the 3
rd
and 5
th
Respondents, being the 9
th
Respondent.
According to the 3
rd
and 5
th
Respondents, the
9
th
Respondent has been operating without issue since
February 2021.
[44]
The 3
rd
and 5
th
Respondents further submit that
after having resigned from the 1
st
Respondent, they
attempted to ensure that the 2
nd
Respondent conducted the
business in the ordinary course.  However, when they attempted
physically and by way of correspondence
to ensure that the 2
nd
Respondent is attending to the business of the 1
st
Respondent in a manner as is expected from him, they were instructed
by the 1
st
and/or 2
nd
Respondent’s attorneys
of record to desist from doing so.
[45]
It is submitted by the 3
rd
and 5
th
Respondents
that in addition to the aforementioned steps taken by them, and in
order to ensure that the 1
st
and 2
nd
Respondents were duly investigated relating to their concerns raised
with the 2
nd
Respondent at the partners meeting on 7
January 2021, they also lodged a complaint with the Gauteng
Provincial Office of the South
African Legal Practice Council.
[46]
The 3
rd
and 5
th
Respondents submit that the
Applicant seeks to suspend them from practice for a period of 18
months, notwithstanding the fact that
they have taken the above
mentioned steps and that on their own they have also attempted to
hold the 1
st
and 2
nd
Respondents accountable
and tried to ensure that the business of the 1
st
Respondent was conducted properly.  The 3
rd
and 5
th
Respondents contend that they are fit and proper persons.
[47]
The 3
rd
and 5
th
Respondents further submitted
that at the time of the disciplinary proceedings on 22 June 2021,
neither the 3
rd
nor the 5
th
Respondents were
directors of the 1
st
Respondent.  They were not
invited to the disciplinary proceedings either, nor were they
represented at those proceedings.
[48]
According to the 3
rd
and 5
th
Respondents, the
2
nd
Respondent intentionally kept them in the dark and
their ignorance is not “professed” without any basis therefore.
To the extent
that they were not aware of the complaints, double
payments and other irregularities, this was caused as a result of the
intentional
subterfuge of the 2
nd
Respondent.
The
4
th
and 8
th
Respondents:
[49]
The 4
th
and 8
th
Respondents contend that no
cause of action is made out and no case of wrong doing or unlawful
conduct is established against them.
The 4
th
and 8
th
Respondents were accordingly mis-joined to these proceedings.
[50]
The 4
th
and 8
th
Respondents submit that the
cause of action as per the Applicant’s founding affidavit is in
relation to the handling of trust monies
and/or financial
impropriety.  The provisions of
Section 84
of the
Legal Practice
Act exonerate
the 4
th
and 8
th
Respondents from
the current proceedings.
[51]
It was submitted that
Section 84
of the LPA
stipulates as
follows:-
“
Every
attorney or any advocate referred to in
section 34(2)(b)
, other than
a legal practitioner in the full-time employ of the South African
Human Rights Commission or the State as a state attorney
or state
advocate and who practices or is deemed to practice-
(a)
For his or her own account either alone or in partnership; or
(b)
As a director of a practice which is a juristic entity, must
be in possession of a Fidelity Fund Certificate.”
[52]
The 4
th
and 8
th
Respondents submit that they
are not practicing for their own account or as partners in relation
to the 1
st
Respondent. They are not directors of a
juristic person either.  It is therefore misplaced to
incorporate or join the 4
th
and 8
th
Respondents
in this current application especially when the cause of action is
the handling of trust funds or misappropriation of
funds.
[53]
The 4
th
and 8
th
Respondents submit that they
are salaried directors, employed by the 1
st
Respondent and
in terms of their employment with the 1
st
Respondent they
are not entitled to receive trust monies on behalf of or from members
of the public.
[54]
The 4
th
and 8
th
Respondents submit the
misjoinder could have been prevented and avoided if the Applicant in
terms of
Section 87(1)(d)
of the LPA inspected the Trust Account of
the 1
st
Respondent before instituting the current
proceedings.
[55]
The 4
th
and 8
th
Respondents contend that they
were joined in these proceedings in terms of paragraph 2 of the
Applicant’s founding affidavit and
the Applicant does not take it
further by establishing whether or not
Section 34(7)
of the LPA does
apply to them.
[56]
According to the 4
th
and 8
th
Respondents, the
provisions of
Section 34(7)
are not applicable to them based on the
following:-
(a)       They are not and
have never been shareholders, partners or members of the 1
st
Respondent;
(b)       They have no
access to the 1
st
Respondent’s Trust, Business, Deceased
Estate funds, Investments accounts and Client Ledger Accounts.
(c)       They are not
signatories to any of such accounts.
[57]
The 4
th
and 8
th
Respondents further contend
that paragraph 5.5 of the Applicant’s Founding Affidavit outlines
sets of complaints against the Respondents,
but it is important to
note that none of these complaints implicates them or connect them to
the handling of Trust Funds and/or misappropriation
of funds.
[58]
It is submitted by the 4
th
and 8
th
Respondents
that in the result, the application against them contains
unsubstantiated legal conclusions which are meaningless without
supporting factual evidence and therefore has no probative value and
should the application be dismissed with costs in favour of
the 4
th
and 8
th
Respondents.
[59]
The 4
th
and 8
th
Respondents further submit that
during about June 2021, Ms. Buthane, an Administrator at the
Lephalale office brought to the 4
th
Respondent’s
attention the contents of an invitation to appear before a
Disciplinary Committee of the LPC on the 22
nd
of June
2021.  It appeared from the invitations that only the 2
nd
,
4
th
, 7
th
and 8
th
Respondents were
invited. It later transpired that all the complaints related to
failure to pay clients timeously and failing to
respond to
correspondence from the Applicant.
[60]
According to the 4
th
and 8
th
Respondents, a
ruling was made at the disciplinary hearing,
inter alia
,
that:-
(a)       The matter be
postponed;
(b)       The 2
nd
,
4
th
, 7
th
and 8
th
Respondents should
respond to all the complaints;
(c)       All these matters are
not referred back to the Investigating Committee since the
Disciplinary Committee
is now seized with same;
(d)       The Applicant
should furnish the Respondents with the full bundle of documents that
are before
the Disciplinary Committee in order for them to respond;
(e)       Since Adv. Maphutha
had attended physically at the Applicant’s premises, it was ruled
that he
be given a soft copy of the bundle via email;
(f)        Client
Ledger accounts relating to the 7 (seven) Complaints must be
submitted to the
Applicant;
(e)       The Respondents to
pay the costs.
[61]
The 4
th
Respondent submits that now that he has had sight
of the complaints as attached to this application, it is disingenuous
for the Applicant
not to refer in detail to its own Disciplinary
Committee hearing held on the 22
nd
of June 2021.  His
submission is based on the fact that despite that
ex facie
the
complaints, the 4
th
and 8
th
Respondents are not
a subject of the complaints, the Applicant was informed on that day
that the only person that could assist the
Committee, by implication
the Applicant, was the 2
nd
Respondent.
[62]
The 4
th
Respondent’s submission is further based on the
fact that, despite the fact that Counsel was briefed to apply for
postponement,
the Applicant could have sought that the 4
th
Respondent, together with the 7
th
and 8
th
Respondents should answer to the charges and the complaints as they
were in attendance.  This did not happen.
The
6
th
Respondent
:
[63]
The 6
th
Respondent submits that he was admitted as an
attorney on the 27
th
of July 2004.  He joined the 1
st
Respondent as a professional assistant on the 1
st
of
October 2008.  He was subsequently appointed as a director on
the 30
th
of April 2011 and had a shareholding of 4% in the
firm.
[64]
The 6
th
Respondent submits that on his appointment, he
exclusively dealt with litigation in the firm and was stationed in
Limpopo.
The affairs of the firm were handled or managed by the
managing director, the 2
nd
Respondent, herein.
[65]
According to the 6
th
Respondent he and his team,
consisting of junior attorneys, would handle matters from summons
stage to close of pleadings in respect
of all the matters in the
firm.  The litigation concerned Polokwane High Court matters,
and they dealt with those matter up
to completion stage.  Once
the matter became settled, they would send the court orders to the
firm’s finance department and
ultimately to the Pretoria branch for
taxation and payment facilitation where they were centralized.
Payments to clients in respect
of matters with partial or full
capital settlements were handled by the 2
nd
Respondent
with assistance of the finance department.
[66]
According to the 6
th
Respondent, he did not have any
financial control of the 1
st
Respondent.  The issue
concerning payments of clients were dealt with by the relevant
financial officer being the 2
nd
Respondent.  The 2
nd
Respondent was also the Chief Financial Officer of the firm.
During his employment and period as director of the 1
st
Respondent he was only responsible for litigation of matters, which
was his only duties.
[67]
The 6
th
Respondent submits that he left the 1
st
Respondent on the 1
st
of February 2021 due to non-payment
of his salary.  The 6
th
Respondent also effected his
resignation at the Companies and Intellectual Property Commission on
the 1
st
of February 2021.
[68]
On the 10
th
of February 2021, the 6
th
Respondent registered his own law firm with the Companies and
Intellectual Property Commission at which firm he is currently
practicing.
[69]
The 6
th
Respondent submits that he had the utmost good
faith and trust in the 2
nd
Respondent.  The 1
st
Respondent’s audit reports always came through unqualified and
fidelity fund certificates were always issued to them.  In
the
circumstances, the 6
th
Respondent believed and assumed
that all was run well in so far as the firm’s finances were
concerned. There was no need to request
to see and/or access the
trust account.
[70]
The 6
th
Respondent submits that the current application is
premised on his position as a former director, only.  It is not
premised
on the basis that he personally did something wrong except
to say,
prima facie
, something wrong occurred while he was a
director.
[71]
The 6
th
Respondent further submits that it is inarguable
that his liability for debts as a former director of the 1
st
Respondent is established, but this liability for debt does not
extend to the relief sought by the Applicant on the papers.
[72]
The 6
th
Respondent accepts that once a duty to pay a debt
as a former director arise, he will likely be liable to pay the debts
which arose
while he was a director, but what is vehemently denied is
the idea that he has conducted himself improperly in relation to the
trust.
The 6
th
Respondent submits he did not know
anything concerning the trust and did not control the trust.
[73]
It is submitted by the 6
th
Respondent that beyond being a
director, the Applicant must say he personally knew something or
participated in something wrong and
therefore his suspension is
necessary to achieve an investigation which the LPC envisages.
[74]
The 6
th
Respondent submits that on the facts, the
Applicant failed to suggest or prove that the 6
th
Respondent did something wrong, except to say he was a director,
which is simply not enough.
The
7
th
Respondent:
[75]
The 7
th
Respondent submits that she joined the 1
st
Respondent on 21   August 2017.  She was appointed as
“Director Core Business”.  In this respect she was
responsible for the smooth running of the 1
st
Respondent
in terms of making sure that the litigation processes are aligned
with the litigation strategy of the 1
st
Respondent,
managing the performance of the attorneys as well as ensuring synergy
between the work of the attorneys/professional
staff and that of the
support staff.
[76]
The 7
th
Respondent submits that in this role she had no
access whatsoever to either the trust or business accounts of the 1
st
Respondent.  She was therefore a salaried director with clear
roles and responsibilities. She is neither a shareholder, member
nor
partner as contemplated in
Section 34(7)
of the
Legal Practice Act,
28 of 2014
.  The 7
th
Respondent further submits that
she was not in control of the 1
st
Respondent’s financial
affairs.
[77]
The 7
th
Respondent submits that the financial affairs of
the 1
st
Respondent was handled by the 2
nd
Respondent.  Everything she knows about the financial affairs of
the 1
st
Respondent is from hearsay.
[78]
According to the 7
th
Respondent, the 1
st
Respondent had its trust account audited on an annual basis.
Such audited financial statements were submitted to the LPC and
it is
on the strength of which she and the other directors received
Fidelity Fund Certificates.
[79]
The 7
th
Respondent submits that she labored under the
impression that their Fidelity Fund Certificates were issued pursuant
to the LPC’s
interrogation of such audited financial statements,
and simply not as a rubber stamp exercise.  Had the audited
financial statements
revealed dishonest conduct or a misappropriation
of funds, then the LPC would not have issued the directors of the 1
st
Respondent with such Fidelity Fund Certificates.  Accordingly,
she had no reason to suspect that there was anything untoward,
as
alleged by the Applicant.
[80]
In addition, the 7
th
Respondent submits that the mere fact
that she had been issued with a Fidelity Fund Certificate does not
automatically put her in
charge of the financial affairs of the 1
st
Respondent, including its trust account.  It simply put her in a
position to be able to do so, had the 2
nd
Respondent
become incapacitated or unable to perform his functions.  The
true state of affairs remained that she was not in
control of the
trust account of the 1
st
Respondent.
[81]
The 7
th
Respondent further submits that at the end of May
2021, she became aware that the 1
st
Respondent’s clients
had lodged complaints against it and that a disciplinary hearing was
already scheduled to take place on the
22
nd
day of June
2021, which hearing was to be held virtually. She attended the
hearing virtually, as did the 4
th
and 8
th
Respondents, represented by Advocate Maphutha.
[82]
According to the 7
th
Respondent, Adv. Maphutha submitted
at the disciplinary hearing that the 2
nd
Respondent could
not be present, as he was ill.  Adv. Maphutha proceeded to apply
for a postponement on the grounds that the
disciplinary inquiry
primarily was to be conducted in relation to the duties associated
with the 2
nd
Respondent’s role in the firm.  The
7
th
Respondent submits that she personally could not be of
any assistance to the disciplinary inquiry.  These submissions
were not
refuted or challenged by the LPC.
[83]
It is further submitted by the 7
th
Respondent that the
current proceedings are grounded on an urgent basis for a suspension
– under circumstances which according
to her, it is not necessary
for the Applicant to bring this application for her suspension to
achieve the purpose of investigating
the 1
st
Respondent.
She submits that she has already shown that she is not in control of
the trust account and that she is not an equity
director.  It is
further not explained by the Applicant on what basis will her
continued practice and enrolment as an attorney
interfere with the
intended investigation of the Applicant.
[84]
The 7
th
Respondent further submits that the balance of
convenience does not favour the suspension precisely because the
Applicant does not
tell this court how her suspension will assist
with the intended investigation.  She submits that the version
put before this
court, is sufficient to show that no order for
suspension should be made against her.  The 7
th
Respondent reiterates to state that she has never been in control of
the trust account and she only remained as a salaried director,
with
restricted responsibilities in the firm.
The
Law:
[85]
The LPC is empowered under
section
40(3)(a)(iv)
read with section 44(1) of the Act
,
to launch an application for the striking off the roll or suspension
from practice of a legal practitioner. If the court is satisfied
that
the legal practitioner is not a fit and proper person to continue to
practice, the provisions of the Act “do not derogate
in any way
from the power of the High Court to adjudicate upon and make orders
in respect of matters concerning the conduct of a
legal practitioner,
candidate legal practitioner or a juristic entity.
[86]
It
is trite that an application of this nature constitutes a
disciplinary inquiry by the court into the conduct of the
practitioner
concerned. These proceedings do not constitute ordinary
civil proceedings but are in their nature
sui
generis
with
the LPC fulfilling the role of
amicus
curiae.
Accordingly,
the LPC is not an ordinary litigant in this application. As
custos
morum
of
the profession, the LPC places the facts and its views for this court
to take appropriate action in the exercise of its discretion
using
its disciplinary powers. Significantly, the court’s power is
inherent in nature over and above the provisions of the
Act.
See
Law
Society of the Transvaal v Tloubatla
[1999]
4 All SA 59
(D);
Law
Society of the Transvaal v Machaka and Others (No 2)
1998
(4) SA 413
(T) and
Law
Society of the Cape of Good Hope v C
1986
(1) SA 616
(A).
[87]
In considering the evidence before it, the court is not bound by the
views of the LPC. However, the LPC
is not an ordinary litigant. It
brings the matter to court in its capacity as both the
statutory
custos
morum
of
the legal profession, those practising at the side bar, and protector
of the public in their dealings with that profession. Due
weight
should accordingly be given to its views.  See
Solomon
v Law Society of the Cape of Good Hope
1934
AD 401
at 409.
[88]
In
South
African Legal Practice Council v Chalom (18445/2020) [2020] ZAGPPHC
663 (26 November 2020)
at
paragraph
16 to 18 Mudau J
held
as follows
:
“
[16]
In
exercising its discretion, the court embarks upon a three-stage
inquiry. The first inquiry is for the court to decide whether the
alleged offending conduct has been established on a preponderance of
probabilities. This is a factual enquiry. Once the court is
satisfied
that the offending conduct has been established, the second inquiry
is whether the practitioner concerned is a fit and
proper person to
continue to practise. This inquiry entails a value judgment, which
involves the weighing up of the conduct complained
of against the
conduct expected of an attorney. If the court holds the view that,
the practitioner is not a fit and proper person
to practise as an
attorney, the third inquiry is whether in all the circumstances, the
practitioner in question is to be removed
from the roll of attorneys
or whether an order suspending him from practice for a specified
period will suffice. This will depend
on factors such as the nature
of the conduct complained of, the extent to which it reflects upon
the person's character or shows
him to be unworthy to remain in the
ranks of an honourable profession, the likelihood or otherwise of a
repetition of such conduct
and the need to protect the public.
Ultimately, this is a question of degree. In deciding whether an
attorney ought to be removed
from the roll or suspended from
practice, the court is not primarily imposing a penalty. The main
consideration is the protection
of the public.
[17]       A
legal practitioner is expected to scrupulously observe and comply
with the provisions
of the Act, the Rules promulgated thereunder and
the Code of Conduct. The respondent is a member of a learned,
respected and honourable
profession and by entering, upon taking the
oath, he pledged himself with total and unquestionable integrity to
society, to the courts
and to the profession.
[18]       The
courts and the LPC have a duty to act where a legal practitioner's
conduct falls
short of what is expected and to curb the erosion of
values in the profession. The protection of the public goes hand in
hand with
a court's obligation to protect the integrity of the courts
and the legal profession. Public confidence in the legal profession
and
in the courts is undoubtedly undermined when the strict
requirements for membership to the profession are weakened.”
Application of the law to
the facts:
[89]
In embarking upon the three-stage enquiry, I cannot find that
offending conduct has been established
on a preponderance of
probabilities against the 3
rd
, 4
th
, 5
th
,
6
th
, 7
th
and 8
th
Respondents.
[90]
According to the Applicant’s affidavit, the purpose of this
application is to suspend the 2
nd
to 8
th
Respondents pending the finalization of investigations into their
conduct and disciplinary proceedings against them.
[91]
It should however be mentioned that a preliminary investigation has
already been done in respect of the
complaints received by the LPC
relating to the conduct of the Respondents.  Despite the
investigation and the recommendation
by the LPC in the minutes of the
committee meeting held on 31 August 2021, and despite the
investigating committee having found that
according to them the
complaints and investigation constitutes
prima facie
evidence
which is sufficient that the 1
st
Respondent and all those
who were its directors at the time of the commission of the
misconducts which gave rise to all these complaints,
are guilty of
misconducts, not one single misconduct or complaint was alleged or
proved against the 3
rd
, 4
th
, 5
th
,
6
th
, 7
th
and 8
th
Respondents
directly.
[92]
Each and every complaint attached to the Applicant’s Founding
Affidavit is addressed to the 2
nd
Respondent and relates
in essence to the 1
st
Respondent, alternatively the 2
nd
Respondent.  The extremely general allegations of the Applicant
do not at all refer to the 3
rd
to 8
th
Respondents.
[93]
The Applicant applies for the suspension of the 3
rd
, 4
th
,
5
th
, 6
th
, 7
th
and 8
th
Respondents merely on the basis that they were at one stage directors
of the 1
st
Respondent, alternatively members of the 1
st
Respondent, further alternatively it seems, associated with the 1
st
Respondent.  In my view, the Applicant has failed to pass the
first stage of the enquiry against the 3
rd
, 4
th
,
5
th
, 6
th
, 7
th
and 8
th
Respondents and there is therefore no need to proceed to the second
and third stages of the enquiry.
[94]
As the application of the Applicant is one of an interim interdict to
be granted, the Applicant further,
in my view, also had to satisfy
the requirements of an interim interdict. The Applicant has failed to
present any evidence of irreparable
harm being caused by the 3
rd
to 8
th
Respondents if they were to be permitted to
continue practicing as attorneys.  In circumstances where the
1
st
and 2
nd
Respondents have consented to an
order suspending the 2
nd
Respondent from practicing and
having the trust account placed under the control of the Applicant
there can be no harm to the public
relating to the un-investigated
complaints before the court.
[95]
The Applicant has furthermore not presented any evidence that the
balance of convenience favours the
Applicant where it has not made
specific allegations or conducted an investigation specifically
relating to the 3
rd
to 8
th
Respondents.
[96]
No case was made out that the Applicant does not have an alternative
remedy either.  In my view,
the opposite is true, the Applicant
allege to have initiated an investigation process and commenced
disciplinary proceedings.
These disciplinary proceedings have
not been completed.  In my view, in this present matter, the
Applicant was pre-mature in
bringing this urgent application against
the 3
rd
to 8
th
Respondents without having at
least established offending conduct on the part of the 3
rd
to 8
th
Respondents specifically, first.
[97]
In the result the application issued by the Applicant can only
succeed in so far as it relates to the
1
st
and 2
nd
Respondents, as the 1
st
and 2
nd
Respondents
have consented to the order being granted against them.
[98]
As the application stands to be dismissed against the 4
th
and 8
th
Respondents as well, I will therefore not make an
order in respect of the
point in limine
raised by the 4
th
and 8
th
Respondents here above, although my view has been
expressed in this judgment in respect of the defective resolution.
Costs:
[99]
The only issue remaining to be determined is costs. The 3
rd
,
5
th
, and 9
th
Respondents apply that the
application be dismissed with costs. The 4
th
and 8
th
Respondents apply in their answering affidavit that the application
be dismissed with costs on an attorney and client scale, but
in the
4
th
and 8
th
Respondent’s Heads of Argument it
was stated that no order as to costs should be made.
Similarly, the 6
th
and 7
th
Respondents apply
that the application be dismissed with costs.
[100]
The purpose of an award of costs to a successful litigant is to
indemnify him for the expense to which he has been
put through having
been unjustly compelled to initiate or defend litigation, as the case
may be.  The award of costs is a matter
wholly within the
discretion of the court, but this is a judicial discretion and must
be exercised on grounds upon which a reasonable
person could have
come to the conclusion arrived at.
[101]
In leaving a judge with a discretion, the law contemplates that he
should take into consideration the circumstances
of each case,
carefully weighing the various issues in the case, the conduct of the
parties and any other circumstances which may
have a bearing upon the
question of costs and then make such order as to costs as would be
fair and just between the parties.
[102]
Even the general rule, that costs follow the event, is subject to the
overriding principle that the court has a
judicial discretion in
awarding costs.
[103]
In the present matter, the Applicant
is
not an ordinary litigant in this application. The Applicant acts
as
custos
morum
of
the profession, and places the facts and its views for this court to
take appropriate action in the exercise of its discretion
using its
disciplinary powers.
[104]
However, the fact that the Applicant brought this application as
custos morum
,
does not give the Applicant an umbrella protection against a cost
order, especially where for example in this present application,
the
Applicant rushed to court in an application against the 3
rd
to 9
th
Respondents without having placed any facts relating to the 3
rd
and 9
th
Respondents’ conduct before court.
[105]
The Applicant has been represented by senior counsels and senior
counsels have deposed to the affidavits. Acting
as
custos
morum
of the profession, the Applicant
should have taken extra care before bringing this application or any
other application of this nature
to court.  It can hardly be
said that the Applicant acted reasonably in the present application.
[106]
It was pertinently argued by Counsel for the Applicant that the
Applicant needs to protect the fiscus and the profession,
but in
contradiction, the Applicant brought this application pre-maturely
and without any reasonable grounds or substantiated facts
against the
3
rd
to
9
th
Respondents.  In the same breath, the Respondents should also be
protected against the Applicant who abused its powers and the
court
process in bringing this application on an extremely urgent basis.
The Applicant did not even institute these proceedings
with proper
authority, alternatively a proper resolution by the board members.
[107]
In the result there is no reason why the Applicant should not be
ordered to pay the costs of the 3
rd
to 9
th
Respondents on a party and party scale.
[108]
The Applicant has however been successful in respect of the 1
st
and 2
nd
Respondents and therefore, I am of the view that the 1
st
and 2
nd
Respondents should be liable to pay the Applicant’s costs of this
application in so far as the application relates to the 1
st
and 2
nd
Respondents.  The 2
nd
Respondent has consented to the order being granted from the onset
and is attorney and client costs therefore not justifiable in
the
present instance.
[109]
I therefore make the
following order:-
The 2
nd
Respondent is suspended from practicing as an attorney for a period
of 12 months pending the finalisation of investigations into
his
conduct and disciplinary proceedings against him.
The 2
nd
Respondent is ordered to hand over and deliver his certificate of
enrolment as legal practitioner to the Registrar of this Court
within 7 days from date of this order.
In the event
of the 2
nd
Respondent failing to comply with the terms of this order granted in
prayer 2 here above, within 7 days from the date of this order,
the
Sheriff of the district in which the 2
nd
Respondent’s certificate of enrolment is, is authorised and
directed to take possession of the said certificate and to hand it
to the Applicant.
The 2
nd
Respondent is prohibited from handling or operating on the 1
st
Respondent’s trust account.
The Director
of the Limpopo Provincial Council of the Applicant, Khomotso
Matsaung, or any person nominated by her, is appointed
as
curator
bonis
to
administer and control the trust accounts of the 1
st
and 2
nd
Respondents, including accounts relating to insolvent and deceased
estates and any deceased estate and any estate under curatorship
connected with the 2
nd
Respondent’s practices as legal practitioner and including the
separate banking accounts opened and kept by the 2
nd
Respondent at any bank in the Republic of South Africa in terms of
Section 86(1) and (2) of Act 28 of 2014 and/or any separate
savings
or interest-bearing trust accounts as contemplated by Section 86(3)
and/or 86(4) of Act No. 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:-.
5.1
immediately to
take  possession of the 2
nd
Respondent’s accounting records, records, files and documents as
referred to in prayer 6 hereunder and subject to the approval
of the
board of control of the Legal Practitioners Fidelity Fund
(hereinafter referred to as the Fund) to sign all forms and generally
to operate upon the trust account(s), but only to such extent and for
such purpose as may be necessary to bring to completion current
transactions in which the 2
nd
Respondent was acting at the date of this order;
5.2
subject to the
approval and control of the board of control of the Fund and where
monies had been paid incorrectly and unlawfully
from the
undermentioned trust accounts, to recover and receive and, if
necessary in the interest of persons having lawful claims
upon the
trust account(s) and/or against the 1
st
and 2
nd
Respondents in respect of monies held, received and/or invested by
the Respondents in terms of Section 86(1) and (2) and/or Section
86(3) and/or Section 86(4) of Act 28 of 2014 (hereinafter referred to
as “trust monies”), to take any legal proceedings which
may be
necessary for the recovery of money which may be due to such persons
in respect of incomplete transactions, if any, in which
the 2
nd
Respondent was and may still have been concerned and to receive such
monies and to pay the same to the credit of the trust account(s);
5.3
to ascertain
from the 1
st
and 2
nd
Respondents’ accounting records the names of all persons on whose
account the 1
st
and 2
nd
Respondents appear to hold or to have received trust monies
(hereinafter referred to as “trust creditors”) and to call upon
the
1
st
and 2
nd
Respondents to furnish her, within 30 (thirty) days of the date of
service of this order or such further period as she may agree
to in
writing, with the names, addresses and amounts due to all trust
creditors;
5.4
to call upon
such trust creditors to furnish such proof, information and/or
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 monies in the trust account(s) of the Respondents and, if
so, the amount of such claim;
5.5
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 trust
creditor or
creditors, without prejudice to such trust creditor’s or creditor’s
right of access to the civil courts;
5.6
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;
5.7
in the event
of there being any surplus in the trust account(s) of the 1
st
and 2
nd
Respondents after payment of the admitted claims of all trust
creditors in full, to utilise such surplus to settle or reduce (as
the case may be), firstly, any claim of the Fund in terms of Section
86(5) of Act 28 of 2014 in respect of any interest therein referred
to and, secondly, without prejudice to the rights of the creditors of
the Respondents, the costs, fees and expenses referred to in
prayer
10 hereunder, or such portion thereof as has not already been
separately paid by the 1
st
and 2
nd
Respondents 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 1
st
and 2
nd
Respondents, if she is solvent, or, if 1
st
and 2
nd
Respondents are insolvent, to the trustee(s) of 1
st
and 2
nd
Respondents’ insolvent estates;
5.8
in the event
of there being insufficient trust monies in the trust banking
account(s) of the 1
st
and 2
nd
Respondents, in accordance with the available documentation and
information, to pay in full the claims of trust creditors who have
lodged claims for repayment and whose claims have been approved, to
distribute the credit balance(s) which may be available in the
trust
banking account(s) amongst the trust creditors alternatively to pay
the balance to the Legal Practitioners Fidelity Fund;
5.9
subject to the
approval of the chairman of the board of control of the Fund, to
appoint nominees or representatives and/or consult
with and/or engage
the services of legal practitioners, counsel, accountants and/or any
other persons, where considered necessary,
to assist her in carrying
out her duties as curator; and
5.10
to render from
time to time, as curator, returns to the board of control of the Fund
showing how the trust account(s) of the 1
st
and 2
nd
Respondents has/have been dealt with until such time as the board
notifies her that she may regard her duties as curator as terminated.
That the 1
st
and 2
nd
Respondents immediately deliver their accounting records, records,
files and documents containing particulars and information relating
to:
6.1
any monies
received, held or paid by the 1
st
and 2
nd
Respondents for or on account of any person while practising as an
attorney;
6.2
any monies
invested by the 1
st
and 2
nd
Respondents in terms of Section 86(3) and/or Section 86(4) Act 28 of
2014;
6.3
any interest
on monies so invested which was paid over or credited to the 1
st
and 2
nd
Respondents;
6.4
any estate of
a deceased person or an insolvent estate or an estate under
curatorship administered by the 1
st
and 2
nd
Respondents, whether as executor or trustee or curator or on behalf
of the executor, trustee or curator;
6.5
any insolvent
estate administered by the 1
st
and 2
nd
Respondents as trustee or on behalf of the trustee in terms of the
Insolvency Act, No 24 of 1936
;
6.6
any trust
administered by the 1
st
and 2
nd
Respondents as trustee or on behalf of the trustee in terms of the
Trust Properties Control Act, No 57 of 1988;
6.7
any company
liquidated in terms of the Companies Act, No 61 of 1973 read together
with the provisions of the
Companies Act No 71 of 2008
, administered
by the 1
st
and 2
nd
Respondents as or on behalf of the liquidator;
6.8
any close
corporation liquidated in terms of the
Close Corporations Act, 69 of
1984
, administered by the 1
st
and 2
nd
Respondents as or on behalf of the liquidator; and
6.9
the 1
st
and 2
nd
Respondents’ practices as legal practitioners of this Court, to the
curator appointed in terms of prayer 5 hereof, provided that,
as far
as such accounting records, records, files and documents are
concerned, the 1
st
and 2
nd
Respondents shall be entitled to have reasonable access to them but
always subject to the supervision of such curator or her nominee.
Should the 1
st
and/or 2
nd
Respondents fail to comply with the provisions of the preceding
paragraph of this order on service thereof upon them or after a
return by the person entrusted with the service thereof that he has
been unable to effect service thereof on the 1
st
and/or 2
nd
Respondents (as the case may be), the Sheriff for the district in
which such accounting records, records, files and documents are,
be
empowered and directed to search for and to take possession thereof
wherever they may be and to deliver them to such curator.
That the
curator shall be entitled to:
8.1
hand over to
the persons entitled thereto all such records, files and documents
provided  that a satisfactory written undertaking
had 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;
8.2
require from
the persons referred to in prayer 8.1 to provide any such
documentation or information which she may consider relevant
in
respect of a claim or possible or anticipated claim, against her
and/or the 1
st
and 2
nd
Respondents and/or the 1
st
and 2
nd
Respondents’ clients and/or the Fund in respect of money and/or
other property entrusted to the 1
st
and 2
nd
Respondents.  Provided that any person entitled thereto shall be
granted reasonable access thereto and shall be permitted to
make
copies thereof;
8.3
publish this
order or an abridged version thereof in any newspaper she considers
appropriate; and
8.4
wind-up the
1
st
and 2
nd
Respondent’s practices in the event she considers it appropriate.
The 2
nd
Respondent is hereby removed from office as –
9.1
executor of
any estate of which the 1
st
and 2
nd
Respondents have been appointed in terms of
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)
;
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9.2
curators or
guardians 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
;
9.3
trustees of
any insolvent estate in terms of
Section 59
of the
Insolvency Act, No
24 of 1936
;
9.4
liquidators of
any company in terms of
Section 379(2)
read with Section 379(e) of
the Companies Act, No 61 of 1973 and read together with the
provisions of the
Companies Act, No 71 of 2008
;
9.5
trustees of
any trust in terms of Section 20(1) of the Trust Property Control
Act, No 57 of 1988;
9.6
liquidators of
any close corporation appointed in terms of
Section 74
of the
Close
Corporations Act, No 69 of 1984
; and
9.7
administrators
appointed in terms of
Section 74
of the Magistrates Court Ac, No 32
of 1944;
The
1
st
and 2
nd
Respondents are hereby ordered and directed to:
10.1
pay in terms
of
Section 87(2)
of Act No. 28 of 2014, the reasonable costs of the
inspection of the accounting records of the Respondents;
10.2
pay the
reasonable fees of the auditor engaged by Applicant;
10.3
pay the
reasonable fees and expenses of the curator, including travelling
time;
10.4
pay the
reasonable fees and expenses of any person(s) consulted and/or
engaged by the curator as aforesaid; and
10.5
pay the
expenses relating to the publication of this order or an abbreviated
version thereof.
If
there are any trust Funds available the 1
st
and/or 2
nd
Respondents shall within 6 (six) months after having been requested
to do so by the curator, or within such longer period as the
curator
may agree to in writing, satisfy the curator, by means of the
submission of taxed bills of costs or otherwise, of the amount
of
the fees and disbursements due to them (1
st
and 2
nd
Respondents) in respect of their (former) legal practices, and
should she fail to do so, she shall not be entitled to recover such
fees and disbursements form the curator without prejudice, however,
to such rights (if any) as she may have against the trust

creditor(s) concerned for payment or recovery thereof.
A certificate
issued by a director of the Legal Practitioners Fidelity Fund shall
constitute
prima
facie
proof of the curator’s costs and that the Registrar be authorised
to issue a writ of execution on the strength of such certificate
in
order to collect the curator’s costs.
The 1
st
and 2
nd
Respondents shall during the period of suspension (12 months from
date of this order) comply with the provisions of
Sections 84(1)
and
85
of the
Legal Practice Act No. 28 of 2014
.
The
application against the 3
rd
to 9
th
Respondents is dismissed.
The 1
st
and 2
nd
Respondents are ordered to pay the costs of this application in so
far as this application relates to the 1
st
and 2
nd
Respondents, only.
The Applicant
is ordered to pay the costs of the 3
rd
to 9
th
Respondents.
M. NAUDÈ
ACTING JUDGE OF
THE HIGH COURT
APPEARANCES:
HEARD
ON:
12 OCTOBER 2021
JUDGMENT
DELIVERED ON:     25 OCTOBER 2021
For the
Applicant:
Adv. P.W. Makhambeni
Instructed
by:
A M Vilakazi Tau Inc.
Polokwane
Mpho@vilakazitauattorneys.com
For the 1
st
& 2
nd
Respondents:      Adv. D. Mphahlele
Instructed
by:
Mphahlele & Makhumbila Attorneys
C/O CJ Ntsoane Attorneys
Polokwane
info@mminca.com
For the 3
rd
, 5
th
& 9
th
Respondents:
Adv. G. Naude (SC)
Instructed
by:
Hansen Inc. Attorneys
C/O DDKK Attorneys
Polokwane
pa3@ddkk.co.za
For the 4
th
& 8
th
Respondents:
Adv. K. Mokwena
Instructed
by:
Matotola Tseleng Attorneys
Polokwane
Vinoliamat@gmail.com
For the 6
th
Respondent:
Adv. M.R. Maphutha
Instructed
by:
Tstetsewa Inc. Attorneys
Polokwane
tsetsewainc@gmail.com
For the 7
th
Respondent:
Adv. C. Malatji
Instructed
by:
D.S Chuene Attorneys
Polokwane
dschueneattorneys@gmail.com