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[2021] ZAGPPHC 430
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South African Legal Practice Council v Masha and Others (518/20) [2021] ZAGPPHC 430 (8 June 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NUMBER: 518/20
REPORTABLE
OF
INTEREST TO OTHER JUDGES
REVISED
8
JUNE 2021
In
the matter between:
THE
SOUTH AFRICAN LEGAL PRACTICE COUNCIL
APPLICANT
And
TOTOLO
LEHUMO PAUL MASHA
FIRST
RESPONDENT
ESEU
NKE MSIZA
SECOND
RESPONDENT
PAUL
MASHA INCORPORATED ATTORNEYS THIRD
RESPONDENT
(Registration
number, 2004/008540/2 1)
JUDGMENT
TLHAPI
J
INTRODUCTION
[1]
The applicant is a regulatory body which has jurisdiction over the
affairs of all legal practitioners
in the Republic of South Africa.
The applicant was established in terms of section 4 of the Legal
Practice Act No. 28 of 2014 ("the
LPA"). The first and
second respondents are directors and legal practitioners in the third
respondent incorporated firm of
attorneys. The first and second
respondent were enrolled and admitted as members of the applicant
during 1999 and 2003 respectively.
They are permitted upon
registration to function only under the auspices of the applicant and
as contemplated in the LPA. Since
the conduct complained about
preceded the coming into operation of the LPA on 1 November 2018,
section 119 (3) thereof provides
that anything 'done in terms of a
law repealed or amended by the Act and if it is consistent with the
LPA, is valid and is deemed
to have been done in terms of the
corresponding provision of the LPA.
[2]
Pursuant to complaints received against the respondents, the
applicant launched an urgent application
on 9 January 2020, against
the first and second respondent for their removal alternatively,
their suspension pending their removal
as attorneys from the roll of
legal practitioners. According to the applicant, the conduct
complained about posed a risk to the
respondents' trust creditors and
to the Legal Practitioners Fidelity Fund. The latter Fund was created
for the purpose of reimbursing
persons who suffered pecuniary loss as
a result of the misappropriation of trust funds by the legal
practitioner. In terms of section
85 of the LPA a legal practitioner
is obliged to be in possession of a Fidelity Fund Certificate, which
is issued annually and
is valid until 31 December of the year of
issue. The Fidelity Fund Certificate is issued on the basis of an
unqualified auditor's
report and the said report relates to the
financial year ending immediately prior to the application by a legal
practitioner for
such certificate.
[3]
The applicant contended that the respondents were guilty of
unprofessional or dishonourable conduct
and, consequently , that they
were not fit and proper persons to continue to practice as legal
practitioners. The respondents conceded
that the application was
urgent and opposed the application only to the extent of the relief
sought in prayer 1.2, which was for
their removal from the roll of
legal practitioners without a proper audit of the trust account of
their firm.
BACKGROUND
COMPLAINTS
[4]
The applicant contended that the complaints received against the
first and second respondents
were in contravention of the Attorneys
Act, the LPA, the Code of Conduct, the Legal Practice Council Rules
(LPC) and the Rules
of the Attorneys Profession. An investigation was
consequently launched into the conduct of the affairs of the firm
and, the applicant
also relied on the report subsequently produced,
which supported the complaints as basis for the charges against the
respondents.
The investigations were conducted by Mr Swart ("Swart"),
a chartered accountant who conducts investigations for the
applicant's
Risk and Compliance Unit. At his first attempt to obtain
the accounting records of the firm, the respondents reported that
there
was an armed robbery and they had lost the accounting records.
They undertook to endeavour to obtain the records from their auditor
or alternatively to reconstruct such records.
[5]
When there was a delay in producing the records, Swart made effort to
contact the respondents
to no avail. He also reported that the
respondents had failed to cooperate with a person authorised by the
applicant to inspect
the respondents' trust account. It was contended
that there was reluctance to avail the accounting records on the part
of the respondents
. In fact the attempt by Swart to conduct an
investigation and to appoint Mr Van Staden of the applicant's Risk
and Compliance
Unit was not well received by the respondents. They
had indicated that they were seeking legal advice on the matter.
[6]
Annexed to the founding affidavit are the letters of complaint with
annexures, letters to the
respondents depending on the nature of the
complaint, follow up letters of correspondence from the applicant and
in certain instances
minutes of the Investigating and/or Disciplinary
Committee meeting where applicable.
[7]
Having considered the eleven complaints from individual clients and
the Swart report, the applicant
found that there was no difference in
dealing with the complaints individually as pertaining to the first
or second respondents
or cumulatively . The applicant contended that
their conduct was such that they should not be allowed to continue to
practice as
legal practitioners . The report stated that there were
possible trust shortages. This was established by taking into account
a
report from the Attorney's Annual Statement on Trust Accounts and
an independent Registered Auditor's report on Attorney 's Trust
Accounts from the firm's auditors for the year 2017.
[8]
The balances of the amount in the trust account were signed off by
the respondents and their auditor.
The monies available in the trust
account for the years ending 28 February 2016 and 29 February 2017,
were in the amount R3 723.80
and R 38 718.88 respectively . Regard
was had to the complaints, in particular the one regarding the trust
position of their client
Ms Ndlovu. The RAF had in December 2015 made
payment in the amount R 3 192 135.50.The trust shortage at 29
February 2016 was calculated
to be in the amount of R 2 188 411.70
and as at 28 February 2017 an amount of R1 753 416. 62. It was opined
by Mr Swart that the
amount in shortages would increase depending on
when the R 1 000 000.00 was invested and when the R400 000.00 was
paid to Ms Ndlovu.
[9]
The first and second respondents were found to have contravened the
following :
Code
of Conduct:
Clause
16.1 - failure to reply to all communication which required an answer
within a reasonable time unless good cause for refusing
to answer
existed;
Clause
16.2 - failure to respond timeously to requests for information
and/or documentation which they were able to provide;
Clause
16.3 - failure to comply timeously with directives from the
applicant; Clause 18.14 - failure to perform professional work
with a
degree of skill, care or attention and of such quality or standard as
may be expected;
Rules
of the LPC
Rule
54.12 - failure within a reasonable time, after the performance or
earlier termination of the mandate received from the complainant
to
furnish the complainant with a written statement of account setting
out with reasonable clarity:
•
Details of all
amounts received by the firm in connection with the matter,
appropriately explained;
•
Particulars of all
disbursements and other payments made by the firm in connection with
the matter;
•
Fees and other
charges, charged to or raised against the client and, where any fee
represents an agreed fee, a statement that such
fee was agreed and
the amount so agreed;
•
The amount due to
owed by the client;
Rule
54.13 - failed to pay the amount due to the complainant within a
reasonable time.
Legal
Practice Act
Section
37 (2) (a) and (b) read with
Section 87
(2) (a) - the respondents did
not produce any book, documents or record in their possession,
custody or control for inspection
to a person nominated by the
applicant's council, and
Section
86(2)
and (4) read together with
Rule 54
,
14
,
8
of the Rules in that
the respondents did not ensure that the total amount of money in the
firm's Trust banking account, trust investment
account and trust cash
at any date shall not be less than the total amount of credit
balances of the trust creditors shown in its
accounting records.
[10]
Both respondents dispute that the complaints alleged are deserving of
the ultimate sanction, being that of
their removal. Further they
dispute the allegations of deficiencies in the trust account without
a proper audit. They are willing
to cooperate and to grant full
access to the applicant's auditors to investigate their books. A
request in this regard was made
to the applicant but declined. The
respondents lamented the attempt by Swart to launch an investigation
without a resolution in
terms of
section 37
of the LPA.
[11]
According to the first respondent, personal circumstances he suffered
were the reason for his neglect in
fulfilling his oversight role when
payments were made. He admitted his failure of not fulfilling his
responsibilities as a legal
practitioner and he relied mostly on the
second respondent to do his work during his absence . His wife was
diagnosed with an aggressive
cancer during 2012 which required him to
take care of her while receiving treatment. During 2015 she suffered
a stroke and was
bedridden, and this added to his responsibilities of
taking charge of the home and up bringing of his two minor children
ages thirteen
and seven. He eventually had to take leave of absence
from the practice. His wife passed away during 2015 and thereafter he
suffered
depression and had to undergo treatment. He recovered fully
during 2018.
[12]
The second respondent apologised and took full responsibility for his
wrong doing.
[13]
The eleven complaints from clients and responses from the respondents
are summarised below:
13.1
Mr Tumelo Machabe Mohlala: The first respondent failed to execute
with the skill, care or attention in the execution of his
duties
towards the complainant, who had instructed the first respondent to
institute a claim against the RAF on behalf of the his
mentally ill
son. After the complainant had been advised that the offer made by
the RAF in the amount of R25 000.00 was too little
and that the RAF
would be approached to increase the amount. The first respondent
thereafter ignored the complainant's request
for a feedback .
In
answer the first respondent referred the enquiry to the second
respondent who admitted the inordinate delay of four years, he
stated
that this was attributed to the fact that he could not trace the
complainant,
13.2
Ms Anna Yende: The second respondent was instructed to institute a
loss of earnings claim against the RAF. During April 2018
the RAF
settled and paid to the respondents an amount of R2 000 000.00. The
complainant was only paid an amount of R500 000.00
during December
2018. Payment was delayed and the respondents failed to account for
the outstanding amount of R1500 000.00.
The
first respondent denied handling the matter or of knowing how it was
finalized and he referred the enquiry to the second respondent.
The
latter admitted the amount paid in by the RAF. He denied that he
deliberately ignored the complaint. According to him it was
the
complainant who requested that a sum of R500 000.00 be paid into her
account and, she had wanted the rest of the monies paid
into her
account at Standard Bank despite being explained to that the monies
had to be deposited into a trust. He did not
deliberately
withhold payment. The matter had been partly settled and general
damages were settled at a later date. His bill of
costs took long to
be taxed and he still had to draw up a statement for his fees and
disbursements
13.3
Ms Nomvula Sibeko: The first respondent was instructed to institute a
claim against the RAF on behalf of a minor child. The
minor child was
referred to a Doctor for medical examination. The respondent failed
to give the complainant a report on progress
in the prosecution of
the claim.
The
first respondent denied knowledge of the matter which was being dealt
with by the second respondent, He stated that he questioned
the
second respondent who informed him that the complainant failed to
give proper instructions to the respondents.
13.4
Ms Anna Yende: The complainant was assisted by the second respondent.
The RAF settled the claim and paid out a sum R2 000 000.00
for the
loss of earnings during April 2018. An amount of R500 000.00 was paid
to the complainant. An amount of R1 500 000.00 remains
outstanding
and, that the first and second respondent have not accounted fully to
the complainant and or neglected to respond to
correspondence
addressed to them by the applicant.
The
first respondent stated that he did not deal with the matter, he
called for the file to peruse on progress and, he enquired
from the
second respondent who reported that proper instructions were not
given and, the complainant had refused to avail the minor
child for
further medical examination. The second respondent confirmed what was
reported by the first respondent. The complainant
refused to travel
with the child from Natal to Gauteng for medical examinations. The
respondents contend that in this instance
they responded timeously to
the queries from the applicant. After the complaint was lodged it was
difficult to communicate with
the compainant.
13.5
Roel Nel Incorporated Attorneys : Independent Actuaries and
Consultants instructed the attorneys to collect from the respondents
an amount of R78 271.69 in respect of fees for services rendered, in
the form of actuarial reports used by the respondents in their
prosecution of RAF matters on behalf of their clients.
Notwithstanding demand the fees remained outstanding .
The
second respondent contended that the complaint had been dealt with
timeously. The problem was that the statements sent to the
respondents did not reflect some of the deposits the respondents made
and the agreement was that the actuaries would be made when
the work
was done. The respondent had made payment in the amount of R40
000.00.
13.6
Thorrington -Smith & Silver Attorneys obo Mr OPS Zungu: The
respondents were instructed to institute action against the
RAF obo
complaints younger brother Mr Z Zungu who was a psychiatric patient.
Summons had been issued in 2008 . At the time his
younger brother was
assisted his father who had since died. In a follow up on progress in
the matter during 2017 he was informed
by the RAF that indeed summons
had been issued and he was belatedly advised by the first respondent
that the file could not be
located
The
first respondent stated that he was not aware of the complaint,
however, on shown some correspondence by Ms Van Zyl of the applicant
he came across a letter dated 28 July 2004 directed to the client by
an attorney in his office at the time, the postal and email
address
on the letter were no longer in use by his office. The second
respondent denied any knowledge of the matter.
13.7
Ms M M Tshabalala: The first respondent was given instructions to
institute action against the RAF. The first respondent failed
to give
feed back to the complainant. She was later informed by the RAF that
the claim had been settled and that payment in the
amount of R597
751.00 had been paid into the respondents' trust account. It was only
after repeated requests for payment that she
was paid an amount of
R280 000.00.
The
first respondent referred the complaint to the second respondent. The
latter admitted to receiving payment but he contended
but it took
long to prepare a statement for the complainant. He stated that the
communication from the applicant did not reach
him. He had accounted
to the complainant and documentation was available for inspection by
the applicant.
13.8
Ms N J Nyawo: The claim against the RAF on behalf of the
complainant's minor son was settled in the amount of R3 810 517.50.
The second respondent took a fee of 25% paid the client R600 000.00
and invested an amount of R2 000 000.00 with Wealth Property
Trust
during 2014 and the said Trust was liquidated the following year. At
the second respondent's office she was introduced to
a certain Mr
Moloi and she was advised that the first respondent had appointed
him. The complainant stated that she refused to
sign an already
completed document , but that she was forced to because the second
respondent advised that the court order made
provision for the
establishment of a Trust and for the appointment of a curator bonis
The second respondent has failed to give
the applicant a
comprehensive report on the matter.
Again,
the first respondent referred this complaint to the second
respondent. The second respondent stated that he had not deliberately
refused to attend to correspondence with the applicant. He had fully
accounted to the complainant. She was referred to Wealth Property
Trust not by him but by someone in his office. He denied the
participation of a Mr Moloi Further, that the complainant was not
forced to invest in that Trust, that the consultation with her was in
the presence of her brother and sister- in- law. He stated
that he
had communicated with the complainant 's attorney and had reported
the Wealth Property Trust to the Fidelity Trust
13.9
Ms S Radebe: The first respondent was instructed to institute action
against the RAF on behalf of the claimant. The respondent
failed to
inform the claimant timeously that the matter had been finalized, she
heard from the receptionist when she went to make
enquiries. The
first respondent has failed to pay the complainant timeously and to
properly account to the complainant, and had
also failed to provide
proof to the applicant that he had accounted and made payment.
The
first respondent explained that the matter was attended by a Ms
Mvundla who settled the claim at R10 000.00 for general damages.
There was a contribution towards costs in the amount of R2 500.00.
The client was untraceable hence the delay. The complainant
received
R9000.00 and she was satisfied with the outcome. The first respondent
and Ms Mvundla appeared before the applicant and
proof of documents
were handed over to the applicant.
13.10
Ms R Ndlovu: The complainant had given instructions to institute
action against the RAF on behalf of her minor child. It was
only when
she went to make enquiries when she was informed that an amount of
R450 000.00 had been paid into her account, that a
R1 000 000.00
would be invested for the minor child till she reached 18 years and,
further that al R1 000 000,00 was available
to her for the purchase
of immovable property. The second respondent avoided her when she
wanted to purchase the property. On her
enquiries with the RAF she
was informed that the claim had been settled in the amount of R 3 192
135.50 during December 2015. The
second respondent failed to
timeously respond to the applicant and had instead communicated with
the complainant. The complainant
was instructed to open a trust
account into which an amount of R 1 000 000.00 was deposited and a
further amount of R400 000.00
on 19 May 2016. On 15 August 2016
second respondent requested a further meeting with the complainant
where he informed her that
more funds would be deposited in her bank
account the following week. On 22 August 2016 the complainant filed
an affidavit explaining
that there had been a misunderstanding, that
she was satisfied with the second respondent's explanation. The
second respondent
was called before the disciplinary committee of the
Applicant's Monitoring unit was ordered to conduct an investigation.
The
second respondent stated that the complaint was attended to timeously
. He attended a disciplinary enquiry and and the applicant
was given
all the documents relating to the matter The delay was occasioned by
him having to finalize the party and party costs,
Further, the
complainant was arrogant and they tried to protect the interests of
the minor child under extreme difficulty. The
complainant did not
wish the money to be put in trust for the minor child. He believed
that she was being influenced against him.
13.11
Ms P Rasunyane: The first respondent was given instructions to
institute action against the RAF and the first respondent failed
to
give reports on the progress in the matter and he could not be
reached. In response to a complaint by the applicant he advised
that
his office did not have record of the matter, this was despite
conformation by the RAF on 26 September 2016 that the firm
had lodged
a claim. The first respondent subsequently advised that his mandate
had been terminated on 12 December 2015 and that
his office was still
searching for the file.
The
first respondent denies having consulted with the complainant. He
searched for her file and could not find it. The RAF refused
to give
him information regarding the claim as his mandate had been
terminated and he reported such fact to the applicant. He appeared
before the disciplinary enquiry of the applicant and the complainant
declined the invite to attend.
13.12
Ms F M Mahlangu: The first respondent was given instructions to
institute action against the RAF following the demise of one
Ms
Matlala and on behalf of the complainant. The complainant was
informed after a lengthy period that her claim had 'expired'.
The
first respondent neglected to respond to the complaint. The
complainant denied that instructions were given only for funeral
expenses. The first responded pleaded not guilty at the disciplinary
hearing and informed the applicant that it was a certain Mr
Mduba and
attorney was handling the matter and the latter pointed a finger at a
certain Mr Mahlasela of the Germiston branch.
The
first respondent denied knowledge of the matter and at the
disciplinary hearing the complainant stated that she did not know
him
and the matter was postponed
sine
die.
The
second respondent also denied knowledge of the matter.
APPOINTMENT
OF A CURATOR BONIS AND AUDITOR
[14]
In the event that the court is satisfied that the applicant has made
out a case for the removal, alternatively
the suspension of the
respondents , a curator
bonis
has to be appointed in
terms of
section 89
of the LPA, with powers as contemplated in the
notice of motion, to take charge of the books in particular the trust
account and
operations of the respondents and the administration of
the third respondent. In terms of
section 87
(2) of the LPA the
applicant is also entitled to instruct an auditor to write up and
audit the books of the respondent and to certify
compliance with
sections 86
and
87
(1) of the LPA.
ANALYSIS
AND APPLICATION OF THE LAW
[15]
This being a
sui generis
disciplinary process, the applicant
brings forth such facts from which it is objectively determined,
whether the respondents were
fit and proper persons to be allowed to
remain in the legal profession and to practice law. In a long line of
cases it has been
established that the courts engage a three -stage
enquiry, (i) that the offending conduct be established on a
preponderance of
probabilities; (ii) making a value judgment from the
facts whether the legal practitioner is a fit and proper person to
continue
to practice
(iii)
having regard to all the circumstances and in exercising its
discretion whether it is proper to strike a legal practitioner
from
the roll or to suspend him or her from practice; Jasat v Natal Law
Society 2000(3) SA 44 (SCA); Malan v The Law Society of
the Northern
Provinces (568/2007)
[2008] ZASCA 90
at para
[9]
.
[16]
It is contended for the applicant that the respondents ' responses
were replete with defiance and disdain
for the functionaries and the
oversight responsibilities of the applicant.
This
was evident that despite the complaints, they insisted that an audit
of the books of the practice be conducted. It was contended
for the
first respondent that the merits were not challenged and that it was
conceded that serious transgressions had occurred.
Further, it was
contended that remorse was shown and, that a suspension rather than a
removal be ordered. For the second respondent
it was conceded that a
trust shortfall did occur but not to the extent alleged by the
applicant and that same had been caused the
delay in payment by the
RAF. He contended that the shortfall may now be decreased. The second
respondent denied that he had refused
or had not consulted with his
clients
[17]
The value judgment is made by having regard to the conduct complained
about against that which is expected
of the legal practitioner as
determined by the LPA, the Code of Conduct and the LPC rules. This
expectation is aptly stated by
Eksteen JA in Vassen v Law Society of
the Cape of Good Hope 1998 (4) 532 (SCA) at [14 and [15]:
"
....it must be borne in mind that the profession of an attorney, as
of any other officer of the Court, is an honourable profession
which
demands complete honesty, reliability and integrity from its members;
and it is the duty of the respondent Society to ensure
as far as it
is able, that its members measure up to the high standards demanded
of them. A client who entrusts his affairs to
an attorney must be
able to rest assured that the attorney is an honourable man who can
the trusted to manage his affairs meticulously
and honestly."
"When
money is entrusted to an attorney or when money comes to an attorney
to be held in trust, the general public is entitled
to expect that
that money will not be used for any purpose than that for which it is
being held, and that it will be available
to be paid to the persons
on whose behalf it is held whenever it is required."
[18]
In Hepple v Law Society of the Northern Provinces (507/2013)
[2014]
ZASCA 75
(29 May 2014) Mthiyane DP stated at [3]:
".........The
proceedings in applications to strike the name of attorneys from the
roll are not ordinary civil proceedings.
They are proceedings of a
disciplinary nature and are
sui generis.
[4] It follows
therefore that where allegations and evidence are presented against
an attorney they cannot be met with mere denials
by the attorney
concerned. If allegations are made by the Law Society and underlying
documents are provided which form the basis
of the allegations , they
cannot simply be brushed aside, the attorneys are expected to respond
meaningfully to them and to furnish
a proper explanation of the
financial discrepancies as their failure to do so may count against
them. In this regard the remarks
of Harms ADO in Malan v The Law
Society of the Northern Provinces [5] are apposite:
"If
one turns to the bookkeeping charges, the position is simply that
there is no allegation of the seriousness of the offences.
They are
brushed off on the basis
that
the society
failed to prove
a
trust shortage
that the
bookkeeper had erred, that they did not know the rules, that the
auditors had erred, or simply by not dealing with the
pertinent
allegations , the appellants' .....approach on the paper was
obstructionist. These factors are..."aggravating "
and not
extenuating because they manifest character defects, a lack of
judgement and a lack of insight."
Section
37
(2) (a) read with
section 87
(2)(a) and
section 86
of the LPA
[19]
Practitioners (attorneys) must operate a separate trust account as
provided for in
section 86
of the LPA and they have a responsibility
to account to their clients and to the applicant. Rule 54.6 of the
LPC Rules requires
the keeping of books of account which record both
trust account and business account transactions which shall enable
the respondents
to comply with its obligations under the LPA. The
purpose of the LPA is to give assurance to the general public that
through its
powers conferred by the Act it shall ensure that its
members are fit and proper persons to conduct the affairs of clients
in the
legal profession. Practitioners therefore have a duty to
cooperate with the applicant whenever an investigation is called for.
The applicant is entitled in terms the sections 37 (2) (a) read with
section 87 (2) (a), to establish an investigation into alleged
financial irregularities against its members at the premises from
which the trust account is operated. The investigative committee
or
individual so appointed by the applicant may demand that the
practitioner produce for inspection any book/s or document/s relating
to the trust account and the legal practitioner may not refuse to
allow such inspection.
[20]
Of vital importance is the nature of the improper conduct alleged and
displayed by the respondents when,
the applicant after several
complaints made its first attempt to gain access for the purpose of
examining their books. There was
no explanation as to what the stolen
accounting records consisted of, whether the records were kept in
hardcopy form or whether
they used a legal accounting software which
would have meant that computers were stolen. The applicant contended
that it was improbable
that robbers would seek to steal only the
respondents' books of account. The respondents' undertaking to
approach their auditors
to see what could be retrieved was not
carried out and when this was followed upon, demand was made for a
resolution that Mr Swart
was appointed by the applicant to carry out
such investigation. The first respondent informed Mr Swart of an
intention to challenge
applicant's authority to initiate such
investigation.
[21]
The balance on the annual statement in the trust accounts for the
years 2016 and 2017 which were certified
by the respondents' auditors
and, the complaint by Mrs Ndlovu, raised a possibility of a trust
shortage as at financial year ending
29 February 2016 and 28 February
2017 which had to be investigated. While the respondent conceded that
there might be a trust deficit,
they do not agree on the amounts
projected by Mr Swart. This was also the submission in the heads of
argument by counsel for the
second respondent. In my view, even
though the respondents may have been entitled to demand to see a
resolution, or an authority
to Mr Swart to inspect their books, as
stated in Hepple
supra
and Malan
supra,
their conduct
of refusing to cooperate at that early stage and a failure to enlist
the assistance of their own auditors can be
described as being
obstructionist at that time. A failure to properly account to a
client "poses a very serious threat to
public interest" and
a failure to keep proper books of account is serious and exposes the
practitioner to a suspension or
removal from the roll; The Law
Society of the Free State v M G Molapo (1030/2013) ZAFSHC 99 (27 June
2013) and Chetty v The Law
Society, Transvaal 1985 (2)768 AD at 768
E-H.
[22]
Subsequently there was a concession that there is a trust deficit
caused by the RAF's failure to pay settlements
on time. The second
respondent suggests that the trust account may be reimbursed with
fees earned in future matters from the RAF.While
the first respondent
takes full responsibility and pleads that his name not be removed
from the roll, the second respondent suggests
that such concession is
made only to mitigate sentence , in other words , for his name not to
be removed from the roll. In my view,
the second respondent by even
suggesting such solution loses sight of the fact that there was
misappropriation from one client
to reimburse another or, a
misappropriation by the respondents for themselves with monies
belonging to their clients and which
they have not rightfully earned.
This points to an abuse of the position of trust and fiduciary
relationship the respondents had
with their respective clients.
Further, it also points to a disregard of the strain such conduct
puts on the Legal Practitioners'
Fidelity Fund to reimbursing clients
who suffered pecuniary loss as a result of the improper conduct , and
is a weakness in character
establishing that they are not fit and
proper persons to continue practicing as attorneys .
Complaints
by clients : Clauses 16.1; 16.2; 16.3; 18.14 and Rule 54.13
[23]
The above -mentioned clauses in the Code of Conduct and LPC Rules
have been summarised and these pertain
to the process engaged by the
applicant, which was a precursor to ordering an investigation into
the books of account of the practice
by Mr Swart. There was a
complete refusal by the respondent to avail any information. The
applicant has no idea of the extent of
the financial irregularities
that have been complained about or that may be revealed by further
investigation. When considering
the responses to the various
complaints in the answering affidavits , there seems to be a pointing
of fingers , a shifting of the
blame among them, disregarding that in
the process their reluctance to give full cooperation to enquiries
into complaints of their
clients, amounted to unprofessional conduct.
While
it is understandable that the first respondent had personal problems
to deal with during the ill health of his spouse, as
a partner in the
firm he still had a responsibility to ensure that its affairs were
smoothly run, first for the benefit of his
clients and also where he
stood to be remunerated by the practice. He was complicit in the
refusal to avail the books of account
for inspection by Mr Swart.
Decision
of the applicant to seek removal or suspension
[24]
I am satisfied that there was good cause to subject the respondents
to this disciplinary process, however,
I am not satisfied that the
applicant or this court has been placed in a position where it has
been fully appraised of the extent
of the respondent's misconduct ,
especially with relation to the state of affairs regarding the status
of the trust account of
the firm. A full -scale investigation is
required especially given the duration of the misconduct alleged. It
is my view that in
the circumstance it is proper to grant an interim
suspension from practice of both respondents, it being relief in the
alternative
pending a final decision whether or not to strike the
respondents from the roll. In the event that a striking from the roll
is
recommended after the full-scale investigation, "The full
breadth of a practitioner's prior conduct should be before a court
considering an application for re admission", The Law
Society of the Northern Provinces v P A Morobadi (1151/2017) [2018]
CASCA 185 (11 December 2018) .
[25]
In the result the following order is granted:
(a)
The respondents are as an interim measure suspended from practicing
as attorneys pending
the finalization of an investigation into the
trust account ; to be followed by a disciplinary enquiry into the
professional conduct
of the respondents ;
(b)
The investigation into the trust account referred to in (a) must be
instituted within
6 (six) months of the date of this judgement and a
disciplinary enquiry concerning the respondent professional conduct
be instituted
within 2 (two) months of the finalization of the report
on the respondents' trust account;
(c)
The prayers granted in the relief sought in the notice of motion
prayers are: 1.2
the alternative thereto and pending the finalization
of the investigation and disciplinary enquiry in (a) and (b); 1.5 and
1.6
onwards where applicable for purposes of (a) and (b); 1.7; 1.8;
1.9 1.9.1; 1.9.3 are incorporated herein;
(d)
The application for the removal of the respondents' names from the
roll of attorneys
pending the enquiry referred to in are (a) (b) and
the remainder of the prayers not incorporated herein is postponed;
(e)
The parties may supplement their papers on matters arising from the
enquiry,
(f)
Costs are reserved;
TLHAPIV
V
(JUDGE OF THE HIGH COURT)
MNYOVU
B F
(ACTING
JUDGE OF THE HIGH COURT)
MATTER
HEARD ON
09 FEBRUARY 2021
JUDGMENT
RESERVED ON 09 FEBRUARY 2021
ATTORNEYS FOR THE
APPLICANTS : DAMONS
MAGARDIE
RICHARDSON
ATTORNEYS
ATTORNEYS
FOR THE RESPONDENTS: PAUL MASHA INC.