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[2021] ZAGPPHC 416
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Road Accident Fund v All Firms of Attorneys Listed in Annexure "A1" and Others (21560/2021) [2021] ZAGPPHC 416 (9 June 2021)
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
Case
No: 21560/2021
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
THE
ROAD ACCIDENT FUND
APPLICANT
and
ALL FIRMS OF ATTORNEYS
LISTED IN
ANNEXURE
“A1”
FIRST
RESPONDENT
THE
LEGAL PRACTICE COUNCIL
SECOND
RESPONDENT
THE
SHERIFF, PRETORIA CENTRAL
THIRD RESPONDENT
THE
SHERIFF, PRETORIA EAST
FOURTH
RESPONDENT
THE
SHERIFF, CENTURION EAST
FIFTH
RESPONDENT
THE
SHERIFF, JOHANNESBURG CENTRAL
SIXTH RESPONDENT
THE
SHERIFF, JOHANNESBURG NORTH
SEVENTH RESPONDENT
ABSA
BANK LIMITED
EIGHTH RESPONDENT
JUDGMENT
BASSON
J
THE PARTIES
[1]
The
applicant is the Road Accident Fund (the RAF), a Schedule 3A public
entity established in terms of section 2(1) of the Road
Accident Fund
Act
[1]
(the RAF Act). The
first respondent is all firms of attorneys listed in Annexure A1 to
the application (as subsequently revised).
Initially 102
attorneys’ firms were listed as respondents. I will
amplify on the reasons why this list dwindled
down to 14 attorney
firms later in this judgment. Only four attorneys’ firms
opposed this application namely Phefadu
AP Attorneys; Shabangu &
Beachamp Attorneys; Erasmus-Scheepers Attorneys and Frans Rabie
Attorneys. The dispute with
Frans Rabie Attorneys was settled
shortly before the hearing of the application. Only 14
attorneys’ firms therefore
remain on the list of attorneys,
none of whom, except for the three attorneys’ firms mentioned,
have opposed this application.
[2]
The firms listed as respondents are firms that, according to
the RAF’s records, have received duplicate payments from the
RAF and have failed or refused to make repayment of the duplicate
payments to the RAF. Some of those firms have also threatened
to
execute writs against the RAF’s assets immediately after 30
April 2021. Others have failed or refused to reply to
the RAF’s
letters of demand. The second respondent is the Legal Practice
Council (the LPC). The LPC filed a notice
of intention to
participate in the proceedings in accordance with its statutory
duties and functions in order to assist and facilitate
the court in
granting an appropriate order. As will be pointed out
hereinbelow, the ultimate order by this court has been
crafted taking
into account the submissions made on behalf of the LPC. The
remainder of the respondents cited as the 3
rd
to 8
th
respondents have not opposed the application.
MARCH APPLICATION
BEFORE THE FULL BENCH OF THIS DIVISION
[3]
In March 2021, the RAF approached a full
bench of this court for extraordinary relief as a step to stabilise
the precarious financial
position it found itself in an attempt to
prevent a constitutional crisis brought about by the severe financial
difficulties it
found itself in that have been exacerbated by the
Covid-19 pandemic.
[4]
In essence the RAF sought a lifeline suspending
all writs of execution and attachments based on court orders already
granted against
it or settlements already reached with claimants
which entitled the claimants to payment of compensation for damages
resulting
from bodily injury or death caused by road accidents that
are regulated by the RAF Act.
[5]
On
9 April 2021, the full bench handed down its judgment (
Road
Accident Fund v Legal Practice Council and Others
[2]
– “
the
judgment of the full bench”) in which it held that all writs of
execution and attachments against RAF assets based on
court orders
already granted or settlements already reached in terms of the RAF
Act were suspended until 30 April 2021.
[3]
This
was done to,
inter
alia,
allow
the RAF time to implement systems to make payment equitably.
Relevant to this judgment are the following paragraphs
of this
order:
“
(a)…
(b) All
writs of execution and attachments against the applicant based on
court orders already granted or settlements
already reached in terms
of the Road Accident Fund Act, 56 of 1996 (the RAF Act) are suspended
until 30 April 2021.
(c) The
applicant is to pay all claims based on court orders already granted
or settlements already reached in
terms of the RAF Act, which are
older than 180 days as from the date of the court order or date of
the settlement reached, on or
before 30 April 2021, provided that the
applicant has been notified by any attorneys who represent claimants
that have such claims
that are older than 180 days of the existence
of such claims in accordance with paragraph 3 of this court's order
made on 16 March
2021.
(d) All
writs of execution and warrants of attachment against the applicant
based on court orders already granted
or settlements already reached
in terms of the RAF Act, which are not older than 180 days as from
the date of the court order or
date of the settlement reached, are
suspended from 1 May 2021 until 12 September 2021….”
[6]
The
remainder of the order provides for issues such as steps to be taken
to register and capture court orders or written settlement
agreements
on the RAF’s payment list and for the RAF to continue with its
process of making payment of the oldest claims
first by date of court
order or date of written settlement agreement
a
priore tempore
.
[4]
[7]
The upshot of this order therefore is that
all executions against the RAF assets were suspended until 30 April
2021. Beyond
30 April 2021 the RAF therefore has no further
protection against execution in respect of orders older than 180
days.
[8]
The RAF refers to the fact that in the
period dating 1 to 29 April 2021, it paid out 19,395 claims worth R 4
575 427 892.97
to firms of attorneys who had conducted
themselves honestly and in terms of the RAF’s rules and
precepts. On the date
of the launch of this application, the
RAF had processed a further 5 763 claims worth R 380 584
586.50. The
total of payments made by the RAF to claimants
during April 2021 totalled an amount of R 4 956 012 579.47.
In
the preceding period from 1 to 31 March 2021 a total of
51,043 claims to the value of R 8 006 528 668.39 were
paid
out.
THE
PRESENT APPLICATION
[9]
This application is a sequel to the application
launched by the RAF against various firms of attorneys who were
executing daily
against the RAF’s assets including its bank
accounts which conduct had virtually brought the RAF’s business
to a standstill
and which culminated in the judgment of the full
bench.
[10]
The
RAF once again approaches this court on an urgent basis for a
rule
nisi
to
be issued calling upon all firms of attorneys listed in Annexure “A1”
and any other interested parties to show cause,
if any, to this court
on 6 July 2021 at 10H00 why this court should not make a final order
that any writ of execution based upon
a court order that compels the
RAF to make payment to a trust account of any of the respondents
listed in “Annexure “A1”
or any attachment pursuant
thereto is suspended in terms of section 173 of the Constitution,
[5]
alternatively Rule 45A of the Uniform Rules of Court and set aside
pending:
(i)
Repayment by such of the respondents listed in Annexure “A1”
of all duplicate
payments to the RAF and the reconciliation of the
RAF’s records and processes; alternatively
(ii)
The finalization of an application to be brought by the Applicant
within 45 days of the
date of this Honorable Court’s order in
which application the Applicant will seek just and equitable relief.
That
the order shall operate as an interim order, with immediate effect,
pending the confirmation or discharge of the
rule nisi
.
[11]
The RAF explains that this application is necessitated by
virtue of the terms of the order of the full court which suspended
all
writs of execution and attachments against the
applicant based on court orders already granted or settlements
already reached in
terms of the RAF Act (older than 180 days) but
only until 30 April 2021.
[12]
Since this court order the RAF suspended
payment to various attorneys’ firms (initially the 102
respondents listed on Annexure
“A1” now only 13) due to
duplicate payments that they received into trust and have not repaid
or have repaid but the
RAF is still busy with urgent reconciliation
of such repayments. The RAF makes it clear in its papers that
it had the funds
to make payment of the relevant claims before 30
April 2021 in accordance with the order of the full court but could
not do so
because payment was suspended to some firms due to the
unresolved issue of double payments.
[13]
The
purpose of this application is to seek urgent interim relief against
the threat by the remaining attorneys’ firms to execute
against
the RAF’s assets immediately after 30 April 2021 in
circumstances where payment to their trust accounts has been
suspended due to the unresolved issue of double payments. The RAF
submitted that this court can urgently intervene in terms of,
inter
alia
,
section 39(2) and 173 of the Constitution to prevent a constitutional
crisis and to prevent potential contraventions of the Public
Finance
Management Act
[6]
(PFMA). The RAF further submitted that the RAF is
constitutionally obliged to put measures in place to safeguard its
“available
resources” against fruitless and wasteful
expenditure and more specifically against contraventions of the
PFMA.
[7]
[14]
Regarding its public duty, the RAF points
out that it should ensure that the administration of the Road
Accident Fund Fuel Levy
is not spent fruitlessly, wastefully or
disbursed where there is suspicion of impropriety especially in
respect of the trust account
of an attorney’s firm and that the
RAF is empowered and obliged to suspend payment in instances of
suspicion of impropriety
to an attorney’s trust account. It
is further submitted that any attempt to execute after 30 April 2021
against the
RAF’s assets before repayment of double payments
and reconciliation constitutes an attempt to circumvent the RAF’s
systems to safeguard the RAF Fuel Levy against unconstitutional
conduct.
[15]
The RAF acknowledges the plight of
claimants that will have to wait for the claims to be met but submits
that it owes such claimants
and the public a duty not to pay monies
to trust accounts or law firms that continue to owe the RAF or while
the process of reconciliation
is ongoing. One of the problems
highlighted by the RAF with the duplicate payments is that it has
become apparent that many
firms have used duplicate funds received
from the RAF for purposes other than as designated. Also, the
RAF cannot in many
instances determine which claims have actually
been paid, if any, with those double payments.
[16]
By now the financial woes of
RAF
are well-known and need not be restated. But, in order to give
some context to the present application, I find it suffice
to briefly
refer to some aspects highlighted by Mr. Collins Phutjane Letsoalo,
the Chief Executive Officer of the RAF (CEO), in
the founding
affidavit deposed to on behalf of the RAF. He explains that the
RAF has discovered over the years that billions
of rands of public
funds were paid as double payments to firms of attorneys’ trust
account. In November 2020 alone,
the total of such duplicate
payment was in the region of R1.2 billion. Since then, the RAF
has successfully recovered significant
amounts of duplicate payments
from firms of attorneys.
[17]
The RAF explains that once its records show
that a firm of attorneys received duplicate payments from the RAF,
the RAF would inform
that firm of attorneys that the decision has
been taken to suspend payment to the trust account pending the
repayment of the duplicate
amounts and a reconciliation thereafter.
Where a firm disputes that it had received duplicate payments,
the RAF would provide
that firm with proof of the duplicate payments
that were made to its trust account. Usually, such proof would
be in the form
of proof of payments or bank statements. If a
firm of attorneys still disputes that they received duplicate
payments, the
RAF would then suggest as an urgent option that the
dispute be referred to alternative dispute resolution to be
determined by an
independent auditor. Should the independent
auditor find that the duplicate payments were received by the firm of
attorneys,
then the firm of attorneys is expected to pay the costs of
the alternative dispute resolution. However, where there is no
dispute
that a firm of attorneys received duplicate payments into its
trust account, then there is no dispute to be referred to alternative
dispute resolution and the firm of attorneys would then have no right
to withhold repayment to the RAF.
[18]
There are approximately 300 firms on the
RAF’s database of attorneys involved in RAF matters. I
have already referred
to the fact that 102 firms have been identified
as having received duplicate payments and their names appear on
Annexure “A1”
to this application as respondents. Since
the launch of this application, by far most of these 102 firms have
responded to
the demand of the RAF and accepted their duty to repay
duplicate payments. Once they have repaid any duplicate amounts
paid
into their trust account and after the RAF has done the
necessary reconciliation, their names are then removed from the list.
Of
the 102 attorney firms initially implicated in the duplicate
payment scheme, only 13 remain.
[19]
The RAF assured the court that where a firm
of attorneys repaid duplicate payments to the RAF and once
reconciliation of the RAF’s
records has occurred, the
suspension of payment is lifted. Their place on the list is
restored and payment from oldest to
newest claims
a
priore tempore
is resumed.
[20]
I
should also mention in passing that where a firm of attorneys has
refused to make repayment of duplicate payments, such conduct
is
invalid, unlawful and unconstitutional. The codes of conduct of
officers of this court expect such practitioner immediately
to repay
any duplicate payments. Furthermore, every legal practitioner
is required to report to the LPC any dishonest or
irregular conduct
on the part of the trust account in relation to the handling of or
accounting of trust money on the part of the
trust account (Rule
54.36). Moreover, trust account legal practitioners are
responsible for ensuring that the provisions
of the Legal Practice
Act
[8]
and of those rules relating to trust accounts are complied with (Rule
54.19).
[21]
The RAF referred the court to various
letters that have been dispatched to attorneys suspected of having
received duplicated payments
as discussed below.
THE
LETTER OF 18 APRIL 2021
[22]
On 18 April 2021 a letter entitled
“DUPLICATE PAYMENTS AND CRIMINAL INVESTIGATIONS” was
dispatched to the implicated
firms. In this letter the firm is
advised that it has received double payments from the RAF into its
trust account and is
currently being investigated for possible
criminal conduct. Subsequent to having receiving double payments, the
firm has failed
or refused to make repayment of the double payments
to the RAF. A formal complaint has also been made against such
firm to
the LPC. The RAF refers to the court order of the full
bench in terms of which the RAF is ordered to pay all claims based
on
court orders already granted or settlements already reached in terms
of the RAF Act which are older than 180 days from the date
of the
court order or the date of the settlement reached on or before 30
April 2021.
[23]
The firm to which this letter was addressed
is advised that payment is currently suspended pending repayment of
all double payments
to the RAF. The firm is requested to state
by 20 April 2021 whether it agrees to make repayment of all double
payments to
the RAF and if not, the full reasons for refusing to do
so. The firm is also advised of the urgent alternative dispute
resolution
process that is in place. The firm is further
advised that, should it choose to refuse to make repayment of all
double payments,
then such firm is requested to indicate by 20 April
2021 whether it intends to execute any warrants after 30 April 2021
against
the RAF’s assets and to provide the details of those
parties’ writs. Should the firm agree to make repayment
to the RAF of all double payments and such repayment is made on or
before 20 April 2021, then the claims older than 180 days will
be
paid before the end of April 2021. Lastly, the firm is advised
that if such firm is intending to execute on any of the
RAF’s
assets, then it is the RAF’s intention to bring proceedings in
terms of,
inter alia
,
Rule 45A to suspend execution. To avoid cluttering the court
with urgent applications, the RAF finally requests that the
attorneys’ firm gives the RAF warning of its intention to
attach so that the RAF can negotiate with that particular attorneys’
firm an orderly disposal of such application.
THE
LETTER OF 27 APRIL 2021
[24]
On 27 April 2021, a further letter was
dispatched to those attorneys’ firms suspected of having
received duplicate payments
but who have not responded to the letter
of 18 April 2021. The said attorneys’ firm is advised
that unless it responds
to that letter and states that it will not
execute against the RAF’s assets after 30 April 2021, the RAF
intends bringing
“an extremely urgent application for a
rule
nisi
to ensure that it can continue to
operate as an essential institution.”
IS
THE RELIEF SOUGHT IN CONFLICT WITH THE JUDGMENT OF THE FULL BENCH?
[25]
Before I turn to the merits of the matter
in more detail, it must be considered whether or not the judgment of
the full court constitutes
an obstacle against bringing the present
application.
[26]
Counsel on behalf of Erasmus-Scheepers
Attorneys (now 14
th
on the list - Annexure “A1”) submitted that it is in
conflict with the judgment, particularly in light of the fact
that
the motive behind this application is to withhold payment to
successful claimants on the basis that there is a “suspicion
of
impropriety” in the conduct of the attorneys listed in Annexure
“A1”. Moreover, it submitted that having
regard to
what the full bench held in paragraph 39 of the judgment, it is clear
that payment to successful claimants should not
be withheld by the
RAF because of a dispute between the attorneys representing the
claimants and the RAF.
[27]
I do not read the judgment of the full
bench to exclude any possible approach to the court to further
suspend writs of execution
and warrants of attachment. What is, in my
view, clear from the judgment is that the RAF may, on a case by case
basis, approach
the court if it has
valid
grounds
to seek an order for a
(further) suspension. The full bench held as follows:
“
[39] I
have referred to the objections raised by attorneys acting on behalf
clients who are successful claimants
against the RAF. I do not
believe that payments should be withheld from successful claimants
because of a dispute between the RAF
and the attorneys acting for
them, or pending the repayment of double payments by attorneys. Such
exceptions may cause undue hardship
on and be unfair to successful
claimants
.
In such instances, the RAF should approach the court, on a
case-by-case basis, if it believes or is advised that it has valid
grounds to obtain an order suspending writs of execution and warrants
of attachment against it. The order which we propose to make,
therefore, does not provide for any exceptions.
The RAF, as it undertook to do, must pay all claims based on court
orders already granted or settlements already reached in terms
of the
RAF Act, which are older than 180 days as from the date of the court
order or date of the settlement, on or before 30 April
2021, provided
it has been notified by any attorneys who represent claimants that
have such claims that are older than 180 days
of the existence of
such claims in accordance with paragraph 3 of this court's order made
on 16 March 2021.”
[9]
[28]
I will return to whether the RAF has made
out a
prima facie
case for interim relief later in the judgment.
OTHER
ISSUES RAISED
[29]
Various other issues have been raised by
the three parties before court. I intend to deal with them briefly.
But before I
do so, only two attorneys firms –
Erasmus-Scheepers and Shabangu B Attorneys – have properly
opposed this matter by
filing an intention to oppose and followed by
an opposing affidavit. In the case of Erasmus-Scheepers a
counter-application
has also been filed. The first name on the
list in Annexure “A1” – Phefadu AP Attorneys –
only filed
a notice in terms of section 6(5)(d)(iii) of the Rules of
its intention to raise various points of law. It did not file
an
answering affidavit disputing the allegations of double payments
levelled against it. As such those factual allegations
vis
à vis
Phefadu AP Attorneys stand
uncontested. Also, the said notice was filed late.
Urgency
[30]
The first is the issue of urgency.
Shabangu B Attorneys submitted that there is no evidence
whatsoever of any actual or threatened
attempt by them to either
attach or execute against any of the RAF’s assets and submitted
that the mere theoretical existence
of such possible attachments or
execution somewhere in future does not render the application urgent.
This may be so in their
case. But, if regard is had to
the order of the full court, the RAF enjoys no protection against
execution after 30 April
2021 in respect of orders older than 180
days.
[31]
I have referred to the correspondence in
which attorney firms on the list have been requested to indicate
whether or not they intend
to execute any warrants against the RAF’s
assets by 16H00 on 28 April 2021 failing which the RAF would assume
that they intended
to execute should they not state that they would
not. In that event the RAF would then approach the court on an
extremely
urgent basis for a ruling. Nothing has been placed
before the court to indicate that any of the other attorneys on the
list
have given such an undertaking.
[32]
I am therefore of the view that the matter
is urgent in order to prevent a flurry of executions in circumstances
where an attorneys’
firm is suspected of having received double
payments.
POINTS
OF LAW RAISED BY PHEFADU AP ATTORNEYS
Section
173 and Rule 45A of the Rules
[33]
Phefadu AP Attorneys submitted with
reference to section 173 of the Constitution and Rule 45A of the
Rules that this court does
not have the necessary jurisdiction to
grant suspension relief. The submission that this court does not have
the power to grant
suspension relief is misplaced and has been dealt
with by the full court as follows:
“
[30] It
is unnecessary for us to decide whether r 45A of the Uniform Rules of
Court, which provides that '[t]he
court may suspend the execution of
any order for such period as it may deem fit', finds application in
the present case, because
a stay of execution falls within the
purviews of a court's common law inherent power to regulate its
procedures and also s 173
of the Constitution. Superior courts have
an 'inherent reservoir of power to regulate its procedures in the
interests of the proper
administration of justice':
Universal
City Studios Incorporated and others v Network Video (Pty) Ltd
[1986] ZASCA 3
;
[1986]
2 All SA 192
(A). There, Corbett JA drew a distinction between a
court creating substantive law as opposed to procedural law:
'Substantive law
is concerned with the ends which the administration
of justice seeks; procedural law deals with the means and instruments
by which
those ends are to be attained'. The present case clearly
concerns procedural law, not substantive law.”
Non-joinder
[34]
Phefadu AP Attorneys (as did Shabangu B
Attorneys) also raised the issue of non-joinder. This point
likewise has no merit.
In this matter all those attorneys that
are suspected of having received double payments have been notified.
They represent
the claimants affected by any order that this
court may ultimately grant. In these circumstances the steps
taken renders
the joinder of each and every claimant to these
proceedings for purposes of the issuing of a
rule
nisi
adequate. The issue of
non-joinder was also fully dealt with by the full court:
“
[10] This
matter, in my view, is one where the joinder of the many thousands of
parties that could be affected
by the order of this court, is
unnecessary in the light of the steps taken by the RAF to notify as
many parties of its application
as possible. The steps taken are
adequate. The number of affected parties is substantial, and the
steps taken by the RAF to notify
the sheer volume of parties that
could be affected were sufficient to effect their joinder. Only the
seventeenth to twenty third
respondents responded and were joined to
these proceedings. The failure to respond by those who were notified
can be taken to equate
to a waiver of the right to be joined.”
[35]
See
also in this regard
Insamcor
(Pty) Ltd v Dorbyl Light & General Engineering (Pty) Ltd, Dorbyl
Light & General Engineering (Pty) Ltd v Insamcor
(Pty) Ltd
[10]
where
the court dealt with non-joinder where a substantial number of
persons are affected and held that the issuing of a
rule
nisi
may be sufficient in such circumstances.
[11]
PRIMA
FACIE
RIGHT
[36]
The
RAF submitted that it has no alternative but to temporarily suspend
payment to trust accounts where there is a suspicion of
impropriety
particularly in the form of having received double payments. Any
attempt to further execute after 30 April 2021
against the RAF’s
assets before repayment of the duplicate payments amounts to an
attempt to circumvent the RAF systems to
safeguard the RAF Fuel Levy
against unconstitutional conduct. Except for Shabangu B
Attorneys and Erasmus-Scheepers Attorneys,
none of the other firms on
the list has disputed the claim of double payment. I will
return in more detail to whether a
prima
facie
case for relief has been made out in respect of Shabangu B Attorneys
and Erasmus-Scheepers Attorneys but, as will be pointed out,
I am
likewise of the view that a
prima
facie
case for relief has also been made out in respect of them. In
this regard I agree with the sentiments expressed by Fisher
J in
Taylor v Road Accident Fund
and a related matter
:
[12]
“
Conclusion
[131]
While De Broglio might believe that it has served the interests of
its clients and itself in achieving a settlement agreement
for a
grossly inflated amount in circumstances where it has avoided this
court's jurisdiction, in fact it has placed them in jeopardy.
To the
extent that the settlements are unconstitutional they are
unenforceable. And if payment is made pursuant thereto this would
constitute irregular expenditure by the RAF and potentially make
those approving such payments vulnerable to personal scrutiny
by the
courts. The RAF is a public entity, as contemplated in part A of sch
3 to the Public Finance Management Act (“PFMA”)
and is
therefore subject to the onerous prescripts relating to public
expenditure set out in the PFMA. Thus, without further
collusion by the RAF in relation to payment, the settlements are, in
effect, worthless.”
REASONABLE
APPREHENSION OF HARM
[37]
I am in agreement that should the order not
be granted, the RAF will lose the progress it has made since the
implementation of systems
to safeguard the RAF Fuel Levy against,
inter alia
,
wasteful expenses brought about by the billions of Rand that have
been paid over to the trust accounts of various firms of attorneys
in
the form of double payments. Should the process of attachment
be allowed to continue in circumstances where there exists
suspicion
of impropriety especially in respect of a trust account, the
administration of the RAF in attending to and paying out
claims to
claimants, will be severely hampered. I am thus persuaded that
the RAF will suffer irreparable harm should the
interim order not be
granted.
BALANCE
OF CONVENIENCE
[38]
I have considered the plight of those
clients of the firms of attorneys listed in Annexure “A1”.
It is indeed
unfortunate that the individual claimants again
have to bear the brunt of serious failings not only on the part of
the RAF but
on the part of their attorneys. This is indeed
unfortunate. On the other hand, this court cannot lose sight of
the
importance of resolving existing disputes regarding double
payments whereafter the payment to claimants will be restored.
[39]
One also cannot lose sight of the fact that
the RAF has a constitutional obligation to safeguard the RAF Fuel
Levy and to ensure
that claimants have indeed benefitted from
payments that have been made into the trust account of their
attorneys.
[40]
Lastly, the court can also not, in my view,
ignore the fact that the launching of this application yielded
significant success in
that the RAF has recovered significant amounts
of duplicate payments from firms of attorneys. That it took an
application
such as this to catapult numerous attorneys’ firms
into repaying amounts they were not entitled to in the first place,
is
also unfortunate.
[41]
The fact that time limits are set to
resolve the outstanding dispute does, to some extent, ameliorate the
harm that a claimant may
suffer.
NO
ALTERNATIVE RELIEF
[42]
I am in agreement that the RAF has no other
alternative remedy but to seek urgent interim relief in circumstances
where the measure
of protection that was afforded by the full court
no longer exists.
THE
12
TH
NAME ON ANNEXURE “A1”: SHABANGU B
ATTORNEYS
[43]
Shabangu B Attorneys accept that they have
received double payments but do not disclose how much they have
received in duplicate
payments. They do, however, undertake in
their papers that they will repay duplicate payments but that they
intend to make
deductions from the double payments and then only
thereafter repay the balance thereof.
[44]
The RAF is adamant that no deductions can
be made from the duplicate payments paid into the trust account and
that this firm is
obliged to make repayment. Shabangu B Attorneys
also places the blame for the double payments squarely on the
shoulders of the
RAF but conveniently fails to accept the obligation
of the firm
vis
-
à -vis
its
trust fund to repay any double payments paid into its trust account.
The following extract from Shabangu B Attorneys’
affidavit is instructive:
“
From
this paragraph it is patently obvious that any double payments that
may have been made to my legal practice was made exclusively
at the
hands of Applicant and was the Applicant’s own fault.”
“
I
do admit that my legal practice has from time to time received
erroneous and duplicate payments from the Applicant which have
been
addressed.”
“
I
concur the duplicate payments could indeed have occurred under the
circumstances outlined at sub-paragraph 1.4 but, once identified,
the
issue could have easily resolved administratively by engagement
between the Applicant’s relevant officials and effected
legal
practices”
“
The
Applicant must indeed avoid wasteful and fruitless expenditure but
within the realms of the law.”
[45]
I am likewise of the view that the RAF has,
in respect of Shabangu B Attorneys,
established
a
prima facie
right to the relief sought, that there is a reasonable apprehension
of harm, that there is no suitable alternative remedy, and
that the
balance of convenience favours the granting of the relief. Shabangu
B Attorneys should repay all duplicate
payments to the
RAF forthwith, without deductions, whereafter reconciliation will
follow and the suspension will be lifted. Once
the suspension
has been lifted, payment will resume
a
priore tempore
.
THE
14TH NAME ON ANNEXURE “A1”: ERASMUS-SCHEEPERS ATTORNEYS
[46]
Erasmus-Scheepers Attorneys filed a
comprehensive answering affidavit together with a counter-application
in which it claims that
it has already duly accounted to the RAF in
respect of three matters referred to as the “Chetty”
matter; the “Wuster”
matter and the “Demana”
matter. Despite having done so, the RAF and its attorneys
ignored the accounting furnished
to it. It also submitted that
the RAF did not establish a case to suspend and/or set aside
attachment of assets of each of
the successful clients.
[47]
Erasmus-Scheepers Attorneys do not dispute
having received duplicate payments and have in fact repaid half of
the duplicate payments
to the RAF. They, however, assert that they
have the right to apply set-off against duplicate payments. The
RAF disputes
this and submits that where an attorneys’ firm
receives double payments into its trust account, such public funds
cannot
be utilised in any way and must be repaid immediately. The
RAF insists that Erasmus-Scheepers should repay the balance to
the
RAF forthwith after which the RAF will reconcile its accounts. Once
repayment has occurred and the reconciliation completed,
payment to
their trust account
a priore tempore
will be restored. That this is the nub of the dispute between
the parties also appears from Erasmus-Scheepers’ affidavit:
“
[19]
To my mind the nub of the dispute, between the Applicant and ES
Attorneys (and its ref clients concerned) is whether or not
set-off
has lawfully occurred. If the Honourable Court is against my
submissions on this score:
19.1
ES Attorneys asks that the matter stands down for an hour, whereupon
it will furnish the Honourable Presiding Judge proof of
payment, into
the Applicant’s so-called “Debtors Account” number
… of the R 80 257.38 common cause
disputed amount….
19.2
upon such payment the Applicant will have no further excuse not to,
within 48 hours (as opposed to when and if it wants) to
reconcile its
records accordingly, inform Treasury thereof, and remove any
reference to ES Attorneys from any of its internal lists
and
processes which may prevent or hamper future payments of the claims
of its RAF clients into the trust account of ES Attorneys.”
[48]
I am persuaded that in respect of
Erasmus-Scheepers Attorneys the RAF has likewise established a
prima
facie
right to the relief sought, that
there is a reasonable apprehension of harm, that there is no suitable
alternative remedy, and
that the balance of convenience favours the
granting of the relief.
[49]
Regarding the counter-application,
Erasmus-Scheepers Attorneys sought an order that the RAF must first
and in writing inform them
of alleged double payments whereafter
Erasmus-Scheepers will have 14 court days within which to respond
thereto. If the RAF
is still not satisfied the dispute must be
adjudicated by a court or by an alternative dispute resolution forum
to be agreed upon
by the parties before the RAF may take any internal
steps which prevent further payment of the claims of the third party
claims
of Erasmus-Scheepers. In the alternative, should this
court not be inclined to come to the assistance of Erasmus-Scheepers,
the balance of R 80 257.38 will be repaid by Erasmus-Scheepers
into trust pending the conclusion of the main application.
[50]
I have already largely dealt with the RAF’s
response to Erasmus-Scheepers. In brief, the
counter-application has no
merit. The dispute between the
parties is clear and by its own papers, Erasmus-Scheepers
acknowledges what the disputed amount
is. As already pointed
out, once the amount has been repaid and the urgent reconciliation
has been completed, Erasmus-Scheepers’
position on the payment
list will be restored. The RAF cannot reconcile its records
until repayment has been made into the
RAF’s account. Also,
Erasmus-Scheepers could have – as other firms of attorneys have
– repaid the balance
under protest in order for the
reconciliation process to take place. In the event the
counter-application is dismissed.
THE
LEGAL PRACTICE COUNCIL
[51]
The LPC’s participation is limited to
the alternative relief initially sought by the RAF and only to the
extent that reference
is made to the appointment of a
curator
bonis
by the LPC. In this regard
the LPC submitted that the alternative relief should not include an
order that the RAF may request
the LPC to appoint a
curator
bonis
to control and administer the
trust accounts of such firms of attorneys who appear on the list
(Annexure “A1”) who
refuse or neglect to repay any
duplicate payments which are proven to have been made to them.
[52]
The RAF has conceded the point and the
draft order submitted to the court has been amended accordingly.
ORDER
[53]
In the event the following order is made:
1.
A
rule nisi
is issued calling upon all firms of attorneys
listed in Annexure “A1” and any other interested parties
to show cause,
if any, to this court on 6 July 2021 at 10H00, why the
following order should not be made final:
1.1
Any writ of execution based upon a court order that compels the
Applicant to make payment to a trust account
of any of the First
Respondents listed in Annexure “A1” or any attachment
pursuant thereto is suspended in terms of
Section 173 of the
Constitution, alternatively Rule 45A of the Uniform Rules of Court
and set aside pending:
1.1.1
Repayment by such of the First Respondents listed in Annexure “A1”
of all duplicate payments to the Applicant
and the reconciliation of
the Applicant’s records and processes; alternatively
1.1.2
The finalization of an application to be brought by the Applicant
within 45 days of the date of this Honorable Court’s
order in
which application the Applicant will seek just and equitable relief.
2.
That the order sought under paragraphs 1 to 1.1.2 shall operate as an
interim
order, with immediate effect, pending the confirmation or
discharge of the
rule nisi
.
3.
That the Applicant be granted leave to publish this order by
publication in two
national newspapers.
4.
That the Applicant’s costs of this application are to be paid
by Erasmus-Els
Incorporated t/a Erasmus-Scheepers Attorneys, Shabangu
B Attorneys and Associates and AP Phefadu Incorporated, jointly, and
severally,
the one paying the other to be absolved, including the
costs of two counsel, one of whom is a senior counsel.
AC BASSON
JUDGE OF THE HIGH
COURT
GAUTENG DIVISION OF
THE HIGH COURT, PRETORIA
Electronically
generated and therefor unsigned
Delivered:
This judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically
by circulation to the
Parties/their legal representatives by email and by uploading it to
the electronic file of this matter on
CaseLines. The date for
hand-down is deemed to be 9 June 2021.
APPEARANCES
For the
Applicant:
ADV. CEDRIC PUCKRIN SC
(Road Accident
Fund)
ADV. REIMER SCHOEMAN
ADV. PALESA
NYAPHOLI-MOTSIE
Instructed
by:
MALATJI & CO ATTORNEYS
For the 1
st
Respondent:
ADV. MATLHABA MANALA
(Phefadu AP
Attorneys)
ADV. DONALD SEKWAKWENG
Instructed
by:
AP
PHEFADU ATTORNEYS
For the 1
st
Respondent:
ADV. BP GEACH SC
(Shabangu & Beachamp
Attorneys)
ADV. FHH KERHAHN
ADV.
DB TSHABALALA
Instructed
by:
SHABANGU B ATTORNEYS & ASSOCIATES
For the 1
st
Respondent:
ADV. RUSSEL BEATON SC
(Erasmus-Scheepers
Attorneys)
ADV. JACQUES EASTES
ADV. DB TSHABALALA
Instructed
by:
ERASMUS-SCHEEPERS ATTORNEYS
For the 2
nd
Respondent:
MR
LIAM GROOME (ATTORNEYS)
(Legal Practice
Council)
Instructed
by:
ROOTH & WESSELS INC
Date
of hearing:
3
June 2021 (virtual hearing)
Date
of judgment:
9
June 2021
ANNEXURE
“A1”
1.
Phefadu AP Attorneys with its business
address at Suite 407-408, Savelkouls Building, Cnr Paul Kruger &
Pretorius Street.
2.
CN Phukubje Attorneys with its business
address at 83 Albertina Sisulu Street Corner Von Brandis Street
Bradlows Building, Works
@ Market 4th Floor Offices 405-407.
3.
Gura Tlaletsi & Partners with its
business address at 38 Carrington Street Mafikeng Industrial
Mafikeng, North West.
4.
KG Mashigo Attorneys with its business
address at 58 Marshall Street Marshall Street Marshalltown
Johannesburg.
5.
Makokga Sebei Inc with its business address
at Tudor Chambers Office No 0240 229 Helen Joseph Street Pretoria.
6.
Malose Matsaung Attorneys with its business
address at 238 Paul Kruger Street, Standard Bank Chambers, Pretoria
Central, Pretoria.
7.
Maluleka Tlhasi Inc with its business
address at 754 Stanza Bopape Street, Eastcliff, Pretoria.
8.
Mammile A M Attorneys with its business
address at Mammile Law Chambers, 130 Highveld Road, Kempton Park.
9.
Mzamo Attorneys with its business address
at Suite 2, 3rd Floor, West Wing Suites, 132 Fox Street,
Johannesburg.
10.
N.T Ntshele Attorneys with its business
address at Suite 325, Bank Towers, 190 Thabo Sehume Street, Pretoria,
0001.
11.
PM Mositsa Inc with its business address at
Lapa Building,380 Bosman Street, Pretoria.
12.
Shabangu & Beauchamp (Pretoria) with
its business address at Shop 15, Bothongo Plaza West, Francis Baard
Street, Pretoria Central,
Pretoria,0001.
13.
Modibedi Sebele Phethoe Attorneys with its
business address at 44 Rooihuiskraal Road, The Reeds Centurion.
14.
Erasmus ELS Inc t/a Erasmus Scheepers with
its business address at 172 Bronkhorst Street Nieuw Muckleneuk
Pretoria.
[1]
56 of 1996 (as amended).
[2]
[2021]
2 All SA 886 (GP).
[3]
Paragraph 45(b) of the order.
[4]
Paragraph 45(f) of the court order.
[5]
Constitution
of the Republic of South Africa, Act 108 of 1996.
[6]
1 of 1999.
[7]
See,
inter
alia,
section
50 of the PFMA which provides for the fiduciary duties of accounting
authorities:
‘
(1)
The accounting authority for a public entity must –
(a)
exercise
the duty of utmost care to ensure reasonable protection of the
assets and records
of
the public entity;
(b)
act with
fidelity, honesty, integrity and in the best interests of the public
entity in managing
the
financial affairs of the public entity;’
See
also sections 51, 57, 81 and 83 of the PFMA where similar
obligations are placed on the accounting authority of a public
entity to guard against irregular, fruitless and wasteful
expenditure.
[8]
28 of 2014.
[9]
My emphasis.
[10]
2007
(4) SA 467 (SCA).
[11]
Ibid
ad
paras 30 and 31. This judgment was also quoted with approval by the
full bench
ad
para 9.
[12]
2021
(2) SA 618
(GJ).