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[2017] ZASCA 119
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Heppell v Law Society of the Northern Provinces (1096/16) [2017] ZASCA 119 (22 September 2017)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case No:
1096/16
In
the matter between:
WARRICK
LESLEY VISSER HEPPELL
APPELLANT
and
THE
LAW SOCIETY OF THE
NORTHERN
PROVINCES
RESPONDENT
Neutral
citation:
Heppell
v The Law Society of the Northern Provinces
(1096/16)
[2017]
ZASCA 119
(22 September 2017)
Coram:
Shongwe
AP, Majiedt JA and Mokgohloa, Gorven and Ploos van Amstel AJJA
Heard:
31
August 2017
Delivered:
22
September 2017
Summary:
Attorney
– whether fit and proper to practise notwithstanding being
sequestrated – whether suspension an appropriate
sanction for
an attorney guilty of non-disclosure of critical information when
applying for his sequestration – no sound
reason to interfere
with the exercise of discretion.
ORDER
On
appeal from:
Gauteng
Division of the High Court, Pretoria (De Vos J and Mogotsi AJ sitting
as court of first instance):
The
appeal is dismissed with costs on the attorney and client scale.
JUDGMENT
Shongwe
AP (Mokgohloa, Gorven and Ploos van Amstel AJJA concurring)
[1]
The appellant, an attorney by profession, was suspended from
practising as an attorney for a period of six months as from the
date
of the judgment of the Gauteng Division of the High Court, Pretoria
(De Vos J and Mogotsi AJ). He now appeals against that
judgment to
this court with the leave of the court below.
[2]
As a result of the appellant’s successful application for the
acceptance of the voluntary surrender of his estate, the
respondent,
the Law Society of the Northern Provinces (the Law Society)
incorporated in terms of s 56 of the Attorneys Act 53 of
1979 (the
Act), commenced an investigation into the appellant’s fitness
to remain in practice. The Investigative Committee
of the Council of
the Law Society of the Northern Provinces (the Council) concluded
that the appellant was guilty of unprofessional
or dishonourable or
unworthy conduct and was no longer a fit and proper person to
continue to practise as an attorney. The Law
Society brought an
application before the court a quo to have the appellant’s name
struck from the roll of attorneys, alternatively
that he be suspended
from practising as an attorney on such terms and conditions as the
court may deem appropriate.
[3]
The appellant was admitted as an attorney on 7 May 1991 and thus
became a member of the Law Society. He ceased to practise as
an
attorney on 30 May 2007 but remained on the roll of attorneys as a
non-practising attorney. He ventured into business. He formed
a close
corporation, traded in liquor, and became a property developer and
signed a number of suretyships for the debts of the
close
corporation. Due to the unstable economic climate the businesses were
not doing too well. He eventually sold all that he
had at a loss and
decided to practise law again as an attorney from 1 September 2010.
Because he could not cope with all his financial
responsibilities
while in business, he decided to approach the court with an
application for the voluntary surrender of his estate
which order was
granted on 11 January 2012.
[4]
After the appellant had been sequestrated, the Law Society instructed
Ms Magda Geringer, a legal official in the employ of its
Monitoring
Unit, to investigate the circumstances which led to the appellant’s
sequestration. Ms Geringer visited the appellant’s
offices and
presented a report to the Law Society on 6 July 2012. She reported,
inter alia, that the appellant did inform the Law
Society during
August 2011 that he was contemplating applying for the voluntary
surrender of his estate. She concluded her report
positively in
favour of the appellant. She mentioned that no complaints had been
lodged against him regarding trust funds and that
there appeared to
be no risks for the Fidelity Fund, and finally that in her opinion
the appellant was still a fit and proper person
to practise as an
attorney.
[5]
After considering Ms Geringer’s report, the disciplinary
department of the Law Society resolved to refer the matter to
the
investigation committee of the Council to establish whether the
appellant could be regarded as a fit and proper person to remain
on
the roll of attorneys, notwithstanding the sequestration of his
estate. This was motivated by the provisions of s 22(1)(
e
) of
the Act which provides as follows:
‘
22 Removal
of attorneys from roll
(1) Any
person who has been admitted and enrolled as an attorney may on
application by the society
concerned be struck off the roll or
suspended from practice by the court within the jurisdiction of which
he or she practises
‐
.
. .
(
e
) if
his or her estate has been finally sequestrated and he or she is
unable to satisfy the court that
despite his or her sequestration he
or she is still a fit and proper person to continue to practise as an
attorney.'
[6]
After several consultations and a formal inquiry the committee
concluded that the appellant had been dishonest in his application
for voluntary surrender and failed to disclose material facts as he
was obliged to do. It found amongst others that he misrepresented
his
liabilities under oath to the court as amounting to R146 000
whilst in actual fact, when the suretyships were included,
they
amounted to about R20 million. He had also failed to disclose that he
was a practising attorney. He had misled the court concerning
his
monthly income and failed to disclose his monthly expenses relating
to his practice. He had also failed to disclose the type
of marriage
he had entered into. The appellant’s explanation for most of
these discrepancies was that his attorney had drafted
the founding
affidavit and that he signed it without properly checking whether the
content was correct or not.
[7]
The committee resolved to refer the matter to the Council because it
was not convinced that the appellant could be regarded
as fit and
proper to remain on the roll of attorneys. It expressed its disquiet
on his failure to disclose all relevant facts and
his failure to be
honest with the court. The Council concluded that the appellant could
not be regarded as a fit and proper person
to practise as an attorney
and resolved to refer the matter to court, hence the application to
have his name struck from the roll
of attorneys, alternatively to
suspend him from practising as an attorney.
[8]
The court a quo concluded that the appellant was not a fit and proper
person to remain on the roll of practising attorneys ‘without
any form of sanction’. This conclusion was based on the proven
facts that he failed to disclose that he was a practising
attorney
when he applied for his estate to be sequestrated, he failed to
disclose properly the type of matrimonial regime he had
entered into,
he failed to disclose all the facts relating to his income and
expenditure, he failed to disclose his suretyships
accurately and he
failed to make a proper disclosure of the current amount of his
liabilities. It concluded that he was ‘at
least grossly
negligent in his failure to make a full and proper disclosure to the
court in his application for the surrender of
his estate’.
[9]
The appellant contended that he did not contravene any of the
sections of the Act or rules of the Society; that there was no
complaint lodged against him relating to his practice as an attorney;
that he had no shortfall in his trust account; and that he
did not
contravene any of the provisions of the
Insolvency Act 24 of 1936
.
He stated that he was not an insolvency practitioner and therefore
not acquainted with applications for voluntary surrender
and that he
relied on his attorney, Ms Esme King, as she was the expert in such
applications. He denied that he was not a
fit and proper person
to practise as an attorney. He conceded, though, that he did not
disclose the fact that he was a practising
attorney but contended
that he did not consider it relevant because the genesis of his
voluntary surrender application arose from
his business activities.
[10]
The Law Society, on the other hand, argued that voluntary surrender
applications required an even higher level of disclosure
than the ‘so
called’ friendly sequestration. This will place the courts in a
better position to arrive at a correct
finding and exercise their
discretion properly ‘especially in view of the fact that these
applications are brought on an
ex
parte
basis’. It further contended that some of the appellant’s
allegations under oath concerning his financial position
were false.
It submitted that he is therefore not a fit and proper person.
[11]
The issue before this court is in essence, whether the court below
was correct in finding that the appellant is not a fit and
proper
person to practise as an attorney and, if so, whether the sanction
imposed should be interfered with on appeal. It is trite
that this
court must embark on a three-stage enquiry. (See
Jasat
v Natal Law Society
2000
(3) SA 44
(SCA);
[2000] 2 All SA 310
(A) para 10 and
Malan
v The Law Society of the Northern Provinces
[2008] ZASCA 90
;
2009 (1) SA 216
(SCA);
[2009] 1 All SA 133
(SCA) para 4;
Wilkinson
v The Law Society of the Northern Provinces
[2017] ZASCA 69
at para 4.) For completeness I shall restate the
three-stage enquiry. First, the court must decide whether the alleged
offending
conduct has been established on a balance of probabilities.
It is a factual inquiry. Second, consideration must be given to the
question whether, in the discretion of the court, the person
concerned is not a fit and proper person to continue to practise.
This involves a weighing up of the conduct complained of against the
conduct expected of an attorney, and is a value judgment.
And third,
the court is required to consider whether, in light of all the
circumstances, the name of the attorney concerned should
be removed
from the roll of attorneys or whether an order of suspension from
practice would suffice. This is a matter for the discretion
of the
court.
[12]
The Law Society in its founding papers laid out certain general
principles as a prelude to what it alleged to be unprofessional
misconduct. The appellant admits these principles as part of what an
attorney must observe at all times. For example that 'the
law exacts
from an attorney
uberrima
fides
– the highest possible degree of good faith – in his
dealings with his clients, which implies that at all times his
submissions and representations to his clients must be accurate,
honest and frank’. I may add that, the submissions and
representations should not only be honest and frank to his clients
but, as an officer of the court, when moving his application
for
voluntary surrender he should have informed the court that he was an
admitted attorney. He failed to disclose that he had signed
suretyships with his creditors. Instead of admitting the fact that he
did not disclose the suretyships he prevaricated and mounted
a
misconceived defence of why he failed to do so. He avers that he
relied on the advice of his attorney Ms King, that the suretyships
were contingent liabilities that had not been called up either by
demand or summons. In my view, it is irrelevant whether the
suretyships have been called up – their disclosure would
certainly have affected the benefit to creditors. These suretyships
amounted to about R20 million. Such failure to disclose is a
contravention of the general principles.
[13]
The appellant was obliged to be frank and honest with the court and
disclose all relevant information. The failure to disclose
these
suretyships amounted to a misrepresentation of his liabilities. Had
they been so disclosed, it is unlikely that the application
for
voluntary surrender would have succeeded. He also failed to fully
disclose his income and expenditure. An example of this is
that he
indicated in his disciplinary hearing that he paid for his various
insurance policies from his attorney’s business
account but did
not disclose that he was an attorney or this fact. He did not give
details of his income and expenditure from his
practice, contenting
himself with saying that his monthly income was R5 000. That he
failed to disclose his marital status
is not so weighty, as elsewhere
in his papers he did mention that he was married out of community of
property, though he did not
provide other minor details. The
appellant signed an affidavit wherein he confirmed the truthfulness
of its contents, however during
the enquiry by the Law Society he
made a volte face by saying that he did not check or that he did not
properly read the affidavit
prepared by his attorney, but went on to
sign it. An attorney’s duty, amongst others, is to advise his
clients not to sign
documents without reading and understanding them.
Here he does the opposite. His evidence is tantamount to perjury.
[14]
The gravamen of this case essentially is whether he is a fit and
proper person to remain on the roll of attorneys. In terms
of s
22(1)
(e)
of the Act, the appellant bears the onus of satisfying the
court that despite his sequestration he is still a fit and proper
person to continue to practise as an attorney. Counsel for the
appellant conceded during the hearing of this matter that, in this
case it cannot be said that the court below exercised its discretion
capriciously nor that it failed to bring an unbiased judgment
to
bear. Counsel attacked the exercise of the court’s discretion
on the basis that it exercised its discretion upon a wrong
principle
or as a result of a material misdirection. It was unclear, from the
submission made, what that wrong principle was.
[15]
It is now settled that an appeal court has limited powers to
interfere with the decision of the court below. See
Malan
v The Law Society of the Northern Provinces
(supra)
para 12. This court has on numerous occasions decided that this
discretion is a strict discretion, meaning that a court
of appeal
will not interfere if the discretion was exercised judicially. (See
also
Mabaso
v Law Society, Northern Provinces & another
[2004] ZACC 8
;
2005
(2) SA 117
(CC) para 20 and
Giddey
NO v JC Barnard and Partners
[2006] ZACC 13
;
2007 (5) SA 525
(CC) para 20.) In the present case the facts speak
for themselves. I am unable to conclude that the court below
exercised its discretion
capriciously or that it based its judgment
on a wrong principle. Therefore, the court found, correctly so, that
the appellant is
not a fit and proper person to practise as an
attorney.
[16]
I now turn to the question of whether the sanction of suspension is
the appropriate one in the circumstances of this case.
This, too, is
a matter for the discretion of the court below. It has been
consistently held by this court that the main consideration,
when
dealing with the aspect of sanction, is the protection of the public.
I am of the view that not only is the protection of
the public at
stake, but also the errant attorney needs to be disciplined for
his/her acts of misconduct. Of course, the court
exercises its
discretion depending on the degree and severity of the misconduct. In
the present case the court below found that
the appellant was ‘at
least grossly negligent,’ however it acknowledged that there
was merit in the Law Society’s
contention that the appellant
was dishonest. As I said earlier, this case deals with failing to
fully and frankly disclose critical
information to the court dealing
with an application for voluntary surrender. I am unable to fault the
court a quo on the sanction
of suspension. The court motivated the
suspension on the basis that the appellant should be given the
opportunity to rehabilitate
himself. In order to do so, it held that
he needs time to reconsider his unprofessional conduct while on
suspension. Although the
appellant did not admit his wrongful
conduct, he justified his failure to disclose by blaming his attorney
who prepared the papers
on his behalf. His failure to admit and show
remorse is a danger to the public, as he might continue to do it
without realising
it and accepting that it is unprofessional and
unlawful. The period of suspension will indeed be an opportunity for
him to reconsider
and change his ways. It is hoped that, by taking
this opportunity, he will return to practise as a better attorney,
more attuned
to his duty to the public and the court. His absence
from practice will of necessity protect the public more than
punishing him,
in as much as he will think twice before committing
the same act of misconduct.
[17]
I therefore find that there is no basis to interfere with the
exercise of the discretion of the court below.
[18]
The appeal is dismissed with costs on the attorney and client scale.
____________________
J
B Z Shongwe
Acting
President of the Supreme Court of Appeal
Majiedt
JA:
[19]
I have read the well-reasoned judgment of my colleague, Shongwe AP.
While I agree with the outcome and the underlying reasons,
I deem it
necessary to write separately on certain less than satisfactory
aspects of the approach adopted by the high court.
[20]
My colleague has narrated the facts comprehensively and they need no
further elucidation, save to highlight and to add the
detail which
follows. It bears repetition and special emphasis that in her
detailed report, Ms Geringer (referred to in para 4
above), made no
negative findings whatsoever against the appellant as far as his
practice as an attorney is concerned. On the contrary,
she alluded to
his unblemished professional record, in particular his handling of
his trust account. As Shongwe AP states, Ms Geringer
opined that
there was no risk to the Attorney’s Fidelity Fund or to the
public should the appellant continue to practise.
In addition, the
curator of the appellant’s insolvent estate, Mr A P Pretorius
of Corporate Liquidators (Pty) Ltd, furnished
the respondent with a
letter indicating that he had no objection against the appellant
continuing to practise as an attorney for
his own account. Lastly, it
was the appellant who had informed the respondent of his
sequestration.
[21]
The high court rightly concluded that the offending conduct did not
warrant a striking off, but that some form of sanction
was necessary.
And it bears emphasis that, as Shongwe AP points out, the crux of the
high court’s finding was that the appellant
had been ‘at
least grossly negligent in his failure to make a full and proper
disclosure to the Court in his application
for the surrender of his
estate’. What must be borne in mind, therefore, is that on a
conspectus of all the facts and circumstances
the appellant’s
lapses related not to his practice as an attorney, but to his failure
to make full and proper disclosure
in his ex parte application for
voluntary surrender. Both his professional status as an attorney and
the nature of his application
required of him to have acted with the
utmost good faith, which he lamentably failed to do. My concern
relates to the approach
adopted by the high court in deciding what
sanction to impose, ie the third stage of the enquiry alluded to in
para 10 above.
[22]
My colleague has, with respect, correctly observed (in para 16 above)
that the main consideration in respect of a suitable
sanction is the
protection of the public. That well established approach is
strikingly lacking in the high court’s reasoning.
Evidently it
was concerned mainly with the aspect of penalising the appellant. The
high court held:
‘
Applying
the principles emanated by the Rules of the Law Society, the
applicable Act and the case law referred to above, I am of
the
opinion that the respondent is not a fit and proper person to remain
on the Roll of practising attorneys without any form of
sanction. An
order sequestrating a debtor’s estate affects such a person’s
status. The respondent had a duty to make
a proper disclosure under
the present circumstances. Having said that I am of the view that
respondent can still be rehabilitated
and should be granted an
opportunity to rethink his actions before being allowed to practise
as an attorney. I therefore propose
that Mr Warrick Leslie Visser
Heppell, the respondent in this matter, be suspended from practising
as an attorney for a period
of six months as from the date of this
Order.’
[23]
The impermissible narrow approach adopted by the high court is
regrettable. In
General Council of the Bar of South Africa v Geach
and others
2013 (2) SA 52
(SCA), this court restated how such an
enquiry is to be directed, by referring to the following dictum in
Van der Berg v General Council of the Bar of South Africa
[2007] 2 All SA 499
(SCA) at para 50 (reiterated in
Malan
cited in para 10 above):
‘
The
enquiry before a court that is called upon to exercise its
disciplinary powers is not what constitutes an appropriate punishment
for a past transgression but rather what is required for the
protection of the public in the future’.
The
same observation was also made by Nugent JA in
Law Society of the
Cape of Good Hope v Peter
2009 (2) SA 18
(SCA) para 28. And, in
Law Society of the Cape of Good Hope v Budricks
2003 (2) SA 11
(SCA) at para 7, this court said (albeit obiter):
‘
Logically,
a striking-off order or an order of suspension from practice should
be suspended only if the Court finds that the attorney
concerned is a
fit and proper person to continue to practise but still wishes to
penalise him’.
[24]
The high court not only failed to enunciate and follow the correct
approach, but it also neglected to consider suspending the
appellant’s suspension from practice. Such an order of
suspension could have been made for a period of, say, three years
on
appropriate conditions (for example, on condition that, during the
period of suspension, the appellant not be found by a court
or by the
Law Society to have failed to make a material disclosure (either
deliberately or negligently), whether on his own behalf
or on behalf
of a client of his.) A sanction of that type was competent and would,
in my view, arguably have served to protect
the public more than a
suspension from practice for 6 months. But I am mindful of the very
limited power of an appellate court
to interfere with the discretion
of a trial court in matters such as these. The cases cited in para 14
of my colleague’s
judgment makes this point very clear (see
also:
Geach
at para 58 and
Kekana
v Society of Advocates of South Africa
[1998] ZASCA 54
;
1998
(4) SA 649
(SCA) at 654 E-H). A suspended suspension from practice on
appropriate conditions for a lengthy period could not, in my view, be
regarded as too lenient. I think it would have been of adequate
severity to have penalised the appellant for his reprehensible
conduct and would simultaneously have served to protect the public.
But the test is not what sanction I would have imposed –
what
requires determination is whether interference on appeal is
warranted.
[25]
To conclude and in summary: while the high court’s underlying
reasoning for the sanction imposed and the sanction itself
are rather
unsatisfactory, there are not sufficient grounds on which to
interfere with the exercise of its discretion.
______________________
S
A Majiedt
Judge
of Appeal
Appearances
For
the Appellant: N Davis SC with him M Coetzee
Instructed by:
Theron Jordaan &
Smit Attorneys, Pretoria
Symington & De
Kok Attorneys
For
the Respondent: H J L Vorster
Instructed by:
Rooth & Wessels
Incorpotated, Pretoria
Peter Skein
Attorneys, Bloemfontein