Summary of Judgment

1. Introduction

This judgment concerns an application for leave to appeal brought by an attorney whose name had previously been ordered to be removed from the roll of attorneys. The application was determined by the High Court of South Africa, Free State Division, Bloemfontein (Mathebula J, with Chesiwe AJ concurring).

The applicant was Yolandi Hewetson. The respondents were the Law Society of the Free State (first respondent), Alexander Fowly Hewetson (second respondent), and Hewetson Incorporated (third respondent). The Law Society was the statutory body involved in the disciplinary consequences flowing from the firm’s trust account irregularities.

The procedural history, as recorded in the judgment, is that on 15 December 2017 the court (in a judgment authored by Mathebula J, with Chesiwe AJ concurring) made an order which included that the applicant’s name be removed from the roll of attorneys. The present decision concerns the applicant’s subsequent attempt to obtain leave to appeal against that earlier judgment. The application for leave to appeal was heard on 16 March 2018 and judgment was delivered on 26 April 2018.

The general subject-matter of the dispute is the applicant’s professional fitness to practise as an attorney in light of the court’s findings regarding the state of the firm’s bookkeeping and trust account controls, the misappropriation of trust funds, and the applicant’s role and responsibilities as a director of the firm.

2. Material Facts

The court proceeded from the factual foundation accepted in the main judgment and highlighted those features most material to whether leave to appeal ought to be granted. Central to the matter was the court’s finding that the firm’s bookkeeping systems were “in shambles”, and that there were no mechanisms in place to prevent the massive misappropriation of trust funds. The judgment records that the fee books were used and checked again after the second respondent left the firm, and that the transgressions occurred while the applicant was a director of the firm.

On the applicant’s own version, as treated by the court, she was not in direct control of the trust account, notwithstanding that she would “here and there sign a cheque or two”. The court further accepted that for a prolonged period the applicant was away from the practice and “did not play a role”. The court treated these features as material because, in its view, they implicated the applicant’s legal duty to preserve trust funds and the extent to which she appreciated the scope of her obligations as a director and practitioner.

The judgment reflects that approximately R1 700 000.00 had been misappropriated from the trust account by the time remedial steps were taken. Although the applicant was noted to have corrected the systems after the Law Society became seized with the matter, the court treated the timing of this rectification as significant, holding that it occurred only after substantial harm had already materialised.

The court also addressed the applicant’s reliance on the fact that bookkeepers and auditors were employed and that auditors did not detect misconduct. The court treated it as material that, as a director, the applicant was responsible for ensuring that correct source documents were provided to auditors and for signing off an audit letter to the Law Society confirming compliance. The court considered it significant that the applicant appeared to have signed off without proper verification.

As to disputed matters, the judgment records that the applicant’s grounds of appeal largely reiterated contentions that the court erred in finding she acted recklessly by leaving financial responsibilities to the second respondent while she focused on human resources, and that she should not be blamed for bookkeeping failures because of the presence of bookkeepers and auditors. She also disputed that she was party to a massive dishonest scheme led by the second respondent and contended that no specific transaction could be attributed to her.

One factual finding from the main judgment was identified as erroneous in part: the court accepted counsel’s submission that it had erred in finding that the applicant made loans totalling R305 489.09 from funds of certain creditors. However, the court treated this conceded error as non-determinative, stating that its decision did not turn primarily on that error.

3. Legal Issues

The central legal question was whether the applicant satisfied the statutory threshold for leave to appeal under section 17 of the Superior Courts Act 10 of 2013, namely whether the appeal would have a reasonable prospect of success, or whether there existed some other compelling reason why the appeal should be heard.

This question primarily involved the application of law to fact, focusing on whether the applicant’s stated grounds of appeal demonstrated a realistic likelihood that another court would come to a different conclusion, given the findings already made in the main judgment about the applicant’s conduct, responsibilities, and fitness to practise.

A related issue was whether the conceded error regarding the purported loans affected the viability of the appeal to such an extent that leave should nonetheless be granted. The court addressed this by evaluating whether that error was central to the sanction imposed and to the overall reasoning in the main judgment.

4. Court’s Reasoning

The court began by locating the application within section 17 of the Superior Courts Act 10 of 2013, emphasising that leave to appeal may only be granted if the statutory requirements are met. It endorsed an approach (citing prior authority) that the threshold for leave to appeal under the current statutory formulation is more stringent than the earlier test, because the legislature’s use of the word “would” (as opposed to “might”) implies a greater measure of certainty that another court will differ.

Against that standard, the court evaluated the substance of the applicant’s grounds of appeal. While accepting that there was an error in one aspect of the main judgment (the finding relating to loans of R305 489.09), it held that the overall decision—particularly the sanction of removal from the roll—did not depend primarily on that point. The court therefore treated the error as insufficient, without more, to establish reasonable prospects of success on appeal.

The court reiterated the core findings underpinning the main judgment: that the trust account controls and bookkeeping systems were severely deficient; that there were no effective mechanisms to prevent misappropriation; and that the applicant, as a director, bore responsibility for the preservation of trust funds. The court considered the applicant’s admissions regarding her non-participation in the financial affairs and lack of direct control over the trust account to be significant, viewing this as inconsistent with the duties owed by an attorney responsible for trust monies.

In addressing the applicant’s reliance on auditors and bookkeepers, the court reasoned that the presence of such functionaries did not displace the applicant’s obligations as a director. It emphasised that the applicant had responsibility to ensure that appropriate documentation was provided for auditing and that she signed off the audit letter to the Law Society confirming compliance. The court characterised the applicant’s signing-off without adequate verification as supporting its adverse conclusions regarding her role and responsibility, and it reiterated its earlier finding that she was part of a massive dishonest scheme led by her former co-director.

The court acknowledged that the applicant’s later correction of systems was commendable, but reasoned that this remedial conduct occurred only after significant misappropriation had already occurred, and therefore did not materially change the assessment of the misconduct in issue.

The court referred to the “long established” three-stage enquiry adopted in attorney disciplinary matters and stated that, on the evidence on the papers (including the applicant’s admissions), the misconduct had been established and the applicant was not a fit and proper person to continue practising. On that footing, the court concluded that its ultimate sanction—removal from the roll—remained justified.

When turning directly to the leave to appeal standard, the court concluded that there were no reasonable prospects that another court would come to a different conclusion. It characterised the grounds relied on as lacking substance and amounting to disagreement with the court’s conclusions rather than demonstrating appealable error meeting the section 17 threshold.

On costs, the court applied the general approach that costs follow the result and found no reason to depart from that principle. It further maintained the position that costs should be on an attorney and client scale, referring to reasons said to be explained in the main judgment.

5. Outcome and Relief

The application for leave to appeal was dismissed.

The applicant was ordered to pay the costs of the application on the attorney and client scale.

Cases Cited

Acting National Director of Public Prosecutions and Others v Democratic Alliance (19577/2009) [2016] ZAGPPHC 489 (24 June 2016).

Hans Seuntjie Matoto v Free State Gambling and Liquor Authority and Three Others (Case Number 4629/2015, unreported) (as referenced in the judgment at para 5).

Jasat v Natal Law Society 2000 (3) SA 44 (SCA).

Legislation Cited

Superior Courts Act 10 of 2013, section 17.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that the statutory threshold in section 17 of the Superior Courts Act 10 of 2013 was not met because there were no reasonable prospects that an appeal would succeed, and no other compelling reason was shown for the appeal to be heard.

The court held that, notwithstanding a conceded error relating to an alleged finding about loans totalling R305 489.09, the outcome of the matter was not dependent on that aspect, and the applicant’s grounds of appeal did not demonstrate substantive appealable error.

The court held that the application for leave to appeal should be dismissed and that the applicant should bear costs on the attorney and client scale.

LEGAL PRINCIPLES

The judgment applied the principle that leave to appeal under section 17(1) of the Superior Courts Act 10 of 2013 may be granted only where the court is of the opinion that the appeal would have a reasonable prospect of success or there is some other compelling reason for the appeal to be heard. The court adopted the understanding that the statutory language indicates a heightened threshold compared to earlier formulations, requiring more than a mere possibility that another court might differ.

In evaluating professional discipline, the court proceeded on the basis that attorney misconduct matters are assessed through a three-stage enquiry (as referenced by the court), encompassing whether misconduct is established, whether the practitioner remains a fit and proper person to practise, and what sanction is appropriate. The court treated the protection of trust funds and the maintenance of proper accounting and control mechanisms as integral to the duties of an attorney and, in particular, to the responsibilities of a director of an incorporated practice.

The judgment further applied the principle that reliance on auditors or bookkeepers does not, without more, absolve a practitioner or director from responsibility for the integrity of trust accounting and reporting, particularly where the practitioner signs compliance-related confirmations (such as an audit letter to the professional body) without proper verification.

On costs, the judgment applied the general principle that costs follow the result, and it maintained an order of costs on an attorney and client scale in relation to the dismissal of leave to appeal, referring to justification provided in the main judgment.