About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
>>
2016
>>
[2016] ZAKZPHC 25
|
|
KwaZulu - Natal Law Society v Moodley and Another (7037/2014) [2016] ZAKZPHC 25 (26 February 2016)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL DIVISION,
PIETERMARITZBURG
CASE NO: 7037/2014
DATE: 26 FEBRUARY 2016
In the matter between:
KWAZULU-NATAL LAW
SOCIETY
...............................................................................
APPLICANT
And
SUBASHNIE
MOODLEY
.................................................................................
FIRST
RESPONDENT
ABSA
BANK
..................................................................................................
SECOND
RESPONDENT
Date of hearing: 10-11 February 2016
Date of judgment: 26 February 2016
D. Pillay J (Van Zyl J Concurring)
ORDER
[1] a. The name of the first respondent
be struck from the roll of attorneys of this court, and
b. an order is made in terms of the
provision of prayer 1.1 to 1.12, both inclusive, as well as prayers 5
and 6 of the notice of
motion dated 16 May 2014.
JUDGMENT
[1] The applicant seeks to strike off
the first respondent from the roll of attorneys on account of her not
being a fit and proper
person to practise as an attorney. On the
first day of a three-day trial the first respondent conceded three of
the four counts
of professional misconduct against her. The applicant
called two witnesses to prove the only count that the second
respondent denied.
The first respondent closed her case without
testifying.
[2] In this application for striking
off in terms of s 22(1)(d) I adopt the three-staged enquiry outlined
in Jasat v Natal Law Society
2000 (3) SA 44
(SCA) para 10 and
followed in Malan and another v Law Society, Northern Provinces
2009(1) SA 216 SCA para 4-6:
a. Has the applicant established the
first respondent’s offending conduct as a fact?
b. Is the first respondent a fit and
proper person to remain in practice having regard to the conduct
expected of an attorney?
c. In all the circumstances should the
first respondent be removed from the roll of attorneys or be
suspended from practice?
[3] The applicant received a
complainant from Ms Vijayluxmi Gengan that the first respondent was
handling a Road Accident Fund (RAF)
matter for Mr Theodore Charles
Minnie who had granted Ms Gengan a special power of attorney to
represent him. His accident had
left him physically disabled without
his right leg. Mr Minnie also had a child of sixteen years with Ms
Gengan.
[4] Ms Gengan and the first respondent
were friends having met at their temple in Chatsworth. Ms Gengan was
dissatisfied with the
services her ex-husband Mr Minnie received from
his erstwhile attorney who was attending to the claim and instructed
the first
respondent to take over the file. She and Mr Minnie met the
first respondent at Checkers in the Bluff south of Durban. The first
respondent requested Mr Minnie to sign documents pertaining to the
claim. She confirms that it was on this occasion that she also
secured a special power of attorney and a contingency fee agreement
in terms of the
Contingency Fees Act No. 66 of 1997
from Mr Minnie.
[5] Ms Gengan sent several short
message services (smses) to the first respondent’s cellular
phone during 2013. She received
the following response from the first
respondent:
‘The Minnie file has not been
settled as soon as it is settled I will contact you until then I do
not want to see you, hear
you or smell you.’
[6] The first respondent has no
recollection of sending this sms response but acknowledges that she
might have done so because Ms
Gengan’s conduct had become
increasingly unreasonable. She constantly contacted the first
respondent’s offices and
was aggressive when enquiring about
progress.
[7] Ms Gengan reminded the first
respondent that the RAF had settled the claim in February 2013 and
that they had paid an amount
of R560 000.00 to the first respondent.
Frustrated at not receiving any response from the first respondent
who had also moved offices
by then Ms Gengan approached attorneys
Arvin Singh and thereafter the applicant for assistance with proof
that the RAF had paid
the claim into the first respondent’s
trust account on 15 February 2013.
[8] Two inspectors testified that on
receipt by the applicant of a complaint against the first respondent
the applicant resolved
to issue a notice in terms of s 70 of the
Attorneys Act 53 of 1979 informing her that it intended to inspect
her books, documents
and records as a prelude to deciding whether to
enquire into her conduct in terms of s 71 of the Act. The notice
required her to
meet with the inspectors to provide records of her
trust account investments in terms of s 78(2) or s 78(2A), interest
and records
of deceased or insolvent estates or estates under
curatorship in which she was an executor or curator. She was also
required to
produce various accounting and other records to the
inspectors. This notice was despatched about 20 August 2013.
[9] The inspectors met the first
respondent only on 10 March 2014. The extraordinary delay of more
than six months occurred as a
result of the first respondent avoiding
the meeting with the inspectors.
[10] The documents that the inspection
committee requested from the first respondent included a purported
contingency fees agreement,
a paid cheque for R5 000.00 in favour of
S Ramnarain, an extract from the first respondent’s trust
account for February to
March 2013, an affidavit from Mr Minnie
revoking his special power of attorney to Ms Gengan, terminating his
mandate to Arvin Singh
attorneys and confirming his mandate to the
first respondent to act on his behalf, and an acknowledgment of debt
signed by the
first respondent in favour of Mr Minnie for R420 000.00
plus interest at 7% per annum. In the meantime Mr Minnie had died on
7
October 2013.
[11] At the meeting with the inspectors
on 10 March 2014 the first respondent produced a manuscript ledger
page for Mr Minnie. Arising
from this ledger page the inspectors
identified three items that they required the first respondent to
produce. These were: the
file of Estate Late Sadhanandan Naidoo,
support documents for the payment of R5 000.00 to Advocate Roberts
and proof that an amount
of R375 000.00 disbursed out of Mr Minnie’s
account had been invested in an interest bearing trust account for
his benefit.
The first respondent undertook to deliver these items to
the office of one of the inspectors, which was nearby her own office
within
a week.
[12] The applicant alleged that
notwithstanding the lapse of more than a month the first respondent
failed to produce the documents
before this application was launched
on 21 May 2014. Hence her failure to produce the documents requested
by the inspectors in
terms of s 70 constituted count 1, the only
disputed count.
[13] The applicant’s inspectors
ascertained from the first respondent the following: Using the power
of attorney that Mr Minnie
had given her to accept the offer from the
RAF she received the RAF payment into her trust account on 20
February 2013. She went
to see Mr Minnie after she received the funds
to discuss the offer and her proposal that he lend her the sum of
R420 000.00. She
was unable to find Mr Minnie at his usual place at
Checkers. He had no known relatives. When she met Mr Minnie again he
agreed
to lend her the total proceeds of his claim and was ‘adamant’
that he did not want legal advice about lending her his
money. She
prepared the acknowledgment of debt for Mr Minnie’s signature.
For the first time Mr Minnie attended at her offices
on his own at 23
September 2013 and dropped off an affidavit, which she insisted she
did not prepare.
[14] The first respondent disputed the
power of attorney Mr Minnie had given to Ms Gengan. The inspectors
formed the view that her
affidavit was an attempt to absolve her of
any wrong doing; that the affidavit and acknowledgement of debt are
framed in the language
and format typically used by legal
practitioners.
[15] The first respondent initially
stated that she had repaid the loan with interest. After further
questioning she advised the
inspectors that she had paid the loan
into her trust account. The inspectors advised her then to place Mr
Minnie’s funds
in a separate interest bearing account pending
appointment of an executor to wind up Mr Minnie’s estate.
Production of proof
of that investment in terms of s 70 formed the
basis of the charges in count one.
[16] The four counts were:
a. A contravention of s 70(2) of the
Attorneys Act No. 53 of 1979 by the first respondent failing to
produce documents as requested
by the inspectors.
b. A contravention of KwaZulu-Natal Law
Society rule 14(b)(xx) in that the first respondent borrowed money
from her client, Mr Minnie
without him being independently
represented in the transaction.
c. A contravention of KwaZulu-Natal Law
Society rule 20 in that the first respondent paid business debts from
her trust bank account.
d. The contingency fee agreement signed
by Mr Minnie did not comply with the requirements of the
Contingency
Fees Act No. 66 of 1997
.
[17] In her defence the first
respondent pointed to a letter dated 14 March 2014 from ABSA Bank,
the second respondent confirming
a deposit of R450 544.00 into the
account of the first respondent in trust for T.C Minnie. She
maintained that she submitted that
letter to the applicant before it
launched this application. She also submitted a report from her
accountant to explain that the
payment to Advocate Roberts was
against an invoice from him for R10 000.00. She persisted that no
file existed for Estate Late
S Naidoo.
[18] The applicant denied receiving the
requested documents any time before the application was launched. The
first respondent produced
no proof of delivery of the documents any
time before the application was launched, nor details of when, where
and to whom delivery
was made.
[19] The applicant’s inspectors
did not record in writing to the first respondent what documents she
was required to produce
and the date by which she was to do so. The
explanation was that as a member of the profession it was unnecessary
to do so because
the documents had been identified in discussion at
the meeting.
[20] Serious disciplinary consequences
flow from non-compliance by a practitioner with a request for
information in terms of
s 70.
As an indication of the degree of
importance of a notice to inspect in term of
s 70
the applicant
issues such notices in writing. Inspectors should also record their
requests in writing precisely to avoid the waste
of time and expense
of having to testify to prove such an elementary administrative fact.
Equally, responses to such official notices
should also be recorded
in writing. Proof of delivery and receipt of such notices and replies
should be easily ascertainable from
the mere production of
documentation without the need to lead oral evidence.
[21] In this instance because the first
respondent declined to testify I find that the applicant requested
the documents that the
first respondent failed to deliver before the
application was instituted. This amounts to contravention of s 70(2)
of the Act.
Accordingly the first respondent is guilty of
contravening s 70(2) of the Act.
[22] The first respondent’s
admission that she contravened the provisions of rule 14(b)(xx) of
the applicant’s rules
is accompanied by her explanation as
follows:
[23] Mr Minnie, a sometime car guard
and beggar, was fearful of Vijayluxmi Gengan also known as Rebecca.
He was concerned that she
wanted the proceeds of his claim against
the RAF. He also did not want to squander the money as another beggar
had done. Hence
he wanted the first respondent to keep the money for
him until he decided what to do with it. The first respondent
suggested that
he should lend the money to her for a year and she
would repay it with interest. He agreed. The first respondent advised
him that
he should get independent legal advice before lending the
money to her but he ‘flatly refused’. The first
respondent
respected his views. With the benefit of hindsight she
regrets doing so. She undertakes not to repeat this contravention.
[24] The first respondent’s
explanation for contravening the third count is as follows: With the
benefit of hindsight the
first respondent acknowledges that she ought
first to have transferred the capital of the loan from Mr Minnie into
her business
account and not disbursed it from her trust account. She
has since realised that she has to keep her business and trust
accounts
separate and not to pay any business debts from her trust
account. She has received her Rule 21(A) certificates consistently
since
this transgression.
[25] Her explanation for count four is
as follows: She concedes that the contingency fees agreement that Mr
Minnie signed did not
comply with the Contingency Fee Act. She
regrets not being more careful in insuring that the agreement
complied with this Act.
She consents to repaying the estate of the
late Mr Minnie the amount she received in terms of the agreement in
excess of her taxed
fees. She undertakes to study the applicant’s
December 2015 circular and its guidelines published on its website
since 21
May 2014. She also withdraws her claim as sole beneficiary
in the purported will of the late Mr Minnie.
[26] In view of my finding on count one
and the first respondent’s admissions in respect of the
remaining three counts the
applicant has discharged its onus of
proving on a balance of probabilities that the first respondent has
committed professional
misconduct as alleged. In turning to consider
whether the first respondent is a fit and proper person to remain in
practice I consider
her explanations on affidavit for contravening
counts two to four which must be weighed against the following case
the applicant
makes against her:
[27] The first respondent is an
attorney enrolled to practice as such on 18 June 2004. When she
committed the contraventions above
she had been in practice for about
ten years. She was an experienced attorney who should have known the
rules and the consequences
of contravening them.
[28] The nature of the contraventions
is such that the first respondent cannot and does not plead ignorance
of the law. Such a plea
is quite unsustainable considering that
firstly the curriculum for legal practise training for attorneys
includes accounting practice.
In this course much emphasis is placed
on differentiating between an attorney’s trust account and
business account. Candidate
attorneys are taught that attorneys
cannot treat their trust account as their personal accounts.
Therefore business and personal
accounts cannot be paid out of the
trust account. Prior to receiving settlement of Mr Minnie’s
claim the first respondent
did not have sufficient funds in her trust
account to repay her loan obligation to Estate Late Naidoo.
[29] The first respondent’s
chartered accountant appointed to audit the queried payments from her
trust account confirmed
that she paid her business debts from the
monies she held for Mr Minnie in her trust account. He obtained
affidavits from the various
persons to whom she had made such
payments to confirm that they had received them. Three payments
including the one to Estate Late
Naidoo were repayments of loans
advanced to the first respondent.
[30] On receipt of the RAF settlement
of R560 000.00 she immediately appropriated the sum of R140 000.00
being 25% of the settlement
as per her alleged contingency fee
agreement with Mr Minnie. In addition the first respondent had
rendered a bill of costs for
R24 281.94 excluding disbursements of
R28 000.00 in Mr Minnie’s matter.
[31] The contingency fee agreement
manifestly fails to comply with the
Contingency Fees Act. It
is
incomplete, undated and unsigned by the first respondent. The
applicant also questioned Mr Minnie’s signature to the
purported agreement because it appears to be different from his
signature to his affidavit; it is also not witnessed or commissioned.
[32] What makes the first respondent’s
conduct particularly egregious is that Mr Minnie was on her own
version a beggar and
a person with disabilities. Furthermore he had a
minor dependant. They were vulnerable persons at her mercy.
[33] In reply damning affidavits were
delivered on behalf of the applicant. In the first Ms Gengan
responded to the first respondent’s
claim that Mr Minnie had
instructed her to draw his will and instate herself as his sole
beneficiary. Ms Gengan drew attention
to two wills that were lodged
with the Master following Mr Minnie’s death. The first was
dated 3 July 2013 in favour of their
child Dinalee Minnie. The second
dated 25 September 2013 nominated the first respondent as the sole
beneficiary and P Odayar and
Associates an attorney with whom the
first respondent shared offices as the executor. The will In favour
of the first respondent
was lodged on 12 February 2014. Faced with
two wills the Master made no appointment of an executor. The first
respondent used this
as an excuse for not paying the funds due to the
Master as the guardian of the minor child who is in the meantime
severely prejudiced.
[34] Significantly the will in favour
of his daughter is signed with both a thumbprint and a signature and
commissioned by an attorney.
The signature appearing on this will is
manifestly different from his signature to the will in favour of the
first respondent,
the acknowledgement of debt and the contingency fee
agreement. However it falls beyond the expertise of the court to
reach any
conclusion as to whether the signatures appearing on the
documents produced by the first respondent are the signatures of Mr
Minnie.
[35] Ms Gengan insisted that all
communications with the first respondent about Mr Minnie’s
claim was through her; she had
arranged to take him to specialists.
She and her daughter had a good relationship with Mr Minnie.
[36] She complained bitterly about the
first respondent’s failure to pay Mr Minnie and his daughter
any interest monthly for
their survival. She disputed that Mr Minnie
was educated and literate to the extent that he would understand the
contents of the
acknowledgement of debt. Contrary to the first
respondent’s evidence that he had matriculated he had achieved
no higher than
standard two. As a result of their dire financial
circumstances the child was forced to leave school.
[37] Ms Gengan was constantly in touch
with Mr Minnie. However on 26 September 2013 she lodged a missing
persons complainant with
the South African Police Services at
Brighton beach police station under Malvern CAS 45/10/2013. On 8
October 2013 the Bayview
Police informed her that the first
respondent had given them her address and requested her to identify
the deceased Mr Minnie.
She did. He was wearing the same clothes in
which she had seen him on the last occasion. Attorney Arvin Singh and
a private investigator
Seelan Pillay arranged Mr Minnie’s
funeral and church service.
[38] In the second affidavit Mr Arvin
Singh attests to receiving Ms Gengan and Mr Minnie in his offices on
21 August 2013. After
explaining and ensuring that Mr Minnie
understood the nature and contents of his mandate instructing Mr
Singh. Mr Minnie signed
the mandate in favour of Mr Singh. Taking
precautions Mr Singh attached a photograph of Mr Minnie to the
mandate. He forwarded
the mandate to the first respondent.
[39] Mr Singh narrated the
correspondence exchanged with the first respondent complaining in his
letters of 30 July and 12 August
that she had failed to afford him
the courtesy of a reply. In his letter of 11 September 2013 he
informed the first respondent
that he acted for Ms Gengan who had
been instructed by Mr Minnie. He demanded a copy of the offer of
acceptance and other documents
signed by Mr Minnie and the first
respondent on his behalf, his original identity book, her trust
account receipts in respect of
payments she received in respect of
his claim and costs from the RAF. He demanded a cheque for the full
amount for the payment
from the RAF plus interest in favour of Mr
Minnie alternatively Ms Gengan.
[40] On 23 September 2013 Mr Bahadur
contacted him. Attorney Bob Bahadur representing the first respondent
contacted Mr Singh on
behalf of the first respondent. Mr Singh
informed him that the first respondent had already been reported to
the applicant and
the South African Police Services for
investigation. Mr Bahadur informed Mr Singh that the first respondent
was prepared to pay
Ms Gengan and Mr Minnie in instalments and that
she had already paid Ms Gengan R200 000.00 Mr Singh called for proof
of payment
of this amount.
[41] In a letter of 23 September 2013
Mr Singh informed Mr Bahadur that the first respondent was behaving
‘in a sinister and
perturbing manner’ and that he refused
to believe that Mr Minnie had genuinely cancelled his mandate to him
until Mr Minnie
confirmed this personally.
[42] When he received the letter of 25
September 2013 from the first respondent enclosing the affidavit
purportedly by Mr Minnie
he ascertained that the commissioner of
oaths in that affidavit, a certain ‘Govender’, a
detective from Isipingo was
the first respondent’s cousin. He
obtained an affidavit from Colonel Sandhya Singh. She had also
informed Mr Singh that she
had obtained the affidavit from Mr Minnie
on 7 October 2013.
[43] Colonel Sandhya Singh attached to
the Durban Commercial Crimes Unit within the priority crimes
directorate attested in an affidavit
that on 4 October 2013 she
confronted the first respondent with the allegations by Ms Gengan
against her. She informed the Colonel
that Mr Minnie had revoked Ms
Gengan’s power of attorney; that she could no longer represent
him; that she had distributed
all monies paid into her trust account
in accordance with Mr Minnie’s instructions and that she could
account for his money.
She informed the Colonel that she was unable
to produce Mr Minnie to the Colonel as he did not have a fixed abode.
[44] On 7 October 2013 she produced an
affidavit purportedly signed by Mr Minnie that morning revoking Ms
Gengan’s power of
attorney. The Colonel insisted on seeing Mr
Minnie personally. The Colonel advised her to bring Mr Minnie to her
when next he contacted
her. The Colonel observed that the first
respondent was uneasy and nervous during this meeting. After she left
the Colonel noticed
that contrary to the first respondent’s
advice the affidavit was dated 25 September 2013 and not 7 October
2013.
[45] On 8 October 2013 Mr Singh advised
the Colonel that Mr Minnie was found burnt to death. The Colonel
reported the first respondent
to the law society and the Fidelity
Fund. About a week later she learnt from a policewoman that Mr
Minnie’s death was being
investigated.
[46] On 6 November 2013 the first
respondent deposed to an affidavit confirming that Mr Minnie was
homeless and that he was accommodated
at 23 Vera Road Malvern. Minnie
had burnt to death at that address.
[47] In her supplementary answering
affidavit the first respondent denied that she had instructed Mr
Bahadur to represent her. Nor
did she instruct him that she had
already paid the amount of R200 000 to the complainant. She conceded
that the commissioner of
oaths of Mr Minnie’s affidavit of 25
September 2013 was her relative but a distant one. She contended that
her reference
to the will in her answering affidavit at paragraph 24
was not to Mr Minnie’s but to Ms Gengan’s former partner
Mr
Prithraj. She denied preparing Mr Minnie’s will (page 226 of
the record). This is patently false because in paragraph 24 she
stated that she ‘asked the deceased in the presence of the
complainant when [she] took instructions to prepare his will’
about any immovable property.
[48] She attached a copy of Mr Minnie’s
death certificate dated 7 October 2013. The first respondent denied
that the child
suffered any prejudice. She suggested that Ms Gengan
might be implicated in Mr Minnie’s death. A letter from the
Specialised
Crime Unit dated 11 March 2015 states that the first
respondent is a suspect in the criminal case under investigation and
that
outstanding documents awaited included documents from the RAF
and bank statements.
[49] How Mr Minnie demised is not a
matter from which this court is able to draw any adverse inference
against the first respondent.
However the fact that she declined to
enter the witness box and submit to cross-examination detracts from
the credibility of her
version.
[50] The four counts on which the first
respondent has been found guilty are serious enough to justify her
striking off. Not only
is her competence to practice in issue but
also her honesty and integrity. The further affidavit she obtained
from Mr Minnie on
the day he burnt to death raises many more
questions especially as in that affidavit Mr Minnie purports to
‘withdraw all
charges’ against the first respondent. Yet
she has admitted to her professional misconduct in these proceedings.
Most damning
is her perjury relating to her drafting of Mr Minnie’s
will in which she was the beneficiary. Seemingly she was also unaware
of
s 4A
of the
Wills Act 7 of 1953
that the preparer of a will cannot
also be a beneficiary.
[51] In all the circumstances I am of
the view that the first respondent is not a fit and proper person to
practice as an attorney
of this court. The final question which then
arises is the sanction to be imposed upon her.
[52] In my view the conduct of the
first respondent, both in taking advantage of a vulnerable client
like the late Mr Minnie, as
well as in her responses to the
complaints and the enquiry by the applicant, as well as in opposing
the present proceedings are
open to criticism. Such conduct
demonstrates a lack of judgment, integrity and insight on the part of
the first respondent. But
underlying these is also a pervasive
character defect.
[53] It follows that the removal of the
first respondent from the roll of attorneys is called for. If and
when, at some future date,
the first respondent is able to persuade
the court that these underlying defects in character have been
suitably addressed, it
might be possible for her to seek readmission
as an attorney. But for the foreseeable future it would be quite
inadequate in the
circumstances to impose upon her a suspension from
practice.
[54] In the result the order that I
propose is that:
a. the name of the first respondent be
struck from the roll of attorneys of this court, and
b. an order is made in terms of the
provision of prayer 1.1 to 1.12, both inclusive, as well as prayers 5
and 6 of the notice of
motion dated 16 May 2014.
D. Pillay J
Van Zyl J
APPEARANCES
Counsel for the Applicant : M.I.A
Ganie
Instructed by : Ganie & Company
Tel: (033) 342 7750
Ref: Mr Ganie/ND/K219
Counsel for the First Respondent :
A.G Jeffrey SC
Instructed by : Larson Falconer
Hassan Parsee
Tel: (031) 534 1600\
Ref: Mr N Karrian