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[2007] ZASCA 16
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Van der Berg v General Council of the Bar of South Africa (270/06) [2007] ZASCA 16; [2007] SCA 16 (RSA); [2007] 2 All SA 499 (SCA) (22 March 2007)
Links to summary
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Reportable
CASE NO
:
270/06
In the matter between :
JOHAN
VAN DER BERG
......................................
Appellant
and
THE
GENERAL COUNCIL OF THE BAR OF SOUTH AFRICA
...............................
Respondent
____________________________________________________________________________
Before: HARMS ADP, STREICHER, NUGENT, LEWIS JJA & MUSI AJA
Heard: 26 FEBRUARY 2007
Delivered: 22 MARCH 2007
Summary: Application to strike advocate from the roll –
restatement of the duties of advocates.
Neutral citation: This judgment may be referred
to as
Van der Berg v General
Council of the Bar
[2007] SCA 16
(RSA)
____________________________________________________________________________
J U D G M E N T
____________________________________________________________________________
NUGENT JA
NUGENT JA
:
[1] A person who is
admitted to practise as an advocate, and who chooses to exercise that
right to practise, must adhere to the recognised
standards of the
profession.
1
An advocate who fails to adhere to those standards to a
degree that satisfies a court that he is unfit to continue to
practise is
liable to be suspended from practise or to have his name
struck from the roll of advocates.
2
On the application of the General Council of the Bar of
South Africa (GCB) the name of the appellant – who has
practised as
an advocate at the Cape Bar for over 30 years, the last
sixteen years as Senior Counsel – was struck from the roll of
advocates
by the Cape High Court (H.J. Erasmus and Dlodlo JJ). This
appeal is with the leave of that court.
[2] Proceedings to discipline a practitioner are
generally commenced on notice of motion but the ordinary approach as
outlined in
Plascon-Evans
3
is not appropriate to applications of that kind. The
applicant’s role in bringing such proceedings is not that of an
ordinary
adversarial litigant but is rather to bring evidence of a
practitioner’s misconduct to the attention of the court, in the
interests
of the court, the profession and the public at large, to
enable a court to exercise its disciplinary powers.
4
It will not always be possible for a court to properly
fulfil its disciplinary function if it confines its enquiry to
admitted facts
as it would ordinarily do in motion proceedings and it
will often find it necessary to properly establish the facts. Bearing
in mind
that it is always undesirable to attempt to resolve factual
disputes on the affidavits alone
5
(unless the relevant assertions are so far-fetched or
untenable as to be capable of being disposed of summarily) that might
make it
necessary for the court itself to call for oral evidence or
for the cross-examination of deponents (including the practitioner)
in
appropriate cases. In the present case that might well have been
prudent and desirable so as to resolve the many questions that are
raised by the evidence, but that notwithstanding, the appeal can in
any event be properly disposed of on the undisputed facts. (For
that
reason it is also not necessary to revisit what degree of persuasion
evidence must carry before facts can be taken to have been
established in cases of this kind.
6
)
[3] The issues and material facts in this matter appear
from the careful and meticulous judgment of the court below but some
repetition
is nonetheless unavoidable. Various procedural matters
that were raised in the papers and dealt with by the court below were
not
pursued in this court and I need say no more about them. I will
deal with the various complaints against the appellant in the
chronological
order in which the relevant events occurred.
[4] The complaints against the appellant all arise from
his relationship with Mr Jürgen Harksen who arrived in this
country from
Germany in 1993 to seek relief from what Harksen
quaintly described as ‘mounting pressure’ from his
European creditors.
The creditors concerned had paid substantial sums
of money to Harksen in the belief that the moneys would be invested
with large
returns. Harksen led them to believe that they were
assured of being repaid because he was the beneficiary of a large
fortune –
Harksen placed it at about DM1.85 billion –
that was invested in a fund known as SCAN 1000 that was held in
trust. But when
investors sought to recover their money there was
none to be had and Harksen fobbed them off with various explanations
for why the
trustees were unable to release the necessary funds. I
think it can now safely be accepted that in truth there was no fund,
there
was no trust, and there were no trustees (although that is not
admitted by the appellant).
MISLEADING THE COURT
[5] One creditor, Mr Siegfried Greve, pursued his claim
against Harksen in this country by applying for Harksen’s
sequestration
in March 1995. Other creditors later intervened to
support the application. In his founding affidavit Greve alleged that
there was
no SCAN 1000 fund, no trust, and no trustees. Harksen
disputed those allegations, and in support of his assertion that the
fund and
the trust existed he produced what purported to be
affidavits of three of the alleged trustees (Mr Hans-Josef Siegwart,
Mr Ove Unri
Johannson, and Mr Lars-Peter Arnemann) that purported to
have been attested before a Swiss official.
[6] Enquiries that were made by the attorney for an
intervening creditor revealed, amongst other things, that the Swiss
official had
never encountered Johannson and Arnemann, and that the
attestations to their affidavits had been forged. When these facts
were brought
to the attention of Harksen’s legal
representatives – who included the appellant – there was
naturally some consternation.
[7] The upshot was that the appellant, accompanied by an
attorney, travelled to Switzerland, intent upon meeting with the
alleged
trustees, obtaining an explanation for the forged
attestations, and securing authentic affidavits. In Switzerland they
met Siegwart.
It is not necessary to deal in any detail with the
explanations they received from Siegwart. It is sufficient to say
that he told
them that the affidavits had indeed been signed by
Johannson and Arnemann respectively but admitted that he had forged
the attestation
and obfuscated why he had done so.
[8] The appellant prepared fresh affidavits for the
signature of the three deponents, having been assured by Siegwart
that Johannson
and Arnemann would soon arrive to sign them (they were
said to be in the vicinity of the Mediterranean and in New York
respectively).
Days went by, the two men did not arrive, various
explanations were offered by Swiegart, and when it became apparent
that, in the
words of the appellant, ‘the whole issue had
become ridiculous’, the appellant and his attorney packed up
and left.
[9] While returning to South Africa the appellant
prepared a memorandum recording his impressions of what had occurred.
He recorded
that Swiegart had been obstructive, dishonest and
fraudulent, and had never intended that Johannson and Arnemann would
appear. He
went on to record the following:
‘It is our duty to satisfy
ourselves whether Jürgen Harksen has any knowledge of the
attitude adopted by Siegwart and/or
Siegwart, Johannson and Arnemann,
and whether Johannson and Arnemann in fact exist. If Harksen is in
any way whatsoever part of this
scheme to mislead the Court including
the representation that there is a trust of which they are trustees,
and this is a scam, we
have no option but to withdraw. …. If
we are not satisfied that Jürgen Harksen is a part of this
unacceptable conduct
and behaviour of Siegwart and/or Siegwart,
Johannson and Arnemann, we have no right to withdraw from our
mandate.’
(I will return to that view of his
ethical duty later in this judgment.)
[10] What happened thereafter in relation to the
sequestration application is not material to the complaint made
against the appellant.
For completeness it is sufficient to say that
Harksen’s legal representatives asked for the offending
affidavits to be struck
out and Harksen was finally sequestrated on
16 October 1995. Whether the appellant ever discussed his experience
in Switzerland with
Harksen, and if so what Harksen said, does not
appear from the affidavits.
[11] In April 1996 Harksen’s provisional trustees
brought an application aimed at recovering certain property that was
believed
to belong to Harksen. In the founding affidavit it was again
alleged that SCAN 1000 and the trust were fictitious. Harksen deposed
to an answering affidavit in which he once more asserted that there
was indeed such a fund, and that there were indeed trustees who
were
administering the fund.
[12] Harksen’s affidavit was settled by the
appellant and the fact that he did so forms the subject of the first
complaint.
The GCB alleged in the founding affidavit that it should
be inferred from the surrounding facts that at the time the appellant
settled
the affidavit he ‘either knew that SCAN 1000 and the
alleged trustees thereof did not exist, alternatively, he suspected
that
they were a fiction but allowed the assertion as to their
existence to be made recklessly and without regard for the truth.’
In effect the complaint is that the appellant was a party to
misleading the court by knowingly or recklessly allowing perjured
evidence
to be placed before it.
[13] The appellant denied that he knew or suspected that
the fund and the trustees did not exist at the time he settled
Harksen’s
affidavit but acknowledged that he had had some
reservations
7
in that regard. The court below found that the appellant
settled the affidavit while suspecting that the evidence it contained
was
untrue and thereby ‘acted in a manner that was incompatible
with the high standards of integrity and honesty that are expected
of
an advocate.’
8
[14] Advocacy fulfils a necessary role in the proper
administration of justice. (What is said in this judgment applies
equally to
attorneys to the extent that they play an equivalent role
but for convenience I have referred to advocates). It is through the
availability
of the knowledge and skills of an advocate that a
litigant is able to realise the right of every person to have a
dispute resolved
by a court of law. Its function in the
administration of justice at the same time defines the duties of
those who practise it. The
right of every person to have a dispute
resolved by a court of law would be seriously compromised if an
advocate were to be required
to believe the evidence of his client
before being permitted to present it. That would mean that the rights
of the litigant would
be determined by the advocate rather than by
the court. As David Pannick QC observes (in his book entitled
‘Advocates’)
an advocate is required
‘to keep his personal opinions of
the merits of the case (legal or otherwise) to himself and not make
them the subject of his
submissions. The advocate’s duty to his
client authorizes and obliges the advocate to say all that the client
would say for
himself (were he able to do so) … He has no
right to “set himself up as a judge of his client’s case”
and
should not “forsake [his] client on any mere suspicion of
[his] own or any view [he] might take as to the client’s
chances
of ultimate success”. As Baron Bramwell explained in
1871, a “man’s rights are to be determined by the Court,
not
by his [solicitor] or counsel … A client is entitled to
say to his counsel, I want your advocacy, not your judgment; I prefer
that of the Court.”’
9
The Master of the Rolls made the same point when
describing the duty of an advocate towards his client in
Rondel
v Worsley
:
10
‘[A barrister] has a monopoly of
audience in the higher courts. No one save he can address the judge,
unless it be a litigant
in person. This carries with it a
corresponding responsibility. A barrister cannot pick or choose his
clients. He is bound to accept
a brief for any man who comes before
the courts. No matter how great a rascal the man may be. No matter
how given to complaining.
No matter how undeserving or unpopular his
cause. The barrister must defend him to the end.’
[15] The finding by the court below that it was improper
for the appellant to settle the affidavit because he suspected that
the evidence
was false is not correct. Merely to suspect, or even to
firmly believe, that evidence is false does not preclude an advocate
from
permitting his client to place the evidence before a court. On
the contrary, it would be improper for an advocate to refuse to do
so
on those grounds alone. For the same reason the submission on behalf
of the GCB that an advocate may settle an affidavit only
if ‘the
advocate has a reasonable basis for believing that the evidence might
be true’ is also incorrect. An advocate
is not called upon to
believe, to any degree, the evidence that he is instructed to place
before a court. Even if he believes positively
that his client’s
evidence is false, he is entitled, and indeed obliged, to place it
before a court if those are his client’s
instructions, and
there can be no qualification in that regard. (No doubt it would be
prudent for an advocate to advise his client
that a court is likely
to share his belief but that is something else.)
[16] But it is a different matter altogether if an
advocate knows (as a fact and not merely as a matter of belief) that
evidence is
false or misleading. For the role of advocacy in
furthering the proper administration of justice also gives rise to
duties that are
owed to the court, primarily a duty upon an advocate
not to deceive or mislead a court himself. After observing in
Rondel
v Worsley
that the advocate must do ‘all
he honourably can on behalf of his client’ the Master of the
Rolls went on as follows:
11
‘I say “all he
honourably
can” because his duty is not only to his client. He has a duty
to the court which is paramount. It is a mistake to suppose
that he
is the mouthpiece of his client to say what he wants: or his tool to
do what he directs. He is none of these things. He owes
allegiance to
a higher cause. It is the cause of truth and justice. He must not
consciously mis-state the facts. He must not knowingly
conceal the
truth. He must not unjustly make a charge of fraud, that is, without
evidence to support it. He must produce all the
relevant authorities,
even those that are against him. He must see that his client
discloses, if ordered, the relevant documents,
even those that are
fatal to his case. He must disregard the most specific instructions
of his client, if they conflict with his
duty to the court.’
In
Incorporated Law Society v
Bevan
12
the Chief Justice expressed it as follows:
‘Now practitioners, in the conduct
of court cases, play a very important part in the administration of
justice. Without importing
any knowledge or opinion of their own –
which it is entirely wrong that they should ever do – they
present the case of
their client by urging everything, both in fact
and in law, which can honourably and properly be said on his behalf.
And this method
of examining and discussing disputed causes seems to
me a very effective way of arriving at the truth – as effective
a way,
probably, as any fallible human tribunal is ever likely to
devise. But it implies this, that the practitioner shall say or do
nothing,
shall conceal nothing or state nothing, with the object of
deceiving the Court; shall quote no statute which he knows has been
repealed,
and shall put forward no fact which he knows to be untrue,
shall refer to no case which he knows has been overruled. If he were
allowed
to do any of these things the whole system would be
discredited. Therefore any practitioner who deliberately places
before the Court,
or relies upon, a contention or a statement which
he knows to be false, is in my opinion not fit to remain a member of
the profession.
[17] An advocate breaches his duty to the court not only
by permitting evidence to be given knowing it to be false but also by
failing
to speak when he knows that the court is being misled. An
example is
Meek v Fleming
,
13
in which counsel knew that the jury was under the
impression that a police witness was a Chief Inspector and failed to
disclose that
the officer had been demoted to the rank of sergeant on
account of misconduct.
[18] Advocates who confine themselves to acting upon
instructions will usually avoid ethical conflicts of that kind. But
advocates
who depart from that salutary practice, and set about
discovering the truth for themselves (which they have no duty to do)
invite
such conflicts. For by doing so they run the risk of becoming
material witnesses themselves and thereby compromising their ability
to perform their proper function. That is what occurred in the
present case.
[19] That an attempt to make contact with the three
alleged trustees had produced only a dishonest, fraudulent and
obstructive man
claiming to be a trustee, but had failed to discover
the others, was clearly material to the truth of Harksen’s
assertion that
a trust existed. So material that in my view a court
with knowledge of those facts might justifiably have rejected
Harksen’s
assertion summarily on the grounds that it was
‘far-fetched [and] untenable’.
14
Having discovered those facts the appellant was not
obliged to refuse to permit Harksen’s evidence to be placed
before the court
– it was for the court and not for the
appellant to assess the impact of those facts on Harksen’s
evidence – but
if Harksen’s evidence was to be placed
before the court the appellant was obliged to ensure that those facts
were also disclosed.
Without them the evidence misrepresented the
true state of affairs, which was not only that Harksen alleged that
the trust existed,
but also that a search for them had produced only
the results that I have described.
[20] The appellant’s view of his ethical duties
once he had discovered those facts, as reflected in the extract from
his memorandum
that I referred to earlier, was misguided. The fact
that Harksen might not have known of or been a party to Siegwart’s
machinations
was quite immaterial. It was the appellant’s own
knowledge of the facts that gave rise to the dilemma and not whether
Harksen
was aware of or a party to them. Once the appellant became
aware of the facts his duty was to tell Harksen that if he persisted
in
asserting that the trustees existed, the appellant’s own
evidence of what he had discovered would also need to be disclosed.
If Harksen had instructed the appellant not to make the disclosure
the appellant’s proper course would have been to withdraw.
Any
explanations that might have been forthcoming from Harksen were
properly to be directed to the court and not merely to his counsel:
explanations by Harksen could not somehow have made the appellant’s
knowledge of the facts disappear.
[21] The appellant cannot be faulted for permitting
Harksen to assert to the court (in the affidavit that the appellant
settled) that
the fund and the trustees existed, which was the charge
brought against him by the GCB. (The GCB expressly refrained from
contending
in this court that the appellant knew those assertions to
be false.) Where he is to be faulted is for permitting those
assertions
to be made without simultaneously disclosing the
additional facts he had discovered that were material to the truth of
the assertions,
and in that respect he acted improperly. I have
pointed out that that is not strictly the offence with which the
appellant was charged
but we would fail in our duty if we were to
overlook it merely on that ground. The facts that establish the
offence are all undisputed,
no further evidence could alter the
position in that regard, and there can be no explanation that would
justify the appellant’s
conduct.
CHARGES CONCERNING FEES.
[22] Complaints of various kinds were made by the GCB
concerning fees that were received by the appellant and it is
convenient to
deal with them together.
[23] It has been affirmed by this court in recent cases
that, at least in regard to the conduct of litigation, advocacy is a
referral
profession, and that an advocate misconducts himself if he
acts in such matters without the intervention of an attorney.
15
It follows, as a consequence of that rule, that ‘fees
for professional services may only be paid by or through an
attorney’
16
(subject to certain exceptions that are not now
relevant). Needless to say, fees charged by an advocate must be
reasonable.
17
[24] In about February 1999 Harksen was taken into
custody (apparently pending proceedings for his extradition to
Germany). In April
1999 Harksen’s wife telephoned the appellant
and asked him to represent her husband in various proceedings,
including proceedings
for his release on bail. The appellant informed
her that he needed to be instructed by an attorney if he was to
assist. On 12 April
1999 he received a letter from a legal
practitioner in Switzerland, Mr Studer, in the following terms:
‘This morning I was instructed by
Janette Harksen to ask you [to represent] Jürgen Harksen’s
interests in his extradition
case immediately and, if necessary, her
interests in different matters. I was also instructed that you will
be paid by third parties,
represented by attorney Uwe Griem,
Hamburg/Germany.’
Later that day the appellant received the following
letter from Studer:
‘We are relieved – and I do
not only speak for Jürgen and myself, but for all those who
believe in Jürgen that
you are going to take care of the pending
matters. I have been instructed to confirm that you have been
mandated as the leader for
the following cases:
1. Bail application (coming Wednesday),
if lost
2. Bail Review at Supreme Court;
3. Appeal against [Magistrate Wagner’s]
committal of Jürgen;
4. Filing of an application to secure the
bail of R1 000 000,00;
5. Appeal against judgment of [Judge
Brand] (of last Friday);
6. Control of the application § 3.2
pending at the Constitutional Court;
7. Jeannette’s sequestration.
I am convinced that we shall have a
perfect cooperation.’
[25] The appellant required payment of the sum of R250
000 – his estimate of his fees for the work that would be
required, which
he anticipated would engage him for about two months.
The following day the sum of £25 000 was deposited to the
appellant’s
account at a foreign bank at the instance of a
third party.
[26] In 2001 the appellant received two further amounts
of R150 000 and R100 000 respectively from an entity known
as the
Voyager Trust. According to the appellant these payments
constituted his fees for further work that he performed on the
instructions
of Studer (the appellant recorded the work in an invoice
as being ‘consultation, advice, drafting papers and opinion’).
[27] The GCB alleges in respect of all these payments
that the appellant acted improperly by receiving payment other than
from or
through an attorney and that the fees concerned were
excessive. (Certain further fees received by the appellant –
amounts of
DM58 000, DM56 000 and DM168 000 –
were also said to be excessive but I do not intend dealing with them
for
reasons that follow.)
[28] The appellant explained, but only in general terms,
the nature of the work that he performed in return for these fees.
The court
below found that in each case the fees were excessive. I do
not think those findings were justified on the evidence, which is
insufficient
to determine what work was done. (That is not to say
that the evidence established that the fees were not excessive.) In
the absence
of proper evidence of the work that was done – or
not done, as the case may be – there is no foundation for
determining
whether the fees were reasonable. No doubt it is
incumbent upon an advocate who is alleged to have charged excessive
fees to provide
sufficient detail of the work that was performed to
enable the fee to be assessed, and in appropriate cases
cross-examination might
be called for to establish the true facts,
but in the absence of such evidence I do not think the court below
was justified in making
its finding.
[29] With regard to the further charges (‘receiving
payment other than from or through an attorney’) the court
below found
that, at least in relation to work that concerned
litigation, Studer was no more than a nominal attorney. Since the
payments were
not received through an attorney as contemplated by the
rule the appellant acted improperly in receiving them. I agree with
those
findings. But I think I should add that the difficulties
relating to fees, at least so far as they related to litigation, all
arose
because the appellant acted without proper instructions in the
first place. An advocate may not act in litigation other than on the
instructions of an attorney and by that I do not mean a nominal
attorney. Had the appellant been properly instructed, as required
by
that rule, he would no doubt have been held to account by his
attorney for the fees that he charged. That would necessarily have
required that he record his fees in the ordinary way, that he mark
his briefs with the work he had done and the fee that was relevant
to
that work, that he submit accounts that could be scrutinized by his
attorney, and no doubt he would have received payment in a
more
conventional way. Had he acted at the outset in accordance with his
obligations these charges need never have arisen.
THE MANDATE RELATING TO THE ‘CHASE-MANHATTAN FUND’
AND THE FEE RELATING TO THAT MANDATE
[30] By March 2001 the appellant had terminated
full-time practice and turned his hand to viticulture. The Cape Bar
Council permitted
him to keep associate membership.
[31] It seems that Harksen was aware that the appellant
was on the lookout for investment capital to develop a wine cellar on
his
farm. In March 2001 Harksen telephoned the appellant and told him
that he wished to introduce him to a potential investor. It seems
that this was the start of a plan by Harksen to lure the appellant
into a new fraudulent scheme.
[32] Harksen arrived at the appellant’s farm
accompanied by Studer who told the appellant that he was acting for a
foreign investor
who would be interested in investing in the
appellant’s project. In due course Studer, purporting to act on
behalf of a trust,
agreed that the trust would advance $1.7 million
on loan to the appellant for a period of ten years. Needless to say,
the money was
never forthcoming.
[33] Meanwhile Harksen and Studer told the appellant
that Studer was to undertake the payment of Harksen’s
creditors. Payment
was to be made, so the appellant was told, from a
fund of US$44 billion that was being held by Chase Manhattan Private
Bank and Trust
Ltd (Chase Manhattan) on behalf of an entity called
Global Finance SA. (What relationship was said to exist between
Harksen and Global
Finance is not clear. It is also not clear what
relationship, if any, there was said to be between the Chase
Manhattan fund, and
the SCAN 1000 fund.)
[34] Some time later the appellant was induced
(precisely how this occurred does not appear from the papers but
clearly Harksen was
masterminding the scheme) to accept a mandate to
participate with Studer in paying the creditors. The arrangement was
essentially
this: Global Finance purported to authorise the appellant
and Studer to take charge of the fund that was purportedly being held
by
Chase Manhattan and to pay various creditors, including those of
Harksen, from the fund. In return, the appellant and Studer were
to
be paid $22 million, from which they were to meet disbursements
incurred in performing the mandate.
[35] The authorisation by Global Finance was recorded in
a document purporting to be a power of attorney given by ‘Frederick
Chanberie in my capacity as Director of Global Finance SA’
authorising the appellant
‘on behalf of Global Finance SA to
sign the Notarial Recordal dated 14 May 2001, to act as set out in
the said Notarial Recordal
on behalf of Global Finance SA, and to do
all that is necessary to give effect to the mandate in terms of the
said Notarial Recordal
dated 14 May 2001.’
[36] In the ‘notarial recordal’, which was a
notarialised document signed by the appellant on the same day, the
appellant
recorded that he was
‘acting for the directors of Global
Finance SA Registration No. 19525792584 in terms of a Power of
Attorney of Global Finance
SA dated 14
th
of May 2001 and
signed at Cape Town of which a copy is annexed as Annexure 1’
(the document that I referred to earlier)
and that
‘he, JOHAN VAN DER BERG and WALTER
ADRIAN STUDER with power of substitution, have been authorised to
make payments to all creditors
of the companies Nord Analyse Hamburg
or Fates Finance Inc or Global Finance SA or of Mr Jürgen
Harksen upon documentary proof
of the creditors’ legal claims
against the aforesaid companies or Mr Jürgen Harksen and against
valid cession of such
claims.’
[37] There are many loose ends in the evidence relating
to the scheme but I need not deal with them because in truth it was
all an
elaborate fraud. If there was an entity known as ‘Global
Finance SA’ it certainly had no fund of money at Chase
Manhattan,
least of all a fund of $44 billion, because Chase
Manhattan was not involved at all. The appellant had regular
telephone conversations
with two people who purported to be
representatives of Chase Manhattan (‘Mr Goldstein’, who
purported to be a Vice President,
and ‘Mr Rothschild’,
who purported to be its attorney) but at the time he signed the
documents the appellant had not
met them personally. Indeed, the only
person purporting to be from Chase Manhattan whom he ever met (on
only one occasion after the
documents had been signed) was ‘Mr
Goldstein’. The appellant also had regular telephone
conversations with Mr Hamman,
who purported to be the President of
Global Finance, but it is not clear whether he had any contact at all
with ‘Frederick
Chanberie’. Who all these people actually
were does not appear from the papers but it is clear that they were
not who they
purported to be.
[38] The documentation, under the hand of the appellant,
was clearly designed by Harksen and his associates to create the
impression
that a large fund of money was immediately available for
distribution by two respectable lawyers. Armed with that
documentation Harksen
would be in a position to once again persuade
people to part with money on the assurance that they would be repaid.
What clinched
the deception was that the notarial document signed by
the appellant recorded not only that had he been authorised to make
the distribution
but also that he was already in possession of
cheques drawn by Chase Manhattan and a guarantee by Chase Manhattan
(in the form of
a letter of credit) that the moneys would be paid. It
recorded that
‘the undersigned JOHAN VAN DER BERG
has been given the necessary
authority and power to receive a Letter of Credit Drawn by The Chase
Manhattan Private Bank and Trust
Ltd, in favour of Global Finance SA
… which he has duly received from The Chase Manhattan Private
Bank and Trust Ltd and
confirm that the Letter of Credit is now
legally in his possession, he acting for Global Finance SA.
records that he has received bank
cheques the drawer being The Chase Manhattan Private Bank &
Trust Ltd from The Chase Manhattan
Private Bank & Trust Ltd and
confirm that the bank cheques are now legally in his possession, he
acting for Global Finance
SA.’
[39] Those statements by the appellant were false. The
appellant had no cheques nor a letter of credit. (Documents that
purported
to be cheques and a letter of credit were later shown to
him by Harksen.) With the written assurance from the appellant that
he was
in possession of documents that were almost the equivalent of
ready money the potential for deception was complete. (Whether moneys
were in fact solicited does not appear from the papers.)
[40] The appellant was later told by Harksen that
because of his ‘busy program’ Studer was no longer
available and the
appellant agreed to execute the mandate alone (the
amount available to pay disbursements and his fees remained $22
million). The
appellant appointed an attorney to receive the funds
into his trust account and to make the distribution under the
appellant’s
supervision and he waited for the funds to arrive.
Days, and then months, went by, and still the funds did not arrive,
various explanations
were given to the appellant for the delay,
letters went back and forth, and eventually Harksen was arrested in
April 2002, bringing
the charade to an end.
[41] The saga resulted in three charges being brought
against the appellant by the GCB. First, it alleged that by accepting
the mandate
the appellant ‘engaged in another occupation which
adversely affected the reputation of the Bar and prejudiced his
ability
to attend to the interests of his clients’ in breach of
Rule 4.15.1.
18
Secondly, it alleged that ‘in performing or
purporting to perform the mandate the [appellant] made certain false
statements’
and that in doing so he ‘acted
unprofessionally and in a manner unbecoming to an advocate’.
And thirdly, it alleged that
the amount of $22 million that the
appellant agreed to receive was excessive.
[42] A person who is admitted to practise as an advocate
need not necessarily enter into practice and may embark upon any
other occupation
that is not incompatible with his standing as an
advocate. The only additional restrictions that apply once an
advocate chooses to
practise are those in Rule 4.15.1. The second
proviso to the rule is not now material – the appellant was not
in full-time
practice and his duty to other clients was not
interfered with by accepting the mandate. Moreover, I do not think a
mandate of this
nature – which was essentially to arrange for
the distribution of a fund to creditors – is one that an
advocate may never
accept. Distributing a fund of money to creditors,
if done honestly and responsibly, is not inherently detrimental to
the reputation
of the Bar. But when seen against its background this
was no ordinary mandate.
[43] The mandate that was offered to the appellant came
against a considerable background. The appellant was well aware at
the time
that Harksen had once before claimed to have an interest in
a large fund (SCAN 1000) and that large sums of money had been paid
to
Harksen on the strength of the existence of the fund. He also knew
that Harksen’s creditors claimed that there was no such
fund
and that they had been defrauded. His own enquiries had also revealed
facts that had led the appellant to suspect that the scheme
might be
a scam (as he recorded in the memorandum that he dictated while
returning from Switzerland). Since then Harksen had been
sequestrated, attempts had been made to locate his assets amidst
allegations that he had surreptitiously concealed them, and Harksen
faced proceedings to extradite him to Germany to face criminal
charges. If anything had occurred by March 2001 to dispel what the
appellant coyly referred to as ‘some reservations’ that
he had had some six years earlier the evidence does not disclose
what
it might have been. Indeed, the continued elusiveness of any
objective evidence of the existence of the SCAN 1000 fund should
only
have exacerbated them. For the appellant to have associated himself
with another alleged fund that was connected to Harksen,
at least
without first making careful and diligent enquiry, was most certainly
detrimental to the reputation of professional advocates
and hence to
that of the Bar.
19
[44] But it is in the purported execution of the mandate
that the conduct of the appellant was even more extraordinary. The
key to
a confidence trick of that nature is to convince potential
victims that a fund of money does indeed exist. The appellant
provided
Harksen with the means for doing just that when he signed a
false statement that he was in possession of cheques and a letter of
credit from Chase Manhattan. The appellant’s explanation for
making those false statements is that he was told by Studer, amongst
others, that the document ‘was required by the bank to get its
funds and administrative documents in order for the purpose
of making
the funds available to Global Finance’ and that the document
was ‘confidential and was not to be used for any
purpose other
than that of the bank’. I have considerable difficulty
understanding why the appellant would have thought that
the bank
required him to make false statements in order to get its affairs in
order. But the submission before us on behalf of the
appellant was
that that evidence showed that the appellant did not intend to
mislead. I think that submission misses the point. The
question is
not whether the appellant had fraudulent intent but rather whether an
advocate should be making false statements at all,
least of all false
statements of the kind that the appellant made, in a document that is
to leave his possession and control (and
in fact left his possession
and control). By doing so the appellant lent the reputation and
standing of an advocate to a fraudulent
scheme, whether or not he
knew it at the time, and thereby brought the profession into
disrepute, which would not have occurred if
he had desisted from
making false statements at all irrespective of his intent.
[45] With regard to the charge concerning the amount of
the fee I am not sure that the rules regulating the profession apply
to fees
that are earned from other occupations. But in any event I
have found that it was improper for the appellant to have accepted
the
mandate at all and the amount he was to be paid for doing so does
not seem to me to take the matter further.
MISREPRESENTATIONS TO THE DIRECTOR OF PUBLIC
PROSECUTIONS.
[46] In July 2002, after Harksen had been arrested, the
appellant deposed to an affidavit outlining his relationship with
Harksen,
at the request of the Director of Public Prosecutions, in
which he listed the fees that he had earned from representing
Harksen.
The GCB alleges that the affidavit was misleading because it
omitted various fees that had been earned.
[47] The list did not reflect the amounts of £25 000,
(an amount of R30 000 was listed instead), R150 000 and
R100 000 that I referred to earlier in this judgment, and in
that respect, at least, it was inaccurate. The appellant alleged
that
the absence of proper record-keeping had resulted in the fees being
omitted inadvertently. The court below rejected the appellant’s
explanation and found by inference that the fees had deliberately
been mis-stated and concealed respectively.
[48] The state of a person’s mind is as much a
fact as any other and I have already referred to the undesirability
of resolving
factual issues on affidavit. In the absence of
cross-examination of the appellant to test the truth of his
explanation I do not think
the finding against him was justified.
CONCLUSIONS
[49] In summary, the evidence discloses that the
appellant acted in conflict with the duties of an advocate in various
respects. He
failed to disclose facts that were material to the truth
of evidence that he permitted to be placed before the court and
without
which the evidence was misleading. He received fees other
than through an attorney (which was merely a consequence of acting
without
proper instructions in the first place). He associated
himself with a mandate that was detrimental to the reputation of the
profession.
And in executing the mandate he lent his name to false
statements that had the potential to facilitate the perpetration of
fraud.
[50] It remains to determine whether the conduct of the
appellant justified an order striking his name from the roll. 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. Some cases will require
nothing less than
the removal of the advocate from the roll
forthwith. In other cases, where a court is satisfied that a period
of suspension will
be sufficiently corrective to avoid a recurrence,
an order of suspension might suffice.
[51] The various transgressions of the appellant should
not be viewed in isolation. I accept that the appellant was not aware
that
the Chase Manhattan fund did not exist and was not a knowing
party to the fraudulent scheme. I also accept that he had no
fraudulent
intent when he made the false statements. But the absence
of such knowledge and fraudulent intent does not detract from the
appellant’s
breach of his professional duties. A person who
practises as an advocate is expected to know what those duties are
and there are
no grounds for excusing the appellant’s various
transgressions. This is not an inexperienced advocate whose judgment
and appreciation
of what his professional duties demand has yet to
mature. The appellant has practised for more than thirty years and
for sixteen
years he has worn silk. The various transgressions, when
viewed together, paint a picture of an advocate who is quite
indifferent
to the demands of his profession. His initial responses
to the GCB, and his affidavit that is now before this court, betray
not the
slightest appreciation of where he has fallen short, but
instead reflect indignation that his conduct should be called into
question
at all. I have no doubt that he is not fit to continue in
practice and that the court was correct in ordering his name to be
struck
from the roll.
[52] With regard to costs we were informed from the bar
that counsel for the GCB acted in this appeal without fee and that an
order
should be made only for the recovery of their disbursements. We
intend making the ordinary order with regard to costs though we note
for the information of the taxing master that the costs of counsel
are restricted to the recovery of disbursements that have been
made
by them or on their behalf. I need only add that we have appreciated
the assistance we have received from all counsel in this
appeal.
[53] The appeal is dismissed with costs that include the
costs of three counsel.
_____________________
R.W. NUGENT
JUDGE OF
APPEAL
CONCUR
:
HARMS ADP)
STREICHER JA)
LEWIS JA)
MUSI AJA)
1
Those
standards are largely reflected in the Uniform Rules of Professional
Conduct of the GCB though a court ‘is not bound
by those rules
and remains the ultimate arbiter of the ethical rules of conduct of
the profession’. See
General Council of the Bar of South
Africa v Van der Spuy
1999 (1) SA 577 (T).
2
Section
7(1)(d)
of the
Admission of Advocates Act 74 of 1964
.
3
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1984 (3) SA 620
(A)
at 634E-635D.
4
Society
of Advocates of South Africa (Witwatersrand Division) v Edeling
1998
(2) SA 852
(W) at 860B-D;
General Council of the Bar of South
Africa v Matthys
2002 (5) SA 1
(E) at 5A-C.
5
Middelberg
v Prokureursorde Transvaal
2001 (2) SA 865
(SCA) at 870G-H;
Summerley v Law Society of Northern Provinces
2006 (5) SA 613
(SCA) para 3.
6
Olivier
v Die Kaapse Balieraad
1972 (3) SA 485
(A) at 496F-G; Cf
Campbell v Hamlet
[2005] 3 All ER 1116
(PC) at 1120 para 15
and 1123 para 26.
7
‘Sekere
voorbehoude’.
8
‘…het
nie voldoen aan die hoë graad van eerlikheid en integriteit wat
van ‘n advokaat vereis word nie.’
9
Pages
92-93.
10
1967
(1) QB 443
(CA) at 502.
11
At
502.
12
1908
TS 724
at 731-732.
13
1961
(2) QB 366
(CA).
14
Plascon-Evans,
above.
15
De
Freitas v Society of Advocates of Natal
2001 (3) SA 750
(SCA);
Commissioner, Competition Commission v General Council of the Bar
of South Africa
2002 (6) SA 606
(SCA) para 19;
Rösemann
v General Council of the Bar of South Africa
2004 (1) SA 568
(SCA).
16
Rule
7.9.1 of the Uniform Rules of Professional Conduct of the GCB.
17
Rule
7.1.1 of the Uniform Rules of Professional Conduct of the GCB.
18
‘A
member of the Bar is entitled to engage directly or indirectly in
any occupation unless:
his association with that occupation adversely affects the
reputation of the Bar, or
such engagement prejudices the ability to attend properly to the
interests of clients.’
19
The
appellant contended that his acceptance of the mandate was
conditional but even if that was so it is immaterial.