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[2016] ZAGPPHC 1023
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Law Society of the Northern Provinces v Tumagole (24662/2016) [2016] ZAGPPHC 1023 (12 December 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 24662/2016
12/12/2016
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
In
the matter between:
LAW
SOCIETY OF THE NORTHERN
PROVINCES
Applicant
and
MORUTI
RAMOGUDI
TUMAGOLE
Respondent
JUDGMENT
BASSON.
J
Introduction
[1]
This is an application brought by the Law Society of the Northern
Provinces ("Law Society") for an order removing
the name of
the respondent (Mr. Tumagole) from the roll of attorneys
alternatively for an order suspending him from practice as
an
attorney.
Background
facts
[2]
The respondent was admitted and enrolled to practice as an attorney
of this court on 10 April 2001. The respondent practiced
on and off
as an attorney and was a non-practicing member for various periods
the last being 1 December 2009 until 31 July 2010.
[3]
Various financial obligations are placed on attorneys in terms of the
Attorneys Act ("the Act")
[1]
and the Rules.
[2]
Non-adherence
to any of these obligations may result in disciplinary action being
taken against such an attorney.
[4]
In terms of rule 70.3 and rule 70.4 of the Rules, for example, every
attorney who practices for his own account must cause his
auditor to
lodge an unqualified report with the Law Society within six months of
the annual closing of his accounting records to
the effect that the
attorney has kept such records as required by the Act and the Rules
and further to the effect that there was
at all relevant times
sufficient monies in his trust bank account to cover his liabilities
to trust creditors. The closing date
of an attorney's accounting
records is the last day of February in each year and the attorney
should therefore cause his auditor
to lodge the required auditor's
report on or before the last day of August of each year. Lodging the
auditor's report as required
by rule 70.4 read with rule 70.3 is a
prerequisite for an attorney to be issued with a Fidelity Fund
Certificate as required by
section 41 of the Act.
Complaints
against the respondent
[5]
The following complaints have been levelled against the Respondent:
The respondent had failed to cause his auditor to lodge
an
unqualified audit report as required by the Rules of the Law Society
and, more in particularly as required by rule 70.4 read
with rule
70.3 for the periods ending February 2014 and February 2015. I have
already pointed out that the lodging of the required
unqualified
audit report in terms of rule 70 is a prerequisite for the respondent
to be issued with a Fidelity Fund Certificate
in terms of section 41
of the Act. Section 41 of the Act provides that an attorney may not
practice for his own account for reward
without being in possession
of a Fidelity Fund Certificate whilst section 83(1) of the Act makes
it a criminal offence for an attorney
to do so. An attorney who
practices without such a certificate also places the Fidelity Fund at
risk.
[6]
As a result of the respondent not having been issued with a Fidelity
Fund Certificate because of his failure to lodge the required
unqualified rule 70 audit report for the years 2014 and 2015, he was
not issued with a Fidelity Fund Certificate and accordingly
he was
not entitled to practice for reward for the years commencing January
2015 and January 2016. As will be pointed out herein
below,
practicing without a Fidelity Fund Certificate not only constitutes a
serious transgression, but also constitutes a criminal
offence in
terms of the Act.
[7]
It is common cause that in a letter dated 3 November 2014 the
respondent was called upon to appear before a Disciplinary Committee
of the Law Society. The charges against him emanated from his failure
to cause his auditor to lodge the required unqualified audit
report
for the year 2014. The respondent attended the disciplinary enquiry
and pleaded guilty to the charge preferred against him.
The
respondent was found guilty and a fine of R 3 000.00 was imposed on
him. In a letter dated 9 December 2014 the respondent was
informed of
the outcome of the hearing.
[8]
It is further alleged by the Law Society that the respondent had
abandoned his practice and that he failed to cause his auditor
to
lodge his firm's closing audit report to this effect. It is also
alleged by the Law Society that the respondent has transgressed
rule
89.17 of the Rules by abandoning his practice without prior notice to
clients.
The
disciplinary proceedings
[9]
I have already referred to the fact that the respond13nt had been
charged and found guilty for not having submitted his firm's
annual
audit report for the financial year 2014. For this transgression he
received a penalty in the nature of a fine in the amount
of R3000.00
which was payable in two instalments of R1500.00 each.
[10]
I specifically refer to this enquiry in light of the fact that it
appears from the papers that the Law Society is again relying
on this
failure to lodge an audit report for the period ending February 2014
in this application. In other words, the Law Society
is relying in
this application on a transgression in respect of which the
respondent has already been found guilty and fined. I
am of the view
that the Law Society cannot rely on a transgression in respect of
which an attorney has already been found guilty
and fin1d for
purposes of these proceedings now serving before this court. I
should, however make it clear that I am not taking
issue with the
fact that the Law Soc11ety is also relying in these proceedings on
the fact that the respondent did not lodge his
audit report with the
Law Society for the period ending February 2015 as that transgression
was not the subject of the disciplinary
hearing. I will now briefly
turn to the reasons for my view.
[11]
The Council of the Law Society may appoint a committee in terms of
section 67 and more in particular section 67(1)(a) to assist
in the
carrying out of its duties including performing the duties of a
disciplinary committee. In terms of section 67(2) the Council
may
assign to the disciplinary committee such powers as it may deem fit.
[12]
Section 71 of the Act provides for the procedure that may be followed
by the disciplinary committee appointed to inquiry into
cases of
alleged unprofessional conduct and provides for wide ranging powers
ranging from the power to summon any person who is
able to give
material information concerning the subject matter of the enquiry to
interrogating such a person.
[13]
Section 72 provides for the disciplinary powers of the council. In
terms of section 72(1) the council may impose a fine not
exceeding R
100 000.00; reprimand the attorney; debar such an attorney from
engaging or continuing to engage a candidate attorney
and may recover
from such an attorney the costs incurred by the Council in connection
with the enquiry.
[14]
The fact that a matter has been referred to a disciplinary committee
does not, however, affect the right of the Law Society
to refer the
matter to this court in terms of section 72(6) of the Act and apply
for the striking-off of an attorney from the role
provided that the
disciplinary committee has not disposed of the matter finally by
having found the attorney guilty
and
by having imposed a
penalty on such attorney after which the Law Society will become
functus officio.
Put differently, provided that the committee
has not finally dealt with the matter, the Law Society may refer the
matter to this
court and may do so even after a finding of guilty has
been made.
[15]
Section 67(2) importantly provides that, if the council has assigned
to the (disciplinary) committee the power to enquire into
any case of
unprofessional or dishonourable conduct and to impose any punishment
in respect thereof in accordance of section 72,
the council shall not
amend or withdraw any decision arrived at by the commission in terms
of any power assigned to the (disciplinary)
committee. A disciplinary
committee therefore acts as an extension of the Council once it has
been appointed and once certain powers
have been assigned to it by
the Council. Any decision taken in accordance with those powers will
be final in that section 67(2)
specifically provides that the council
shall not amend or withdraw any decision including a decision
regarding punishment in accordance
with section 72. It therefore
follows that once the Law Society (through a duly appointed
committee) - which is a creature of statute
- has made a decision in
terms of section 72 in terms of its disciplinary powers, the Law
Society will become
functus officio
in respect of decisions
duly taken by the disciplinary committee in terms of the powers
delegated to it by the Council of the Law
Society. It further follows
that until such decision has been reviewed or set aside, the decision
will stand.
[16]
Having regard then to the complaint before the disciplinary committee
regarding outstanding audits for the financial year 2014,
the Law
Society is
functus officio:
Not only was the respondent found
guilty after a guilty plea, the committee also imposed a fine of
R3000.00 on him in respect of
the transgression relating to the
February 2014 audit report.
Proceedings
in terms of section 22 of the Attorneys Act
[17]
Proceedings in terms of section 22 of the Act contemplates a
three-stage enquiry. In this regard the court in
Botha
v Law Society of the Northern Provinces
[3]
explained
that in terms of the first enquiry the court must decide whether the
alleged offending conduct has been established on
a preponderance of
probabilities. In terms of the second enquiry the court must consider
whether or not the person against whom
the application is brought is
a fit and proper person to continue to practise as an attorney. In
terms of the third enquiry the
court must inquire whether in all the
circumstances, the attorney is to be removed from the roll of
attorneys or whether an order
of suspension would suffice.
[4]
[18]
As a general rule striking-off is reserved for attorneys who have
acted dishonestly whilst transgressions not involving dishonesty
are
usually visited with a lesser penalty of suspension from practice.
[5]
[19]
In this case it is not in dispute that the respondent did not
misappropriate trust funds: The respondent is not charged with
any
form of misconduct relating to his trust account.
The
first enquiry: the offending conduct
[20]
The respondent is charged with essentially three transgressions: The
first is that he did not lodge an unqualified audit report
as
required by the Rules for the year ending February 2015. I have for
the reasons already alluded to, disregarded the transgressions
in
respect of the year ending February 2014. It is common cause that the
respondent did not submit the required report for the
year ending
February 2015. He, however, submitted that his practice was
non-existent at the relevant time and that he did not have
any
clients.
[21]
The second transgression levelled against the applicant relates to
the fact that, because he did not lodge the unqualified
audit reports
as required, he practiced as an attorney without a Fidelity Fund
Certificate for the years 2014 and 2015. This allegation
is not
denied by the respondent. The respondent, however, explains in his
answering affidavit that although he was not in possession
of a
Fidelity Fund Certificate for the years 2014 and 2015 and although he
accepts that he was not entitled to practice for reward
for his own
account, he did not have any clients during this period and that he
had in fact informed the Law Society on 14 May
2015 that he had
obtained employment elsewhere. He also submits that during this
period and specifically since January 2015 to
date he had not
received any monies in his trust account on behalf of any member of
the public. In response the Law Society submitted
that the respondent
was obliged in these circumstances to submit a closing audit report
which he did not do.
[22]
I am in agreement with the submission on behalf of the Law Society:
Inasmuch as the respondent claims that he did not have
any clients
and that that he did not receive any monies from the public in his
trust account, the fact remains that he was still
on the Roll of
practicing attorneys at the relevant time and as such he was obliged
to have been in possession of a Fidelity Fund
Certificate. Moreover,
although the respondent tried his b•3St to persuade the court
that he was not practising at the time
and that his firm was
effectively dormant, his letter to the Law Society dated 14 May 2015
seems to suggest that this was not the
case. In this letter the
respondent informed the Law Society that the practice was moved to
another address. He further informed
the Law Society that a decision
will be taken at some stage "as to the person who shall be in
charge of the practise and his
or her particulars shall be made known
to yourselves".
[23]
If regard is had to the contents of his letter it is clear that the
practise was - contrary to what the respondent contends
in his papers
- still in existence as of 14 May 2015. A Fidelity Fund Certificate
was therefore clearly a requirement for the firm
to practise.
[24]
I am therefore satisfied that the Law Society has sufficiently
established the offensive conduct in respect of Fidelity Fund
Certificates which was not issued as a result of the fact that the
respondent had failed to provide the Law Society with the required
annual audit reports.
[25]
Practicing without an Attorney's Fidelity Fund certificate
constitutes a risk not only to the public but also to the Fidelity
Fund. Such a failure as already indicated also constitutes a criminal
offence.
[6]
It is for these
reasons that practicing without being in possession of a Fidelity
Fund Certificate is considered to constitute
a serious breach of an
attorney's duties. Although it will be taken into account as a
mitigating factor when considering an appropriate
sanction that the
respondent did not have clients during the relevant periods, the fact
that he had no clients and received no
monies in his trust account
does not detract from the fact that it constitutes a serious
transgression to practice without the
necessary Fidelity Fund
Certificate.
[26]
In respect of the closing audit report it is accepted that in terms
of the Rules an attorney must lodge his firm's closing
audit report
as required by the Act. The respondent disputed that it was incumbent
upon him to submit a closing audit report because
he did inform the
Law Society on 14 May 2015 that he had obtained employment elsewhere.
He also disputed the allegation that he
had abandoned his practice.
Again, inasmuch as the respondent attempts to persuade this court
that he did not abandon his practice
that much is clear from the
papers: Mapfumo visited the respondent's firm's given address and
found no trace of the respondent
and of his firm. It was under those
circumstances incumbent upon the respondent to submit his closing
audit report which he had
not done. The respondent also placed no
documents before the court that prove that he did in fact inform the
Law Society that he
was closing down his firm and that he has filed
the firm's closing audit report. It was only after Mapfumo visited
the premises
that the Law Society gained knowledge of the fact that
the respond1nt had abandoned his practice.
[27]
I am therefore satisfied that the Law Society has sufficiently
established the offensive conduct in respect of the closing
audit
report. Against the background of these conclusions, the court now
has to consider whether the respondent is fit to continue
practising
as an attorney.
The
second enquiry: is the respondent a fit and proper person to continue
practicing?
[28] Attorneys are officers of the court and has a duty to comply
with the prescripts of the Act and the Rules regulating the conduct
of attorneys. As already repeatedly stated, an attorney is not
entitled to practise for his own account without being in possession
of a Fidelity Fund Certificate. In this regard the court in
Law
Society of The Cape of Good Hope v Adams
[7]
stated
that it is taken for granted that an attorney who practices without a
valid Fidelity Fund Certificate contravenes section
83(10) of the
Act.
[8]
[29]
In
Law
Society, Northern Provinces v Mogami and others
[9]
the
court also accepted that the failure to submit audited reports and to
practice without a Fidelity Fund Certificate are serious
offences:
"[25] I have with
reservations concluded that the respondents are not unfit to continue
practicing as attorneys. The particular
complaints dealt with
indicate a level either of incompetence, inattention or inability to
do professional work but the seriousness
is not such as to disqualify
them from practising. More serious were the failure to submit their
auditor's report and the fact
that they practiced without fidelity
fund certificates."
[30]
I have considered the circumstances and I am of the view that despite
these transgressions it cannot unreservedly be concluded
that the
respondent is not fit to continue practicing. However, despite the
fact that I have come to this conclusion, the court
still has a
discretion to consider whether to impose an appropriate sanction on a
respondent found guilty of a transgression. In
this regard the
Supreme Court of Appeals in
Law
Society, Northern Provinces v
Mogami
and others
[10]
held as
follows:
"[27] The finding
that the respondents are guilty of unprofessional conduct but that
they are fit to continue to practise does
not mean that it is the end
of the inquiry. We are entitled to discipline them by suspending them
from practice with or without
conditions or by reprimanding them
(Malan and Another v Law Society, Northern Provinces
[2008] ZASCA 90
;
2009 (1)
SA 216
{SCA) ([2009]
1 All SA 133
;
[2008] ZASCA 90)
para 5)."
The
third enquiry: the sanction
[31]
I now turn to the third leg of the enquiry namely what an appropriate
sanction would be in the circumstances. In this regard
the court has
a discretion to consider the appropriate sanction and must do so
taking into account all the circumstances.
[32]
Although it is undoubtedly a serious offence to practice without a
Fidelity Fund Certificate following a failure to submit
unqualified
audit reports and failing to submit a closing audit report, I am of
the view that the conduct of the respondent in
this matter warrants
considering a penalty of suspension. I am further of the view that it
is appropriate to order that the respondent's
suspension from
practice be conditionally suspended.
[33]
I accordingly make the following order:
(i) Moruti Ramofudi
Tumagole {the respondent) is suspended from practicing as an attorney
of this Court for a period of one year.
His suspension is suspended
for a period of three years on condition that he does not make
himself guilty of any of the provisions
of the Attorneys' Act and the
Law Society's Rules during the period of suspension;
(ii) The respondent is to
pay the costs of this application on the attorney and client scale.
______________________
AC
BASSON
JUDGE
OF THE HIGH COURT
I
agree
______________________
PH
MALUNGANA
ACTING
JUDGE OF THE HIGH COURT
Appearances:
For
the applicant
: Mrs. Magardie
Instructed
by
: Damons Magardie Richardson Attorneys
For
the 2
nd
respondent
:
Adv.
CA da Silva SC
Instructed
by
: Fasken Martineau
[1]
Act 53 of 1979.
[2]
The Rules of the Law Society was replaced by a new set of Rules with
effect 1March 2016. In light of the fact that the alleged
transgressions levelled against the respondent took place at a time
that the old Rules were still applicable, the conduct of
the
respondent is assessed in terms of the previous Rules.
[3]
2009 (3) SA 329
(SCA) para [4].
[4]
See also: Jasat v Natal Law Society
2000 (3) SA 44
(SCA) at 51C-1.
[5]
See Summertey v Law Society, Norlhern Provinces
2006 (5) SA 613
SCA
at para [21] and Malan and Another v Law Society of Norlhern
Provinces
[2008] ZASCA 90
;
2009 (1) SA 216
(SCA).
[6]
Section 83(10) of the Attorneys Act provides that any person who
directly or indirectly purports to act as a practitioner in
his own
account or in partnership without being in possession of a fidelity
fund certificate shall be guilty of an offence.
[7]
2013 (2) SACR 480 (WCC).
[8]
At paragraph [19].
[9]
2010 (1) SA 186 (SCA)
[10]
Ibid.