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[2016] ZAGPPHC 1074
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Law Society of the Northern Provinces v Evan (28523/2008) [2016] ZAGPPHC 1074 (12 December 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO.:28523/2008
Date
of Hearing: 02 December 2016
Date
of Judgement: 12/12/2016
Reportable:
Yes
Of
interest to other judges: Yes
Revised:
Yes
In
the matter between:
THE
LAW SOCIETY OF THE NORTHERN
PROVINCES
Applicant
and
ALEXANDER
EVAN
Respondent
JUDGEMENT
DE
VOS J:
The
Application:
[I]
This is an application for the removal of the name of the Respondent
from the roll of attorneys ito section 22(l)(d) of the
Attorneys Act,
incorporating the court order of 06 February 2009, which suspends the
Respondent from practise as an attorney.
[2]
The application suspending the Respondent from practicing as an
attorney was served on the Respondent's practise on 23 June
2008. The
Respondent opposed the application on 07 July 2008. Between the
period 04 August 2008 and 14 October 2008, requests were
made to the
Respondent to file his answering affidavit. The Respondent failed to
do so.
[3]
The Applicant proceeded to enroll the application for hearing on 06
February 2009. The Notice of Set Down was served on the
Respondent's
attorneys on 04 August 2008. The Respondent's attorneys withdrew as
attorneys of record on 07 January 2009. The indexes
were faxed to the
Respondent and also sent to him by registered mail.
[4]
On 06 February 2009, the court granted an order suspending .the
Respondent from practise as an attorney, pending the removal
of his
name from the roll of attorneys. On 11 May 2011, the Applicant
resolved to have the name of the Respondent removed from
the roll of
attorneys.
[5]
The matter was enrolled for final determination on 02 October 2012.
On 28 February 2012, the Applicant transmitted the Notice
of Set Down
to the Respondent by fax and e-mail. It was also served at the
Respondent's place of employment on 15 May 2012. The
Respondent was
therefore sufficiently informed of the date of the hearing of the
application.
[6]
At the hearing of the matter on 02 October 2012, the Respondent
brought an application to have the matter postponed in order
to file
an answering affidavit. The court
inter alia
ordered the
Respondent to file his answering affidavit within 14 days. The matter
was postponed
sine die.
On 09 October 2012, the Respondent
served a Notice ito Rule 35(12). On 02 November 2012, the Applicant
filed its reply to the said
notice. The Respondent served his
answering affidavit on 16 November 2012. The Applicant filed its
replying affidavit on 11 December
2012.
[7]
The matter was enrolled for final determination on
11
October 2013. On 04 March 2013, the Applicant served the Notice
of Set Down on the Respondent's attorneys. On 20 September 2013,
the
Applicant filed its Practise Note and Heads of Argument. The
Applicant filed Supplementary Heads of Argument on 08 October
2013.
On 10 October 2013, a day before the hearing of the application for
his removal, the Respondent filed a supplementary affidavit
together
with his firm's outstanding audit reports for the periods ending
February 2007, February 2008 and February 2009. On the
same day, the
Respondent also filed his Heads of Argument.
[8]
At the hearing of the matter on 11 October 2013, the court postponed
the matter
sine die
and ordered the Respondent to ensure that
the Applicant has full access to the books of account which are in
possession of his auditors.
The Applicant then instructed its
auditor, Mr Ashwin Reddy, to conduct an investigation into the
Respondent's firm's accounting
records as per the order of 11 October
2013, and to verify the accuracy of the audit reports submitted by
the Respondent on IO
October 2013. Mr Reddy's findings are dealt with
in the Applicant's replying affidavit which was filed on 13 July
2016.
[9]
The matter has again been enrolled for final determination on 02
December 2016. The Applicant filed the Notice of Set Down on
the
Respondent's attorneys on 19 August 2016. On 26 August 2016, the
Respondent filed a Notice ito Rule 35(3). The Applicant responded
to
the said notice on 12 September 2016. As at date hereof, the
Respondent has failed to grant the Applicant access to the accounting
records as directed by the order of court dated 11 October 2013.
The
Respondent's Supplementary Affidavit filed on 10 October 2013 and the
Applicant's reply thereto:
[10]
The Applicant furnished its auditor, Mr Reddy, with the Respondent's
audit reports with the instruction to verify the reliability
and
conclusions arrived at by the Respondent's auditors. Reddy
subsequently filed a report dated 04 February 2014, in which he
deals
with his findings on the execution of the mandate that the Applicant
gave him.
[11]
It is clear from Reddy's report that he was not given access to the
Respondent's firm's trust accounting records, making it
impossible
for him to determine the firm's trust position. Reddy's exercise was
limited to reviewing certain of the bank statements
of the
Respondent's trust account. Reddy reported that the Respondent
transferred monies from the firm's trust account in rounded
amounts
into the firm's business account. Insofar as no supporting documents
were furnished to him, Reddy could not determine if
such transfers
constituted fees. Reddy also identified some transfers and came to
the conclusion that such were suspicious payments
insofar as they
were described as loans that were made from the firm's trust account
to the firm's business account. Reddy was
also handicapped by the
Respondent's failure to furnish him with the firm's fee journal.
[12]
In conclusion, Reddy stated that, in the absence of a complete set of
trust accounting records, it was impossible to perform
a detailed
inspection with a view to making concise conclusions. Further, that
information and explanations from the Respondent
were required in
order to provide a fair inspection of the firm's accounting records.
From the foregoing, it is clear that the
Respondent did not comply
with the court order, thereby obstructing the Applicant in its
process of verifying the firm's audit
reports. To this extent the
Respondent's firm's audit reports cannot be relied upon and are of no
assistance to the court.
Merits:
Outstanding
Rule 70 audit report:
[13]
The Respondent was last issued with a Fidelity Fund Certificate in
2006. The Respondent failed to cause his auditor to lodge
an
unqualified audit report for the year ending February 2007. The
Respondent was called upon to appear before the Applicant's
Disciplinary Committee on 07 November 2007 to answer to charges
arising from his failure to cause the audit report, for the year
ending February 2007, to be lodged and for practising without a
Fidelity Fund Certificate. The Respondent failed to attend the
disciplinary enquiry. The hearing was re-scheduled for 29 November
2007 and the Respondent again failed to attend same.
Investigations
by Geringer:
[14]
Geringer, on behalf of the Applicant, conducted an investigation into
the Respondent's practise. Geringer battled since September
2007 for
an appointment with the Respondent. She addressed a fax to him
advising him that she will visit his offices on 21 November
2007. The
Respondent was not present when she arrived and she spoke to Mrs
Odendaal, the secretary. No accounting records were
available for
inspection. Odendaal advised Geringer that the firm's accounting
records were with the firm's accountant. Geringer
enquired where the
firm's trust banking account was held and Odendaal provided Geringer
with the account details which in fact
were a business account. As no
trust accounting records could be found, Geringer was unable to
express any opinion in regard to
the firm's trust position. The
Respondent closed his previous firm Evan & Scop Incorporated on 9
August 2004 but never closed
the firm's trust account.
[15]
The Respondent contravened:
15.1. Section 41 of the Attorneys Act, Act 53 of 1979 in
that he practised without a Fidelity Fund Certificate since 01
January
2007.
15.2. Rule 68.4.2 in that no accounting records were
available in the office of the Respondent for inspection.
15.3. Rule 70 in that he failed to file a Rule 70 report
for the period ending 28 February 2007.
Complaint
by H Van Dyke Attorneys obo L Van Der Spuy:
[16]
The essence of the complaint is that the Respondent neglected and
failed to give proper attention to the affairs of this client
and
failed to perform professional work, or work of a kind commonly
performed by an attorney with such a degree of skill, care
and
attention, or of such a quality or standard, as may be reasonably
expected. Further, the Respondent failed to account to client
and
failed to answer to correspondence sent to him by the Applicant.
[17]
The Respondent failed to appear before the Disciplinary Committee on
28 February 2007. The Respondent was again called to appear
before
the Disciplinary Committee on 0I August 2007. Ina letter dated 11
July 2007 the Respondent advised that he will not be in
a position to
attend the scheduled hearing due to the fact that he will be overseas
during that time. The Respondent was requested
to furnish the
Applicant with proof of same which he failed to do. The Respondent
however attended the scheduled hearing and was
found guilty of
charges relating to the contravention of the Applicant's Rules 68.7,
89.23 and 89.25. A fine was imposed on the
Respondent. This conduct
constitutes a contravention of the Applicant's Rules 89.15 and 89.30;
89.23 & 89.25
Complaint
by Stein Scop Attorneys obo Mr R Fehrsen:
[18]
The Respondent failed to carry out instructions given to him by the
complainant. The Respondent also continued to act on behalf
of the
complainant in circumstances where he was conflicted. The Respondent
further failed to disclose to the complainant, timeously
or at all,
that such conflict of interest existed; such conflict resulted in the
Respondent failing to protect the interest of
the complainant and
thereby causing the complainant to suffer financial loss. This
complaint was referred to the Respondent for
comment but he failed to
respond thereto. The essence of the complaint is that the Respondent
neglected to give proper attention
to the affairs of the complainant
and further, that the Respondent, without reasonable cause or excuse,
failed to perform professional
work, or work of a kind commonly
performed by a practitioner, with such a degree of skill and care or
attention, or such a quality
of standard as may be reasonably
expected of an attorney. This conduct constitutes a contravention of
the Applicant's Rules 89.15
and 89.30; 89.23 & 89.25.
Complaint
by Deon De Bruyn Attorneys obo VRG Telecommunications and Projects
CPty) Ltd:
[19]
The essence of the complaint is that the Respondent neglected to give
proper attention to the affairs of the complainant and
further, that
the Respondent, without reasonable cause or excuse, failed to perform
professional work, or work of a kind commonly
performed by a
practitioner, with such a degree of skill and care or attention, or
such a quality of standard as may be reasonably
expected of an
attorney. The complainant instructed the Respondent to bring a Review
Application in the Labour Court against an
arbitration award of R230
000.00 which was granted against the company. The Respondent failed
to execute his mandate and the complainant
was shocked when the
sheriff attended at its offices to execute a warrant issued against
it for its non-compliance with the award.
[20]
As a result of the Respondent's conduct and omissions the
complainant's position with regards to the review application was
prejudiced and weakened to such an extent that a reasonable
apprehension existed that the complainant would not be successful in
bringing the review application. Furthermore, additional legal costs
had to be incurred by the complainant to remedy or correct,
or
endeavour to explain the defects or omissions of the Respondent.
Senior counsel advised the complainant to settle the matter
and an
amount of R96 000.00 was paid and a further amount of R l5 000.00 in
legal fees.. This complaint was referred to the Respondent
for
comment and the Respondent failed to respond thereto. This conduct
constitutes a contravention of the Applicant's Rules 89.15
and 89.30;
89.23 & 89.25.
The Respondent's contentions:
[21]
The Respondent contends with the information that Ms Odendaal
furnished to Geringer. In his contentions, the Respondent's version
is that:
21.1. He maintained separate offices for his practise.
His office at Simeka was just down the corridor from Ms Odendaal's.
21.2. Clients who wanted to see him would be brought to
one of the boardrooms at Simeka offices for consultation.
21.3. There were books of account and financial system
in the computer available in Odendaal's office.
21.4. Odendaal did not have access to the firm's bank
accounts and finance records.
21.5. Had the Applicant sought to engage the Respondent,
he would have made himself available for that purpose.
[22]
It must be borne in mind that the Respondent's version only came
after an interim order was granted, in circumstances where
the
Respondent chose not to contest the version presented by the
Applicant when the interim order was granted. Suddenly, on the
same
papers, not even amplified, the Respondent comes belatedly to contest
the veracity of Ms Odendaal's version.
[23]
The pertinent question is whether the Respondent's contradiction of
Ms Odendaal's version does substantively upset the Applicant's
version. Put differently, the question is whether the dispute of fact
is relevant to the issues central to the determination of
the
question whether the Respondent is a fit and proper person to remain
on the roll of attorneys.
[24]
Another aspect of note is that Geringer reported that there were no
accounting records stored at the Respondent's practise.
The
Respondent contends with Geringer's version by stating that he kept
financial records for his practise. However, he does not
mention
where such records were kept. Such connection is nothing more than a
bare denial of the allegation made against him. This
is more so in
that the Respondent alone could have assisted the court with
sufficient details of where the financial records were
kept; however,
he chose not to do so. It was Odendaal's version given to Geringer
that the monies were received into the firm's
business account, not
the trust account. Even considering the late stage at which his
answering affidavit was tiled, the Respondent
has not produced the
financial records of the firm.
[25]
The Respondent also disputes that he abandoned his practise. The fact
of the matter is that the Applicant had to liaise with
Odendaal with
regard to the complaints against him. The Respondent was never
available to interact with the Applicant despite various
calls and
appointments made to meet with him.
[26]
The Respondent attempted to take issues with Odendaal's version that
moneys of the firm were deposited into the business bank
account. He
contended that Odendaal had no access to the firm's bank account.
However, it is not easily understood who had access
to the financial
records of the firm if Odendaal didn't have, more so when regard is
had to the fact that, according to the Respondent,
the records were
kept at the same office used by Odendaal. It is also worth pointing
out that the Respondent did not use the firm's
offices; the firm's
offices were used by Odendaal. The Respondent also attempted to
contradict Odendaal's version as told to Geringer,
by alleging that a
Ms Anthea Johaar was the one that captured information from
accounting source documents. However, no confirmatory
affidavit of Ms
Johaar was even annexed. Ms Odendaal already informed Geringer that
no accounting records were available at the
firm. It is surprising
that the Respondent, who already alleged that Odendaal had no access
to the firm's financial records, would
suddenly have electronic
records of the firm in her computer in which case she was supposed to
grant Geringer access thereto.
[27]
The Respondent was not available to engage with the Applicant on any
aspect of this matter. Suddenly, after the fact, the Respondent
would
have this court believe that, had the Applicant engaged him, he would
have presented the accounting system and record. With
all the
opportunities he has had since the start of this litigation, it is
surprising that the Respondent has not done such to
date. The
Respondent would have this court believe his say-so that the firm's
books balanced. There were no books available for
inspection;
consequently, the Applicant could not formulate an opinion on the
balancing of the firm's books. Even to this date,
and notwithstanding
the provisions of the court order of 11 October 2013, the Respondent
has not laid his books bare for inspection.
It is only the Respondent
who could prove a contrary point about the balancing of the books, by
subjecting them to an independent
audit, which he has not done. Even
with the Respondent's convoluted version about appointments made with
Odendaal to meet with
him, he does not deny that that Odendaal made
appointments on his behalf to meet with the representatives of the
Applicant.
[28]
Insofar as the complaint made by HL van Dyke Attorneys was concerned,
the Respondent was found guilty and duly fined. Now,
the Respondent
claims that he duly accounted to Mr van der Spuy and paid the credit
to the client. However, there was no proof
of such payment having
been made. Such a fact is within the Respondent's personal knowledge
and he should have taken the court
into his confidence by presenting
proof, if it exists at all. It must be remembered that it was in
relation to the Van Dyke complaint
that the Respondent alleged he was
going overseas in order to avoid the disciplinary hearing. However,
when taxed with the production
of proof of the trip, the respondent
could not produce any, and suddenly made an about tum by attending
the hearing.
[29]
The Respondent now contends that none of the complainants instituted
civil claims against him. The Respondent cannot use the
fact that the
complainants did not elect to prosecute civil claims against him in
order to avoid disciplinary proceedings and prescription
of claim.
The fact of the matter is that there was a complaint made against the
Respondent relating to his unprofessional handling
of an instruction.
Disciplinary action against a practitioner is not dependent on
prescription of claim and/or the complainant's
pursuit of civil suit
against a practitioner. If anything, the Respondent is good at
blaming others for his own wrongs. A further
example is the
Respondent's blaming of his auditor for failure to submit an audit
report. It is the responsibility of the Respondent
to ensure that
such report was submitted.
Determination
of a real, genuine and
bona fide
dispute of fact preventing
the adjudication of the matter on papers:
[30]
There is no genuine dispute of fact preventing the adjudication of
the matter on the papers as they stand. Although the Respondent
has,
to some extent, attempted to contest the contents of Geringer's
report, he did no more than to present a bare denial of such
averments. In such situation the rule established in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints Pty Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
applies.
The Respondent did not present any substantive fact to place such
issues genuinely in dispute.
[31]
In
John Cecil Wightman t/a JW Construction v Head/our Pty Ltd
&
Another
(66/2007)
[2008] ZASCA 6
(10 March 2008)
the following was said:
"[13] A real, genuine and bona fide dispute of
fact can exist only where the court is satisfied
that the
party who purports to raise the dispute has in his affidavit
seriously and unambiguously addressed the fact said to be
disputed
There will of course be instances where a bare denial meets the
requirement because there is no other way open to the
disputing
party and nothing more can therefore be expected of him. But even
that may not be sufficient if the fact averred lies
purely within the
knowledge of the averring party and no basis is laid for disputing
the veracity or accuracy of the averment.
When the facts averred
are such that the disputing party must necessarily possess
knowledge of them and be able to provide an answer (or countervailing
evidence) if they be not true or accurate but, instead of doing so,
rests his case on a bare or ambiguous denial the court will
generally
have
difficulty in finding that the test is satisfied.
"
See
in this regard also
National Scrap Metal Cape Town
&
Another v Murray
&
Roberts Ltd
&
Another
(809/2011) [2012) ZASCA 47 (29 March
2012)
.
[32]
In order to succeed, the Respondent should have presented facts,
which are within his personal knowledge, to counter the Applicant's
version. The Respondent's failure to do so means that the court can
proceed to accept the Applicant's version.
[33]
Three things stand out when regard is had to the Respondent's
version, viz:
33.1. He denied that he abandoned his practise.\
33.2. He claimed that the accounting records and books
were kept at his offices. In addition, he further denies that
Odendaal had
access to the firm's books and financial records.
Further, that the records were at all material times available in
Odendaal's
office for inspection.
33.3. He denied that he acted unprofessionally in
handling client's instructions. Further that neither of the
complainants had instituted
any civil claims against him.
[34]
As already stated hereinbefore, this court should have regard to the
fact that the dispute of these issues only came up when
the Applicant
decided to enroll the application for the removal of the Respondent's
name from the roll of attorneys. The Respondent
did not have any
issues with the facts as contained in the Applicant's founding papers
when he decided not to oppose the order
for his suspension from
practicing as an attorney. The motivation for the dispute now raised
by the Respondent is the prevention
of loss of livelihood given the
fact that the Respondent is now a fulltime director in a company. It
appears that he is afraid
that if he were to be removed from the roll
of attorneys it may result in him losing his employment. It is not
explained as to
whether the Respondent's current employers are aware
of the fact that he was suspended from practising as an attorney. The
Respondent
also wants the court to believe that Odendaal and the
filing clerk only left the Respondent's employ as a result of the
court order.
There is no merit in this contention. By the time the
court order was served at the Respondent's offices, he had already
abandoned
his practise and was in full-time employment of another
company.
[35]
The Respondent has not filed any closing audit report as required by
the Applicant's Rules. There are no financial records
before us today
to determine whether the Respondent's books balanced at the time. The
absence of any further complaint or civil
claim against the
Respondent is not decisive on the issue of balancing of trust account
books of the firm.
[36]
There was no suggestion that Odendaal was fabricating any story for
any reason or that Odendaal had an axe to grind with the
Respondent,
nor was there any suggestion that Geringer did not correctly record
her conversation with Odendaal. Geringer' s version
is supported by
correspondence and also the fact that she visited the Respondent's
office and found no accounting records. There
is therefore no genuine
dispute of fact that this court may refer to oral evidence. The
application can be decided on the papers
as they stand. Further, the
Respondent's version insofar as it attempts to contradict that of the
Applicant, should be rejected.
Audit
Reports:
[37]
The requirements concerning an attorney's financial obligations to
the Applicant can briefly be summarised as follows:
37.1. Section 70 of the Attorneys Act empowers the
Applicant to direct an attorney to provide it with any document which
is in the
possession of such attorney and which relates to his
practise to enable the council to decide whether or not a
disciplinary enquiry
into the conduct of such attorney should be
conducted.
37.2. Rule 68 obliges every firm of attorneys (which
includes a sole practitioner for his own account) to keep complete
and accurate
accounting records which must explain the transactions
and financial position of the firm and which must distinguish in
readily
discernable form between business account transactions and
trust account transactions.
37.3. Section 78(5) of the Attorneys Act gives the
Applicant the power to inspect the accounting records of any attorney
in order
to satisfy itself that the provisions relating to keeping of
trust banking accounts and maintaining of proper accounting records
relating to trust monies have been observed.
37.4. Rule 70.4 read with Rule 70.3 requires every
attorney who practises for his own account to cause his auditor to
lodge a report
with the Applicant within 6 months of the annual
closing of his accounting records to the effect that the attorney has
kept such
records as required by the Attorneys Act and the
Applicant's Rules and further to the effect that there were at all
relevant times
sufficient monies in his trust bank account to cover
his liability to trust creditors.
37.5. Lodging of an auditor's report is a prerequisite
for an attorney to be issued with a Fidelity Fund Certificate for the
commencement
of a new year.
Applicable
Legal Principles:
[38]
It is trite law that applications of this nature are
sui generis
and of a disciplinary nature. There is no
;lis
between the
Law Society and the Respondent. The Law Society, as
custos morum
of the profession merely places facts before the court for
consideration. The question whether an attorney is a fit and proper
person
in terms of Section 22(1)(d) of the Act is not dependent upon
factual findings, but lies in the discretion of the court.
[39]
In matters of this nature the enquiry which the court must conduct is
threefold, namely:
39.1. The court must first decide as a matter of fact
whether the alleged offending conduct by the attorney has been
established.
39.2. If the court is satisfied that the offending
conduct has been established, a valued judgment is required to decide
whether
the person concerned is not a fit and proper person to
practise as an attorney.
39.3. If the court decides that the attorney concerned
is not a fit and proper person to practise as an attorney, it must
decide
in the exercise of its discretion whether in all the
circumstances of the case the attorney in question is to be removed
from the
roll or merely suspended from practise. Ultimately this is a
question of degree.
The
court's discretion must be based upon the facts before it and facts
in question must be proven upon a balance of probabilities.
The facts
upon which the court's discretion is based should be considered in
their totality. The court must not consider each issue
in isolation.
See in this regard
Law Society of Transvaal v Matthews
1989
(4) SA 389
(T).
The
Postponement Application:
[40]
At the hearing of this application, the Respondent served an
application for the postponement of this matter based on a review
by
the his auditor, who finds no trust deficits for the years 2007 -
2009. Adv. Oosthuizen SC, who appeared on behalf of the Respondent,
contended that the Respondent should not be removed from the roll,
but instead be suspended from practise for a further given time.
He
relied on the decision of
Malan
&
Another v Law
Society, Northern Provinces
[2008] ZASCA 90
;
2009 (1) SA 216
(SCA) and
specifically on what was said in para 11 thereof. He compared the
position of the Respondent to that of an attorney who
failed or was
unable to administer and conduct his trust account within the
prescribed rules of the Society. He contends that although
there was
a failure to submit the audited trust account timeously, nobody laid
a charge against the Respondent that his or her
trust monies have
gone missing or was lost or stolen. Adv. Oosthuizen also argued that
the decision of
Summerley v Law Society, Northern Provinces
2006
(5) SA 613
(SCA) is authority for the proposition that unless a court
finds dishonesty during the first leg of the enquiry it ought not to
remove the attorney concerned from the roll. I disagree with this
proposition. There is nothing exceptional about the facts before
us.
This matter has been pending for several years. It was postponed on
several occasions to enable the Respondent to prepare and
file his
audit reports. On 02 December 2016 the Respondent sought a further
postponement of the hearing of this matter. After hearing
both
parties, the application for a postponement was refused for
inter
alia
the following reasons:
40.1. The Respondent did not file an affidavit in
support of the application for a postponement but relied on the facts
contained
in the affidavit of Mr Djurle Venter, a registered
chartered accountant. Mr Venter's statement is vague. He declares
that at the
time he signed the "Forms of Insurance Reports by
Independent Auditor" in terms of Rule 70 of the Rules of the Law
Society
of the Northern Provinces for the financial years 2007 to
2009 (the relevant period), he was in possession of the accounting
records
relating to the attorneys trust accounts of the business of
Alex Evan Incorporated (the firm). The Applicant's version is that no
such records were received by them. For that very reason the matter
was postponed in order to give the Respondent an opportunity
to file
such audit reports, which was never done in spite of the court order
dated 11 October 2013. According to Mr Venter's statement
the
erstwhile accounting firm "GTV", of which he was a member,
only dissolved in 2015. No specific date is stated. If
a file of
accounting records and source documents did exist as alleged by Mr
Venter (which allegedly cannot be located), it would
mean that the
Respondent had at least a whole 14 months from 11 October 2013 until
the end of December 2014 to obtain such reports
from "GTV",
which he simply failed to do. In the absence of any explanation from
the Respondent one can only conclude
that he deliberately failed to
comply with the court order.
40.2. Mr Venter does not state where, when and in what
form did he receive the information pertaining to the Respondent's
trust
account. He does not say when he conducted the audits nor does
he say when the certificates were issued. Copies of the certificates
are glaringly absent.
40.3. Mr Venter's statement, and his calculations, does
not contain any actual finding of fact. He says he needs more time
before
a final report can be submitted. His submission is that there
was never any trust deficit. The onus is on the Respondent to prove
that there was no trust deficit. The Respondent has failed to do so.
The Respondent has also failed to explain where the information
relied on by Mr Venter came from. In my view the Respondent is solely
to be blamed for the situation. He is abusing the court process
and
such an attitude should not be allowed as said in the ex-tempore
judgment refusing the Respondent's application for a postponement.
40.4. Advocate Oosthuizen's contention that the
Respondent's trust account appears to be in order cannot be accepted.
In the court
order of 11 October 2013, the Respondent was ordered to
make his firm's accounting records available to the Applicant. The
Applicant
furnished Mr Reddy, who is employed by the Applicant, with
the Respondent's audit reports for the years ending 2007, 2008 and
2009,
with the instruction to verify the reliability and conclusions
arrived at by the Respondent's auditors. Reddy filed a report dated
04 February 2014. It is clear from Reddy's report that he was not
given access to the Respondent's firm's trust accounting records,
making it impossible for him to determine the firm's trust position.
Reddy's exercise was limited to only reviewing certain of
the bank
statements of the Respondent's trust and business accounts. Reddy
identified certain transfers and came to the conclusion
that such
were suspicious payments insofar as they were described as loans that
were made from the firm's trust account to the
firm's business
account. In this regard Reddy specifically referred to two
transactions in the firm's trust account which occurred
on 23 October
2007 and on 01 August 2008. From the description of the transactions
as appear on the firm's bank statements, it
is evident that amounts
of R IOO 000 and R I S 000 were transferred from the firm's trust
account into the firm's business account
as loans. It must be
remembered that trust funds do not form part of the assets of a
practitioner. If one considers the forgoing
transactions then there
exists
prima facie
proof of theft of trust funds. This also
turns on the dishonesty of the Respondent. On this score alone there
is clear evidence
of theft and misappropriation of trust funds on the
part of the Respondent which, on its own, warrant the removal of his
name from
the roll of attorneys.
Conclusion:
[41]
The facts and allegations set out in the Founding Affidavit
constitute sufficient and satisfactory evidence that Respondent
has
been, and is, guilty of unprofessional or dishonourable or unworthy
conduct and, as such, is not a fit and proper person to
continue
practising as an attorney. If the Respondent's misconduct is taken
cumulatively, it has been established that the Respondent's
conduct
does not meet the standard which is required from an attorney and
that his misconduct reveal character defects which cannot
be
tolerated in an officer of this court. In my view the Respondent is
no longer a fit and proper person to practise as an attorney.
There
is nothing of substance contained in the Respondent's answering
affidavit to sway this court to exercise any discretion in
his
favour. If anything, the Respondent's answering affidavit buttresses
the point that the Respondent does not have any regard
for the Rules
of the Applicant.
[42]
The Applicant acts as the
custos mores
of the profession. It
is required by law to protect the interests of the public. The Law
Society is of the opinion that the Respondent
should be struck from
the roll. I have duly considered the reasons stated by the Applicant
as to why the Respondent should be struck
off.
[43]
The conduct of the Respondent is to say the least, shockingly brazen.
He blatantly failed to comply with the Rules of the Applicant,
he
ignored the court order granted in 2013, and he abused the court
processes. It is clear from the application that the Respondent
was
uncooperative and that the degree of openness required from an
attorney in proceedings of this nature was not complied with.
See
Botha
&
Others v Law Society, Northern Provinces
2009
(3) SA 329
(SCA) at p18.
[44]
In my view the facts overwhelmingly prove that no audit reports were
filed by the Respondent for the years 2007 to 2009. There
is no
explanation why this was not done. When the Applicant investigated
the matter, the Respondent failed to cooperate. No books
could be
found and no explanation was forthcoming. During the course of the
court process the Respondent deliberately delayed the
proceedings
seeking a postponement at the last moment thereby abusing the court
process. An attorney stands in a trust relation
towards his
profession and the public. The Rules of the Applicant require an
attorney to be scrupulous in is observations and compliance
with the
Act and the Rules. Rule 88 stipulates that any contravention of the
Act or the Applicant's rules, would constitute unprofessional,
dishonourable and unworthy conduct. Rule 68 provides that an attorney
should keep complete and accurate accounting records, which
must
explain the transactions and financial position of the firm, and
which must distinguish in readily discernible form between
business
account transactions and trust account transactions. Section 78(5) of
the Act empowers the applicant to inspect the accounting
records of
the Respondent and Rule 70.4, read with Rule 70.3, requires every
attorney to lodge a report with the Applicant within
6 months of the
annual closing of his accounting records, to the effect that the
attorney has kept records as required by the Act
and the Rules and to
the effect that there were at all relevant times sufficient monies in
his trust bank account to cover his
trust liabilities. It is common
cause that the Respondent has failed to comply with all these
provisions of the Act and the Rules.
Even when a disciplinary hearing
was constituted, the Respondent failed to attend.
[45]
The Respondent also demonstrated a particularly untenable attitude
towards the Applicant. Such was manifested by his total
disregard of
the court order in terms of which he had to file his answering
affidavit. Instead of filing his answering affidavit,
the Respondent
decided to seek discovery of non-existent documents ito Rule 35. Even
after it was explicitly explained to the Respondent
that the
documents contained in the application were all that the Applicant
had in the matter, the Respondent insisted on being
furnished with
non-existent documents. Such attitude even resulted in an aborted
application to force the applicant to furnish
the documents.
[46]
I am satisfied that there is ample proof that the Respondent is not a
fit and proper person to remain on the roll of practising
attorneys.
Not only is he in contempt of a court order dated 11 October 2013, he
also failed to file is firm's outstanding Audit
Reports for the years
2007, 2008, and 2009. He has not been in possession of a Fidelity
Fund Certificate since 2006 and has no
intention of obtaining such a
certificate. His failure to appear before the Disciplinary Committee
and his deliberate omission
to cooperate with the Applicant's
requests is further evidence of his unfitness to practise as an
attorney of the High Court.
Costs
[47]
In the Notice of Motion the Applicant seeks an Order that the
Respondent should pay the costs of this application on the scale
as
between attorney and client. Justification for this prayer is found
in paragraph 16 of the Founding Affidavit. The Respondent's
conduct
does not meet the standard which is required from an attorney and
that his misconduct has indeed been established. Furthermore,
the
Respondent's conduct and his omissions reveal character defects which
cannot be tolerated in an attorney of this court. The
Respondent is
in contempt of the order of 11 October 2013 in that he persisted with
his failure to allow the Applicant access to
his firm's accounting
records, which are allegedly in the possession of his auditors. The
Applicant submits that the above Honourable
Court should show its
displeasure at the conduct of the Respondent in this regard by
mulcting him with a punitive cost order. I
agree with the Applicant's
submissions. There is no reason why other practising and law-abiding
attorneys should be held liable
for the costs of this application.
I
THEREFORE PROPOSE THE FOLLOWING ORDER:
[a] The
Draft Order marked "X", which corresponds with the Notice
of Motion, is made an Order of Court in terms of which
the
Respondent's name is removed from the roll of attorneys of this
Court.
_____________________
DE VOS J
JUDGE
OF THE GAUTENG DIVISION
OF
THE HIGH COURT OF SOUTH AFRICA
I
agree and it is so ordered.
_____________________
RANCHOD
J
JUDGE
OF THE GAUTENG DIVISION
OF
THE HIGH COURT OF SOUTH AFRICA
FOR THE
APPLICANT: S MAGARDIE
INSTRUCTED
BY: DAMONS MAGARDIE RICHARDSON ATTORNEYS
FOR THE
RESPONDENT: ADV H OOSTHUIZEN SC
INSTRUCTED
BY: RICHARD MEADEN & ASSOCIATES