About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2015
>>
[2015] ZAGPPHC 56
|
|
Law Society of the Northern Provinces v Lourens (64651/2014) [2015] ZAGPPHC 56 (6 February 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 64651/2014
DATE:
6 FEBRUARY 2015
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In the matter
between:
THE
LAW SOCIETY OF THE NORTHERN
PROVINCES
.......................................................
Applicant
and
LOUIS
LOURENS
..........................................................................................................................
Respondent
JUDGMENT
MUDAU AJ:
[1] This is an
application by the applicant that the name of Louis Lourens be struck
off the roll of attorneys of this court. On
20 November 2014 a copy
of this application was personally served on the respondent. A Notice
to Defend was filed by the respondent
but he failed to file any
further opposing affidavits. The matter will accordingly proceed on
an unopposed basis.
[2] It is common
cause that the respondent was suspended from practice in terms of a
court order of this court dated 26 September
2014, on an unopposed
basis.
[3] It is further
common cause that the suspension order was granted after the
respondent failed to submit his Rule 70 auditors
report for the
period ending 28 February 2013 to the applicant. This report had to
be submitted on or before 31 August 2013. Due
to his failure to
submit the Rule 70 report, the respondent was notified to attend
disciplinary proceedings. He failed to attend
such proceedings. He
further failed to reply to correspondence from the applicant. The
respondent’s failure to submit his
Rule 70 report is a criminal
offence in terms of section 81(10) of the applicant’s rules.
Every attorney who practices for
his own account is obliged in terms
of the legislation to cause his auditor to lodge a report with the
applicant within six months
of the annual closing of the accounting
records. This requirement is to ensure that there should at all
relevant times be sufficient
funds in an attorneys trust bank account
to cover his liability to trust creditors.
[4] In terms of
section 41(1) of the Attorneys Act, no practitioner shall practice or
act as a practitioner for his own account
or in partnership unless he
is in possession of a fidelity fund certificate. This stipulation is
peremptory by nature. A fidelity
fund certificate is mainly issued on
the strength of an unqualified auditors report as provided for in
Rule 70. According to the
provisions of Rule 89.11 the respondent
rendered himself guilty of unprofessional, dishonourable and unworthy
conduct by failing
to submit his Rule 70 report. As a result of the
respondent’s failure to submit his Rule 70 report for the
period ending
28 February 2013, the respondent was not issued with a
fidelity fund certificate for 2014. The respondent nevertheless
continued
practicing as an attorney without a fidelity fund
certificate from 1 January 2014 until he was suspended. The
respondent’s
failure to submit his report placed his trust
creditors at risk.
[4] In the meantime,
the applicant received complaints against the respondent. The
applicant instructed a legal official in the
employ of the
applicant’s monitoring unit, Mrs Magda Geringer ( “Geringer”),
to visit the respondent and to investigate
why no Rule 70 auditors
report had been submitted. Geringer submitted her report on 18 July
2014. It appears from her report that
initially the respondent did
not cooperate fully with Geringer to enable her to conduct her
investigation. She had a subsequent
consultation with the respondent
on 1 April 2014. The respondent then admitted that his accounting
records were not updated but
he undertook to do so. He further
admitted that he did not execute his instructions to attend to the
registration of a transfer
which I will refer to later on. It was
then agreed that Geringer would attend at his offices at a later
stage to inspect his accounting
records. Geringer then again
struggled to arrange a meeting with the respondent for the
inspection. At a further meeting on 25
June 2014 the respondent
admitted to Geringer that he was being dishonest and that there was a
trust deficit of approximately R2.5
million in his bookkeeping. He
further admitted that his accounting records had still not been
updated, and that his failure to
do so was as a result of his
knowledge of the trust deficit.
[5] Based on the
complaints received and the certificate of balance obtained from the
respondent’s bank, Geringer was eventually
able to calculate a
trust deficit in the amount of R2 453 802, 08. During her
investigation, she also established that the respondent
acted without
having instructions from his clients to do so, that he
misappropriated trust funds and that he failed to execute
his
instructions. Geringer concluded that the respondent contravened
several provisions of the applicant’s rules and the
Attorneys
Act.
[6] In respect of
the property transaction referred to above, the Law Society received
complaints from both the seller, Fikkert,
and the purchaser, Kohler.
According to the complaint, the amount of R1.3 million was deposited
by Kohler into the respondent’s
trust banking account. The
respondent failed to attend to the transfer of the property concerned
and his mandate was subsequently
terminated. He failed to pay the
amount previously received from Kohler to the new firm of attorneys
that was instructed to further
attend to the registration of the
transfer. During the investigation, it was discovered that the
respondent advanced an amount
of R300 000 to Fikkert without Kohler’s
knowledge or consent. Summons was subsequently issued against the
respondent for
the recovery of the amount of R1.3 million plus
interest and the matter is still pending. A further complaint was
received from
Mr ZJ Abdoola. Abdoola purchased a property and an
amount of R1 055 810 was paid into the respondent’s trust
banking account
during April 2013 and May 2013 respectively. The
payment represented the purchase price and transfer costs. The
respondent failed
to attend to the registration of the transfer of
the property. The respondent admitted that the property was never
transferred
into Abdoola’s name. Abdoola’s money is no
longer available in the respondent’s trust banking account.
[7] Another
complaint was received from Mr G Kitsi. Kitsi paid an amount of R35
000, 00 into the respondent’s trust banking
account during
March 2013 and April 2013 respectively. The said amount related to an
immovable property which Kitsi had purchased.
The respondent failed
to attend to the transfer of the property into the name of Kitsi.
Kitsi’s moneys are also not available
in the said trust banking
account.
[8] Mr PM Makhutle
complained that he deposited an amount of R50 000, 00 into the
respondent’s trust banking account during
2011. The respondent
never attended to the registration of the transfer of the property
into the name of Mr Makhutle. He also failed
to repay Makuthle’s
money. The money is no longer available in the respondent’s
trust account.
[9] Mr O Haggard, on
behalf of Contrada Africa paid an amount R12 500, 00 into the
respondent’s trust banking account during
April 2014. The
amount had to be refunded to Contrada Arica within two days after
request for such refund had been made. Although
Contrada Africa made
such a request the respondent failed to make the repayment. These
moneys are no longer available in the respondent’s
trust
banking account.
[10] On inspection
of the respondent’s trust banking account at the Brits branch
of Standard Bank on 8 April 2014, it appeared
that there was only an
amount of R7, 92 available.
[11] It is
abundantly clear that there is a trust deficit in the amount of R2
453 802, 08 in the respondent’s bookkeeping.
I am satisfied
that it has been proved on a balance of probabilities that the
respondent contravened several provisions of the
Attorneys Act and
the Law Society rules. I do not intend to specify all these
contraventions. The applicant contends that the respondent
can no
longer be regarded as a fit and proper person to continue to practice
as an attorney. Accordingly, the applicant seeks an
order that the
respondent’s name be struck from the roll of attorneys, coupled
with the remainder of the original order that
is normally made in
these matters.
[12]
The question whether an attorney is no longer a fit and proper person
to practice as such lies in the discretion of the court.(
Law Society
of Good Hope v Budricks
2003
(2) SA 11
(SCA);
Hassim
v Incorporated Law Society of Natal
1977
(2) SA 757
(A)
and
Jasat v Natal Law Society
2000
(3) SA 44
(SCA
)
).The appropriate sanction, if the court finds that such a person is
not a fit and proper person, is either to suspend him from
practice
or strike his name from the roll (A v Law Society of the Cape of Good
Hope,
1989
( 1 ) SA 849 (A) at 851 A-F)
.
In the present matter the Law Society, as
custos
morum
of
the profession, placed certain facts before the court for
consideration. It is trite that the facts on which the court
exercises
its discretion are to be established on a balance of
probabilities. The facts are to be considered in their totality
(Malan v the
Law Society of the Northern Provinces (
[2008] ZASCA 90
;
2009)
1 All SA 133
(SCA).
[13]
An attorney’s failure to keep proper accounting records is a
serious contravention and an attorney who fails to comply
with this
requirement is liable to be struck off the roll or to be suspended
form practice ( Cirota and Another v Law Society,
Transvaal
1979
(1)
SA 172
(A
)
at 193). The approach of the court in relation to trust shortages and
the duty of an attorney with regard to trust money was duly
stated in
Law Society
Transvaal v Matthews,
1998(4)
SA 389 (T
)
at 393 I - J where it was held that where trust money is paid to an
attorney it is his duty to keep it in his possession and to
use it
for no other purpose than that of the trust. It is inherent in such a
trust that the attorney should at all times have available
liquid
funds in an equivalent amount. The very essence of a trust is that of
absence of risk. It is clear in this matter that the
respondent has
failed to keep proper accounting records. By so doing; he, rendered
himself guilty of dishonourable or unworthy
conduct (in his
contravention of the attorney’s act and (or) the applicant’s
rules).
[14] After
considering the facts placed before me and the applicable law, I have
no doubt that the respondent can no longer be regarded
as a fit and
proper person to practice as an attorney. Accordingly, his name
should be struck from the roll of practicing attorneys.
His name
should also be removed from the roll as a practicing conveyancer.
I THEREFORE PROPOSE
THE FOLLOWING ORDER:
1. That the name of
Louis Lourens is struck off the roll of attorneys and as conveyancer
of the High Court of South Africa and wherever
his name is
registered.
2. A order is made
in terms of a draft marked “X”.
MUDAU AJ
ACTING JUDGE OF
THE GAUTENG DIVISION OF THE HIGH COURT
I agree and it is so
ordered.
ISMAIL J
JUDGE OF THE
GAUTENG DIVISION OF THE HIGH COURT
Date of Hearing: 6
February 2015
Date of Judgement: 6
February 2015
On behalf of the
Applicant: Adv M Rooyen
Instructed by: Rooth
and Wessels INC.
On behalf of the
Respondent: No appearance