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[2015] ZAGPPHC 396
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Law Society of the Northern Provinces v Mametsa (69558/2014) [2015] ZAGPPHC 396 (12 June 2015)
IN
THE COURT OF SOUT AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 69558/2014
DATE:
12 JUNE 2015
In
the matter between:
THE
LAW SOCIETY OF THE NORTHERN
PROVINCES
...............................................
Applicant
And
MAPUTANA
JACOB
MAMETSA
......................................................................................
Respondent
JUDGMENT
AC BASSON. J
[1]
This
is an application in terms of Part B of the Notice of Motion for an
order in terms of section 22(1 )(d) of the Attorneys Act
[1]
for the removal of the
respondent’s
name from the roll of attorneys following his urgent suspension from
practice as an attorney by order of this
court on 14 October 2014.
[2]
According to the records of the Law Society, the
respondent was admitted and enrolled as an attorney on 5 December
1978. He practiced
as a sole practitioner for his own account under
the name and style of MJ Mametsa Attorneys with effect from 8 April
1980 until
28 February 1991. The respondent was also previously
suspended from practice as an attorney by order of this court on 12
September
1991 which order was uplifted on 21 September 1993.
[3]
Although the respondent was suspended from practice as
an attorney by order of this court dated 14 October 2014, his name is
still
on the role of attorneys of this court.
[4]
The application in terms of Part A of the Notice of
Motion was initially urgent due to the fact that there was
prima
facie
proof that the respondent misappropriated trust monies
and that the Attorneys Fidelity Fund was at risk.
Applicable
principles
[5]
It
is trite that applications of this nature are
sui
generis
in nature in that it takes the form of a disciplinary enquiry. The
Law Society as
custos
morum
of the profession merely places such relevant facts before the court
in order to place the court in a position to make a decision.
[2]
It is also trite that the Law Society has a statutory duty to
approach the court.
[3]
[6]
There
is a general duty on the respondent to cooperate and provide when
necessary all information and to place the full facts before
the
court to enable the court to make a correct decision. It is therefore
not sufficient to make denials.
[4]
[7]
The
court will exercise its discretion on a balance of probabilities
[5]
and will exercise its discretion having regard to the totality of
facts placed before it. It is trite that the views of the Law
Society
that a practitioner is no longer a fit and proper person to practice
as an attorney carry great weight with the court although
the court
is not bound by such an opinion.
[6]
The question whether an attorney is no longer fit and proper person
to practice derives from section 22(1 )(d) of the Attorneys
Act and
is dependent upon factual findings but lies in the discretion of this
court.
[7]
The discretion of the Court must therefore be based upon the facts
before it and must be proven on a balance of probabilities.
[8]
[8]
One of the important principles enshrined in the
Attorneys Act is the principle that trust money does not form part of
the assets
of an attorney. It is furthermore trite that the
unjustifiable handling of trust monies is untenable and undermines
the principle
that the trust account is completely safe in respect of
money held therein by an attorney on behalf of another person.
Furthermore,
an attorney is a member of a learned, respected and
honourable profession and, by entering it, he/she pledges
himself/herself with
total and unquestionable integrity to society at
large, to the court and to the profession. The law therefore expects
from an attorney
uberrima fides -
which is the highest possible degree of good faith - in
his/her dealings with his/her clients.
[9]
In
this regard we can do no better than to refer to the following
extract from a decision of this Court in
The
Law Society of The Northern Provinces v Mantsha
[9]
where the Court summarized the general principles applicable to the
attorney’s profession as follows:
“
[31]
Before considering the established misconduct it would be useful to
review the relevant general principles concerning an attorney,
his
profession and the conduct of his profession. These are set out by
the President of the applicant in its founding affidavit.
None of
them is disputed by the respondent:
(1)
The profession is not a mere calling or occupation by
which a person earns his living. An attorney is a member of a
learned, respected
and honourable profession, and, by entering, he
pledges himself with total and unquestionable integrity to society at
large, the
courts and to the profession. Only the very highest
standard of conduct and repute and good faith are consistent with
membership
of the profession which can only function effectively if
it inspires the unconditional confidence and trust of the public. The
image and standard of the profession are judged by the conduct and
reputation of all of its members and, to maintain this confidence
and
trust, all members of the profession must exhibit the qualities
referred to at all times;
(2)
It is required of an attorney that he observe
scrupulously and comply with the provisions of the Attorneys Act and
the rules;
(3)
It
is of particular importance that an attorney complies with the
provisions of the Attorneys Act and the rules in relation to the
money of the client which is placed into its custody and control.
Such
money, generally known as trust money, does not form part of the
assets of an attorney.
[10]
The
very essence of a trust fund is the absence of risk and the
confidence created thereby. The Law Society has always adopted the
view that there can be no excuse for an attorney not to comply with
each and every one of the requirements which directly or indirectly
relate to trust money. The unjustifiable handling of trust money is
totally untenable and not only frustrates the legal requirements
relating to trust money but also undermines the principle that a
trust account is completely safe in respect of money held therein
by
an attorney on behalf of another person;
(4)
The law exacts from an attorney uberrima fides - the
highest possible degree of good faith - in his dealings with his
client, that
implies that at all times his submissions and
representations to his client must be accurate, honest and frank;
(5)
In pecuniary matters the attorney must be most punctual
and diligent. He must not retain money belonging to his client longer
than
is absolutely necessary and must account to his client for
monies received by him in a proper and diligent manner;
(6)
An attorney must not appropriate for his own use monies
received on behalf of a client for whom he is acting, without the
permission
or authority of the client to do so;
(7)
An attorney must never abuse the position of trust and
the fiduciary relationship that should exist between an attorney and
his
client.”
See
also
Law
Society, Transvaal v Matthews.
[11]
“
I
deal now with the duty of an attorney in regard to trust money.
Section 78(1) of the Attorneys Act obliges an attorney to maintain
a
separate trust account and to deposit therein money held or received
by him on account of any person. 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 the
absence of risk. It is imperative that trust money in the possession
of an attorney should be available to his client
the instant it
becomes payable. Trust money is generally payable before and not
after demand. See
Incorporated Law
Society, Transvaal v Visse and Others; Incorporated Law Society,
Transvaal v
Vty'oen1958 (4) SA 115 (T) at 118F - H. An
attorney’s duty in regard to the preservation of trust money is
a fundamental,
positive and unqualified duty. Thus neither negligence
nor wilfulness is an element of a breach of such duty:
Incorporated
Law Society, Transvaal v Behrman'1977
(1) SA 904 (T) at 905H.
It is significant that in terms of s 83(13) of the Attorneys Act a
practitioner who contravenes the provisions
relating to his trust
account and investment of trust money will be guilty of
unprofessional conduct and be liable to be struck
off the roll or
suspended from practice."
[10]
Various complaints were lodged against the respondent
in this matter. The following two are of particular importance.
Mr Radebe
[11]
In the affidavit on behalf of the Law Society,
reference is made to the complaint submitted against the respondent
by a certain
Mr Radebe. During May 2012 the claim of Mr Radebe
against the RAF was settled for an amount of R1.7 million. This
amount was paid
into the trust account of MJ Mametsa Incorporated.
According to the complainant the respondent overcharged him in that
the respondent
retained 40% of the settlement amount instead of the
25% as agreed to between the parties.
[12]
The respondent initially failed to answer to the
complaint against him. The respondent then tried to explain that he
set-of a bad
debt against the money received from the RAF and that
this was conveyed to the complainant orally. What makes this
explanation
difficult to accept is the fact that the alleged bad debt
related to a 2003 divorce matter and the fact that the respondent
only
forwarded the letter of demand in respect of these outstanding
fees on 27 November 2013. More importantly, the complainant had never
signed any consent for set-off to apply.
[13]
We are in agreement with the submission that the
respondent should have at least issued summons in respect of the
money allegedly
owed to him for the period 2001 to 2010 in order to
prevent prescription of the claims. This was not done. In any event,
apart
from the fact that the debt had prescribed, the respondent had
written of the debt as a bad debt.
[14]
We
are further in agreement that in terms of the Power of Attorney
signed by the complainant, the respondent would have been entitled
to
a fee of the scale as between attorney and client as well as 40% of
the amount received from the RAF. This clearly amounts to
a
contravention of Rule 89.24. The law regarding contingency fee
agreements has been dealt with extensively in various cases and
ought
to have been clear to the respondent.
[12]
MJ Mametsa
Incorporated
[15]
A further complaint relates to the manner in which the
respondent conducted himself in respect of the trust account of the
firm
MJ Mametsa.
[16]
The firm MJ Mametsa incorporated closed down on 1
August 2006. The closing audit report for the period ending 17 August
2006 was
submitted to the applicant on 1 September 2006. The balance
in the trust account was set to be transferred to the trust account
of the firm Van Deventer Mojapelo Incorporated Attorneys. The latter
firm conducts its business from the same premises as MJ Mametsa
and
it appears that the respondent is the only practitioner at the firm's
Boksburg branch office.
[17]
It is important to point out that the respondent
continued to conduct business under the name and style of MJ Mametsa
Incorporated
and that the said firm’s trust account remained
active and utilised by the respondent despite the fact that the firm
had
closed down during 2006 already and despite the fact that the
closing audit report was submitted to the applicant
[18]
It is further important to point out that the
respondent confirmed that no accounting records were kept in respect
of the trust
account of the firm MJ Mametsa Incorporated since the
submission of the closing audit to the applicant on 1 September 2006.
Notwithstanding
the fact that the account was closed down, an amount
of R1.7 million was paid into the trust account of the firm MJ
Mametsa Incorporated
by the RAF. On 22 May 2012 an amount of R1 021
665.20 was transferred into the respondent’s personal bank
account. It appears
that this amount represents the total amount
credited to the complainant (Mr Radebe). Compounding matters is the
fact that this
amount was paid to the complainant from the
respondent’s personal bank account.
[19]
On 22 May 2012 a further amount of R681 110.14 was
transferred into another bank account of the respondent. According to
the respondent
this amount represents the fee that he was entitled to
in terms of the fee agreement with the complainant.
[20]
On 8 November 2012 a further amount of R215 279.82 was
paid into the firms trust account in respect of fees received from
the RAF.
On 9 November 2012 an amount of R214 000.00 was transferred
into the respondents personal bank account.
[21]
Apart from the fact that the respondent continued to
use a trust account long after it was closed, the respondent also
kept no accounting
records since the closure of the firm on 1 August
2006 and no audit report was submitted to the applicant.
[22]
Ms Geringer who investigated the matter on behalf of
the Law Society also found that the respondent had received
approximately 29
payments from the RAF into the trust account of MJ
Mametse Incorporated totalling an amount of R3 155 950.71. Further
payments
totalling R223 862.64 were also received in the trust
account of MJ Mametse. A total amount of R1 718 444.23 was
transferred from
the trust account for the personal benefit of the
respondent. What is clear from the report of Geringer is the fact
that the transactions
were not limited to the RAF matter of Radebe.
There were numerous transactions involving various other entities. In
many instances
the payee is unknown. The explanation by the
respondent that he merely used the account to collect amounts owed on
already open
matters cannot be accepted.
[23]
It is clear from the facts that were placed before the
court that the respondent has,
inter
alia,
contravened various provisions of the Attorneys Act and
the applicant’s Rules: (i) No accounting records were kept for
transactions
in the trust account after the closure of the firm
(Section 78(4) read with Rule 68.1); (ii) Trust money was transferred
to the
respondent’s personal account from where his client was
paid (Rule 68.6.1); (iii) On various dates the trust account had a
debit balance (Rule 69.3); (iv) Withdrawals from the trust account
was not only made to, for or on behalf of the trust creditor
or
transfers to the business account (Rule 69.5); (v) The respondent
failed to submit accountancy records in respect of the trust
account
for the firm from 2006 to date (Rule 70.3 and 70.4). (vi) Lastly, the
respondent overreached his client (Rule 89.24).
[24]
The
respondent was an attorney of 18 years’ standing. Any
explanation that he did not know that he could not utilise the trust
account after the closing of his firm cannot therefore be accepted.
There is also no excuse for the fact that the respondent had
failed
to keep any accounting records after the trust account was
closed.
[13]
Is also clear from the papers that the respondent did not give any
cooperation to the curator. In fact, it would appear from the
papers
that the respondent misrepresented the whereabouts of his firm’s
records to the curator.
[25]
In respect of Mr Radebe’s complaint it is
instructive that the respondent admits liability for his infractions.
[26]
The transgressions are serious and took place over a
substantial period of time. The respondent operated his trust account
for seven
years after the account of his firm was closed. The fact
that he did not submit records of the firm’s account until 2013
is aggravating. The respondent is a long standing member of the
applicant and ought to have known that his conduct is unbecoming.
Furthermore, Mr Radebe has no doubt been prejudiced and he is owed
money by the respondent. Although the respondent has tried to
procure
the funds to pay Mr Radebe the fact remains that he has not yet
repaid the monies owed to Mr Radebe.
[27]
In conclusion: It is clear from the papers that the
respondent has contravened various Rules of the applicant and the
provisions
of the Attorneys Act. Taking into account the respondents
infractions, it is clear that his conduct is indeed dishonourable,
unprofessional
and unworthy of a practitioner. His conduct
constitutes a material deviation from the standards of professional
conduct which is
expected of a practitioner.
[28]
We are therefore of the view that a proper case has
been made out for the relief sought.
[29]
Order:
The
Draft Order attached hereto as Annexure A is made an order of Court.
AC
BASSON JUDGE OF THE HIGH COURT
I
agree,
M
ISMAIL J JUDGE OF THE HIGH COURT
[1]
Act 53 of 1979.
[2]
Prokureursorde van Transvaal v Kleynhans
1995
(1) SA 893
(T) on 851 F - H.
[3]
Law Society of the Northern provinces v RF Sonntag
2011
ZASCA 204
(25 November 2011).
[4]
Prokureursorde van Transvaal v Kleynhans
1995
(1) SA 893
(T) on 853 G -H.
[5]
Ibid at
853
I - J:
“Hoewel
die beantwoording van die vraag of die respondent ‘n geskikte
gepaste persoon is om op die rol van prokureurs
te bly ingevolge art
22(1 )(d) van die Wet op Prokureurs die uitoefening van ’n
diskresie deur hierdie Hof behels, moet
die feite aan die hand
waarvan die diskresie uitgeoefen word, nogtans vas staan...Die
beoordeiing van die feite geskied aan die
hand van die gewone
sivielregteiike maatstafvan bewys, naamlik op ‘n oorwig van
waarskynlikhede
...”
8
Kaplan v incorporated Law Society Transvaal
1981(2)
SA 762 (T) at 781H:
“There is noneed to formulate any
specific charges against him... Because of the special position
occupied by a Law Society
in relation to the profession, its views
as to whether or not an applicant is a fit and proper person are
entitled to great weight
but the Court is in no way bound by them. ”
[7]
Law Society of the Cape of Good Hope v C
1986
(1) SA 616
(A).
[8]
Law Society Transvaal v Matthews
1989 (4) SA 389
(T) at 393 I - J.
[9]
2007 JDR 0646 (T).
“
Court's
emphasis.
[11]
1989
(4) SA 389 (T)
[12]
See
inter
alia: Mnisi v RAF
[2010] JOL 25857 (GNP).
[13]
Law Society
;
Transvaal
v Matthews
1989
(4) SA 389
(T) at 395D - F:
“The
particulars and information of trust moneys must therefore be
contained in the narrative of the entries of the books
of account
and it should not be necessary to resort to documents and files to
obtain such particulars and information
.'
Failure
to keep proper books of account is a serious contravention and
renders an attorney liable to be struck off the roll of
practitioners or liable to suspension; and the Courts have
repeatedly warned practitioners of the seriousness of such a
contravention