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[2015] ZAFSHC 172
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Law Society of the Free State v Roux and Another (3547/2015) [2015] ZAFSHC 172 (4 September 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
FREE STATE DIVISION
BLOEMFONTEIN
Case no.3547/2015
DATE: 04 SEPTEMBER 2015
In the matter between:
THE LAW SOCIETY OF THE FREE
STATE
.......................................................................
Applicant
And
W LE
ROUX
.....................................................................................................................
1st
Respondent
GOODRICK & FRANKLIN ATTORNEYS
INCORPORATED
(Registration number:
2003/031198/21)
.......................................................................
2nd
Respondent
JUDGMENT BY: RAMPAI, J
HEARD ON: 27 AUGUST 2015
DELIVERED ON: 4 SEPTEMBER 2015
[1] These were motion proceedings. The
matter came to court by way of an urgent application on Friday, 31
July 2015. The applicant
sought an interim order whereby the
respondents were provisionally interdicted and restrained from
operating on the trust account
of the second respondent and ancillary
relief. A notice of intention to oppose was filed on behalf of both
respondents.
[2] Notwithstanding the resistance of
the respondents, I was persuaded that various unprofessional and
unlawful actions attributed
to the first respondent prima facie posed
danger to the public that they were potentially harmful to the
interest of the Attorneys
Fidelity Fund as represented by the
applicant; that the applicant’s apprehension of the applicant
was not unfounded and that
its decision to immediately obtain an
interim interdict was informed and prompted by its good intentions to
do some damage control
by reducing the risk of potential harm to the
said fund in particular and the public in general.
[3] Given the alleged circumstances, I
found that the matter was urgent as the applicant contended. I was
not persuaded by the
contention of the respondents that the matter
was not urgent. Thereupon I granted an immediate rule nisi
returnable on 28 August
2015. The interim order practically and
immediately restrained the respondents from practising pending the
final outcome of the
judgment under case number 3039/2014. That case
concerns the main application the primary purpose of which is to have
the name
of the first respondent permanently removed from the roll of
attorneys.
[4] The full text of the interim order
reads:
“1. Condonation is granted for
non-compliance with the rules relating to form and process regarding
service and that this
application be heard as an urgent application
in terms of the provisions of Rule of Court 6(12).
2. A rule nisi is issued calling upon
the respondents to show cause, if any, on Thursday 27 August 2015 at
08h30 or as soon thereafter
as applicants representatives may be
heard, why the following order should not be granted:
2.1 That first respondent be suspended
from practice pending the outcome of case number 3039/2014.
2.2 Respondent is ordered to deliver
his books of account, records, files, documents containing
particulars of information relevant
to his practice as an attorney,
to applicant.
2.3 That should the respondents fail to
comply with the provisions of the preceding paragraphs of this order
within 1 (one) week
after service thereof upon him, or after a return
by a person entrusted with the service thereof that he has been
unable to effect
service thereof on the respondents, as the case may
be, the Sheriff of the district in which such books of account,
records, files
and documents are, is empowered to take possession
thereof and to deliver them to the applicant or curator entrusted
with this
case.
2.4 The respondents are interdicted and
prohibited from operating on the second respondent’s trust
account(s).
2.5 The respondents are ordered to pay
the costs of this application on an attorney and own client scale.
3. The relief in paragraph 2.1 to 2.4
operates as a Rule Nisi with immediate interim effect pending
finalisation of this application.”
[5] Aggrieved by the interim order, the
respondents anticipated the return day. The matter was then argued
before Daffue J on the
6th August 2015, a day after the first
respondent had served and filed his answering affidavit. The order
granted by Daffue, J
reads as follows:
“1. Leave is granted to the
applicant to file his replying affidavit on or before the 14 August
2015.
2. Paragraph 3 of the order of 31 July
2015 is struck out. Save for paragraph 3 of the order of 31 July
2015 the rest of the order
stands as it is.
3. Costs to stand over for later
adjudication.”
[6] The order varied the interim order
in a sense. A death knell was sounded and the immediate interdictory
operation of the interim
order ceased.
[7] The crisp question I was called
upon to decide was whether or not the second respondent had a
director to see that its affairs
and operations were lawfully run at
the time the current application was launched.
[8] On Thursday, 27 August 2015 the
matter was argued before me. On behalf of the applicant Mr Grewar
argued that at the time these
proceedings were instituted the second
respondent did not have and never had a director since the
resignation of Ms Stella Smith.
Accordingly counsel submitted the
applicant had made out a proper case for the interim suspension of
the first respondent. Therefore,
counsel urged me to conditionally
confirm the interim suspension order of the first respondent.
[9] On behalf of the first respondent,
Mr Benade contended that at all times material to these proceedings
the second respondent
had a director through whom it legally
conducted its operations. Counsel submitted that the first
respondent acted as a consultant
and not a director to the second
respondent at all relevant times. Accordingly counsel urged me to
discharge the interim suspension
order of the first respondent.
[10] There were a number of undisputed
facts in the matter. Originally the second respondent, an
incorporated company, had three
directors, namely:
9.1 Mr Werner le Roux, the first
respondent herein;
9.2 Mr Bunhardus Jacobus Viviers;
9.3 Ms Stella Smith.
I shall revert to the directors later.
[11] One of the first respondent’s
creditors, Absa Bank Limited, applied to this court under case number
2942/2013 to have
the first respondent sequestrated. The provisional
sequestration order was granted against the first respondent on 20
February
2014. On 20 March 2014 that order was confirmed as a final
sequestration order. His application for leave to appeal against the
final sequestration order came to naught. Jordaan, J dismissed it on
17 April 2014. His further application to have such refusal
set
aside failed on 22 July 2014. The final order of sequestration was
confirmed.
[12] The applicant subsequently brought
an application under case number 3039/2014 against the second
respondent and its aforesaid
directors. From now on I shall refer to
that case as the main application. Mr Le Roux, Mr Viviers, Ms Smith
and Goodrick &
Franklin Inc were cited as the first respondent,
the second respondent, the third respondent and the fourth respondent
respectively.
The main application was filed for the initial hearing
on 16 October 2014. It was initially heard by Molemela, JP et
Daffue,
J. The purpose of the main application was to have the name
of the first respondent removed from the roll of practising
attorneys.
It was the primary relief sought. The main application
was postponed many times. The last date to which it was postponed
was
6 August 2015. On that day it was finally argued before
Molemela, JP, Daffue, J et Mia, AJ. Judgment was then reserved. I
was
given to understand that on 27 August 2015 when the current
application was argued before me the reserved judgment was still
outstanding.
[13] Let me take a step backwards. It
appeared that on 22 July 2014 the second respondent gave up all his
attempts to have his
sequestration reversed. Therefore, as from that
particular date, the first respondent became an insolvent person and,
as such,
he could no longer lawfully act as a director of the second
respondent in the instant matter. As a result of the sequestration
of the first respondent, the number of directors of the second
respondent dropped from 2 to 1. The one and only remaining director
was Ms S Smith. The main application was filed on 10 October 2014.
By then Mr B J Viviers had already resigned from the second
respondent as a director. After his resignation the first respondent
continued to practise as a consultant. The affairs and operations
of
the second respondent were, legally speaking, supposed to be
exclusively in the hands of the second respondent’s remaining
director, Ms Smith, at that stage.
[14] The composition of the second
respondent’s directorship drastically changed soon after the
main application was launched.
By 31 January 2014 there was no
attorney appointed as a director of the second respondent. Mr
Viviers resigned before 10 October
2014 and joined Messrs Horn &
Van Rensburg Attorneys in Bloemfontein. Ms Smith resigned before 30
January 2014, not long before
the provisional sequestration order was
granted against the first respondent. She subsequently joined Messrs
Bokwa Attorneys also
in Bloemfontein. Her resignation created a
vacuum in the second respondent’s board of directors. The
first respondent
purportedly resigned as a director on 25 February
2014 but carried on all alone after her resignation, under the
pretext that he
was the second respondent’s consultant.
[15] In an endeavour to fill up the
void, a gentleman by the name of Mr Lloyd George Charles Lielies was
approached with the view
of having him appointed as a director at
Goodrick & Franklin. He accepted the offer and he was
accordingly registered with
the registrar of companies in terms of
the Company Law. The effective date of his appointment was 22
December 2014. Mr Lielies
practised as a director of ADW van der
Berg in Welkom. The problem was, he had no fidelity fund certificate
in respect of that
particular law firm. On 29 July 2015 he revoked
his earlier decision to become a director of the second respondent.
[16] On 3 August 2015 Mr Rehan Coetzee,
a partner in the law enterprise known as Steenkamp, De Villiers &
Coetzee of Bloemfontein
stepped forward and certified that he had
become a new director of Goodrick & Franklin Incorporated from
that day – vide
“anx wlr9”, Cipro registration
document.
[17] From 30 January 2015 until 11
August 2015 many letters were exchanged between the applicant and the
first respondent. Among
them were letters written or received on
behalf of the parties by their attorneys Messrs Azar & Havenga
Incorporated and Messrs
Steenkamp, De Villiers & Coetzee. The
important letters were attached to the affidavits filed by the
parties.
[18] Section 41 of Attorneys Act 53 of
1979 provides:
“(1) A practitioner shall not
practise or act as a practitioner on his or her own account or in
partnership unless he or she
is in possession of a fidelity fund
certificate.
(2) Any practitioner who practises or
acts in contravention of subsection (1) shall not be entitled to any
fee, reward or disbursement
in respect of anything done by him or her
while so practising or acting.”
[19] The case of the applicant was that
subsequent to the launch of the main application the circumstances of
the respondents materially
changed. The first respondent was
sequestrated. The sequestration inevitably disqualified him from
lawfully acting as a director
of the second respondent any longer.
[20] On 30 January 2015 the applicant
informed the first respondent that he was contravening subsection (1)
and subsection (2) of
section 41 firstly, by practising without a
fidelity fund certificate and secondly, by so practising at Goodrick
& Franklin,
an incorporated law firm which no longer had a
director who was a holder of a valid fidelity fund certificate –
“anx
vm1”. The applicant called upon the first
respondent to refrain from practising in such an unlawful manner.
The anomaly
was obvious. The second respondent did not have any
director at all and the first respondent did not have the requisite
certificate
– subsection (1) supra.
[21] The first respondent replied to
the applicant’s letter on 2 February 2015. The second
paragraph of his letter reads:
“Writer acknowledges receipt of
your letter of the 30th ultimo.
Kindly note that writer practises under
Mr LGC Lielies of ADW van den Berg of Welkom who has become a
director of Goodrick &
Franklin Inc. Mr Lielies is in possession
of a valid fidelity fund certificate.
Your requirements as well as the
formalities of the Companies Act is in the process of being complied
with and will shortly be forwarded
to you.”
The first respondent’s reply
showed that he implicitly admitted that he was no longer qualified to
practise law autonomously
for his own account; that the applicant’s
averment that he was not duly certificated or licensed in terms of
section 41 to
practise independently as an attorney was correct; that
he could no longer lawfully act in his representative capacity as
director
of the second respondent and that the resignation of Ms
Smith necessitated the appointment of someone else as a director to
prevent
the second respondent from becoming defunct. However, he
disregarded the applicant’s cordial request to stop practising.
[22] At paragraph 7.2.2 of the founding
affidavit, Mr Morobane, the applicant’s deponent and president,
averred that the first
respondent was practising without the required
fidelity fund certificate. The first respondent answered as follows:
“I deny the contents of paragraph
7.2.2. I have at all times since the sequestration of my Estate been
practising as a Consultant
with somebody else carrying the necessary
Fidelity Fund Certificate.”
As can be seen, the first respondent
insisted, from 2 February 2015 that he was entitled to practise as a
consultant of the second
respondent by virtue of a fidelity fund
certificate issued to the second respondent’s director –
vide par 8.3, answering
affidavit dated 3 August 2015.
[23] It was his case that he was
legally not required to have such a fidelity certificate because he
was not practising as a director
of the second respondent but rather
practised as its consultant. He alleged that the second respondent
had a duly accredited or
certificated attorney who practised and
acted as its director. Although the first respondent did not mention
any specific name,
it was common cause that he was referring to Mr
Lielies. He stated that he resigned as the second respondent’s
director
on 25 February 2014, in other words, 5 days after he was
provisionally sequestrated. It would, therefore, be readily
appreciated
that the first respondent heavily relied on Mr Lielies
alleged fidelity fund certificate. The essence of his case was that
the
resignation of Ms Smith did not render the second respondent
legally inoperative or defunct because, as he contended, she was
replaced
by a duly certificated Mr Lielies.
[24] The applicant averred and the
first respondent ultimately conceded that Mr Lielies who became a
director of the second respondent
in terms of the Cipro registration
records himself did not have a fidelity fund certificate in respect
of Goodrick & Franklin.
It followed as a matter of logic
therefore that the first respondent could not have lawfully acted as
a consultant of a law firm
whose purported sole director possessed no
fidelity fund certificate issued in terms of section 41, Attorneys
Act 53 of 1979.
Moreover, Mr Lielies practised law in
Welkom at all times material to the current application. At no stage
did he ever physically
move to Bloemfontein, and physically occupied
the premises or offices of Goodrick & Franklin and practically
took effective
control of the operations or affairs of Goodrick &
Franklin. Therefore, even if he had the requisite certificate, he
would
have been an absent sole director of the second respondent.
The rules of the applicant do not countenance such a situation.
[25] Not one letter written by Mr
Lielies for or on behalf of the second respondent, was attached to
the answering affidavit. His
resignation note, signed ex post facto
on 15 August 2015 as “anx wlr6”, was the only document
written by him on the
letterheads of the second respondent. Apart
from such note, there was virtually no documentary evidence to show
that Mr Lielies
ever took control of the second respondent as its
director. On the contrary, numerous letters written by the first
respondent
for and on behalf of the second respondent were attached
to the answering affidavit. The facts tended to fortify the
applicant’s
contention that, notwithstanding the first
respondent’s sequestration and his alleged resignation on 25
February 2014, he
continued to act on behalf of the second respondent
as if nothing prohibited him from actively and independently
representing the
second respondent and running its day to day
affairs. All this appears strange bearing in mind that according to
the first respondent
Mr Lielies became a director of the second
respondent with effect from 22 December 2014 (vide paragraph 11.4
answering affidavit)
and that he remained a director throughout and
that he would so remain until his name is deregistered by the
registrar of companies
or until 15 August 2015.
[26] I am persuaded that the first
respondent never relinquished his de facto control of the second
respondent even though he was
legally disqualified. On behalf of the
second respondent he apparently approached Mr Lielies and offered him
a position of being
a director of Goodrick & Franklin. It was
not his case that Ms Smith, the only de iure director of Goodrick &
Franklin
at the time, was involved in those negotiations. On 19
March 2015 the first respondent wrote:
“… we pointed out to you
(Ms Maree, the applciant’s chief executive officer) that Mr
Lielies is in the process
of being appointed …” –
vide “anx wlr3”.
[27] It will be recalled that according
to paragraph 11.4 of the answering affidavit, Mr Lielies was alleged
to have become a director
of the second respondent with effect from
22 December 2014. The impression created was that his appointment
was an accomplished
fact by then. The previous inconsistent
statement strongly militated against the version of the first
respondent. It showed that
as on 19th March 2015 Mr Lielies was
still not yet appointed director of Goodrick & Franklin. If this
was so, and I think
it must be so accepted, then it becomes clear and
obvious that the second respondent was a defunct incorporated entity.
As an
insolvent, the first respondent was unaccredited attorney.
Consequently he was disqualified from acting on behalf of the second
respondent as he did.
[28] In his confirmatory affidavit
signed in Welkom on 29 July 2015 Mr Lielies declared:
“1.1 Ek is ‘n meerder
jarige prokureur wat as sulks praktiseer in die naam van stul ADW Van
Den Berg Prokureurs te 380
Longroad, Jan Cilliers Park, Welkom.
1.2 Al die feite hierin vervat is binne
my persoonlike kennis en wete en is beidewaar en korrek.
1.3 Ek was van voorneme om toe te tree
as Direkteur by die Prokureurs Firma Goodrick & Franklin. Ek het
intussen na deeglike
oorweeging van my gesegde voorneme herbesin en
het besluit om nie meer toe te tree nie as Direkteur.
1.4 Ek is tans ook besig om ‘n
regstelling by cipro tedoen deur onder andere aan hulle behoorlik
kennis tegee dat my naam
as Direkteur by Goodrick & Franklin
verwyder moet word.”
(vide “anx vm9”)
It is clear from this that Mr Lielies
intention to become a director of the second respondent remained just
that, an intention,
and nothing more.
[29] The contention of the first
respondent that Mr Lielies became a director of Goodrick &
Franklin as evidence by the Cipro
records failed to impress me. It
is a hollow argument to say that an attorney who possesses no
fidelity fund certificate can,
by virtue of his registration in terms
of the company legislation, lawfully act as a director of an
incorporated lawfirm. The
provisions of the Companies Act and those
of the Attorneys Act must be read together. It takes more than a
mere cipro registration
for an attorney to be lawfully certified to
practise as such. Over and above the registration in accordance with
the provisions
of the Companies Act Mr Lielies was also obliged to go
a step further and to comply with the applicant’s requirements
in
accordance with the Attorneys Act and the domestic rules of the
applicant. He needed, among others, to have a fidelity fund
certificate
issued to him in respect of Goodrick & Franklin.
[30] The applicant provided the first
respondent with a list of certain requirements to facilitate the
process relative to the resignation
of directors and the appointment
of new directors. The situation was untenable because Goodrick &
Franklin had no director
in good standing since the resignation of Ms
Smith. Ms Maree visited the offices of the second respondent on 2
March 2015. She
met the first respondent. She explained to him the
procedures according to the rules of the applicant (vide “anx
vm3”).
After her visit, Ms Maree addressed a letter to the
first respondent on 17 March 2015. The heading of the subject
concerned the
requirements for the appointment of a new director, Mr
LGC Lielies. The procedure and the rules were spelled out to assist
the
first respondent to comply with the rules in order to expedite Mr
Lielies appointment – vide “anx vm4”. The first
respondent did not reply.
[31] By 1 April 2015 the first
respondent still had not complied with the applicant’s
requirements as per “anx vm4”.
On that day the
applicant’s attorneys, Messrs Azar & Havanga Incorporate
addressed a letter to the first respondent’s
attorney, Messrs
Steenkamp, De Villiers & Coetzee. They pointed out that the
applicant was concerned about the unlawful conduct
of the first
respondent who, in spite of previous requests and warnings, continued
to practise as an attorney in contravention
of section 41(1) of the
Attorneys Act 53 of 1979. The applicant demanded written undertaking
from the first respondent whereby
he immediately undertook to stop
practising as an attorney firstly pending the outcome of the main
application and secondly pending
compliance with the applicant’s
outstanding requirements – vide “anx vm6”.
[32] The next day, on 2 April 2015 the
respondent’s attorney Mr Rehan Coetzee replied on behalf of the
first respondent.
The letter (“anx vm8”) was for the
attention of Mr Groenewald. It was worded as follows:
“Ons het die kwessie met kliënt
bespreek en het hy onderneem om op te hou praktiseer met ingang 15:00
vandag (die oggend
word benodig om kliënte in kennis te stel van
die toedrag van sake) tot en met die een van die volgende
gebeurtenisse:
1. Die uitslag van die aansoek om
skrapping onder saaknommer 3039/2014;
2. Daar ten volle voldoen word aan die
vereistes soos gestipuleer deur die Prokureursorde van die Vrystaat
soos vervat in die skrywe
van ons kliënt gedateer 17 Maart 2015
asook die vereistes waarin mnr Lielies nog aan moet voldoen,
alternatiewelik die aanstelling
van ‘n Direkteur wat oor ‘n
geldige Getrouheidswaarborgfonds sertifikaat beskik en origsens aan
die Orde se vereistes
voldoen.”
It will be readily appreciated,
therefore, that the first respondent gave the applicant an
unequivocal undertaking primarily to
cease practising pending the
outcome of the main application for the removal of his name from the
role. The first respondent alternatively
undertook to fully comply
with the requirements of the applicant.
[33] Subsequent to the aforesaid
unequivocal undertaking the first respondent tried to comply but
failed to do so to the satisfaction
of the applicant. The applicant
maintained that its requirements were not fully met. The
shortcomings of his written undertaking
included, for instance, his
failure to furnish the applicant with a list of cases that required
urgent attention for referral to
other firms of attorneys seeing that
there was no longer any qualified attorney at Goodrick & Franklin
to handle any files.
The applicant further alleged that the first
respondent neglected to attend to the applicant’s requirements
relative to
the contemplated appointment of Mr Lielies. The
applicant declined to waive those requirements at the request of the
first respondent.
Instead the applicant also called upon the first
respondent to submit the trust audit report for the financial year
ending on
28 February 2015 – see “anx wlr6”.
[34] Two weeks after the first
respondent’s written undertaking the applicant’s
attorneys address a letter dated 16
April 2015 to the first
respondent’s attorneys. Mr Groenewald wrote (vide “anx
vm10”):
“Dit het tot ons kliënt se
kennis gekom dat u kliënt se kantore steeds oop is en dar steeds
pleitstukke aldaan ontvang
ontvang word.”
[35] The essence of the complaint was
that the first respondent had violated the primary condition of his
written undertaking.
The first respondent reacted as follows to the
aforesaid complaint of 16 April 2015 (see “anx wm10):
“17.3 The contents of Annexure
VM10 is totally untrue. I was not practising and the doors were not
open. What has happened,
is in one or two instances when a staff
member left the firm somebody came through the gate while it was
still open and demanded
that somebody at our office sign for a
particular document. This happened despite the fact that there was a
notice attached to
the front wall of the firm that the firm was
closed and not open for the public;”
Vide 17.3, answering affidavit.
[36] The interesting thing about the
first respondent’s denial was that no letter was attached to
his answering affidavit
whereby the alleged breach of his written
undertaking was contemporaneously refuted as untrue. Apart from
that, his denial was
formulated in vague terms but so was the
applicant’s complaint. The point was, if the office of
Goodrick & Franklin
was closed and not open to the public, staff
members had no business to be on the premises let alone in the office
where they received
and signed for documents or pleadings. There was
no explanation as to why all the gates were not locked. All these
tended to
fortify the applicant’s allegation that the first
respondent breached his unequivocal undertaking not to practise
pending
the outcome of the main application or pending compliance
with specific requirements of the applicant which included but were
not
limited to the winding up of Mr Lielies law practice before he
could be appointed director of the second respondent.
[37] With the passage of time the
applicant received information from certain law-firms in Bloemfontein
concerning the state of
affairs at Goodrick & Franklin. In the
first place De Lange & Du Plessis received notice of intention to
defend purportedly
served by Goodrick & Franklin and signed by Mr
W le Roux on 10 June 2014 – vide “anx sm13”. The
notice
concern an application between C J Fourie and B G Stevens
issued out of this court under case number 2338/2015.
[38] In the second place the applicant
became aware that Van Deventer & Thoabala Inc received a letter
dated 22 June 2015 from
Goodrick & Franklin. The letter
concerned a divorce case between Chris Oosthuizen and Marlene
Oosthuizen. Although the name
of the author was not written at the
foot of the letter, the name W le Roux appeared at the top thereof as
part of the reference.
The signature was strikingly similar to that
of the first respondent. At any rate, on the papers, there was no
dispute that the
first respondent was the author of the letter in
question. – vide “anx vm12”.
[39] In the third place, the applicant
also received a letter from Messrs Van den Berg & Van Vuuren.
The letter concerned Mr
W le Roux’s involvement in an
interpleader in the Bloemfontein Magistrate Court. The letter dated
10 July 2015 to the applicant
read:
“We confirm that our offices
represents the execution creditor in an interpleader summons this
afternoon at 14H00 and that
Mr W Le Roux from Goordrick &
Franklin represents the claimant.”
[40] The applicant took the matter up
with the respondents through its attorneys. On 25 June 2015 Mr
Groenewald brought it to the
attention of Mr Coetzee that the first
respondent was continueing to practise as an attorney. He pointed
out that the actions
of the first respondent amounted to breach of
his written undertaking of 2 April 2015. At paragraph 4 of the
letter Mr Groenewald
warned:
“Dit is ons instruksies om
hiermee op rekord te plaas dat, sou ons kliënt weer kennis
ontvang dat u kliënt wel praktiseer
as prokureur alvorens daar
voldoen is aan een van die voorwaardes soos uiteengesit in u skrywe
gedateer 2 April 2015, ons onmiddelik
‘n dringende aansoek sal
loods ten einde ‘n interdik te bekom met die gepaste regshulp.”
[41] The first respondent denied the
applicant’s allegation that he was continuing to practise
unlawfully as an attorney as
the applicant alleged. He said the
following at paragraph 20 of the answering affidavit:
“20.1 I deny that I failed to
keep to my undertaking towards the Applicant. I kept to the
undertaking as long as it took
to comply with the Applicant’s
requirements.
Thereafter I was entitled to practise
again as a Consultant with Mr Lielies as the Director;
20.2 I am thus not in transgression of
my own undertaking as well as several rules of the Applicant;
20.3 Contrary to what is alleged in
paragraph 11.3, I was entitled to practise again;
20.4 I deny that the matter is urgent
as alleged in paragraph 11.4;
20.5 In view of the aforegoing I submit
that the Applicant is not entitled to relief as set out in paragraph
11.5.”
[42] I have already found that Mr
Lielies never became a director of the respondent. Because he could
not lawfully run his own
practice in Welkom, it is a matter of simple
logic that he could not, likewise, lawfully act as a director for the
second respondent.
It also follows that, if it is accepted, and I
think it should, that the second respondent had no lawful director at
the time,
the first respondent could, likewise, not act as a
legitimate consultant of the second respondent since the second
respondent had
no director to consult him.
[43] No consultant exists in a vacuum.
A consultant is customarily a retired attorney. More often than not
he or she is an ex-partner
or ex-director of the firm consulting him.
His or her dealings with the law -firm are confined to the internal
sphere of the operations
of the law-firm concerned. His work is
often of an advisory nature. He is immuned from public liability of
the active directors
or partners of the law-firm consulting him. He
plays no visible active role on the external sphere of operations of
such a lawfirm.
He is, therefore, precluded from signing pleadings,
writing letters or making appearances like the currently active
directors
or partners of his or her old firm. The Oosthuizen matter
and the Fourie matter, earlier cited, showed, beyond any shadow of
doubt,
that the first respondent failed to distinguish between the
role of an active director of a law company and the inactive role of
the retired director of that company used by that company as
consultant. This is precisely where the danger lies. The public
is
protected against the wrongful acts of the active directors of a law
practice but the public is not so protected as regards
the actions of
a retired director used as a consultant.
[44] In my view the complaint of the
applicant was valid. The first respondent continued and still
continues to act as an attorney
and also as a representative of a law
enterprise without a director as evidenced by “anx vm13”
and “anx vm12”.
His actions constituted a direct
violation of an important condition of his written undertaking not to
practise pending the outcome
of the main application.
[45] Besides the aforesaid complaints
the applicant further received enquiries from other practitioners who
previously had dealings
with Goodrick & Franklin as advisories
but were frustrated by the adverse impact of the operational
paralysis of the directorless
law enterprise. Among the concerned
practitioners were:
45.1 Van Deventer & Thoabla Inc
45.2 W J Botha
45.3 Rossouw & Conradie
45.4 E G Cooper Majiedt.
The concerns and enquiries of those
attorneys were attached to a letter from the applicant to Mr Coetzee
as “anx a”,
“anx b”, “anx c” and
“anx d” respectively. The letter concerned was dated 30
June 2015 and
marked “anx vm11”:
“Ons versoek dringend dat u
kliënt intussen by sy onderneming hou waar ingevolge hy nie sal
praktiseer nie. Ons heg
hierby aan ‘n afskrif van skrywes aan
hom versend ten aansien van 3 sake waarin verneem word met wie the
teenkant moet korrespondeer,
dit wil sê wue due leer by hom sal
oorneem. Op geen aangeleentheid is ons geantwoord nie en sal u merk
dat Van Deventer
& Thoabala aandui dat Mnr Le Roux met hul
korrespondeer in die Oosthuizen aangeleentheid.”
[46] On his own say-so, the first
respondent continues to practise as an attorney. As he says, with
effect from 6 April 2015 the
offices of Goodrick & Franklin
remained closed but re-opened on 8 June 2015. If the first
respondent did not practise unlawfully,
as the applicant alleged he
did, why did he close the offices of the second respondent from 6
April 2015 until 7 June 2015? The
answer is obvious. Judgment in
the main application was still outstanding at the time the applicant
launched these proceedings
for an interim relief. In my view that is
the end of the matter. The respondent has breached his own
undertaking on very flimsy
grounds. I would, therefore, grant or
confirm the interim relief for the immediate suspension of the
respondents pending the outcome
of the main application.
[47] The first respondent contention
that he complied with all the outstanding requirements of the
applicant was on 2 March 2015,
to ridiculous, to put it mildly. He
heavily relied on “anx wlr5”. The last sentence of Ms
Maree’s letter dated
2 June 2015 reads:
“Your request as per your letter
dated the 27th of May 2015 refers.
Council resolved that they are not
prepared to waive the requirements as per Annexure A hereto clause
1.1 and 1.2 thereof with regard
to Mr Lielies entering as a Director
and Mrs Smit retiring.
Council insists on compliance with the
above, alternatively they are prepared to accept the audit
certificate for 2014/2015 financial
year, which period expired on 28
February 2015.
This audit is only due by end of
August, but will this be accepted as a prerequisite for giving
consent that an auditors certificate
as per clause 1.1 and 1.2 of
Annexure A, be handed in, as at date of joining.
This is in the interest of the new
director and will also not cause any extra costs since an audit
report must be handed in, in
any event about a little earlier.
The rest of the requirement for LGC
Lielies and Goodrick & Franklin is in order.”
[48] Though the last sentence was vague
and confusing, the undisputed facts were that in the end Mr Lielies
never actually became
a director of the second respondent. Before
these current proceedings were launched, no qualified and
certificated attorney acted
as a director of the second respondent.
There was overwhelming correspondence between the parties which
negated the first respondent’s
allegation that he had fully
complied with the outstanding requirements of the applicant. The
very letter (“anx wlr5) on
which he heavily relied does not
support his contention. The first respondent hopelessly clutched on
straws to find an escape
route. In my view he also breached the
alternative condition. It must be pointed out that it was the
prerogative of the applicant’s
law council and not the first
respondent or anyone else to decide whether the outstanding
requirements have been met or not. There
exists no such a resolution
by the law council.
[49] As regards costs I am of the view
that the second respondent was strictly speaking not before me in
these current proceedings.
This is so because the second respondent
is a defunct law enterprise. The second respondent had no one to
represent it before
me notwithstanding the notice of intention to
oppose which was filed purportedly on behalf of the first and the
second respondent.
It would be absurd to perpetuate the anomaly by
saddling the second respondent with an order of costs.
[50] Accordingly I make the following
order:
1. The first respondent is hereby
immediately suspended from practising as an attorney under the name
of the second respondent or
any other name pending the outcome of the
application under case number 3039/2014 or pending the issuing of a
valid fidelity fund
certificate to the incoming director designate of
the second respondent, Mr Rehan Coetzee by the counsel of the
applicant which
ever event first shall take place.
2. The first respondent is interdicted
and prohibited from operating on the trust account of the second
respondent pending the fulfilment
of one of the two conditions
stipulated above.
3. The first respondent is directed to
pay the costs of this application on the scale as between attorney
and client.
M. H. RAMPAI, J
On behalf of the applicant: Adv. D.
M. Grewar
Instructed by: Azar & Havenga
Attorneys
BLOEMFONTEIN
Attorneys for the applicants: Adv.
H. J. Benade
Instructed by: Steenkamp, De
Villiers & Coetzee Inc.
BLOEMFONTEIN