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[2014] ZAGPPHC 416
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Law Society of The Northern Provinces v Mogongoa (58948/2011) [2014] ZAGPPHC 416 (23 May 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE NO.:
58948/2011
DATE: 23 MAY 2014
NOT REPORTABLE
NOT OF INTEREST
TO OTHER JUDGES
In the matter
between:
LAW
SOCIETY OF THE NORTHERN
PROVINCES
..................................................................
Applicant
and
MALROSE
RAYMOND
MOGONGOA
........................................................................................
Respondent
JUDGEMENT
DE VOS J:
[1] This is an
application for the suspension of the Respondent from the roll of
practice as an attorney of this Court. The application
is unopposed.
[2] The Respondent
was admitted and enrolled as an attorney of this Court on 3
rd
February 2004, whose name is still on the roll of practicing
attorneys. The Respondent previously practiced as an attorney of this
Court for his own account and is a single practitioner under the
style of Malose Mogongoa Attorneys at Suite 338, Central House
Building, 278 Pretorius Street, Pretoria, Gauteng.
[3] The facts and
circumstances which prompted the Law Society to bring the suspension
application include the following:
3.1 The Respondent
failed to submit the audit reports for the years ending February 2010
and February 2011.
3.2
The Respondent was summoned before the Disciplinary Committee on 11
th
November 2010 for failing to submit the auditor’s report for
the financial year 2010.
3.3 The summons
could not be served as the Respondent could not be traced.
3.4 The Respondent
has abandoned is practice.
[4]
It is common cause that the Respondent’s current whereabouts
are unknown. Several attempts were made to serve this application
on
the Respondent without any success. On the 7
th
August 2013 the Applicant obtained a Court Order that service can be
effected on the Respondent by publishing the Notice of Motion
in this
matter in short form in
The
Star
and
Citizen
newspapers,
which newspapers circulate in the province of Gauteng and South
Africa. Subsequently the Notice of Motion was properly
published in
both
The Star
and
Citizen
newspapers
as appears from the newspaper clippings attached to this application,
marked “C” and “D” respectively.
I have
perused both publications and I am satisfied that the date of
hearing, namely the 23
rd
May 2014, together with all other relevant information required by
the Respondent, have been properly communicated to the Respondent
and
that the matter can proceed. The facts upon which the court’s
discretion is based should be considered in totality and
must be
proven upon a balance of probabilities. The court must therefore make
a value judgment of the Respondent’s character,
with special
reference to his integrity, the standards of conduct, repute and good
faith required by his profession; and the standing
and image of the
profession. This may be weighed up against the administration of
justice in this country and it must be determined
whether the
Respondent’s actions will inspire and maintain the
unconditional confidence of the community and the profession’s
members.
[5]
The Law Society is the
custos
morum
of
the profession. The question whether an attorney is a fit and proper
person in terms of s22(1)(d) of the Act is not dependent
upon factual
findings, but lies in the discretion of the court. In order to
determine whether an attorney should be removed and/or
suspended from
the roll, the court must decide as a matter of fact, whether the
alleged offending conduct by the attorney has been
established. If
such conduct has been established, a value judgement is required to
decide whether the person concerned is not
a fit and proper person to
practise as an attorney. If the court decides that the person 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.
[6]
The Attorneys' Act and the rules applicable thereto require of an
attorney scrupulous observation and compliance with the provisions
of
the Act and its rules. In terms of Rule 89, any contravention of the
provisions of the Attorneys’ Act or its rules would
constitute
unprofessional, dishonourable, and unworthy conduct. The Act and the
rules, read with the Common Law, expects from an
attorney
uberrima
fides -
the
highest possible degree of faith - in his dealing with clients, which
implies that at all times his submissions and representations
to his
clients must be accurate, honest, and frank.
[7] Rule 68 provides
that attorneys are required to keep complete and accurate accounting
records, which must explain the transactions
and financial position
of the firm and which must distinguish in regular discernible form
between business account transactions
and trust account transactions.
[8] Rule 70 makes
further provision for every attorney who practises for his own
account to cause his auditor to lodge a report
with the applicant
within six months of the annual closing of his accounting records.
This implies that the attorney should keep
proper record, as required
by the Attorneys’ Act, and further ensures that there should at
all relevant times be sufficient
funds in an attorney’s trust
bank account to cover his liability to trust creditors. The 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. Failure to
submit the Rule 70 report and to practise without a
Fidelity Fund Certificate is a criminal offence in terms of the
provisions
of s81 (10) of the Applicant’s Rules.
[9] The Applicant
contends that it is of particular importance that the Respondent had
to comply with the provisions of the Attorneys’
Act and the
Applicant’s Rules in relation to trust funds of clients which
were placed into his custody and control. Therefore,
there is no
excuse for an attorney not to comply with each and every one of these
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.
[10] It is common
cause that the Respondent failed to submit the Rule 70 auditor’s
report for the period 2010 and 2011 respectively.
[11] Section 41(1)
of the Attorneys’ Act provides that a practitioner shall not
practice or act as a practitioner for his
own account or in
partnership unless he is in possession of a Fidelity Fund
certificate. The stipulation is peremptory by natureand
the
contravention thereof is, in terms of Section 81(10) of the
Attorneys’ Act, an offence and punishable with a severe fine.
The Respondent failed to obtain a Fidelity Fund certificate for the
relevant periods referred to above.
[12] The seriousness
of the Respondent’s conduct in practising without a Fidelity
Fund Certificate cannot be overemphasised.
Firstly, his conduct is
contrary to a peremptory legal requirement and the Respondent made
himself guilty of an offence. Secondly,
the Respondent placed his
trust creditors, who may suffer pecuniary loss as a result of
misappropriation of trust monies, at risk.
[13]
The approach of the court in relation to trust shortages, and a duty
of an attorney with regard to trust money, was stated
in
Law
Society Transvaal v Matthews,
1989(4)
SA 389 (T) at 394 as follows:
“
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 that that of the trust.
It is inherent in such a
trust that an 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”.
[14]
In
Incorporated
Law Society Transvaal v Visser & Others; Incorporated Law
society Transvaal v Viljoen,
1958(4)
SA 115 at 118 F - H, it was held:
“
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...
It is significant that in terms of s83(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 practise’’.
[15] The uncontested
evidence against the Respondent is that he failed to submit the audit
reports for the years ending 28 February
2010 and 28 February 2011 as
required in terms of Rule 70. Secondly, he failed to appear before
the Disciplinary Committee of the
Applicant on the 11
th
November 2010. The Respondent was charged with failing to submit the
audit certificate for the financial year 2010. However, the
charge
sheet could not be served on the Respondent, as he could not be
traced. Thirdly, it appears that the Respondent has abandoned
his
practice, and is still failing to submit the required audit reports.
[16] In my view the
Respondent’s conduct amounts to such a material deviation from
the standards of professional conduct that
he is no longer a fit and
proper person to continue to practice as an attorney. Accordingly, in
my view, the name of the Respondent
should be suspended from the roll
of attorneys. I propose that an order be made as set out in prayers 1
- 12 of the Notice of Motion.
THE FOLLOWING ORDER
IS MADE:
1. The Draft Order
marked “X” which encapsulates prayers 1 -12 of the Notice
of Motion is made an Order of Court in
terms of which the Respondent
is suspended from the roll of practicing attorneys of this Court.
DE VOS J
JUDGE OF THE
GAUTENG
DIVISION OF THE
HIGH COURT
I agree.
LAMMINGA AJ
ACTING JUDGE OF
THE GAUTENG
DIVISION OF THE
HIGH COURT
IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
PRETORIA on the
23
rd
DAY OF MAY 2014
BEFORE THE
HONOURABLE JUDGE DE VOS & LAMMINGA AJ
CASE NUMBER :
58948/2011
In the matter
between
THE LAW SOCIETY
OF THE NORTHERN
PROVINCES
.................................................
APPLICANT
(Incorporated as
the Law Society of the Transvaal)
AND
MALOSE RAYMOND
MOGONGOA
….............................................................................
RESPONDENT
DRAFT ORDER
Having
read the papers filed of record and having heard the attorney for the
Applicant,
IT IS ORDERED
1.
That
Malose Raymond
Mogongoa
(hereinafter
referred to as Respondent) be suspended from practice as an attorney
of the above Honourable Court until such time
as he satisfies the
court that he is a fit and proper person to resume practice as an
attorney.
2. That Respondent
immediately surrender and deliver to the Registrar of this Honourable
Court his certificate of enrolment as an
attorney of this Honourable
Court.
3. That should
Respondent fail to comply with the provisions of the preceding
paragraph of this order on service of this Order of
Court, the
Sheriff for the district in which such certificate of enrolments, is
empowered and directed to take possession thereof
and deliver it to
the Registrar of this Honourable Court.
4. That Respondent
be interdicted and prohibited from operating on his trust account(s)
as defined in paragraph 5 hereof.
5.
That
JOHAN VAN
STADEN,
the
head : members affairs of Applicant, be appointed as a curator to
administer and control the trust accounts of Respondent, including
accounts relating to insolvent and any deceased estate and any estate
under curatorship connected with Respondent's practice as
an attorney
and including, also, the separate banking accounts opened and kept by
Respondent at a bank in the Republic of South
Africa in terms of
section 78(1) of Act 53 of 1979 and / or any separate savings or
interest-bearing accounts as contemplated by
section 78(2) and / or
section 78(SA) of Act No 53 of 1979, in which monies from such trust
banking accounts have been invested
by virtue of the provisions of
the said sub-sections or in which monies in any manner have been
deposited or credited (the said
accounts being hereafter referred to
as the trust accounts), with the following powers and duties:
5.1. immediately to
take possession of Respondent's accounting records, records, files
and documents as referred to in paragraph
6;
5.2. subject to the
approval of the board of control of the attorneys fidelity fund
(hereinafter referred to as the fund) to sign
all forms and generally
to operate upon the trust account(s), but only to such extent and for
such purpose as may be necessary
to bring to completion current
transactions in which Respondent was acting at the date of this
order;
5.3. subject to the
approval and control of the board of control of the fund, to
5.3.1. recover and
receive such funds which may be due to persons in incomplete
transactions and to pay same to the credit of the
trust account(s) of
the Respondent;
5.3.2. if necessary,
in the interest of persons having lawful claims upon the trust
account(s) and/ or against Respondent in respect
of monies held,
received and /or invested by Respondent in terms of section 78(1) and
/ or section 78(2) and/ or section 78(2A)
of Act No 53 of 1979
(hereinafter referred to as trust monies), to take any legal
proceedings which may be necessary for the recovery
of money which
may be due to such persons in respect of incomplete transactions, if
any, in which Respondent was and may still
have been concerned and
which may have been wrongfully and unlawfully paid from trust
account(s) of Respondent.
5.4. to ascertain
from Respondent's accounting records the names of all persons on
whose account Respondent appears to hold or to
have received trust
monies (hereinafter referred to as trust creditors) and to call upon
Respondent to furnish him, within 30(thirty)
days of the date of
service of this order or such further period as he may agree to in
writing, with the names, addresses and amounts
due to all trust
creditors;
5.5. to call upon
such trust creditors to furnish such proof, information and / or
affidavits as he may require to enable him, acting
in consultation
with, and subject to the requirements of the board of control of the
fund, to determine whether any such trust
creditor has a claim in
respect of monies in the trust account(s) of Respondent and if so,
the amount of such claim ;
5.6. to admit or
reject in whole or in part, subject to the approval of the board of
control of the fund, the claims of any such
trust creditor or
creditors, without prejudice to such trust creditor's or creditors'
right of access to the civil courts;
5.7. having
determined the amounts which he considers are lawfully due to trust
creditors, to pay such claims in full but subject
always to the
approval of the board of control of the fund ;
5.8. in the event of
there being any surplus in the trust account(s) of Respondent after
payment of the admitted claims of all trust
creditors in full, to
utilize such surplus to settle or reduce (as the case may be),
firstly, any claim of the fund in terms of
section 78(3) of Act No 53
of 1979 in respect of any interest therein referred to and, secondly,
without prejudice to the rights
of the creditors of Respondent, the
cost, fees and expenses referred to in paragraph 10 of this order, or
such portion thereof
as has not already been separately paid by
Respondent to Applicant, and, if there is any balance left after
payment in full of
all such claims, costs, fees and expenses, to pay
such balance, subject to the approval of the board of control of the
fund, to
Respondent, if he is solvent, or if Respondent is insolvent,
to the trustee(s) of Respondent's insolvent estate;
5.9. in the event of
there being insufficient trust monies in the trust banking account(s)
of Respondent to pay in full the claims
of trust creditors, to
distribute the credit balance(s) in the trust banking account(s) pro
rata amongst the trust creditors whose
claims have been provide or
admitted ;
5.10. subject to the
approval of the chairman of the board of control of the fund, to
appoint nominees or representatives and /
or consult with and / or
engage the services of attorneys, counsel, accountants and / or any
other persons,where considered necessary,
to assist him in carrying
out his duties as curator; and
5.11. to render from
time to time, as curator, returns to the board of control of the fund
showing how the trust account(s) of Respondent
has/have been dealt
with, until such time as the board notifies him that he may regard
his duties as curator as terminated.
6. That Respondent
immediately deliver his accounting records, records, files and
documents containing particulars and information
relating to
6.1. any monies
received, held or paid by Respondent for or on account of any person
while practicing as an attorney ;
6.2. any monies
invested by Respondent in terms of section 78(2) and/or section
78(2A) of Act No 53 of 1979 ;
6.3. any interest on
monies so invested which was paid over or credited to Respondent;
6.4. any estate of a
deceased person, or any insolvent estate, or any estate placed under
curatorship of which Respondent is the
executor, trustee or curator
or which Respondent is administering on behalf of the executor,
trustee or curator of such estate;
and
6.5. Respondent's
practice as an attorney of this Honourable Court, to the curator
appointed in terms of paragraph 5 hereof, provided
that, as far as
such accounting records, records, files and documents are concerned,
Respondent shall be entitled to have reasonable
access to them but
always subject to the supervision of such curator or his nominee.
7. That should
Respondent fail to comply with the provisions of the preceding
paragraph of this order on service thereof upon him
or after a return
by the person entrusted with the service thereof that he has been
unable to effect service thereof on Respondent
(as the case may be),
the sheriff for the district in which such accounting records,
records, files and documents are, be empowered
and directed to search
for and to take possession thereof wherever they may be and to
deliver them to such curator.
8. That the curator
shall be entitled to
8.1.
hand over to the persons entitled thereto all such records, files and
documents as soon as he has satisfied himself that the
fees and
disbursements in connection therewith have been paid or
satisfactorily secured or that same are no longer required, provided
that a written and signed undertaking by a trust creditor to pay such
amount as may be due to Respondent, either on taxation or
by
agreement, shall be deemed to be satisfactory security for the
purposes of the preceding paragraph hereof; provided that such
written and signed undertaking incorporated a
domicilium
citandi et executandi
of
such trust creditors ;
8.2. require that
any such file, the contents of which he may consider to be relevant
to a claim, or possible or anticipated claim,
against him and / or
Respondent and / or Respondent's clients and / or fund in respect of
money and / or other property entrusted
to Respondent be redelivered
to him(the curator): provided that any person entitled thereto shall
be granted reasonable access
thereto and shall be permitted to make
copies thereof.
9. That Respondent
be and is hereby removed from office as :-
9.1. executor of any
estate of which Respondent has been appointed in terms of
section
54(l)(a)(v)
of the
Administration of Estates Act, No 66 of 1965
or
the estate of any other person referred to in
Section 72(1)
;
9.2. curator or
guardian of any minor or other person's property in terms of
section
72(1)
read with
section 54(l)(a)(v)
and
section 85
of the
Administration of Estates Act, 66 of 1965
;
9.3. trustee of any
insolvent estate in terms of
section 59
of the
Insolvency Act, No 24
of 1936
;
9.4. liquidator of
any company in terms of
section 379(2)
read with 379(e) of the
Companies Act, No 61 of 1973 ;
9.5. trustee
of any trust in terms of section 20(1) of the Trust Property Control
Act, No 57 of 1988 ;
9.6. liquidator of
any close corporation appointed in terms of section 74 of the Close
Corporation Act, No 69 of 1984 ;
10. That Respondent
be and is hereby directed
10.1. to pay, in
terms of section 78(5) of Act NO 53 of 1979, the reasonable costs of
the inspection of the accounting records of
Respondent;
10.2. to pay the
reasonable fees of the auditor engaged by Applicant ;
10.3. to pay the
reasonable fees and expenses of the curator, including traveling
time, at the rate of R300-00 per hour;
10.4. to pay the
reasonable fees and expenses of any person(s) consulted and / or
engaged by the curator as aforesaid; and
10.5. to pay the
costs of this application on an attorney-and-client scale.
11. That Respondent,
within l(one) year of his having been requested to do so by the
curator, or within such longer period as the
curator may agree to in
writing, shall satisfy the curator, by means of the submission of
taxed bills of costs or otherwise, of
the amount of the fees and
disbursements due to him (Respondent) in respect of his former
practice, and should he fail to do so,
he shall not be entitled to
recover such fees and disbursements from the curator without
prejudice, however, to such rights (if
any) as he may have against
the trust creditor(s) concerned for payment or recovery thereof;
12.
That a certificate purporting to be signed by the curator specifying
the number of hours spent by him, shall constitute
prima
facie
proof
of the number of hours spent by him on this matter.
13. That further
and/or alternative relief be granted to the Applicant.
BY ORDER
REGISTRAR