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[2013] ZAGPPHC 151
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Law Society of the Northern Provinces v Van Den Berg (44078/2012) [2013] ZAGPPHC 151 (12 June 2013)
NOT
REPORTABLE
IN THE NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
Case No: 44078/2012
DATE:12/06/2013
In
the matter between:
THE LAW SOCIETY OF THE NORTHERN
PROVINCES
...................................
APPLICANT
(Incorporated
as the Law Society of the Transvaal)
and
SAMUEL JACOBUS VAN DEN
BERG
.................................................................
RESPONDENT
CORAM:
MAUMELA J FT EBERSOHN AJ
DATE
HEARD 31 MAY 2013-06-10
DATE
JUDGMENT HANDED DOWN: 12 th June 2013
JUDGMENT
EBERSOHN
AJ:
[1]
The Law Society of the Northern Provinces (hereinafter referred to as
"the Law Society") is applying for the removal
of the name
of Samuel Jacobus Van Den Berg (hereinafter referred to as "the
Respondent") from the roll of practising
attorneys.
[2]
2.1 The Respondent was admitted as an attorney of this Honourable
Court on 1 February 2001 and his name is still on the roil;
and
2.2
The Respondent is currently practising as an attorney of this
Honourable Court for his own account and as a single practitioner
under the style of Van den Berg Attorneys at First Floor, Landmark
Building, The Link, No 13 Umgazi Street, Menlo Park, Pretoria,
Gauteng.
[3]
The purpose of this application is to submit to this Honourable Court
facts which the Law Society contends constitute such a
deviation from
the standards of professional conduct that the Respondent is not a
fit and proper person to continue to practice
as an attorney and
which will justify the Honourable Court in ordering that the
Respondent be suspended from practising as an attorney
[4]
4.1 It is trite law that applications such as this one, are sui
generis and of a disciplinary nature. There is no /is between
the Law
Society and the Respondent. The Law Society, as curatos morum of the
profession, places facts before the Court for consideration.
Vide:
Hassim v Incorporated Law Society of Natal, 1977(2) SA 757(A) at 767
C-G.
Law
Society, Transvaal v Matthews, 1989(4) SA 389(T) as 393 E. Cirota &
Another v Law Society, Transvaal, 1979(1) SA 172(A)
on 187 H.
Prokureursorde
van Transvaal v Kleynhans, 1995(1) SA 839(T) on 851 E - F.
4.2
The question whether an attorney is a fit and proper person in terms
of Section 22(l)(d) of the Act is not dependent upon a
factual
finding, but lies in the discretion of the Court.
Vide:
Law Society of the Cape of Good Hope v C, 1986(1) SA 616(A) at 637 C
- E.
A
v Law Society of the Cape of Good Hope, 1989(1) SA 849(A) at 851 A -
E.
Law
Society, Transvaal v Mathews, supra at 393 I - 1
4.3
In exercising its discretion, the Court is faced with a three stage
inquiry:
(a)
The first inquiry is for the Court to decide whether or not the
alleged offending conduct has been established on the preponderance
of probabilities;
(b)
The second inquiry is whether, as stated in Section 22(l)(d) of the
Act, the practitioner concerned "in the discretion
of the Court"
is not a fit and proper person to continue to practice. This entails
a value judgment;
(c)
The third inquiry is whether in all the circumstances, the
practitioner in question is to be removed from the roll of attorneys
or whether an order suspending him from practice for a specified
period will suffice. Ultimately this is a question of degree.
Vide:
Jasat v Natal Law Society, 2000(3) SA 44 (SCA) at 51 B -1.
Law
Society of the Cape of Good Hope v Budricks, 2003(2) SA11 (SCA) on
13E-14.
4.4
The Court's discretion must be based upon the facts placed before it
and facts in question must be proven upon a balance of
probabilities.
Vide:
Law Society, Transvaal v Matthews, supra at 393 I -1
Olivier
v Die Kaapse Balie-Raad 1972(3) SA 485(A) at 496 F - G. Summerley v
Law Society, Northern Provinces, 2006(5) SA 613 (SCA)
at 615 B-F.
4.5
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.
Vide:
Law Society, Transvaal v Matthews, supra at 420 B - D.
Law
Society, Cape of Good Hope v Segall, 1975(1) SA 95C at 99B.
Beyers
v Pretoria Balie Raad, 1966(2) SA 593 (A) at 606B.
Malan
and another v The Law Society, Northern Provinces
[2008] ZASCA 90
;
[2009] 1 All SA 133
(SCA).
4.6
The following case law reflects the attitude of the Courts in respect
of attorneys not holding proper accounting records:
Vide:
Malan and another v The Law Society, Northern Provinces
[2008] ZASCA 90
;
[2009] 1 All
SA 133
(SCA)
Law
Society of the Northern Provinces v Morke! [2003] FOL 10868 (T)
Botha
& Others v The Law Society of the Northern Province
[2009] 3 All
SA 293
(SCA)
Law
Society of the Northern Provinces v Setshogoe
[2009] JOL 2307
(T)
[5]
The facts and circumstances which prompted the Law Society to bring
this application to the Honourable Court include the following:
5.1
The Respondent is practising as an attorney of this Honourable Court
without being in possession of a fidelity fund certificate
and he has
done so since 1 January 2012;
5.2
The Respondent failed to submit his Rule 70 Auditor's report for the
period ending 28 February 2011 to the Law Society;
5.3The
Respondent failed to notify the Law Society of his change of address
inaccordance with the provisions of Rule 3; and
5.4
The Respondent failed to reply to correspondence addressed to him by
the Law Society.
[6]
In July 2012 the Law Society launched an application for the
suspension of the Respondent in his practise.
6.1The
application was served by the Sheriff on the Respondent personally on
26 September 2012.
6.2
The Respondent did not enter an appearance to defend. The application
is therefore unopposed.
6.3
On 26 November 2012 a Notice of Set Down was served personally on the
Respondent.
[7]
The Respondent has failed to submit his Rule 70 auditor's report for
the period
ending
28 February 2010 to the Law Society. This report had to be submitted
to the
Law
Society on or before 31 August 2011.
7.1
The purpose of a Rule 70 auditor's report is to satisfy the Law
Society that an attorney's accounting records are kept in accordance
with the provisions of the Rules and the Act and that an attorney
handles and administers trust monies entrusted to him by his
clients
properly and responsibly.
7.2
By failing to submit his Rule 70 auditor's report to the Law Society
the Respondent contravened the provisions of Rule 70. In
terms of
Rule 89.11 the Respondent made himself guilty of unprofessional,
dishonourable and unworthy conduct by contravening Rule
70.
7.3
Due to the Respondent's abovementioned failure the Law Society
notified him on 19 October 2011 to appear before a disciplinary
committee of the Council on 22 November 2011.
7.4
The Law Society was unable to deliver the notice to the Respondent
due to the fact that he had left the addressed recorded in
the Law
Society's records without advising the Law Society thereof in terms
of the provisions of Rule 3.
7.5
By failing to comply with the provisions of Rule 3 the Respondent
made himself guilty of unprofessional, dishonourable or unworthy
conduct in terms of the provisions of Rule 89.11 of the Law Society's
Rules,
8.1
Section 41(1) of the Act provides that a practitioner shall not
practise 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 and a
contravention
thereof is in terms of section 83(10) of the Act an
offence punishable with a severe fine.
8.2
The purpose of the issue of a fidelity fund certificate is to protect
the genera! public. The Attorneys Fidelity Fund (the Fund)
was
founded for the purpose of reimbursing persons who suffer pecuniary
loss as a result of the theft committed by a practising
attorney.
8.3
A fidelity fund certificate is mainly issued on the strength of an
unqualified auditor's report which must be submitted annually
to the
Law Society in terms of Rule 70. This report must be submitted within
six months of the annual closing of the accounting
records of the
firm concerned.
8.4
Due to the fact that the Respondent failed to submit his Rule 70
auditor's report for the period ending 28 February 2011 to
the Law
Society, the Respondent was not issued with a fidelity fund
certificate for 2012. He nevertheless continued practising
without a
certificate from 1 January 2012.
8.5
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
places his trust creditors who may suffer pecuniary loss as a result
of the misappropriation of trust monies, at risk. In its entirety
this state of affairs in unacceptable.
[9]
9.1 After the Respondent had failed to submit his Rule 70 auditor's
report for the period ending 28 February 2011 to the Law
Society, the
Law Society instructed a management consultant and forensic
investigator, Mr AWP Van Rooyen (Van Rooyen), to visit
the Respondent
and to investigate his practice affairs.
9.2
Van Rooyen executed his mandate and report to the Law Society in
writing on 16 April 2012.
9.3
Van Rooyen made five attempts to contact the Respondent
telephonically, but he was unsuccessful. Van Rooyen then attended at
the Respondent's offices at the address recorded in the Law Society's
records.
9.4
Van Rooyen was advised by the security officer at the premises that
the Respondent had vacated his offices during September
2011. Van
Rooyen was further advised to contact attorney Van Der Westhuizen,
who practises in Wapadrand and who was the Respondent's
land lord.
9.5
Van Rooyen contacted attorney Van Der Westhuizen and was advised that
the Respondent had leased offices from him, but that he
was no longer
practising at the said premises. He furnished Van Rooyen with the
Respondent's mobile telephone number.
9.6
Van Rooyen then contacted the Respondent. The Respondent advised Van
Rooyen that he has ceased practising during October 2011.
He admitted
that his Rule 70 auditor's report was still outstanding and under
took to furnish the Law Society with same within
two weeks.
9.7
The Respondent at no stage advised the Law Society of the alleged
closure of his practice. He also failed to submit a closing
auditor's
report to the Law Society after the closure of his practice. A
closing auditor's report must be submitted to the Law
Society within
six months of the closure of a practice in order to satisfy the Law
Society that all trust funds previously received
by the attorney had
been properly accounted for.
9.8
On 19 March 2012 Van Rooyen received an e-mail from the Respondent.
He advised Van Rooyen that he was awaiting his original
trust bank
statements from his bank. He indicated that he hoped to receive the
bank statements by 21 March 2012 where after his
report would be
finalised. Van Rooyen did not hear anything further from the
Respondent.
9.9
The Respondent has contravened at least the following provisions of
the Law Society's Rules:
a)
Rule 3 due to the Respondent's failure to notify the Law Society of
his change of addressed alternatively the closure of his
practice;
b)
Rule 70.3 due to the fact that the Respondent failed to submit his
Rule
70 auditor's report for the period ending 28 February 2011 to the Law
Society; and
c)
Rule 89.23 and Rule 89.25 due to the fact that the Respondent failed
to
reply to correspondence addressed to him by the Law Society.
[10]
10.1 The Respondent has contravened the provisions of the Attorneys'
Act and has
failed;
alternatively he has ignored to comply with the requirements of the
Attorneys7 Act and the Rules.
10.2
Therefore, it is submitted, with respect, that the Respondent has
made himself guilty of unprofessional conduct.
10.3
The Law Society requested that in these circumstances the Honourable
Court grant the order as prayed for in the notice of motion.
The Law
Society submitted that the nature of the offences committed warrants
an order of costs on the attorney and client scale.
[11]The
following order is made:
1.
That the name of Samuel jacobus Van Den Berg (the respondent) be
removed from the roll of attorneys;
2.
That respondent immediately surrenders and delivers to the registrar
of this Honourable Court his certificate of enrolment as
an attorney
of this Honourable Court;
3.
That in the event of the respondent failing to comply with the terms
of this order detailed in the previous paragraph within
two (2) weeks
from the date of this order, the sheriff of the district in which the
certificates are, be authorised and directed
to take possession of
the certificates and to hand it to the Registrar of this Honourable
Court;
4.
That respondent be prohibited from handling or operating on his trust
accounts as detailed in paragraph 5 hereof;
5.
That Johan van Staden, the head : members affairs of the applicant or
any person nominated by him, be appointed as curator bonis
(curator)
to administer and control the trust accounts of the respondent,
including accounts relating to insolvent and deceased
estates 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 a a bank in
the Republic of South Africa in terms of section
78(1) of Act No 53
of 1979 and/or any separate savings or interest-bearing accounts as
contemplated by section 78(2) and/or section
78(2A) 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 and subsections 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 and
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;
5.2
subject to the approval and control of the board of control of the
fund and where monies had been paid incorrectly and unlawfully
from
the undermentioned trust accounts, to recover and receive and, if
necessary in the interests 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 to
receive such monies and to pay the same
to the credit of the trust
account(s);
5.3
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);
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;
5.4
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;
5.5
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;
5.6
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;
5.7
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 utilise 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 any, secondly, without prejudice to the rights
of the
creditors of respondent, the costs, 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;
5.8
in the event of there being insufficient trust monies in the trust
banking accounts(s) of respondent, in accordance with the
available
documentation and information, to pay in full the claims of trust
creditors who have lodged claims for repayment and
whose claims have
been approved, to distribute the credit balance(s) which may be
available in the trust banking account(s) amongst
the trust creditors
alternatively to pay the balance to the Attorneys Fidelity Fund;
5.9
subject to the approval of the chairman of the board of control of
the fund, to appoint nominees or representatives an/or consult
with
and/or engage the services of attorneys, counsel, accountants and/or
any other persons, where considered necessary, to assist
him carrying
out his duties as curator; and
5.10
to render from time to time, as curator, returns to the board of
control of the fund showing how he 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 delivers his accounting records, records
the premises
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 practising 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 an insolvent estate or an estate
under curatorship administered by respondent, whether as
executor or
trustee or curator or on behalf of the executor, trustee or curator;
6.5
any insolvent estate administered by respondent as trustee or on
behalf of the trustee in terms of the
Insolvency Act, No 24 of 1936
;
6.6
any trust administered by respondent as trustee or on behalf of the
trustee in terms of the Trust Properties Control Act, No
57 of 1988;
6.7
any company liquidated in terms of the Companies Act, No 61 of 1973,
administrated by respondent as or on behalf of the liquidator;
6.8
any close corporation liquidated in terms of the
Close Corporations
Act, 69 of 1984
, administered by respondent as or on behalf of the
liquidator; and
6.9
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 into 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 provided that a satisfactory written undertaking
has been
received
from such persons to pay any amount, either determined on taxation or
by agreement, in respect of fees and disbursements
due to the firm;
8.2
require from the persons referred to in paragraph 8.1 to provide any
such documentation or information which he may consider
relevant in
respect of 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 provided that
any person entitled thereto shall be granted
reasonable access
thereto and shall be permitted to make copies thereof; and
8.3
publish this order or an abridged version thereof in any newspaper he
considers appropriate.
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)
;
0cm
; line-height: 200%">
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
, ; No 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 Corporations 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
travelling time;
10.4
to pay the reasonable fees and expenses of any person(s) consulted
and/or engaged by the curator as aforesaid;
10.5
to pay the expenses relating to the publication of this order or an
abbreviated version thereof; and
10.6
to pay the costs of this application on an attorney and client scale.
11.
That if there are any trust funds available the respondent shall
within 6 (six) months after 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 issued by a director of the Attorneys Fidelity
Fund shall constitute prima facie proof of the curator's costs
and
that the Registrar be authorised to issue a writ of execution on the
strength of such certificate in order to collect the curator's
costs.
P.Z.
EBERSOHN
ACTING
JUDGE OF THE HIGH COURT
I
AGREE:
T.A.
MAUMELA
JUDGE
OF THE HIGH COURT
Applicant's
attorneys:Rooth & Wessels
Ref.
Mr. Bloem/B30260