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[2011] ZANCHC 34
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Law Society of the Cape of Good Hope v Appie (549/11) [2011] ZANCHC 34 (25 November 2011)
27
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Circulate to Judges:
YES / NO
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to Magistrates: YES / NO
IN THE HIGH COURT OF
SOUTH AFRICA
(NORTHERN CAPE HIGH
COURT, KIMBERLEY)
Case
No: 549/11
Heard on: 23-09-2011
Delivered
on: 25-11-2011
In the matter between:
THE LAW SOCIETY OF
THE
CAPE OF GOOD HOPE
…...............................................
APPLICANT
AND
DESMOND APPIE
…............................................................
RESPONDENT
Coram:
Phatshoane J et Hughes-Madondo AJ
JUDGMENT
PHATSHOANE J:
The
application before us is preceded by an interim order issued on 08
March 2010,
inter alia
, interdicting the respondent, Mr
Desmond Appie, from practising as an attorney, surrendering and
delivering to the registrar
his certificate of enrolment as an
attorney and such further related relief, pending the final
determination of these proceedings.
2.
The Law Society of the Cape of Good Hope, the applicant, seeks an
order that the respondent’s name be struck off the roll
of
Attorneys. Further ancillary relief to give practical effect to the
order is also sought. In his answering affidavit the respondent
withdrew his opposition but he is still challenging the relief sought
and has furnished extenuating circumstances for a lenient
sanction.
In essence therefore he has opposed the application as a sanction to
be meted out is an integral part of this application.
The
respondent was admitted as an attorney of this Court on 01 December
2000. He has since 04 December 2000 practised for his
own account
under the name and style of Desmond Appie Incorporated in Kimberley.
On 27 October 2006 he was enrolled as a conveyancer.
His practice
included general litigation, debt collections and on a minimal scale
conveyancing.
The
fons et origo
of the application is the various complaints
the applicant received from members of the public from whom the
respondent had accepted
instructions. The applicant contends that
the respondent misappropriated monies belonging to a number of his
clients. The Attorneys
Fidelity Fund settled some of the claims
amounting to R1 791 691.70. During an inspection of his books the
respondent admitted
to the applicant’s senior legal officer in
charge of disciplinary matters, Mr Frank Charles Dorey that he
misappropriated
monies belonging to various clients. In the
affidavit he filed challenging the relief sought the respondent
argued that the amount
claimed cannot be reflective of monies
misappropriated. He intimated that some of the small amounts
complained of were for services
rendered which his firm was entitled
to debit as fees.
The
applicant is for the most part relying on the report compiled by Mr
Dorey which succinctly sets out the factual background.
The
first complaint is from a Kimberley firm of attorneys, Van de Wall &
Partners. Mr Honiball, an attorney in this firm,
directed
a letter to the applicant on 7 October 2009 complaining that the
respondent was instructed to attend to the registration
of transfer
of the immovable property from Mr
Molefi
Pascaline Morake to Mr George Lentikile January. The purchase price
in the amount of R120 000.00 was paid to the respondent
during
July 2009. The second complaint was in respect of the transfer of
property from the same Morake to Mr Leornard Bongani
Sibisi. Sibisi
states in his affidavit that he paid the respondent R325 000.00
as the purchase price for the property.
Mr
Honiball states further that as the above two transactions did not
progress the complainants’ terminated the respondent’s
mandate, instructed him to obtain their files from him and to
request him to account for the monies paid as well as the interest
that had accrued thereon.
On
24 August 2009 the respondent delivered two trust cheques post-dated
to 30 September 2009 in the amounts of R120 000.00 and
R316 000.00
to Van De Wall’s offices. He informed Mr Honiball that he had
also instructed the bank to cancel these
interest bearing
investments made on behalf of these two complainants. On 03
September 2009 Mr Honiball dispatched a letter to
the respondent
confirming that the cheques would be presented for payment on 30
September 2009 and further requested him to account
for the interest
earned up to 30 September 2009 at that stage. The cheques were
deposited into the firm’s trust account
on 30 September 2009.
They were dishonoured by the bank marked ‘
refer to drawer’
.
The
respondent did not account for the interest earned on the amounts
either. As it turned out he misled his colleague into believing
that
he held the funds in trust when in fact there were none. The
applicant avers that it solicited a response from the respondent
in
respect of the complaint but received no satisfactory explanation.
In
the third complaint Mr Honiball intimates that Sibisi, his client,
purchased three properties from the estates administered
by the
respondent. Sibisi paid the purchase price to the respondent in
respect of these properties as follows: R200 000.00 in
July 2009 and
a further R200 000.00 in August 2009. Early in November 2009
Sibisi terminated the respondent’s mandate
due to a lack of
progress. The respondent undertook to refund him on 10 November 2009
but no payment was received.
On
07 December 2009 the applicant forwarded a copy of Sibisi’s
complaint to the respondent for his comment. Thereafter reminders
were sent to him but to no avail. The applicant resolved that these
three complaints be further investigated during the visit
it was to
pay to him for the inspection of his book and the state of affairs
of his practice.
On
19 February 2010 Mr Dorey attended a meeting with the respondent at
his offices and had a discussion with him. During his conversation
with Mr Dorey the respondent gave him two contrasting and mutually
destructive versions none rational. The first version was
that his
firm held trust and business accounts at Nedbank and Standard Bank
and did not hold any s78(2A) of the Attorneys Act,
53 of 1979,
investments save that certain investments were placed with a broker,
a certain Mr Cliff Randall. The report by Mr
Dorey
, inter alia
,
reflects the following:
“
Morake
/ January and Morake /Sibisi Transfers (Complaint Reference: 42942)
Mr Appie advised that no trust
ledger accounts were opened in respect of the above two transfers as
the funds paid to him in respect
of these were paid over directly to
Mr Cliff Randall for investment.
Mr Appie advised that Mr Randall
was employed at Momentum Life in Kimberley, approximately 3 to 4
years previously, and that Mr
Appie purchased two life policies from
Mr Randall, which policies had since lapsed. Mr Appie further advised
that Mr Randall was,
at that stage, operating as a broker between
Johannesburg and Kimberley. Mr Appie was however unable to provide
any details of
the brokerage/organisation through which Mr Randall
allegedly operated.
Mr appie explained that during
the previous year Mr Randall attended at Mr Appie’s offices
regularly in an effort to market
further insurance products to Mr
Appie and that, during one of these visits, Mr Appie enquired from Mr
Randall whether Mr Randall
could assist him with the investment of
trust funds on behalf of Mr Appie’s various clients. Mr Appie
further explained that
he indicated to Mr Randall that he wished to
obtain the best possible interest rates for his clients. Mr Appie
advised that Mr
Randall indicated that he was able to assist Mr Appie
and that he was aware of somebody in Johannesburg through whom the
funds
could be invested. Mr Appie advised that he informed Mr Randall
that he would contact Mr Randall as soon as he had funds available
for investment. Mr Appie advised that, at that stage, he had Mr
Randall’s contact cell phone numbers.
Insofar as the Morake / January
transfer was concerned, Mr Appie advised that during June 2009 Mr
January paid to Mr Appie the R120
00,00 purchase price and that these
funds were paid over to Mr Randall for investment. On being requested
to advise into which
of his trust accounts the funds were deposited
Mr Appie explained that the funds were paid over to him by Mr January
in cash that
the funds were not deposited into his trust account, but
were paid over to Mr Randall for investment in cash. Mr Appie was
unable
to recall the exact date on which the payment was made and was
unable to produce a receipt for the funds or any proof that the funds
were paid to Mr Randall. Mr Appie advised that he did not issue a
receipt for the funds, nor did he require Mr Randall to sign
any form
of acknowledgment of receipt, or to issue him with any documentation
as proof of receipt, of the funds. Mr Appie did however
recall that
Mr January provided him with a copy of the Deed of Sale at the time.
Mr Appie was requested to advise
how he dealt with the cash funds during the period in which he had
the funds in his possession
and Mr Appie explained that on the same
day he received the funds, he contacted Mr Randall telephonically,
who happened to be in
Kimberley at the time, and that Mr Randall
collected the funds in cash from Mr Appie on the same day.
Mr Appie indicated that he
understood the arrangement with Mr Randall to be that Mr Randall
would review the investment options
with the various banks and that
Mr Randall would thereafter invest the funds with the institution
offering the highest interest
rate.
Mr Appie advised that subsequent
to paying the funds over to Mr Randall, he did not receive any proof
of the investment of the funds
from Mr Randall, nor any particulars
relating to the investment. Mr Appie advised that as he was aware,
the funds were invested,
although he received no communication from
Mr Randall in this regard.
Mr Appie explained that he did
not invest the trust funds himself as he was an inexperienced
practitioner insofar as investments
were concerned and Mr Randall was
willing to attend to the investments on his behalf.
According
to Mr Dorey’s report the respondent admitted also receiving
the R316 000.00 purchase price from Sibisi for
which he had not
issued him with a receipt. He dealt with the money as in the
previous complaint of Morake and January by handing
over the funds
on same day of receipt to Mr Randall for investment. Mr Randall did
not furnish him with proof of receipt. The
report reflects that
around 24 August 2009 the respondent spoke to Mr Randall
telephonically and requested him to make the funds
and interest in
both transfers available for transmission to Mr Honiball’s
firm. He alleges that Mr Randall informed him
of the difficulties he
had in securing the release of the funds from the investing
institute but undertook to ensure that the
funds were available by
30 September 2009.
Early
in February 2010 the respondent informed Mr Dorey that he lost
Randall’s cellular phone numbers. He took no steps
to
establish Randall’s contact particulars. Although he was a bit
concerned he believed that Mr Randall would again attend
at his
offices and that matters would be resolved. When Mr Dorey enquired
which telephone instrument he used to contact Mr Randall
the
respondent advised that he usually called him on either the office
landline or used a staff member’s cellular phone,
but he could
not recall which staff member’s cellular phone he used. The
report further records:
“
Mr
Appie was then requested to advise why his response to the complaint
lodged in respect of these two transfers made no mention
of the
investments allegedly made via Mr Randall and Mr Appie indicated that
he feared advising the Society of the true state of
affairs.”
With
regard to the three erven Sibisi purchased, the respondent admitted
to having received from him three cheques in the amounts
of R1000
000.00; R100 000.00 and R200 000.00 payable to his firm
without issuing receipts. In anticipation of receiving
these cheques
he contacted and made arrangements with Mr Randall to collect the
funds for investment. Mr Randall collected the
funds without
providing proof of receipt. When the time arrived for Mr Randall to
release the funds Randall claimed again that
he experienced
difficulties to comply with the respondent’s request.
Mr
Dorey avers that he confronted the respondent with a letter dated 14
July 2009 he addressed to Sibisi and requested him to
explain the
reference therein to an ABSA Bank account number. The problem was
that this Desmond Appie Incorporated’s banking
account did not
appear in the applicant’s records as any of his firm’s
trust accounts nor did he disclose it at the
commencement of the
interview. Mr Dorey probed the apparent improbable nature of the
explanation the respondent gave in respect
of how he dealt with the
trust funds. Mr Dorey says that at that juncture the respondent left
the room. On his return he abandoned
the version he gave and
tendered a fresh one.
The
respondent’s fresh version was that the R120 000.00 he
received out of Morake and January property transactions
was paid
into his personal saving account held with First National Bank and
not posted to the firm’s books. That it was
near month end and
his fee income was insufficient to defray the overheads of his
practise, prompting him to applying these funds
towards payment of
the salaries of his employees. His intention was that as soon as he
can manage it he would refund the monies
misappropriated.
In
respect of Morake and Sibisi’s property transaction the
respondent similarly reported to Mr Dorey that the R316 000.00
he received from Sibisi was paid into one of his ABSA Bank personal
savings accounts and used toward the payment of his firm’s
overheads and his personal debts. Therefore it would not be
reflected in his firm’s books.
With
regard to the purchase of the three erven by Sibisi the respondent
explained to Mr Dorey that on receipt of cheques from
Sibisi he
cashed them. Some of the cash was deposited into his business
accounts and reflected therein as the payment of fees
for existing
clients whose debts were due to be written off and some to
fictitious clients. He used the funds to pay his firm’s
overheads and his creditors for personal debts.
Mr
Dorey’s report reveals further transactions which show
malfeasance on the part of the respondent. The fourth transaction
relates to the transfer of property between Changwe and Blignaut.
The property was sold for an amount of R135 000.00. A
mortgage
bond over the property for an amount of R150 000.00 together
with a deed of transfer were registered on 31 August
2009. The
respondent received R131 663.14 into his Standard Bank trust
account on the date of registration. Of this money
he stole
R86 662.50 which he utilised largely to pay his firm’s
overheads.
The
fifth complaint is that of Baedex Financial Corporation. The
respondent informed Mr Dorey that around 2008 he was instructed
to
attend to the registration of the property registered in the name of
Sol Plaatjie Municipality into the name of Mr Hanoor
Camerodien and
thereafter into the name of certain Mrs Moredi whose full names are
not apparent from the papers. According to
the respondent the
transaction did not take off and the file was forwarded to Elliot
Maris Wilmans & Hay attorneys of Kimberley.
In
his further explanation to Mr Dorey the respondent says with the
consent of Camerodien he applied for bridging finance in
Camerodien’s name who signed the necessary documents. The
R74 000.00 borrowed from Baedex for the bridging finance
was
for the respondent’s personal affairs. The funds were paid
into his business account. The deal the respondent clinched
with
Camerodien was that he (the respondent) would apply for and receive
funds in Camerodien’s name which money was to
be refunded on
registration of property from the proceeds of the transfer thereof.
It is unheard of and in my view quite inappropriate
for an attorney
to enter into this type of an arrangement with a client.
The
respondent states that Baedex did not pursue a claim against
Camerodien as he (the respondent) signed an acknowledgement of
debt
and made certain payments to Baedex. As at date of his meeting with
Mr Dorey the respondent was approximately four months
in arrears
with the repayments. Nonetheless he advised Mr Dorey that he
intended to continue effecting payment.
The
sixth complaint is that of Mr Martin Botha. The respondent confirmed
to Mr Dorey that he received a deposit from Botha on
the fees in
respect of services to be rendered. The money was paid into his FNB
business account when he had not yet done any
work to earn the fees.
The FNB account was not disclosed to Mr Dorey at the commencement of
the interview. The respondent says
it had escaped his mind as he
utilized the Standard Bank’s account regularly.
The
respondent reported that Botha’s matter was postponed
telephonically on a number of occasions as it was supposed to
be
heard in a district Court situated a distance from Kimberley.
Eventually it was set down for hearing. The respondent was unable
to
attend the proceedings due to vehicle problems. Mr Dorey avers that
Botha’s file was available for inspection. There
were no
accounting records in the file save a letter addressed to Botha
reflecting that a fee of R5 888.00 had been earned.
Mr Dorey
intimates that the respondent was unable to explain how this fee was
arrived at.
The
seventh of the respondent’s misdemeanours relates to the
transfer of property between Mr and Ms Bagananeng on one hand
and Mr
and Ms V.K and L.A Pears, whose full names are not apparent from the
papers. The respondent advised Mr Dorey that the
trust client ledger
account was not opened for the transaction. That during March and
April 2009 a payment of R100 000.00
and R320 000.00,
respectively, in respect of this transaction was made into his Absa
Bank savings account. He did not issue
any receipt to the clients
nor was the transaction recorded in his books. He used the funds
towards the payment of his practice
overheads and his personal
debts.
The
eighth impropriety relates to the transfer of property between Mr M
B January and Mr D N Poss whose full particulars are also
not set
out in the papers. The respondent did not open a ledger account for
the transaction. He informed Mr Dorey that Poss paid
R152 280.00
in cash to him, which he used to pay his practice overheads and
personal expenses. Likewise he did not issue
a receipt to Poss. The
respondent further intimated to Mr Dorey that January required an
advance of R20 000.00 on the purchase
price prior to the
registration of the property. He paid the amount to him. The
respondent could not produce proof of this advance
payment to
January. The property was as at date of the interview conducted by
Dorey, not transferred. The respondent claimed
that he could not
locate the file.
The
above is not an exhaustive list of claims received by the Attorneys
Fidelity Fund against the respondent. In its founding
papers the
applicant attached a claim browser summary received from the
Attorneys Fidelity fund which records 31 claims relating
to
conveyancing, civil litigation, matrimonial matters, criminal cases
and other matters. According to the applicant some of
the claims
were lodged with the Fund after the respondent had been interdicted
from practising.
In
terms of s 22(1)(d) of the Attorneys Act, 53 of 1979, any person who
has been admitted and enrolled as an attorney may on application
by
the society concerned be struck off the roll or suspended from
practice by the Court within the jurisdiction of which he/she
practises, if he/she, in the discretion of the Court, is not a fit
and proper person to continue to practise as an attorney.
The
Courts exercise supervisory powers over the conduct of attorneys,
not only in order to discipline and punish errant practitioners,
but
also, and more importantly in order to protect the public
particularly in cases such as the present where the theft of trust
monies was committed. See
Law
Society of the Cape of Good Hope v Budricks
2003
(2) SA 11
(SCA)
at
16E-G para 7 and
Solomon
v Law Society of the Cape of Good Hope
1934
AD 401
at 408 - 9
.
Scott
JA set out the approach as follows in
Jasat v Natal Law
Society
2000 (3) SA 44
(SCA)
at 51B - I para 10:
“
In
Reyneke
v Wetsgenootskap van die Kaap die Goeie Hoop
[1993] ZASCA 161
;
1994 (1) SA 359
(A)
at
369D it was pointed out that the section[s 22(1)(d)] requires a
twofold inquiry. However, before one gets to the two inquiries
referred to, there is a preliminary question that must be answered.
Ultimately, therefore, what is contemplated is a three-staged
inquiry. First, the Court must decide whether the alleged offending
conduct has been established on a preponderance of probabilities.
(See, for example
,
Nyembezi v Law Society, Natal
1981 (2) SA 752
(A) at 756H - 758A
where
the Court was concerned with the equivalent section in the now
repealed Attorneys, Notaries and Conveyancers Admission Act
23 of
1934; see also
Kekana
v Society of Advocates of South Africa
[1998] ZASCA 54
;
1998 (4) SA 649
(SCA) at 654D
in
relation to
s 7
of the
Admission
of Advocates Act 74 of 1964
.)
The second inquiry is whether, as stated in
s 22(1)(d)
, the person
concerned 'in the discretion of the Court' is not a fit and proper
person to continue to practise. The words italicised
were inserted in
1984 (see
Law
Society of the Cape of Good Hope v C
1986 (1) SA 616
(A) at 637B -
C)
.
It would seem clear, however, that, in the context of the section,
the exercise of the discretion referred to involves in reality
a
weighing up of the conduct complained of against the conduct expected
of an attorney and, to this extent, a value judgment. The
discretion
is that of the Court of first instance. It is well established that a
Court of appeal has a limited power to interfere
and will only do so
on well recognised grounds, viz where the Court of first instance
arrived at its conclusion capriciously, or
upon wrong principle, or
where it has not brought its unbiased judgment to bear on the
question or where it has not acted for substantial
reasons
(Law Society of the Cape of Good Hope v C (supra at 637D - H);
Reyneke v Wetsgenootskap van die Kaap die Goeie Hoop (supra
at 369E -
G); Vassen v Law Society of the Cape of Good Hope
[1998] ZASCA 47
;
1998 (4) SA 532
(SCA) at 537D - G).
The
third inquiry is whether in all the circumstances the person 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. This is similarly a matter for the discretion of the
Court
of first instance and the power of a Court of appeal to interfere is
likewise limited. Whether a Court will adopt the one
course or the
other will depend upon such factors as the nature of the conduct
complained of, the extent to which it reflects upon
the person's
character or shows him to be unworthy to remain in the ranks of an
honourable profession
(Incorporated
Law Society, Transvaal v Mandela
1954 (3) SA 102
(T) at 108D - E)
,
the likelihood or otherwise of a repetition of such conduct and the
need to protect the public. Ultimately it is a question of
degree.”
See
also
Law Society, Northern Provinces v Mogami and others
2010
(1) SA 186
(SCA)
at 189J - 190B
By
the respondent’s own admission, on various occasions he
misappropriated monies which he was supposed to have held in
trust
on behalf of his clients. He deliberately in most of the instances,
if not in all did not issue receipt to his clients
in order not to
leave paper trail. He knew that he intended to use the funds
received for unauthorized purposes. Even a properly
trained
candidate attorney knows that an attorney would not have the
authority to pay his practice overheads or personal debts
with
monies which were supposed to have been held in trust. The
respondent was an experienced attorney. Needless to say, his
conduct
cannot be said to have been to the benefit of his clients. To the
contrary, his drive was quite detrimental to their
interest.
The
principle emerging from our jurisprudence is that the utilisation of
the funds in a trust account without the authority of
the person on
whose behalf the funds are held for purposes which do not benefit
the beneficiary and in circumstances where the
beneficiary or the
benefactor has not authorised such use amounts to misappropriation
of trust money, which in turn is a form
of theft or even fraud
.
See
Law
Society of the Cape of Good Hope v Budricks
supra
at 17G-H;
Cape Law
Society v Parker
2000(1)
SA 582 (C)
at 586I-J
and the definition of theft and or misappropriation in
Law
Society, Cape v Koch
1985
(4) SA 379
(C)
at
382C-I.
The
respondent stole from his clients and was dishonest in his dealings
with them. I am satisfied that the evidence overwhelmingly
established the offending conduct on the balance of probabilities.
The
next question which falls to be determined is whether the respondent
is a fit and proper person to continue to practice as
an attorney.
He has surreptitiously and unashamedly during 2008 to 2009 embarked
on a conduct of misappropriating monies from
his clients as opposed
to diligently discharging his mandate by carrying out their
instructions. The misconduct was not perpetrated
once-off or over a
short period of time as the evidence clearly portrays. At various
times in 2009 he continually deceived his
clients and did not desist
from what had become a pattern of misconduct and criminal conduct.
He has caused his client untold
hardship and has drained the
Fidelity Fund of large sums of money which may proof unreasonable.
The
respondent sought to excuse his untoward behaviour by claiming that
most of his transgressions related to conveyancing matters
in which
he did not receive adequate exposure. The issue central to this
application does not concern the respondent’s
conveyancing
experience. Nothing in the papers suggests that the respondent was
out of his depth when it comes to processing
the conveyancing
related applications. The simple logic is that he did not process
and lodge the transfer papers because payment
to the seller of the
property had to be made upon transfer or registration in the name of
the new owner. If that was done it
would be discovered that the
trust account had no funds.
The
vexing issue involving this application concerns basic accounting
principles which every attorney is expected to be well versed
in.
Conduct which is clearly impermissible and apparent from the
respondent’s way of operation is his deliberate failure
to
issue receipts to clients upon deposits received from them. He
contended that he did not conceal the truth about stealing
from the
clients by making false book entries or engaging in an elaborate
scheme of deceit. He says he cooperated fully with
the applicant,
made full disclosure and took responsibility for his actions.
While
the respondent claims to regret his wrongdoing I am not swayed that
he truly showed any contrition. It cannot also be said
that he gave
his cooperation to the applicant. When the applicant solicited a
response from him through correspondence he did
not respond or if he
did it was in a vague, unsatisfactory or deceitful manner. He
cooperated when he realized that he had no
way to turn to. This
realization came after he had furnished a concocted version which
stretches credulity beyond limit.
The
manner in which he attempted to conceal the truth from the applicant
when confronted on his misdemeanours demonstrates his
ability to
mislead not only the applicant but his colleagues in practice. In my
view the respondent did not display conduct expected
of an attorney
or officer of this Court. He brought the attorneys profession into
disrepute and therefore is not a fit and proper
person to continue
practising as an attorney.
The
last leg of the enquiry is a question whether in all the
circumstances the respondent ought to be removed from the roll of
attorneys or whether an order suspending him from practice for a
specified period will suffice. The applicant argued that the
respondent has a manifested character defect which warrants that his
name be removed from the roll. The respondent countered
by
requesting that he be suspended from practising as an attorney for a
specified period and that when suspending him regard
be had to the
period from 08 May 2009 to date of the order as a period of
suspension already served.
The
respondent’s mitigating circumstances should be considered
within the context of the interest of the public which the
Court has
corresponding duty to protect. The respondent pleads that he is
married with two minor children and has to assist his
parents
financially. He pointed out that his practice was in dire financial
straits, which was largely exacerbated by the global
economic
meltdown. When things went horribly wrong he had in his employ
mostly his family members which made it difficult for
him to
retrench them. He submitted that the funds he misappropriated were
used to pay the firm’s overheads and not to buy
luxury assets.
He is from a disadvantaged background and went through difficulties
to be an attorney and conveyancer. He has
lost his practice and good
name and has difficulties securing employment since he was
interdicted from practising. Presently
he performs administrative
work at Gagayi Attorneys. He says that he has learned his hard and
painful lesson.
Mr
George, for the respondent, referred to the
Law Society of the
Cape of Good Hope v Peter
2009 (2) SA 18
(SCA)
in
support of his argument that an order of suspension would be more
fitting in the circumstances of this case. In that case
the
respondent had no practical experience and had clearly no knowledge
of the functioning of a law firm. The Court concluded
that the
respondent’s theft of an amount of R20 000.00 of the
trust monies in the few months of her practising as
an attorney in
order to pay her expenses and cover her living costs was not the
result of a character defect inherent in her,
but rather of a moral
lapse brought about by the pressure she had been under. Although her
submission to temptation meant that
she was at the time not a fit
and proper person to continue practising, it did not necessarily
mean that she had to be struck
from the roll. The Court stated that
suspension was an option where mitigating factors were present and
it was clear that when
practice was resumed, the person in question
would be purged of his or her unfitness.
What
sets this matter apart from the case in point is the contrasting
factual background. In this case the papers indicate that
for the
most part of his career it would seem the respondent acted within
the confines of the law. He succumbed to the ills of
temptation
later in his life when he ought to have known better. His
transgressions are also many and involve large sums of money.
The
respondent’s case should also be distinguished from these
further cases his counsel referred to:
Law Society, Transvaal
v Blumberg
1987 (3) SA 650
(T),
where an attorney was
convicted in the Regional Court for illicit diamond buying;
A
v Law Society of the Cape of Good Hope
1989 (1) SA 849
(A)
where the attorney’s disability resulted in his
misdemeanours;
Incorporated Law Society, Transvaal v G
1953
(4) SA 150
(T)
where the charges against the attorney related to
three unprofessional conduct. In that case the court found that the
complaints
relating to the dealings with certain trust moneys and
the wrongful failure to keep proper trust accounts had been proved
but
they were not of such gravity requiring the drastic step of
striking the respondent’s name off the roll of attorneys;
Summerley v Law Society, Northern Provinces
2006
(5) SA 613
(SCA)
where the Court found that the attorney’s
transgressions did not reflect on his honesty or integrity.
The
respondent acknowledged that his actions as evinced in the founding
papers were wrong. He states that he has already effected
payments
of certain of the amount which the complainants thereof nonetheless
went ahead and reclaimed. He further contends that
his legal
representative paid R165 000.00 to the Law Society. That he
sold his vehicles and paid R100 000.00; and R80 000.00
respectively to the Law Society through his advocate whom he
wittingly or perhaps even unwittingly failed to mention his name.
The respondent did not adduce proof of payments of these amounts in
the shape of receipts issued to him. Neither did he attach
the
confirmatory affidavit of counsel that allegedly paid these monies
to the Law Society. According to the respondent one Mr
Pretorius of
the applicant acknowledged receipt of these payments. The respondent
also intimates that he intends refunding the
Attorneys Fidelity
Fund.
It
is well to remember that the road to the abyss is paved with good
intentions. I am not persuaded that the respondent has purged
himself of his wrongdoing. According to the applicant there is no
record that those payments were made. The applicant says it
also
does not have Mr Pretorius in its employ. This cannot bode well for
the respondent who even after been caught out and on
the verge of
being punished for his errant ways is still not exhibiting a
concerted effort to come clean.
In
the Western Cape High Court decision handed down on 21 July 2011
Die
Wetsgenootskap Van Die Kaap Die Goeie Hoop v Elmar Van Tonder
4594/2011
an attorney had occasioned shortfalls in
the amount of R536 890.87 in his trust account and later paid
an amount of R550
000.00 in the same account to correct the
shortfall. The attorney’s name was nevertheless struck from
the roll of Attorneys,
Notaries and Conveyancers.
In
Malan And Another v Law Society, Northern Provinces
[2008] ZASCA 90
;
2009
(1) SA 216
(SCA)
at 221 para 10 Harms ADP held:
“
The
appellants relied on
Summerley
v Law Society, Northern Provinces
2006 (5) SA 613
(SCA)
for
the proposition that unless a court finds dishonesty during the first
leg of the inquiry, it ought not to remove the attorney
concerned
from the roll. In Summerley the following was said in connection with
the exercise of this discretion (at para 21):
‘
The
further argument on behalf of the appellant was that, as a general
rule, striking-off is reserved for attorneys who have acted
dishonestly, while transgressions not involving dishonesty are
usually visited with the lesser penalty of suspension from practice.
Although this can obviously not be regarded as a rule of the Medes
and the Persians, since every case must ultimately be decided
on its
own facts, the general approach contended for by the appellant does
appear to be supported by authority [citations omitted].
This
distinction is not difficult to understand. The attorney's profession
is an honourable profession, which demands complete
honesty and
integrity from its members.’
Obviously, if a court finds
dishonesty, the circumstances must be exceptional before a court will
order a suspension instead of
a removal.”
Nothing
exceptional was placed before us to order the respondent’s
suspension from practise as opposed to the removal of
his name from
the roll. There is also nothing to show that the cause of the
unfitness would be removed should the respondent
be merely suspended
from practice. It be noted that respondent submitted that if
permitted to practice he will serve as a professional
assistant at
Gagayi Attorneys or any other attorneys’ firm on condition,
inter alia
, that he does not operate the firm’s trust
account. As it turns out, Mr Gagayi has himself been interdicted
from practising
as an attorney; a fact which the respondent alleges
he was unaware of when he filed his papers. The supervised practice
may be
an option to consider in the event the Court grants an order
short of removing the respondent’s name from the roll of
attorneys
in its assessment that the attorney is fit to practice. In
the
Law Society of the Cape of Good Hope v Windvogel
1996
(1) SA 1171
(C)
at 1175 the Court held:
“
If the
Court has to determine whether an attorney is a fit and proper person
to continue to practise as such, the Court is obviously
vested with a
discretion as to the way in which future practice shall be
conducted.”
I
am not satisfied that the supervised practice would suffice in the
circumstances of the case at hand more so because the respondent
did
not placed facts illustrating how such supervision would be carried
out. Overall, regard being had to his dishonest conduct
I am of the
view that the respondent is unworthy of practising in the profession
which requires the utmost degree of honesty
and integrity. The
interest of the public cannot be downplayed at the whim of an
individual who clearly has instilled a sense
of distrust in a number
of people he had dealings with as an attorney. The public should be
protected from the likes of him.
His conduct is by all accounts
heavily censurable. The respondent did not stop the deprecated
practice on his own or out of a
sense of guilt. If he was not caught
out there is no way of telling where it would all have ended. I am
unable to envisage any
order that would be more fitting than an
order removing the respondent’s name from the roll of
attorneys and conveyancers.
In
the result I make the following order:
ORDER:
The
respondent’s name is struck off the roll of attorneys and
conveyancers of this Court.
The
respondent shall surrender and deliver to the registrar of this
Court his certificate of enrolment as an attorney and conveyancer;
Should
the respondent fail to comply with the provisions of the preceding
paragraph of this order within 2 (two) weeks from date
hereof, the
sheriff for the district in which such certificate of enrolment is
filed is empowered and directed to take possession
of and deliver
same to the registrar of this Court;
The
respondent shall deliver his books of account, records, files and
documents containing particulars and information relevant
to-
any
monies received, held or paid by the respondent for or on account
of any person;
any
moneys invested by the respondent in terms of
s 78(2)
and/or s
78(2A) of the Attorneys Act, 53 of 1979;
any
interest on moneys so invested which was paid over or credited to
the respondent;
any
estate of a deceased person, or any insolvent estate, or any estate
placed under curatorship of which the respondent is
the executor,
trustee or curator or which the respondent is administering on
behalf of the executor, trustee or curator of
such estate; and
the
respondent’s practice as an attorney, to the curator
appointed in terms of paragraph 10 hereof, provided that as far
as
such books of account, records, files and documents are concerned
the respondent shall be entitled to have access to them,
but always
subject to the supervision of such curator or a nominee of such
curator;
Should
the respondent fail to comply with the provisions of the preceding
paragraph of this order within seven Court days after
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
the respondent, as the case may be, the sheriff for the district in
which such books of account, records,
files and documents are, is
empowered to take possession of and deliver them to such curator;
Such
curator shall be entitled-
to
hand over to the persons entitled thereto all such records, files
and documents;
to
hand over all such records, files and documents over which the
respondent exercised a lien to the persons entitled thereto
as soon
as he has satisfied himself that the fees and disbursements in
connection therewith, if any, have been paid, or secured
as
contemplated in paragraph 7 below, or, in the event of any dispute
as to the provision of security, in his discretion;
A
written undertaking by a person to whom the records, files and
documents referred to in the preceding are handed to pay such
amount
as may be due to the respondent, either on taxation or by agreement,
shall be deemed to be satisfactory security for the
purpose of the
preceding paragraph hereof provided that such written undertaking
incorporates a
domicilium citandi et executandi
of such
person;
Such
curator is empowered to 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 the respondent and/or the
respondent’s clients and/or the Attorneys’ Fidelity
Fund
“the Fund” in respect of money and/or other property
entrusted to the respondent, be re-delivered to such curator;
The
respondent is interdicted and prohibited from operating on his trust
account(s) as defined in the following paragraph;
The
director for the time being of the applicant be appointed as curator
to administer and control the trust accounts of the respondent
comprising the separate banking accounts opened and kept by the
respondent at a bank in terms of s78(1) of the Act, 53 of 1979,
and/or any separate saving or interest-bearing accounts as
contemplated by s78(2) and/or s78(2A) of Act, 53 of 1979, in which
moneys from such trust banking accounts have been invested by virtue
of the provisions of the said sub-section or in which moneys
in any
manner been deposited or credited (the said account(s) herein being
referred to as “trust account(s)”) with
the following
powers and duties-
subject
to the approval of the Board of Control of the Fund, to sign and
endorse cheques and/or withdrawal forms and generally
to operate
upon the trust account(s), but only to such extent for such purpose
as may be necessary to bring to completion current
transactions in
which the respondent was acting at the date of this order;
subject
to the approval and control of the Board of Control of the Fund, to
recover and receive and, if necessary in the interests
of persons
having lawful claims upon the trust account(s) and/or against the
respondent in respect of money held, received
and/or invested by
the respondent in terms of s78(1) and/or 78 (2A) of Act, 53 of
1979, (herein referred to as “trust
moneys”), to take
legal proceedings which may be necessary for the recovery of money
which may be due to such persons
in respect of incomplete
transactions in which may be due to such persons in respect of
incomplete transaction in which the
respondent may have been
concerned and which may have been wrongfully and unlawfully paid
from the trust account(s) and to
receive such moneys and to pay
same to the credit of the trust account(s);
to
ascertain from the respondent’s books of account the names of
all persons on whose account the respondent appears to
hold or to
have received trust moneys (hereinafter referred to as “trust
creditors”) and to call upon the respondent
to furnish him,
within 30 (thirty) days of the date of this order or such further
period as he may agree to in writing, with
the names, addresses of
and amounts due to all trust creditors;
to
call upon the trust creditors to furnish such proof, information
and affidavits as he may required to enable him to determine
whether any such trust creditor has a claim in respect of money in
the trust account(s) and, if so, the amount of such claim;
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, without prejudice to such trust creditor’s right to
access to the civil Courts;
having
determined the amounts which he considers are lawfully due to trust
creditors, pay such claims in full, but subject always
to the
approval of the Board of Control of the Fund;
in
the event of there being any surplus in the trust account(s) 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 s 78(3)
of Act, 53 of
1979, in respect of any interest therein referred to and, secondly,
without prejudice to the rights of the creditors
of the respondent,
the cost, fees and expenses referred to in paragraph 11 of this
order, or such portion thereof as has not
already been separately
paid by the respondent to the Law Society, 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 the respondent, if he is solvent,
or, if the respondent is insolvent, to the trustee(s) of the
respondent’s insolvent
estate;
in
the event of there being insufficient trust monies in the trust
banking account(s) opened by the respondent in terms of s
78(1) and
(2) of Act, 53 of 1979 from which to pay the claims of trust
creditors in full, and after having taken reasonable
steps to
ascertain the identity of such creditors and the amounts due to
them, to distribute
pro rata
amongst creditors whose claims
have been proved or admitted, the amount(s) reflected by the credit
balance(s) in the said account(s)
provided that the curator shall
pay to trust creditors whose funds are held in separate accounts in
terms of s 78(2A) of Act
53 of 1979, who satisfy him that they are
entitled to such funds, the amounts due to such creditors;
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 service of attorneys and/or counsel, and/or
accountants and/or other persons, where considered necessary,
to
assist such curator in carrying out the duties of curator; and
to
render from time to time, as curator, returns to the Board of
Control of the Fund showing how the trust account(s) has (have)
been dealt with, until such time as the said Board notifies him
that he may regard his duties as terminated;
The
respondent be and is hereby directed-
to
pay the fees and expenses of the curator, such fees to be assessed
at the rate of R300,00 per hour, including travelling
time;
to
pay the reasonable fees and expenses charged by any person(s)
consulted and/or engaged by the curator as aforesaid;
to
pay the costs of and incidental to this application on a scale as
between an attorney and client;
within
a reasonable period after having been requested to do so by the
curator, or within such longer period as the curator
may agree to
in writing, to satisfy the curator, by means of the submission of
taxed bills of cost, of the amount of the fees
and disbursements
due (to the 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 of recovery thereof.
Any
person whose rights are affected by the terms of this order shall be
entitled, on notice to the respondent, to make an application
to
this Court for a variation of this order on good cause shown.
____________________________
MV PHATSHOANE
JUDGE
NORTHERN CAPE HIGH
COURT
I agree
________________________
W HUGHES-MADONDO
ACTING JUDGE
NORTHERN CAPE HIGH
COURT
On
behalf of the Law Society
Adv
SL Erasmus
Instructed
by
Haarhoffs
Inc
On
behalf of the Respondent
Adv
W George