Law Society of the Cape of Good Hope v Du Toit (314/04) [2004] ZANCHC 60 (30 April 2004)

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[2004] ZANCHC 60
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Law Society of the Cape of Good Hope v Du Toit (314/04) [2004] ZANCHC 60 (30 April 2004)

Reportable: Yes /
No
Circulate to
Judges: Yes / No
Circulate
to Magistrates: Yes / No
IN THE HIGH COURT
OF SOUTH AFRICA
(Northern Cape
Division)
Case no: 314/04
Date
heard: 2004-04-30
Date
delivered: 2004-04-30
In
the matter of
:
The
Law Society of the Cape of Good Hope Applicant
versus
Pieter
Herman Du Toit Respondent
Coram:
MAJIEDT
J
et
LACOCK
J
J
U D G E M E N T
MAJIEDT
J:
This
is an unopposed application to have the name of the Respondent
struck off the Roll of Attorneys of this Court and for certain
ancillary relief.
The
Respondent is Pieter Herman du Toit, an attorney who previously
practised as a director of
PH du
Toit & Vennote Ing.
at 98 Kerk Street, Victoria West. The Respondent is presently
resident in Bloemfontein.
The
Respondent:
3.1 was
admitted as attorney of the Transvaal Provincial Division of the High
Court of South Africa on 11 June 1991;
3.2 was
enrolled as an attorney of this Court on 8 July 1997;
3.3 is
a member of the Applicant society;
3.4 was
interdicted from practising by order of this Court issued on 2 Junie
2003 by my brother Lacock J.
The
approach to be adopted in a matter such as this, i.e. for striking
off an attorney from the roll of attorneys has been succinctly
set
out by Hefer AP in the matter of
Law
Society of the Cape Good Hope
v
Budricks
2003(2)
SA 11 (SCA) at 13J – 14A as follows:
“
In
terms of s 22(1)(d) of the Attorneys Act 53 of 1979 an attorney may
be struck from the roll or suspended from practice 'if he,
in the
discretion of the Court, is not a fit and proper person to continue
to practise as an attorney'. The practical manner in
which the
Courts exercise their disciplinary powers is trite. As explained in
cases like
Jasat
v Natal Law Society
2000
(3) SA 44
(SCA) at 51B - I and
Law
Society of the Cape of Good Hope v C
1986
(1) SA 616
(A) at 637E - G, the enquiry is threefold. The Court first
decides as a matter of fact whether the alleged offending conduct has
been established. If the answer is yes, a value judgment is required
to decide whether the person concerned is not a fit and proper
person
as envisaged in s 22(1). And if the answer is again in the
affirmative, the Court must decide in the exercise of its discretion
whether, in all the circumstances of the case, the person in question
is to be removed from the roll or merely suspended from practice.”
The
Applicant has on an overwhelming balance of probabilities
established on the papers before us that the Respondent has
committed
the following transgressions:
5.1 A
thorough examination of the Respondent’s trust account statements
with Standard Bank at Victoria West, together with the admissions
made by the Respondent to attorney HR Rich (who had done certain
investigations at the request of and on behalf of the Applicant
society), provides clear proof that the Respondent has
misappropriated trust funds – the amount so misappropriated is at
the very
least the sum of R43 000.00.
5.2 The
Respondent has contravened the provisions of sec 41(1) of the
Attorneys Act, 53 of 1979, by practising in 2002 without
the
requisite fidelity fund certificate.
5.3 The
Respondent has also failed to comply with the Applicant society’s
rule 14.3.1 which enjoins members to “maintain the highest
standard
of honesty and integrity”.
5.4 The
Respondent has failed to comply with the Applicant society’s rule
14.3.2 which requires that its members treat the interests
of their
clients as paramount.
5.5 The
Respondent has also failed to comply with the Applicant society’s
rule 14.3.7 which requires of its members to “account
faithfully,
accurately and honestly for any of their client’s money which comes
into their possession, keep such money separate
from their own money
and retain such money for so long only as is strictly necessary.”
5.6 The
Respondent has also failed to comply with the Applicant society’s
rule 14.3.14 which enjoins members to “refrain from
doing anything
which could or might bring the profession into disrepute”.
5.7 The
Respondent has also failed to comply with the Applicant society’s
rule 13.13.3 in that the total amount of money in his
trust banking
account and cash was for a considerable period of time less than the
total amount of credit balances owing to trust
creditors.
5.8 The
Respondent has also failed to comply with the Applicant society’s
rule 13.13.7 which enjoins attorneys’ firms to ensure
that
“withdrawals to or from its trust banking account are made only
..... to or for a trust creditor or .... as transfers to its
business
banking account, provided that such transfers shall be made only in
respect of money claimed to be due to the firm.”
5.9 Lastly
the Respondent has also failed to comply with rule 14.3.10 of the
Applicant society which enjoins its members to “....
use their best
efforts to carry out work in a competent and timely manner...”.
The
proved fact of the Respondent’s misappropriation of trust funds,
together with the cumulative effect of the other transgressions
listed hereinabove, leaves me in no doubt whatsoever that the
Respondent is not a fit and proper person to continue to practise
as
an attorney of this Court. The gravity of these offences, in
particular the misappropriation of trust funds, warrants in my
view
the most severe penalty, to wit that the Respondent be struck from
the roll of attorneys.
In
the course of investigations carried out by attorney Rich, to which
I have alluded hereinbefore, the premises from which the
Respondent
had been practising were mysteriously and suspiciously burnt down
and the computer which had been said to contain the
data relating to
the Respondent’s bookkeeping records, was mysteriously and
suspiciously damaged. The result of all this was
that no
bookkeeping records could be retrieved from either the Respondent’s
offices or from his computer. It comes as no surprise
that the
South African Police is presently conducting a criminal
investigation into these aforesaid occurrences.
A
further matter which bears consideration herein is that the order
issued by my brother Lacock J on 2 June 2003, interdicting the
Respondent from practising, contained the following directive:
“
2.
That the application for the striking off of the Respondent referred
to in paragraph 1 above, shall be instituted within
a period of
one
hundred
and twenty (120) days from date of this order or within such extended
period as this Court may on application allow”.
This
application was launched well after the expiry of the 120 days
referred to in the order above. In this respect there is an
application
for condonation before us. I am satisfied that, due to
the delays in the investigation of the matter, caused in particular
by the
fact that the Respondent’s bookkeeping records and files
were damaged and destroyed when his offices had burnt down, as well
as
the damage to the Respondent’s bookkeeping computer, a proper
case has been made out for condonation to be granted herein.
I
accordingly grant the following order:
The
Applicant’s non-compliance with the provisions of par.2 of the
Order made by this Court on 2 June 2003 in case number 376/03
is
condoned.
B. That
the Respondent’s name be struck off the Roll of Attorneys of this
Court.
C. That
the Respondent surrender and deliver to the Registrar of this Court
his Certificate of Enrolment as an Attorney.
D. That
should the Respondent fail to comply with the provisions of the
preceding paragraph of this Order within 2 (TWO) weeks from
the date
of service hereof, the Sheriff for the District in which such
Certificate of Enrolment is, be empowered and directed to
take
possession of and deliver same to the Registrar of this Court.
E. THAT
the Respondent deliver his books of account, records, files and
documents containing particulars and information relevant
to:-
E.1 any
moneys received, held or paid by the Respondent for or on account of
any person;
E.2 any
moneys invested by the Respondent in terms of Section 78(2) and/or
Section 78(2A) of Act No. 53 of 1979 of the Republic of
South Africa;
E.3 any
interest on moneys so invested which was paid over or credited to the
Respondent;
E.4 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
E.5 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.
F. THAT
should the Respondent fail to comply with the provisions of the
preceding paragraph of this Order within 1 (ONE) week 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, be
empowered to take possession of and deliver them to such curator.
G. THAT
such curator shall be entitled to 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 by the curator.
H. THAT
a written undertaking by a person to whom the records, files and
documents referred to in paragraph 6 above 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
purposes of the preceding paragraph hereof provided that such written
undertaking incorporates a
domicilium
citandi et executandi
of such person.
I. THAT
such curator be 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 (herein
referred to as “
the
Fund
”)
in respect of money and/or other property entrusted to the
respondent, be re-delivered to such curator.
J. THAT
the Respondent be interdicted and prohibited from operating on his
trust account(s) as defined in paragraph 10 hereof.
K. THAT
the Director, failing whom, the Acting Director, failing whom, the
Deputy Director, failing whom, the Acting Deputy Director,
failing
whom, the Assistant Director, failing whom, the Acting Assistant
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 Section 78(1) of the said 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 the said Act
No. 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 have been deposited
or credited (the
said account(s) being herein referred to as “
trust
account(s)
”)
with the following powers and duties:-
K.1 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 and 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;
K.2 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 Section 78(1) and/or Section 78(2) and/or
Section 78 (2A) of the said Act No. 53 of 1979 (hereinafter
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 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 the same to the
credit of the trust account(s);
K.3 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 the Order or such further period as he
may agree
to in writing, with the names, addresses of and amounts due to all
trust creditors;
K.4 to
call upon the trust creditors to furnish such proof, information and
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 money in the trust account(s) and, if so, the amount of
such claim;
K.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,
without prejudice to such trust creditor’s right to access to the
civil courts;
K.6 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;
K.7 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 Section 78(3) of
the said
Act No. 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 costs, 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 applicant, and, if there is
any balance left after payment in full of 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;
K.8 In
the event of there being insufficient trust moneys in the trust
account(s) to pay the claims of trust creditors reflected in
the
books of account of the Respondent in full:
K.8.1 subject
to the approval of the Board of Control of the Fund, to close the
trust account(s) and pay the credit balance(s) to
the Fund and to
require the credit balance(s) to be placed to the credit of a special
trust suspense account in the name of the Respondent
in the Fund’s
books;
K.8.2 to
refer the claims of all trust creditors to the Board of Control of
the Fund to be dealt with in terms of the provisions of
the said Act
No. 53 of 1979; and
K.8.3 to
authorise the Board of Control of the Fund to credit the credit
balance(s) referred to in 10.8.1 above to its “Paid Claims
Account”
when the Fund has paid, in terms of Section 26 of the said Act No. 53
of 1979, admitted claims of the trust creditors
in excess of such
credit balance(s), provided that, notwithstanding the aforegoing, the
said Board shall be entitled, in its discretion,
to transfer to its
“Paid Claims Account” the amount or amounts of any claim or
claims as and when admitted and paid by it;
K.9 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 and/or counsel, and/or accountants
and/or other persons, where considered necessary,
to assist such
curator in carrying out the duties of the curator; and
K.10 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.
L. THAT
Respondent be and is hereby directed:-
L.1 to
pay the fees and expenses of the curator, such fees to be assessed at
the rate of
R300,00
per hour, including traveling time;
L.2 to
pay the reasonable fees and expenses charged by any person(s)
consulted and/or engaged by the curator as aforesaid;
L.3 to
pay the costs of and incidental to this application on a scale as
between attorney and client;
L.4 within
1 (ONE) year of him 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, or otherwise, of the amount of 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 or recovery thereof.
_____________
SA
MAJIEDT
JUDGE
I
concur.
___________
HJ
LACOCK
JUDGE
FOR THE
APPLICANT : ADV JG VAN NIEKERK instructed by HAARHOFFS
FOR
THE RESPONDENT : Unopposed application
DATE
OF HEARING : 2004-04-30
DATE
OF JUDGEMENT :
2004-04-30