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2024
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[2024] ZAFSHC 149
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South African Legal Practice Council v Myburgh (4394/2023) [2024] ZAFSHC 149 (20 May 2024)
IN
THE
HIGH COURT OF SOUTH
AFRICA
FREE STATE DIVISION,
BLOEMFONTEIN
Case
No. 4394/2023
In
the matter between:
SOUTH
AFRICAN LEGAL PRACTICE COUNCIL
APPLICANT
And
ALWYN
ABRAHAM MYBURGH
RESPONDENT
CORAM:
VANZYL,
J,
et MAJOSI,
AJ
HEARD
ON:
09 MAY 2024
DELIVERED
ON:
20 MAY 2024
JUDGMENT
[1]
The Applicant herein seeks an order
to strike the name of the Respondent from the roll of legal
practioners in the High Court of
South Africa after he was suspended
from the said roll on the 14
th
of October 2021 by this court until such time he could show that he
is a fit and proper person and obtained a Fidelity Fund Certificate.
The current application is unopposed.
[2]
The applicant is the South African
Legal Practice Council, a statutory body established in terms of
section 4
of the
Legal Practice Act 28 of 2014
regulating the rules
and exercising oversight over the conduct of legal practioners.
[3]
The respondent is a male legal
practioner, in practice since 1 September 1999, practicing under the
name and style of Myburgh Attorneys
Incorporated, with offices
situated at 54 Reid Street, Westdene, Bloemfontein, Free State.
[4]
The respondent was suspended from
the roll of legal practioners on the strength of a complaint alleging
misappropriation of trust
fund money and non compliance with
section 84(1)
and
84
(2) of the Act until such time he could show that
he is a fit and proper person to resume practice and obtained a
Fidelity Fund
Certificate under Free State High Court case number
1699/2021. A curator was also appointed to take control of the
respondent's
trust account.
[5]
After the respondent was suspended,
the Free State Legal Practice Council investigated the complaint
through their Investigation
Committee. During the investigation, the
respondent deposed to an affidavit and denied that the said amount
was paid into his account.
To that end, the Applicant, on the 6 of
April 2022, obtained a copy of the Respondent's bank statements to
trace an amount of R
350 000.00 associated with the formal complaint
which was allegedly paid into the trust account.
[6]
It was found that this sum was
indeed paid into the trust account of the respondent in two payments
consisting of R 300 000.00 and
R 50 000.00 respectively and the
collective amount was used in various transactions without the
necessary authorization of the
complainant. Furthermore, the trust
account had a mere balance of R 51 821.70. It was also noted that the
trust account had been
in deficit since the year 2016 and had dipped
well below the amount that ought to have been available to trust
creditors.
[7]
This committee then recommended and
resolved that the matter be referred to the Disciplinary Committee·
for a disciplinary
hearing and that the respondent was to face
several charges,
inter alia,
failing
to separate and account for client's money and bringing the legal
profession into disrepute.
[8]
On
the 24
th
and 28
th
April 2023, the disciplinary meeting proceeded in the absence of the
respondent and he was found guilty on five charges of misconduct
in
terms of the
Legal Practice Act Rules
. Firstly, that R 350 000.00 of
the complainant
was
part of a business transaction but was not paid into the business
trust account.
[1]
Secondly, the
said money was not paid over to the complainant on demand.
[2]
[9]
Thirdly,
that the respondent mislead Council in an affidavit deposed to on the
27
th
January
2020 that he never received the money from the complainant and the
money was not paid into his trust account.
[3]
Fourthly,
he did not separate the money of the business from that of clients
and lastly, that he failed as a legal practioner and
firm to take
reasonable steps to avoid a reasonable suspicion that his or his
firm's integrity be compromised.
[4]
[10]
The
sanction imposed for counts 1,2,4 and 7 by the Disciplinary Council
was that an order be sought from the Free State High Court
that the
respondent's name be struck off the roll of legal practioners.
[5]
For count 3, he was ordered to pay a fine for misleading Council as
well as the costs of the disciplinary hearing. In addition
to this,
the respondent made no means to set aside his suspension or to obtain
a fidelity fund certificate as previously ordered
on the 14 October
2021.
[11]
Counsel for the Applicant submitted
that the respondent committed these acts of misconduct willfully and
with full appreciation
of wrongfulness and he cannot be considered as
a fit and proper person to continue to practice as a legal practioner
and should
his name must be struck off the roll.
[12]
The test to be applied to determine
if a practioner is a fit and proper person has been set out in Malan
and Another v Law Society,
Northern Provinces
[2008] ZASCA 90
;
2009 (1) SA 216
(SCA)
para 4:
"First, the court
must decide whether the alleged offending conduct has been
established on a preponderance of probabilities,
which is a factual
inquiry. Second, it must consider whether the person concerned "in
the discretion of the Court" is
not a fit and proper person to
continue to practise. This involves a weighing up of the conduct
complained of against the conduct
expected of an attorney and, to
this extent, is a value judgment. And third, the court must inquire
whether in all the circumstances
the person in question is to be
removed from the roll of attorneys or whether an order of suspension
from practice would suffice."
[13]
This
test was also applied in Jiba and Another v General Council of the
Bar of South Africa and Another
[6]
and
more recently, in Hewetson v Law Society of the Free State
2020 (5)
SA 86
(SCA). The respondent's suspension has persisted since the 14
th
of October 2021 and in the absence of a Fidelity fund certificate, he
cannot practice as an attorney. This in itself is a material
breach
of the rules and no attempt has been made to uplift the suspension.
The application remains unopposed even after the applicant
was
granted leave to serve the application via substituted service.
[7]
[14]
There is no doubt that the
misappropriation of trust account monies falls into ambit of
misconduct by a legal practioner. When an
investigation was conducted
to establish the veracity of the complaint, the respondent under
oath, deliberately mislead the applicant
by stating that the
complainant had no merit as such monies were never received from the
complainant nor was there any record of
such client at the law firm.
[15]
Bank statements obtained on the
6
th
of
April 2024 revealed that not only was the amount paid into the trust
account of the respondent on the 23
rd
and 25
th
of
August 2016, usage of the said funds was not for the benefit of the
complainant, nor could it be accounted for. It was
also never
refunded to the complainant at his request. This is a clear
indication that the respondent is dishonest and without
authorization
or cause, used the funds for his own benefit resulting in a deficit
of the trust account. The cornerstone
of
the legal profession
is
honesty
and integrity. In my view, this
appalling conduct by a practioner falls short of the required conduct
that is expected as a legal
practioner.
[16]
The
respondent's conduct under the prevailing circumstances warrants his
removal from the roll as he cannot be considered
to
be a fit or proper person nor can he be allowed to continue to
practice and line his own pockets with monies of trust creditors.
The
relief sought in the notice of motion seeks an order for removal from
the roll of legal practitioners and costs in favour of
the Applicant.
For the sake of completeness, certain orders as granted on the 14
October 2021 under case number 1699/2021
[8]
will be incorporated in the order below to dispel any uncertainty
relating to the administration and control of the trust banking
account and the duties of the curator.
[17]
Accordingly, the following order is
made;
1.
The name of the Respondent is struck
from the roll of Attorneys/Legal practitioners.
2.
The Director of the Free State
Office of the Applicant is appointed as curator to administer and
control the trust account of the
Respondents comprising of the
separate banking account opened and kept by Respondent at any bank or
institution in terms od
section 86(1)
and (2) of the Act and or in a
separate saving or interest bearing account as contemplated in
section 86(3
and or
86
(4) of the said Act, in which monies from such
trust banking accounts
have
been invested by virtue of the provision of the said sub-sections or
in which monies in any manner had been deposited or credited
(the
said accounts being herein referred to as
"the
trust
accounts" the
following
powers and duties:
2.1
Subject to the approval of the Board
of Control of the Fidelity Fund,
to
sign
and
endorse
cheques
and
or
withdraw
from
and
generally to operate on the trust
account(s), but only to such an extent and or 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;
2.2
Subject to the approval and control
of the Board of Control of the Fund, to recover and receive, and if
necessary, in the interest
of any person having lawful claims against
the trust account(s) and or against the Respondents in respect of
monies held, received
and or invested by the Respondents in terms of
the aforesaid sections( hereinafter referred to as ("trust
monies"), to
take legal proceedings which may be necessary in
respect of incomplete transactions in which the Respondents may have
been involved
and which may have been wrongfully and unlawfully paid
from the trust account(s) and to receive such monies and pay same
into the
creditor of the trust account(s);
2.3
To ascertain from the Respondents'
books of account the names of all persons
on whose account Respondents appear to hold or have received trust
monies (hereinafter
referred to. as "trust creditors") and
to call upon Respondents to furnish him or her within 30(thirty))
days from the
date of this order, or such further period as may be
agreed to in writing, with the names, addresses and the amounts due
to all
creditors;
2.4
To upon such trust creditors to
furnish such proof, information and affidavits as he or she may
require to enable him or her, acting
in consultation and subject to
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 accounts, and if so, the amount such claim;
2.5
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 creditors
without
prejudice to the trust creditors' rights of access to the civil
courts;
2.6
Having determined the amounts which
he or she considers lawfully due to trust creditors, to pay such
claims in full, but subject
to the approval of the Board of Control
of the Fund;
2.7
In the event of there being a
surplus in the trust account(s) 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 respect
of any interest therein
referred to and secondly, without the
prejudice of rights of creditors of the Respondents, the costs, the
fees and expenses referred
to in this order, or such portion thereof
which has not already been separately paid by the Respondents to the
Applicant and, if
there is any balance left after payment in full of
such claims ,costs, fees and expenses, to pay such a balance, subject
to the
approval of the Board of Control of the Fund,
to the Respondents,
if he is so solvent, or if the Respondent
is insolvent, to the trustee of the insolvent estate.
2.8
In the event of there being
insufficient trust monies in the trust account(s) to pay the claims
of the creditors reflected in the
books of the Respondent
in full –
2.8.1
Subject to the approval of the Board
of Control of the Fund, to close the trust account(s) and pay the
credit balances to the fund
and require the credit balance to be
placed in credit of a special trust suspense account in the name of
the Respondent, in the
Fund's books;
2.8.2
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; and
2.8.3
to authorize the Board of Control of
the fund to credit the credit balances referred to in sub- paragraph
2.8.1 above to its "paid
claims account" when the fund has
paid, admitted claims of the trust creditors in excess of such credit
balances, 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.
2.9
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, accountants or other persons where
considered necessary, to assist
such curator in the execution of
duties; and
2.10
To render from time to time as
curator, returns to the Board of Control of the Fund, showing how
trust account(s) have been dealt
with, until such time the Board
notifies him or her that he or she may regard her duties as
terminated.
3.
The Respondent shall pay costs of
this application on an attorney and client scale.
MAJOSI
O.R, AJ
I concur
VAN
ZYL, C,J
On
behalf of the Applicant
Mr.
C.C Boucher
Instructed
by:
Jacobs
Boucher Attorneys
BLOEMFONTEIN
On
behalf of the Respondent
No
appearance
[1]
Rule
54.11
of
the
Legal Practice Act Rules
.
[2]
Rule
54.13.
supra
[3]
Code
of Conduct Provision 16.4.
[4]
Ibid,
Provision 3.8.
[5]
Sanction
Report paragraph 17.
[6]
2019
(1) SA 130 (SCA)
[7]
Court
order
dated 7 March 2024
.
[8]
Court
order Loubser, J et Chesiwe, J paragraphs 6-
6.10