IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
Case number: 6160/24
In the matter between:
THE LEGAL PRACTICE COUNCIL Applicant
and
STEPHANUS JACOBUS KLEYNHANS
Coram: Acting Justice A Montzinger
Heard: 29 July 2024
Delivered electronically: 05 August 2024
Respondent
REASONS FOR POSTPONEMENT
Montzinger AJ:
Summary introduction
1. The Legal Practice Council (LPC), as the applicant, sought an order
suspending the respondent from practice.
2. The respondent is an admitted legal practitioner practising for his own
account. If the suspension order is granted the LPC also seeks certain consequential
relief that effectively places the practice of the respondent in its hands.
3. The basis for the LPC’s application was the respondent’s non-compliance with
ss 84(1) of the Legal Practice Act 1 (the “LPA”). This section requires of every
attorney who practices for his or her own account or who is a director of a practice
which is a juristic entity, to be in possession of a Fidelity Fund certificate.
4. The LPC is the body that issues Fidelity Fund certificates, on application, to
legal practitioners in terms of the provisions of the LPA. S ubsection 85(6) of the LPA
prescribed certain considerations the LPC must consider in conjunction with the LPA
Rules before a legal practitioner may be issued with a Fidelity Fund certificate.
Among the considerations is that the practitioner must obtain an unqualified audit of
the trust account under his/her control2.
5. The respondent did not submit an audit report for his trust account for the
financial year 1 March 2022 to 28 February 2023 (the “period under review”) within
the prescribed cut-off date of 31 August 2023.
6. The failure to lodge an audit of the trust account, rightly so, unlocked great
concern for the LPC , as the respondent by virtue of being a practitioner with a trust
account, is entrusted to control and manag e public money . The LPC , almost 8
months later, issued interdict proceedings during April 2024 on an urgent basis to
suspend the respondent from practice . The respondent filed an answering affidavit
and opposed the application. The matter came before Erasmus J on 5 April 2024 .
1 28 of 2014
2 LPC rule 54.29 provides that:
‘In order to qualify for the issue of a Fidelity Fund certificate, a trust account practitioner must ensure
that an unqualified audit or inspector’s report is issued in respect of any firm or firms of which he or
she is or was a partner or director or sole practitioner during the financial period under review, and is
delivered timeously to the Society.’
On this day the parties reached agreement and Erasmus J issued an order by
agreement (the “Erasmus J order”).
7. The Erasmus J order postponed the matter for hearing to 29 July 2024 and
also obliged the respondent to take proactive measures to comply with the auditory
regulations of the LPC for the period under review. The respondent was also
required to pay certain prescribed fees to t he LPC. In addition the respondent was
interdicted and prohibited from practising as an attorney until 29 July 2024, unless he
was issued with a Fidelity Fund certificate before then.
8. His suspension from practice meant that the respondent could not , withou t
first obtaining the counter -signature or written approval of the Director of the LPC’s
Western Cape Provincial office:
8.1 Issue a cheque drawn, or cause funds to be withdrawn from the trust
account under his control.
8.2 Make a withdrawal from a separate savin gs or interest -bearing
account.
8.3 Issue a cheque or make a withdrawal from the account of a deceased,
insolvent or curatorship estate under his control.
9. The matter then came before me on 29 July 2024. At the hearing of the matter
Mr. Fischer appeared for the respondent. He requested leave to hand up an affidavit
deposed to by the respondent on the previous day. This affidavit essentially
conveyed the fact that the LPC has been provided with a signed audit report for the
period under review. In light of this d evelopment the respondent sought a
postponement of the application for a further 30 days so the LPC can consider the
audit report and decide whether it will issue the respondent with a Fidelity Fund
certificate.
10. Mr. Whitcomb, who appeared for the LPC , informed me that his instructions
were to oppose the request for a further postponement . He made the submission
that the fact that the audit report has been lodged does not mean that the LPC is not
entitled to an order suspend ing the respondent from practice. Mr. Whitcomb insisted
on moving for what I will term the ‘proposed order’. His submission was that the
effect of the proposed order is substantially the same as the Erasmus J order of 5
April 2024. To me it was apparent that the proposed order was significantly more
extensive, in its terms and effect, than the Erasmus J order.
11. The proposed order envisaged a suspension of the respondent of a more
permanent nature. While the Erasmus J order suspended the respondent until such
time that he is issued with a Fidelity Fund certificate, the proposed order was to the
effect that3:
11.1 The respondent would be suspended from practicing as an attorney
until he provides a valid Fidelity Fund certificate for 2024 or comply with the
applicant's closure requirements. The suspension and consequences thereof
will be lifted if the respondent either comes in possess ion of the Fidelity Fund
certificate or complies with the LPC’s closing requirements.
11.2 The respondent had to surrender his Certificate of Enrolment within two
weeks. If he failed to do so, the Sheriff would be authori sed to take
possession of the certificate and deliver it to the Registrar of the court.
11.3 A curator had to be appointed.
11.4 Within one week, the respondent would be required to deliver his
practice’s financial records, documents, and practice -related information to
the appointed curator. Th e records would include details of any money
handled, investments, and deceased estates a dministered. The respondent
would be allowed to access these documents under the curator's supervision.
11.5 If the respondent failed to comply, the Sheriff would be authorise d to
seize these documents and hand them to the curator. The curator could then
3 duly truncated as it is rather extensive
distribute the documents to entitle persons to resolve any disputes over fees
and disbursements.
11.6 The respondent would be prohibited from operating his trust account,
and the Director of the Western Cape Provincial Office would be appointed as
curator to manage t he practitioner’s trust account. The curator would be
authorised to handle transactions, recover funds, and pay claims to trust
creditors. The curator could also appoint assistants and provide returns to the
Board of Control of the Fund until his/her duties are concluded.
11.7 The respondent would have to pay the curator's fees and the expenses
the curator incurred for appointing consultants, if necessary . In addition the
respondent would be liable for the costs of the application on an attorney and
own client scale, including the cost of counsel.
12. I decided to admit and receive the supplementary affidavit of the respondent
and also to grant the postponement of the matte r in line with the Erasmus J order
and decline at the time to grant the proposed order . I did not give reasons at the
time.
13. However, having regard to the nature of matter, and since it is the duty of the
LPC and the court to act where a practitioner's conduct falls short of what is
expected to curb the erosion of the values in the profession and to give consideration
to the court’s duty to uphold the law by protecting the integrity of th e courts and the
legal profession, I found it necessary to provide reasons for admitting the
supplementary affidavit, the decisions to decline to suspend the respondent in terms
of the proposed order and why I granted a postponement.
Admitting the supplementary affidavit
14. The affidavit although styled a ‘supplementary affidavit’ rather serve d the
purpose of requesting the court to postpone the matter . It also contained evidence
on the status of the respondent’s attempts to comply with the requirements by
submitting an audit report to have his Fidelity Fund certificate issued.
15. The affidavit was filed very late. In fact, it was deposed to over the weekend
and this matter came before me on the Monday . It meant that the LPC could only
effectively consider the effect of the allegations in the supplementary affidavit on the
morning of the hearing. However, during argument Mr. Whitcomb confirmed that the
LPC did receive the audit report but has not had time to consider whether it is
unqualified an d if whether the respondent could be issued with his Fidelity Fund
certificate.
16. The LPC did not request that the Erasmus J order remain in place to provide it
with an opportunity to take its time to consider the audit report and then take a view
on how it would treat the respondent. The LPC’s approach was rather that it was not
enough to simply file the audit report, and therefore the information in the
supplementary affidavit did not take the matter any further. The LPC maintained that
in the absence of a Fidelity Fund certificate the respondent should still be suspended
in the terms as per the proposed order.
17. I was persuaded to accept the supplementary affidavit for at least the
following reasons:
17.1 Given the circumstances, where the respondent faces the severe
consequence of suspension from practicing law, it is imperative that the court
considers all relevant information to make an informed decision. The
proposed order involved significant implications, including the surrender of the
respondent’s certificate of enrolment, the appointment of a curator or curators,
and a comprehensive restriction on the financial and professional activities
over the trust account. As a result , the respondent should be provided an
opportunity to place facts before the court that may have an impact on how
the court evaluate the matter.
17.2 The respondent’s audit report was only finalised on 26 July 2024. He
therefore could not have approached the court to file the affidavit earlier.
17.3 While the position he finds himself in was no doubt partly due to his
own leisured conduct, he has explained in his answering affidavit that he had
some health setbacks, which had an impact on his ability to see to it that the
audit report was finalised in time. I had no reason, on the papers, why I had to
entirely reject his explanation for no t having complied with the prescripts of
the LPA and the LPA rules.
17.4 The respondent has been a legal practitioner for approximately 26
years in various capacities and in different provinces since 1998. Except for
the transgression of not complying with the submission of the audit report for
the period under review there is no allegation by the LPC that the respondent
was or is a habitual offender or that he has a history of disciplinary
misconduct or regularly act ed in contravention of the legislation or ru les that
governs the profession.
17.5 The fact that the LPC declined to rather take an opportunity to go on
oath and respond to the allegations by the respondent in the affidavit ,
indicated that there was at least compliance with the requirement of
submitting an audit report for the period under review. Whether it would be
unqualified remained to be seen.
17.6 Even a qualified report would not necessarily mean the LPC will refuse
to issue him with a Fidelity Fund certificate4.
17.7 The prejudice to the respondent, who stands to lose his ability to
practice law.
18. For the reasons foreshadowed I exercised my discretion to a dmit the
‘supplementary affidavit’.
4 South African Legal Practice Council v Louw (10606/2023) [2024] ZAWCHC 50 (20 March 2024 at
par 26 (“Louw”)
The application for postponement
19. I will briefly restate the legal principles an d then summarise the basis for
granting the postponement.
The legal principles guiding postponements
20. When considering an application for postponement, the court exercises a
discretion. The discretion is guided by principles that ensure fairness, justic e, and
efficiency in judicial proceedings. The party seeking a postponement must provide a
‘compelling justification’, often supported by evidence under oath, demonstrating the
necessity for delaying the matter.
21. The ‘ compelling justification’ is particula rly crucial as the request for
postponement is considered an indulgence, interfering with the other party's
procedural right to proceed and the overarching interest in the timely resolution of
cases5.
22. The court's discretion is influenced by several factors. As underscored in Hall6
and Koen7 the application must be made in good faith and not as a tactical
manoeuvre to gain an unfair advantage and not due to any deliberate delay tactics.
23. The court is generally inclined to grant a postponement if the reason for the
postponement is fully explai ned and justified, especially if justice demands further
time for the applicant to present their case adequately8.
24. Prejudice is a vital factor in the court's consideration. The potential prejudice
to either party must be weighed carefully. The court will be cautious in denying a
5 See for an expression of these sentiments: Gentiruco AG v Firestone SA (Pty) Ltd 1969 (3) SA 318
(T) and National Coalition for Gay and Lesbian Equality v Minister of Home Affairs [1999] 1 All SA 643
(C).
6 Hall v Multilateral Motor Vehicle Accidents Fund 1998 (4) SA 195 (C) (“Hall”)
7 Koen and Another v Wedgewood Village Golf & Country Estate (Pty) Ltd and Others 2012 (2) SA
378 (WCC) (“Koen”)
8 As highlighted in Madnitsky v Rosenberg 1949 (2) SA 392 (A) 399 and Garden Route Casino (Pty)
Ltd and Others v Premier of the Western Cape and Others [2021] 4 All SA 445 (WCC).
postponement if it would cause significant prejudice to a party seeking a
postponement, particularly where the reasons for the postponement are legitimate
and justified, as indicated in Panigel9. Conversely, if granting the postp onement
would unfairly disadvantage the other party, the court may refuse the request.
25. Additionally, specific circumstances such as the need to gather relevant and
material evidence that is not immediately available through no fault of the party
seeking a postponement could also support a justification for a postponement10.
Evaluation whether to grant or refuse the postponement
26. While a refusal of a further postponement appeared on the face of it prudent,
especially in light of the cautious approach a court should take in matters involving
legal practitioners and the management of public funds , I was not persuaded the
terms of the proposed order had to be enacted at th e time the postponement was
sought.
27. A great deal for my difficulty in refusing a postponement of the matter was in
the apparent prejudice the proposed order would cause the respondent.
27.1 The proposed order enforced an immediate suspension of the
respondent's practice 11, whereas the Erasmus J order postponed the
suspension until there is compliance with the LPA and LPC Rules. In essence
when the Fidelity Fund certificate is issued.
27.2 The proposed order is not contingent on compliance with the Fidelity
Fund certificate requirements, but also includes the closure of the
respondent’s practice. The consequence of the ‘closure of a practice’ and the
obligation to surrender his Certificate of Enrolment were more in line with
9 Panigel v Kremetart Kliniek (Pty) Ltd 1976 (4) SA 387 (T) (“Panigel”)
10 Estate Norton v Smerling 1936 OPD 44 54
11 This was strange considering that the LPC on 11 April, after the Erasmus J order, granted the
respondent consent to act as practitioner in 8 matters. The proposed order did not address this
situation.
when the court strike or suspend s a practitioner of the roll after a finding of
misconduct.
27.3 A curator or curator s had to be appointed with extensive powers to
manage the respondent’s practice, financial records, and trust account. Also,
to take control of financial records and to allow the curator(s) to access,
manage, and distribute the respondent’s documents and funds.
27.4 The respondent is also required to be liable for the cost and fees of
these curator(s).
27.5 The proposed order entirely prohibits the respondent from operating a
trust account, while the Erasmus J order allows restricted access with L PC
Director approval.
28. In the circumstances where the only outstanding step in the process was for
the LPC to consider the lodged audit report by the respondent and in the absence of
any allegation of a history of impropriety in the management of his trust account I
was not persuaded that a refusal of a postponement would be just in the
circumstances. To me a more cautious approach seemed more prudent and the
Erasmus J order catered for enough safeguards until such time that the LPC has
finalised its review of the respondent’s audit report.
No proper case for suspension as envisaged by the proposed order
29. Another major consideration why I decided to rather grant the postponement
is the vast difference between the relief sought in the ‘proposed order’ and the case
that was advanced on the papers.
30. Prima facie , even without the admission of the supplementary affidavit, the
LPC would have had a difficult task to convince me to grant the ‘proposed order’.
The reasons were at least threefold.
31. Firstly, the case on the papers simply lacks the averments to sustain a
suspension as envisaged by the applicant. The absence of allegations on the papers
of how often the respondent failed to submit his annual audit report by the prescribed
deadline, his professional conduct as an attorney in general or any allegations of
impropriety in the management of the respondent's trust account were all absent
from the applicant’s papers 12. I was therefore in no position to make a decision on
whether the respondent is in fact a fit and proper person to order a suspension of the
nature envisaged by the proposed order.
32. The papers failed to address the three -stage enquiry13 that an application for
the suspension or removal from the roll of a practitioner generally require. Apart from
the single allegation that the respondent does not have a Fidelity Fund certificate,
there is nothing else that addressed the consideration whether the respondent is a fit
and proper person to continue to practice law.
33. The papers simply did not address any repeated conduct of non -compliance,
allegations of fear of misappropriation of trust money or even an intended
investigation to determine imp ropriety, in order for the LPC, if the investigation
confirms its concern, to seek more drastic relief as detailed in the proposed order.
34. I accept that the LPC is not ordinarily required to conduct a disciplinary
hearing before approaching a court to strik e-off a practitioner or suspend him from
practice14. However, on a reading of the various provisions of the LPA and the
prevailing case law , an investigation by the LPC followed by a disciplinary hearing
before a court is approach ed to strike -off or suspen d a practitioner should be the
preferred approach. Alternatively, the court should be presented with facts to allow it
to take up the role as a disciplinary panel 15. This is not what happened here. The
only allegation is the failure of not having a Fidelity Fund certificate.
12 Wild v Legal Practice Council (31120/2019) [2023] ZAGPPHC 521 (19 May 2023) at para [62]
endorsed the approach that the LPC should submit facts to the court when seeking suspension or
striking-off.
13 Law Society, Northern Provinces v Mogami and Others 2010 (1) SA 186 (SCA).
14 Law Society of the Northern Provinces v Morobedi (1151/2017) [2018] ZASCA 185 (11 December
2018) at para [25]; Cape Law Society v Gihwala [2019] 2 All SA 84 (WCC) at para [110] (“Gihwala”)
15 v Gihwala at para [80] of the information a court would be require to consider.
35. Certainly, there would be instances that the misconduct of the practitioner is
so serious that to first conduct an investigation and then a disciplinary hearing would
not suffice. That is not the situation here.
36. Secondly, the LPC’s own rules require of it to first consider the audit report
and determine if the report is unqualified or not. Even an unqualified report is not
necessarily a bar for a legal practitioner to be issued with a Fidelity Fund certificate. I
say so as rule 54.30 requires that if a firm’s trust account audit or inspector’s report
is qualified, the firm must provide the Council with necessary information to confirm
that the trust account is in good order, the practitioner remains fit to practice, and a
Fidelity Fund certificate can still be issued to a practitioner16.
37. Thirdly, the practice in this division is that any relief where the suspension or
striking-off of a legal practitioner is sought on the basis th at the practitioner is no
longer a fit and proper person, must be heard by two judges 17. Since the
consequences of the relief sought in the proposed order would require of me to
make a determination o n whether the respondent is a fit and proper person, I w as
prohibited by the practice of this division to embar k on such an exercise without
another judge being appointed to hear the matter with me.
Conclusion
38. In light of the reasons foreshadowed , I was satisfied that the supplementary
affidavit be admitted and the matter be postponed.
39. To rather grant a postponement and keeping the Erasmus J order in place, as
opposed to granting the ‘proposed order’ balances the potential prejudice equally as
the interest of the LPC is protect ed while the respondent and his clients are not
16 See Louw for endorsement of this approach (fn 4 supra)
17 The practice to allocate two judges to a matter involving the striking or suspension of an attorney
certainly falls under the power afforded to a Judge President or Deputy Judge President of the
division in terms of section 14(1)(a) of the Superior Courts Act 10 of 2013 that provides;
‘Save as provided for in this Act or any other law, a court of a Division must be constituted before a
single judge when sitting as a court of first instance for the hearing of any civil matter, but the Judge
President or, in the absence of both the Judge President and the Deputy Judge President, the senior
available judge, may at any time direct that any matter be heard by a court consisting of not more than
three judges, as he or she may determine.’
negatively affected while the issuing of his Fidelity Fund certificate is being
considered by the LPC.
40. Lastly, the prejudice to the LPC in terms of the costs of the day could be
addressed by an appropriate costs order.
41. For these reasons I issued the following order:
(1) The respondent is granted leave to file the supplementary affidavit
dated 28 July 2024.
(2) The interdict granted by Erasmus J on 5 April 2024 is extended until 30
August 2024, subject thereto that the date of 29 July 2024 in paragraphs 2.1,
2.2 and 2.3 of the Erasmus J order should be read with reference to 30
August 2024.
(3) The matter is postponed to 30 August 2024 for hearing on the urgent
roll by the urgent duty judge on the day.
(4) The applicant to file a replying affidavit, if any, to the respondent’s
answering and supplementary affidavits on or before 28 August 2024.
(5) Should the respondent comply with the terms o f the Erasmus J order
before 30 August 2024, the applicant is directed to file a notice of removal of
the matter from the court roll. Upon the filing of the aforementioned notice the
effect of the Erasmus J order shall immediately lapse.
(6) The respondent shall pay the applicant’s wasted costs of 29 July 2024
for the postponement application as well as the wasted costs occasioned by
the granting of the postponement on an attorney and client scale.
(7) Costs in respect of the main application stands over for late r
determination.
(8) A copy of this order shall be served on the Master of the High Court.
A MONTZINGER
Acting Judge of the High Court
Appearances:
Applicants’ counsel: Adv D Whitcomb
Applicant’s attorney: CK Attorneys
Respondent’s counsel: Adv W Fischer
Respondent’s Attorney: Stephanus Jacobus Kleynhans