IN THE HIGH COURT OF SOUTH AFRICA
FREE STATE DIVISION, BLOEMFONTEIN
Reportable: NO
Of interest to other Judges : NO
Circulate to Magistrates: NO
In the matter between:
REHAN COETZEE
IZAK JACOB STEENKAMP
and
THE SOUTH AFRICAN LEGAL PRACTICE COUNCIL
STEENKAMP & JANSEN INC
THEUNIS GOOSEN
Coram:
Heard:
Delivered:
JP DAFFUE Jet BB MAHLATSI AJ
28 NOVEMBER 2024
04 DECEMBER 2024
Case no: 6368/2023
1st Applicant
2nd Applicant
1st Respondent
2nd Respondent
3rd Respondent
This judgment was handed down electronically by circulation to the parties'
representatives by email and release to SAFLII. The date and time for hand-down is
deemed to be 12H00 on 04 DECEMBER 2024.
Summary: On 26 September 2023 two attorneys were suspended from practice in
terms of s 43 of the Legal Practice Act 28 of 2014 pending finalisation of investigations
against them and subsequent disciplinary proceedings. They applied for the setting
aside of their suspensions. The Legal Practice Council (LPC) has received several
complaints and have been conducting investigations over a number of years. After the
aforesaid suspension several further complaints were received. In the meantime, the
one attorney was found guilty of several charges of misconduct by the disciplinary
committee, but has filed a notice of appeal. The court held that it was in the interests
of justice to get finalisation sooner than later and ordered the LPC to finalise the
disciplinary processes against the attorneys before the end of May 2025, failing which
the suspensions would automatically lapse.
2
ORDER
1. The first respondent shall, as undertaken, serve its detailed charge sheets on
the applicants on/or before 15 January 2025.
2. The disciplinary hearings shall, as undertaken, be scheduled to start not later
than 31 March 2025 and continued until finalised.
3. The first respondent shall finalise its disciplinary proceedings against t_he
applicants on/or before 31 May 2025, failing which their suspensions shall lapse
automatically.
4. The application is removed from the roll, but, in the event of the first respondent
failing to comply with either paragraph 1 or paragraph 2 supra, leave is granted to the
applicants to set the application down for hearing on the opposed motion court roll with
21 days' notice to the first respondent, which notice shall be accompan ied by their
supplementary affidavits.
5. In the event of a notice of set down as envisaged in paragraph 4 supra, the first
respondent shall file an answering supplementary affidavit within 7 days,. whereafter
the parties shall file supplementary heads of argument in accordance with the practice
directives of this court.
6. Costs shall stand over for later adjudication if required.
JUDGMENT
Daffue J (Mahlatsi AJ concurring)
[1] Messrs Rehan Coetzee and Izak Jacob Steenkamp (herein after referred to as
the applicants unless I need to refer to any one of them individually), apply for the
setting aside of their suspension from practising as legal practitioners pending the
finalisation of the investigations against them and any subsequent disciplinary
proceedings to be instituted. The order of suspension was granted in application
6176/2022 on 26 September 2023. That application was not placed before us.
[2] The applicants filed an application for leave to appeal the aforesaid judgment,
relying on a submission that the order was final and/or appealable. The judgment is
still outstanding. They brought an application in terms of s 18 of the Superior Courts
Act 10 of 2013 which was dismissed on 21 November 2023. That application was also
not placed before us.
3
[3] On 23 November 2023 and immediately after the handing down of judgment in
the second application, the applicants brought the present application. Instead of the
normal set of affidavits in application procedure, the applicants and the South African
Legal Practice Council (LPC), cited as first respondent, filed supplementary affidavits.
Consequently, the papers became voluminous and the full set of application papers
consists of 1231 pages. It is not my intention to deal with the history of the litigation
and the ongoing investigations of the LPC. I considered the judgment suspending the
applicants. I also noticed that the LPC was of the view that this court should consider
both the suspension application as well as the subsequents 18 application. In view of
the outcome of this judgment it was really not necessary to consider the various
allegations in especially the suspension application.
[4] Having said this, it is common cause that the applicants initially practised under
the name and style of Steenkamp, De Villiers and Coetzee Inc. They never wound up
that practice in accordance with the relevant rules and also failed to file the required
final audit report. On 13 July 2017 Steenkamp, De Villiers and Coetzee Inc was
suspended by an order of this court under application number 2815/2017. A curator
was appointed with the usual powers and obligations. Although perhaps in dispute, it
is alleged that the applicants took over the files, staff and infrastructure of this firm and
continued to practise under the name and style of Steenkamp and Jansen Inc, cited
as second respondent in this application. The applicants are the only directors of this
entity. In Mr Coetzee's founding affidavit deposed to in November 2023 he alleged
that he and Mr Steenkamp were merely professional assistants and employees of this
entity and that Mr T Goosen, cited as third respondent, was the sole director. It is now
common cause that Mr Goosen has resigned as director and that the applicants were
appointed co-directors. This is still the situation as confirmed from the bar by Mr
Coetzee during his oral argument. He added that he and Mr Steenkamp have no
control over the trust account which was still under the control of Mr Goosen despite
his resignation as director. More about this later.
[5] In the suspension application the court made the following observation:1
' ... The allegations by the LPC that the respondents were appointed as directors of the third
respondent, at a time when they were not in possession of valid Fidelity Fund Certificates, and
that they appear to be acting as directors of the third respondent, creates a sense of unease
1 Record: p 33, judgment para 18.
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and disquiet that requires investigation. If such allegations are true, it would amount to serious
misconduct on the part of the first and second respondents.'
[6] Since the suspension application was filed, several new complaints have been
forthcoming against the applicants and further investigations are still being conducted.
Mr Steenkamp was found guilty by the LPC's disciplinary committee on several counts
of misconduct, but filed a notice of appeal. Consequently, he has not yet been
sanctioned.
[7] I regarded Mr Coetzee's allegation from the bar pertaining to his and Mr
Steenkamp's directorship of Steenkamp and Jansen Inc astonishing. Neither Mr
Coetzee, nor Mr Steenkamp is in possession of a Fidelity Fund Certificate (FFC). As
mentioned, he submitted that the two of them were not in control of the trust account
of Steenkamp and Jansen Inc, but Mr Goosen, the former director. According to Mr
Coetzee, he and Mr Steenkamp administer a business account only. Furthermore,
they administer the bank accounts of the deceased estates under their control. Mr
Coetzee's version is to an extent in line with the following allegation made by the LPG
which he refuted:2
'Mr Goosen's evidence that the applicants in fact, ,according to him, practised for own account
in the circumstances is understandably of grave concern to the LPC. So too his evidence that
the applicants in fact only continued the erstwhile practice of Steenkamp De Villiers & Coetzee
under the name of Steenkamp & Jansen.'
[8] Mr Goosen's version is corroborated by the evidence of Mr T Davids, a
representative of the LPG. He visited the premises of Steenkamp and Jansen Inc on
31 January 2024 where he met Mr Coetzee.3 Mr Davids' report is an eye-opener. Mr
Goosen who was allegedly the director of the entity at that stage, was not present and
did not even have an office on the premises·. He apparently only came in from time to
time to manage the trust account. About 1500 files of Steenkamp and Jansen Inc were
found in cabinets. At that stage FS Law Inc also occupied the premises and the
signage of Steenkamp and Jansen Inc had been removed and replaced with that of
FS Law Inc. FS Law Inc has one director, to wit Mr FW Slabbert, who also acts as the
2 Record: p 158, answering affidavit para 84.
3 Record: p 1089, annexure RSA 16, read with Mr Davids' confirmatory affidavit, annexure RSA 17.
5
applicants' attorney in this application. Insofar as this court is not called upon to deal
with the merits of any charges based on misconduct, nothing more needs to be said.
[9] Although the applicants denied in their replying affidavit that they are practising
as attorneys and/or that they render any legal services,4 this is clearly an aspect that
should be investigated, bearing in mind also Mr Coetzee's responses to questions
from my learned colleague, Mahlatsi AJ . He confirmed that they conduct the
administration of various deceased estates and that he, Mr Coetzee, even appeared
at the Commission for Conciliation, Mediation and Arbitration (CCMA).
[1 0] Adv Greyling made oral representations on instructions of FS Law Inc on behalf
of Mr Steenkamp. Both Adv Greyling and Mr Coetzee submitted that the LPC was
dragging its feet and that the suspensions should be set aside. As said, it is not this
court's function to entertain the merits of the allegations of misconduct against the
applicants. However, I find it strange that the applicants administer a business
account, and not a trust account, in dealing with client funds. It is common cause that
clients often deposit monies into an attorney's trust account with directions how that
should be used. The applicants as directors of their law firm are not in possession of
FFC's. Clients whose monies may be entrusted to them will not be able to claim losses
from the Fidelity Fund in the event of misappropriation and if the attorneys are unable
to pay what is due to clients. I referred to depositum, (deposit in English and
bewaargewing in Afrikaans) when dealing with s 26A of the now repealed Attorneys
Act 53 of 1979, in Legal Practitioners Fidelity Fund v Gui/herme. 5 Existing and new
clients of the applicants may well believe that it is safe to entrust their monies to them.
[11] A personal liability company is a profit company duly recognised ins 8(2)(c) of
the Compan ies Act 71 of 2008. These type of companies are incorporated
associations of professional persons such as inter alia attorneys. The directors are
rendered co-debtors with the company and this enables creditors of the company to
hold the present and past directors liable, jointly and severally, for the debts and
liabilities contracted during each director's term of office.6
'1 Record: pp 181-182, replying affidavit paras 6.5-6.6.
s (702/2007) [2023] ZASC A 96; 2023 (5) SA 409 (SCA) (13 June 2023) para 9 and further.
6 Mar ilz and A nother v Mar itz and P ieterse Inc 2006 (3) SA 481 (SCA) para 13.
6
[12] The LPA provides for personal liability companies in s 34 thereof. Sub-section
34(7) reads as follows:
'(7) A commercial juristic entity may be established to conduct a legal practice provided that,
in terms of its founding documents-
( a) its shareholding, partnership or membership as the case may be, is comprised exclusively
of attorneys;
(b) provision is made for legal services to be rendered only by or under the supervision of
admitted and enrolled attorneys; and
(c) all present and past shareholders, partners or members, as the case may be, are liable
jointly and severally together with the commercial juristic entity for-
(i) the debts and liabilities of the commercial juristic entity as are or were contracted during
their period of office; and
(ii) in respect of any theft committed during their period of office.' (emphasis added)
[13] The Supreme Court of Appeal dealt with the fiduciary duty of directors towards
the company and their liability in Limpopo Provincial Council of the South African Legal
Practice Council v Chueu Incorporated Attorneys and Others (Chueu)7 and stated the
following:
'[26] Every director has a fiduciary duty towards the company of which it is a director. To
plead ignorance of financial matters, when faced with allegations of misappropriation, does
not absolve a director. It has been emphasised over the years that legal practitioners cannot
escape liability by contending that they had no responsibility for the keeping of the books of
account or the control and administration of the trust account. As this Court stated in Hepple
v Law Society of the Northern Provinces, for an attorney to explain trust deficits on the grounds
that he or she had no involvement in the financial affairs of the firm 'is no defence at all'.
[27] Abdication of responsibilities does not absolve legal practitioners of their duties. As
far back as Incorporated Law Society, Transvaal v Kand Others, the court cautioned attorneys
who attempted to excuse their conduct on the basis that they were responsible for other work
in the firm, and did not concern themselves with the books of account. In that matter, as here,
a particular individual in the firm was tasked with handling the books of account. The court
stated:
"Every attorney must realise that it is a fundamental duty on his part, breach of which may easily lead
to his being removed from the roll, to ensure that the books of the firm are properly kept, that there are
sufficient funds at all times to meet the trust account claims, and that when he makes the declaration
required for fidelity fund purposes there is no doubt that that declaration is truly and honestly made .'"
(footnotes omitted)
7 (459/22) [2023] ZASCA 112 (26 July 2023).
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[14) I stated the following in South African Legal Practice Council v Maree and
Others (Maree):8
The following should be born in mind. It is no defence at all for an attorney to explain trust
deficits or any other irregularities on the grounds that they had no involvement in the financial
affairs of the firm or company as clearly enunciated in Hepp/e v Law Society of the Northern
Provinces. A legal practitioner should not be heard to say that they have abdicated their
responsibilities in favour of their co-directors or co-partners. More recently, the Supreme Court
of Appeal put the record straight in Chueu in the following words, also relying on Hepple:
"Every director has a fiduciary duty towards the company of which it is a director. To plead ignorance
of financial matters, when faced with allegations of misappropriation, does not absolve a director. It has
been emphasised over the years that legal practitioners cannot escape liability by contending that they
had no responsibility for the keeping of the books of account or the control and administration of the
trust account. ... '" (footnotes omitted)
[15) Section 84 of the LPA places an obligation on every attorney who practises for
their own account and any director of a practice which is a juristic entity to be in
possession of a FFC and no such legal practitioner or a person employed or
supervised by that legal practitioner may receive or hold funds belonging to any
person, unless the legal practitioner is in possession of a FFC. Section 93 of the LPA
stipulates that any person who contravenes s 84 in rendering legal services commits
an offence and is liable on conviction to a fine or imprisonment for a period not
exceeding two years, or to both such fine and imprisonment. I am not certain whether
the applicants understand the seriousness of these provisions, but I do not have to
say anymore on the subject. If the applicants believe that they are entitled as directors
of Steenkamp and Jansen Inc to apply for and obtain FFC's, they may decide to follow
the route suggested in SA Legal Practice Council v Louw .9
[16] My concern about the LPC 's dilatoriness is much greater in this case as in
Maree. In that case, I insisted that the LPC should act speedily, specifically relying on
the following dictum in Chueu:10
R (4309/2024) [2024] ZAFS H C 352 (31 O ctober 2024) para 29; the full citation of the judgmen t referred to is
H eppfe v Law Society of the Northern Provinces (507/2013) [2014] Z A SCA 75; [2014] 3 A ll SA 408 (SC A) (29
M ay 2014).
9 ( I 0606/2023) [2024] ZA W C H C 88 (20 March 2024).
10 M aree /oc cit para 31; in C h11e11 the court suspended the particular attorneys from practice for a period of 6
mon ths pending finalisation of investigations failing which the suspension shall lapse; in The law Society of
N orlhern Provinces v M orobadi (115 1/201 7) [2018] Z AS C A 185 (11 De cemb er 2018) the court suspended the
attorney as an interim m easure, but ordered that the disciplinary hearing shall be instituted and finalised w ithin 3
month s from the date of judgm ent.
8
'Interim applications for the suspension of a legal practitioner pending an investigation are
generally undesirable if the suspension sought is for a lengthy period. Such applications
should be launched only where there is no other means of safeguarding the public from the
alleged malfeasance of a legal practitioner. An interim order for suspension has a very grave
impact on the professional life of a legal practitioner, who would nonetheless be severely
prejudiced if exonerated at the end of an investigation by the LPC .'
[17] I also reiterated in Maree that investigations and disciplinary proceedings
should be conducted by experienced and properly trained personnel in order to ensure
that finality is reached. I quote:11
'As was the case in Chueu and pointed out in paragraph 33 of that judgment, the LPC with its
far-reaching powers in taking control of MCI's trust account and all accounting records should
have done most of its investigative work by now. It has already taken over all the files and
should have investigated most of them by now . The matter cannot be allowed to carry on
indefinitely. Therefore, an amendment of the rule nisi in respect of paragraph 4 was called for
as suggested herein. It is expected that experienced and properly trained personnel had been
appointed by the curator bonis to ensure that the curatorship is terminated sooner than later.'
[18] I have no doubt that the LPC cannot be allowed to drag their feet to the
detriment of the applicants who are entitled to finality. Their professional and personal
lives are at stake. Notwithstanding Adv Greyling and Mr Coetzee's submissions that
the suspensions should be set aside now, I am not willing to accede to their request.
There appears to be sufficient bright red lights as briefly mentioned above that stand
in the way of granting relief to the applicants. I considered it prudent to grant the LPC
a final opportunity to get their proverbial ducks in a row. Consequently, I directed Adv
Snellenburg SC during oral argument to provide an indication as to when final charge
sheets would be ready and when disciplinary hearings could be started. After an
adjournment we were informed that the LPC would be able to serve final charge sheets
on the applicants by not later than 15 January 2025 and that disciplinary hearings
could start from the end of March 2025. I intend to hold the LPC to their undertaking.
If finality is not reached by 31 May 2025, the suspensions shall lapse automatically.
The order to be granted provides some relief to the applicants to approach the court
on notice if the LPC fails to act in accordance w ith the order.
11 Ma ree toe cit para 28.
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Order
[19) Consequently, the following order is made:
1. The first respondent shall, as undertaken, serve its detailed charge sheets on
the applicants on/or before 15 January 2025.
2. The disciplinary hearings shall, as undertaken, be scheduled to start not later
than 31 March 2025 and continued until finalised.
3. The first respondent shall finalise its disciplinary proceedings against the
applicants on/or before 31 May 2025, failing which their suspensions shall lapse
automatically.
4. The application is removed from the roll, but, in the event of the first respondent
failing to comply with either paragraph 1 or paragraph 2 supra, leave is granted to the
applicants to set the application down for hearing on the opposed motion court roll with
21 days' notice to the first respondent, which notice shall be accompanied by their
supplementary affidavits.
5. In the event of a notice of set down as envisaged in paragraph 4 supra, the first
respondent shall file an answering supplementary affidavit within 7 days, whereafter
the parties shall file supplementary heads of argument in accordance with the practice
directives of this court.
6. Costs shall stand over for later adjudication if required.
---- --
I concur
BB MAHLATSI AJ
Appearances
For 1st Applicant:
Instructed by:
For 2nd Applicant:
Instructed by:
Mr R Coetzee
In Person
Adv P Greyling
FS Law Inc
Bloemfontein
For 1st respondent: Adv N Snellenburg SC
Instructed by: Symington De Kok Inc
Bloemfontein
10