IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)

Case No: 16777/2023

In the matter between:

THE SOUTH AFRICAN LEGAL PRACTICE COUNCIL Applicant

and

ZUKO MACK MICHAEL NONXUBA First Respondent

NONXUBA INCORPORATED Second Respondent
(Registration number 2003/008873/21)

Coram: Henney J et Francis J
Matter heard on 2 August 2024.
Judgment delivered on 4 December 2024

JUDGMENT: 4 December 2024


FRANCIS, J:

[1] The South African Legal Practice Council (‘the LPC’) applies for the striking off of
the name of Zuko Mack Michael Nonxuba (‘the first respondent’ or ‘Mr Nonxuba’)
from the roll of attorneys of this Court , and for the usual ancillary relief relating to
the appointment of a curator to administer and control his trus t accounts and/or
that of his firm, Nonxuba Incorporated ( ‘the second respondent’ or ‘ Nonxuba
Inc’).

[2] The LPC was established in terms of the the Legal Practice Act 28 of 2014 ( ‘the
LPC Act’) and is statutorily enjoined to regulate all legal practitioners, maintain
the integrity of the legal profession, and promote and protect the public interest.

[3] Mr Nonxuba was admitted as an attorney on 7 September 2000 and commenced
practicing as such with Mpambaniso Attorneys. In F ebruary 2003, he started
practicing for his own account, and he established Nonxuba Inc in April 2003 with
himself as the sole director. He remains the only director of the firm and, i n this
judgement, reference to ‘Mr Nonxuba’, includes, where applicable, Nonxuba Inc.

[4] Mr Nonxuba specialises in personal injury and medical negligence cases in
various provinces in South Africa, including the Western Cape . These cases
overwhelmingly involve plaintiffs who are the parents/guardi ans of minor children
who sustained birth injuries because of negligence on the part of medical
personnel during the birth process , resulting in hypoxic ischaemic
encephalopathy, foetal distress and, ultimately, cerebral palsy.

[5] This application for th e striking off of Mr Nonxuba has had an unusual
progression from its inception. It started off as an urgent application brought by
the LPC on 21 June 2021 for an order interdicting him from practicing as a legal
practitioner pending the final determination of disciplinary proceedings (‘the
interdict application’).

[6] Several applications were subsequently launched which included applications to
intervene, joinder applications, a conditional application, an application to
interdict Mr Nonxuba from operating upon the firm’s trust account and the
appointment of a curator to mana ge the trust account (‘the conditional
application’), and an application to suspend him from practicing as an attorney
pending this strike-off application (‘the suspension application’).

[7] While the interdict application process was underway , it was alleged that Mr
Nonxuba had successfully prosecuted five medical negligence claims but had not
complied with the relevant court orders in that he inter alia did not pay over the
monies due to the claimants via the trust s that he should have established on
their behalf (‘the five medical negligence claims’).

[8] Mr Nonxuba failed to provide an adequate explanation for this allegation, and this
prompted the LPC to lodge the conditional application and the subsequent
suspension application as more allegations of misconduct surfaced.

[9] During the course of the litigation pr eceding the hearing of the suspension
application, Mr Nonxuba delivered various affidavits and accounting documents
(over 2000 pages) including documents such as the client letters in all five
medical negligence claims, billing disbursement reports in four of the matters, a
final accounting summary and proof of payment in one matter, and a redacted
copy of the trust bank a ccount statement of Nonxuba Inc. These documents,
according to Mr Nonxuba, proved that the monies paid in the five m edical
negligence claims were still in trust and could be properly accounted for.

[10] The LPC filed a response in the suspension application in which the accounting
records referred to in the previous paragraph were scrutinized. The LPC
contended that the trust reconciliation and client ledger accounts were fabricated.
In addition, the LPC submitted that these documents revealed several
irregularities which amounted to a breach of the rules of the profession made
under the LPC Act and promulgated on 20 July 2018 in Government Gazette
number 41781 (‘the LPC Rules’) . These irregularities included several round or
composite transfers from Nonxuba Inc’s trust bank account to its business bank
account over an extended period.

[11] According to the LPC , the fabrication of Mr Nonxuba’s trust account
reconciliation, the delay in paying the damages awards to the respective trusts ,
and the round transfers, created a suspicion that Mr Nonxuba had stolen trust
monies and had fabricated accounting records to hide his malfeasance.

[12] Given all the inter -related applications, this mat ter had to be case managed.
Eventually, a fter the passage of a fairly leng thy period, Mr Nonxuba was
suspended from practicing as an attorney pursuant to an order granted by Nuku
J on 18 April 2022 , who found that the accounting records had indeed been
fabricated. According to Nuku J, notwithstanding the many patent irregularities
identified by the L PC, the fabrication of accounting records was sufficient reason
for suspending Mr Nonxuba from practice.

[13] In terms of the suspension order, the LPC was directed to bring th e strike-off
application within four months of the Order being granted. However, it was filed
some seventeen months later . Mr Nonxuba utilized all available appeal
mechanisms in a bid to challenge his suspension , including a reconsideration
application to the President of the Supreme Court of Appeal (‘SCA’) and an
appeal to the Constitutional Court. All his appeals were unsuccessful, but t he
inevitable result was that the application before this Court was considerably
delayed.

[14] During the course of the manifold applications, many thousands of pages were
added to an ever-burgeoning record and at least seventeen judges were involved
in adjudicating the various procedural and substantive legal skirmishes.

[15] The mountain of paper filed and the considerable amount of judicial attention
expended on this matter was devoted to one primary issue: did Mr Nonxuba fulfill
his duties as a legal practitioner by implementing the court orders granted in his
clients’ favour and properly account ing to them for the monies received on their
behalf? The LPC is of the view that Mr Nonxuba did not do so; hence, this strik e-
off application.

[16] In this application, apart from the complaint filed by Mr Godfrey Howes on behalf
of the Eastern Cape Provincial Treasury, the LPC relies on the offending conduct
identified, and evidential material presented , during the preceding court
applications against Mr Nonxuba. In essence, the LPC’s complaint is that:

[16.1] Mr Nonxuba and his firm failed to comply with court orders obtained
on behalf of several minors and could not account for the
substantial damages awards that he had received on their behalf;

[16.2] Accounting records were fabricated in an attempt to deceive the
LPC and this Court into concluding that Mr Nonxuba and his firm
held the trust funds in question;

[16.3] Mr Nonxuba plundered the trust funds under his control by making
transfers from the firm’ s trust banking account to its business
banking account, in perfectly round amounts, without being lawfully
entitled to transfer such funds, thereby committing the theft of trust
funds;

[16.4] In managing and operating his trust account in the manner that he
did, Mr Nonxuba failed to keep proper accounting records and,
consequently, contravened various provisions of the LPC Rules;
and

[16.5] Given his serious misconduct, Nonxub a is not a fit and proper
person to practice as an attorney.

[17] Mr Noxuba denied any allegation of having knowingly fabricated ledger accounts
or of having stolen or misappropriated trust monies but (grudgingly) admitted that
he may not have strictly com plied with the LPC Rules relating to the operation of
his trust account and the keeping of accounting records.

[18] The determination of whether a person is a fit and proper person to continue
practicing involves the exercise of a discretion by a court by virtue of its role as
the ultimate repository of disciplinary jurisdiction over legal practitioners (see,
Law Society, Cape of Good Hope v Berrange 2005 (5) SA 160 (C) ). A court’s
discretionary powers to strike -off or suspend a n errant practitioner from practice
derives from the common law and is buttressed by section 44 of the LPC Act
which recognizes the power of the High Court “to adjudicate and make orders in
respect of matters concerning the conduct” of legal practitioners.

[19] The practical manner in which the court exercises these discretionary powers is
by way of a threefold inquiry (see, Jasat v Natal Law Society 2000 (3) SA 44
(SCA), and Law Society of the Cape of Good Hope v Budricks 2003 (2) SA
11 (SCA) ). First, the court must decide on the evidence before it whether the
alleged misconduct has bee n established on a preponderance of probabilit ies. If
the answer is in the affirmative, the court must thereafter decide whether the
person concerned is a fit and proper person to continue practicing. Finally, the
court must decide whether in all the circu mstances of that particular case, the
person in question is to be removed from the roll or merely suspended from
practice. The first inquiry is a factual one while the other two are value judgments
exercised by the court having regards to all the evidence at its disposal.

[20] In considering the evidence before it, the court is not bound by the views of the
LPC. However, the LPC is not an ordinary litigant. It brings the matter to court in
its capacity as both the statutory custos morum over the legal pro fession and
protector of the public in their dealings with the legal profession. Its views should
be accorded due weight (see, Law Society, Cape v Koc h 1985 (4) SA 379 (C)
at 386 G).

[21] I now turn to consider the offending conduct as alleged by the LPC.

Non-compliance with court orders relating to medical negligence claims

[22] It is not disputed that Mr Nonxuba was the attorney of record for the plaintiffs in
the five medical negligence claims: Jiba, Mininye, Sandi, Sihlobo, and Ncapai.

[23] In each of the five medical negligence claims , Mr Nonxuba represented children
who were found to have suffered debilitating mental and physical harm because
of the negligence of personnel of the Eastern Cape Provincial Department of
Health. In all five claims, the Member of the Executive Committee for Health,
Eastern Cape (‘MEC for Health, EC’) was ordered to pay substantial damages
awards to Nonxuba Inc which, in turn, had to establish, within 6 months of th e
court orders, trusts to administer the monies for the benefit of the disabled
children.

[24] Despite the fact that the court orders in all five medical negligence claims were
made during 2018 and 2019, Nonxub a, as of July 2021, had not established all
the trusts, and where the trust s had been established, he failed to pay over the
monies due to the se trusts. These facts were common cause in the suspension
proceedings, as they are in this strike-off application.

[25] Apart from the five medical negligence claims, the LPC also received a
complaint, dated 28 April 2022, from Mr Godfrey Howes on behalf of the Eastern
Cape Provincial Treasury . He identified a further five trusts which Mr Nonxuba
had failed to establish timeously or at all (“the Howes complaint”). These trusts
were supposed to be established by court order for the minors, Simnikiwe Picani,
Mbasa Qhubu, Ibenam Koli, Luniko Mdeni, and Thandolwethu Balikhulu between
six and nine months of the court orders being handed down, and the monies paid
into them. According to Mr Howes, none of the trusts had been established when
he made his enquiries at the relevant Masters Office more than three years after
the court orders were obtained.

Fabricated ledger accounts and trust account reconciliations

[26] Mr Nonxuba is required by Rule 54.15.1 of the LPC Rules to extract a list of all
his trust creditors every month. The total amount he holds on behalf of his trust
creditors must be compared to his trust account balance and both amounts
should reconcile.

[27] The trust reconciliation for the perio d ending July 2021 was provided by Mr
Nonxuba under oath in the suspension application. This trust reconciliation lists
twelve trust creditors, and the amounts so held, R101 721 310.63, purports to
reconcile exactly with the amount reflected in the trust account bank statement
for July 2021. He also provided eleven ledger accounts which purport to relate to
eleven of the twelve trust creditors identified in the reconciliation.

[28] One of the twelve trust creditors included in Mr Nonxuba’s trust reconcilia tion is
Nonxuba Inc itself. No ledger account was furnished for this trust creditor, but the
reconciliation shows a credit balance in trust in an amount of R6 925 887.03. It is
unclear why the trust reconciliation reflects these funds as being held on behalf
of Nonxuba Inc as it is impermissible to keep business and trust monies together.
Rule 54.11 provides that trust money must be separately held from business
money and that , “money other than trust money found in the trust banking
account at any time shall be transferred to a business banking account without
undue delay”.

[29] The authenticity of the remaining eleven ledger accounts reflected in the trust
reconciliation was tested by the LPC by co mparing the transactions recorded
therein with Mr Nonxuba’s trust bank account statements. If the trust
reconciliation was authentic, each payment recorded in the trust ledger accounts
furnished by Mr Nonxuba would be reflected in the trust bank account
statements. After having conducted a detailed analysis of e very ledger account,
the LPC concluded that the accounts were not authentic and had been
fabricated; a conclusion similar to that reached by Nuku J in the suspension
application.

[30] The LPC’s exhaustive analysis of each of the eleven ledger accounts is
reproduced in its founding affidavit filed in support of th is strike-off application. It
is not necessary for the purposes of this judgement to repeat what is stated in the
founding affidavit in respect of each ledger account. Suffice to say, the analysis
of each ledger account revealed a similar pattern.

[31] In so far as the five medical negligence claims are concerned, the ledger account
of Jiba illustrates the sort of evidence uncovered, and analysis conducted, by the
LPC. The Jiba ledger account and the accompanying disbursement report were
provided by Mr Nonxuba in an attempt to satisfy the LPC that the funds paid in
respect of this client by the MEC for Health, EC were properly accounted for and
held by Nonxuba Inc. The total amount payable by the MEC, EC in this matter
was R16 102 500 plus costs of suit. According to the Jiba ledger , the amount
received by Nonxuba Inc on 20 July 2018 was R16 337 640.61. The difference
appears to be attributable to interest pa id by the MEC for Health, EC due to the
late payment in terms of the relevant court order. The LPC identified the following
discrepancies between the Jiba ledger account and the trust bank account
statements:

[31.1] The ledger records four payments having been made on 31 July
2018, 28 February 2019, 29 February 2020, and 28 February 2021.
None of these payments appear in the trus t bank account
statement.

[31.2] The ledger records a payment of R300 000 to ‘client’ which is not
dated. The LPC located a payment in this amount with the narration
‘Jiba travelling’ on 31 October 2019.

[31.3] The trust bank statement reflects a payment of R345 250 with a
narration ‘Jiba’ on 24 July 2019. This is not reflected in the ledger.

[31.4] In addition, t he disbursement report listed the disbursements
incurred by Mr Nonxuba during the course of this matter. The ledger
does not reflect each of the disbursements contained in the
disbursement report as a separate entry. Instead, the ledger
records aggregate debit entries which occurred over a lengthy
period.

[31.5] In addition to the fees debited in the ledger, the disbursement report
also lists a fee (for the drafting of correspondence) and not only
disbursements. The aggregate of this fee is R80.

[31.6] The disbursement report records that Mr Nonxuba debited interest
on disbursements to the client after he had received payment of the
capital award from the MEC, EC. In all, R236 639.81 was debited in
respect of interest allegedly due by the client on disbu rsements
which Mr Nonxuba was able to pay since there was sufficient funds
in his trust bank account to make the payment.

[31.7] Mr Nonxuba provided no source documentation to enable the LPC
to assess whether the fees he purported to debit in the ledger were
lawful. No account for fees was found amongst the voluminous
documentation he furnished. According to the LPC, t he lack of
documentation meant that it was not possible for it to ascertain
whether the provisions of the Contingency Fees Act 66 of 1977 (‘the
Contingency Fees Act’) were complied with.

[32] In so far as the remaining six trust ledger accounts provided by Mr Nonxuba are
concerned (Sopazi, Feni, Malose, Mnyibashe, Mdeni, and Zangwe) , the LPC’s
analysis of these trust accounts also revealed a similar pattern. A comparison of
the ledger accounts and the trust bank account statements showed that none of
the receipts or debits recorded in the ledger were reflected in the bank
statements. Accordingly, so the LPC submitted, all these ledgers were fabricated.

[33] As noted earlier, Mr Nonxuba failed to establish the five trusts falling under the
Howes’ complaint. According to the LPC, in at least one of these matters - Qhubu
- Nonxuba ha d been paid the damages award and ought to have held these
funds in the trust bank account as at July 2021. However, the trust reconciliation
provided by Mr Nonxuba in his answering affidavit in the suspension application
did not reflect this. In the Qhubu matter, a court order was obtaine d on 11
September 2018 in terms of which the MEC for Health, EC was ordered to pay a
total amount of R26 292 236.52. This amount was reflected in Nonxuba Inc ’s
trust bank account statement on 8 November 2018. These funds should have
been held in Nonxuba In c’s trust bank account until the Qhubu trust was
registered which, in terms of the relevant court order, ought to have been done
within six months of the date of the order (that is, by 11 March 2019) . According
to the LPC, the Qhubu ledger account suggeste d that Mr Nonxuba sought to
conceal the existence of th is matter because, as at July 2021, he had
misappropriated the funds and could not account for them. At the very least, it
indicates that the trust reconciliat ion was incomplete and that the trust bank
statement produced in support of all trust creditors was fabricated.

Round transfers from trust to business

[34] Rule 54.14.14 of the LPC Rules provides that:

“Withdrawals from a firm’s trust banking account shall be made only:

54.14.14.1 to or for a trust creditor; or

54.14.14.2 as transfers to the firm’ s business banking account, provided
that such transfer shall only be made in respect of money
due to the firm; and provided that no transfer from its trust
banking account to its business banking account is made in
respect of any disbursement (including counsel’s fees) or
fees of the firm unless:

54.14.14.2.1 the disbursements have been actually made and
debited by the firm; or

54.14.14.2.2 a contractual obligation has arisen on the part of the
firm to pay the disbursements; or

54.14.14.2.3 fees and disbursements have been correctly debited
in its accounting records.”

[35] Rule 54.11.2.1 provides that any amount transferred from trust to business must
be “identifiable with, and … not exceed the amount due to the firm” , and Rule
54.11.2.2 provides that the “trust creditor from whose account the transfer is
made … [must be] identified”.

[36] The relevant LPC rules in force prior to July 2018 contained materially similar
provisions to the LPC Rules.

[37] In summary, then, it is required that every transfer from a firm’s trust bank
account to its business bank account must cle arly specify the amount due to the
firm and to which trust ledger account the payment is debited. Transfers of this
nature may only be made when an attorney is actually entitled to the funds.

[38] Copies of the trust bank account statements from January 2017 to July 2021
were provided by Mr Nonxuba and form part of the record. There are, in total,
759 perfectly round amount transfers from trust to business recorded in these
bank statements. The amount involved is, in total, R348 845 000.

[39] In the months of June and July 2021 no fewer than 16 round amount transfers
were made from the trust funds held by Mr Nonxuba to his b usiness account.
The total amount involved for those months was R15 500 000.

[40] In order to justify these transfers, Mr Nonxuba supplied a ‘payment summary ’
document in the suspension application which purported to itemize the individual
payments which make up the round payments he made from trust to business
during June and July 2021. If the transactions reflected in the payment summary
were genuine, they would be corroborated by corresponding entries in the ledger
accounts and the trust bank statements.

[41] The LPC submitted i n its supplementary replying affidavit in this application that
there are serious problems evident in the payment summary when compared
with the other accounting documents Mr Nonxuba provided. Thus, for example,
in respect of the first four matters listed under the month of July 2020 (Feni,
Mdeni, Malose, and Mnyibashe), none of the transactions referred to in these
ledgers are corroborated by entries in the bank statements. The same applies in
respect of the four matters listed under the month of June 2021 (Feni,
Mnyibashe, Mdeni, and Zangwe).

[42] The LPC further established that the ledger accounts in respect of every payment
made from the trust account listed on the payment summary for July 2021 show
that the debits were passed in each instance on 31 July 2021. All the round
payments were made before that date. This, according to the LPC, m eans that
every round payment was made before an entitlement to funds had arisen.

[43] Similarly, the ledger accounts in respect of every payment made from the trust
bank account listed on the payment summary for June 2021 shows that the
debits were passed in each instance on 30 June 2021. By that time , R2 500 000
had already been transferred from trust to business. This, the LPC submit ted,
again demonstrates that Mr Nonxuba made round payments to himself from trust
funds before an entitlement to the funds had arisen.

[44] Based on its analysis, the LPC submitted that the trust bank account statements
indicate that Mr Nonxuba made unlawful transfers from trust to busi ness; it is
inconceivable that he was entitled to trust funds amounting to R348 845 000
which he transferred in perfectly round amounts on 759 occasions since January
2017. The LPC concluded, therefore, that Mr Nonxuba siphoned off an
astonishingly large amount of money from his clients over an extended period.

[45] The LPC identified other irregularities that amounted to a breach of the LPC
Rules, including the following:

[45.1] By wrongly debiting interest on disbursements allegedly made long
after the funds had been received on behalf of his clients , the
ledger accounts were inaccurate in respect of the amounts held in
trust by Mr Nonxuba on behalf of the relevant clients.

[45.2] In the Sandi claim, Mr Nonxuba acted in contravention of the court
order by transferring the funds held in trust to attorneys instead of
paying the funds into a trust as the court had ordered and, in both
the Sandi and Miniye claims, Mr Nonxuba charged fees in excess
of 25% of the capital awards, thereby contravening the Contingency
Fees Act.

Mr Nonxuba’s response

[46] Mr Nonxuba filed an answering affidavit in which he, for all intents and purposes,
glossed over the serious allegations made by the LPC in respect of the trust fund
and accounting irregularities . He, instead, stated that his accountant , Ms
Wapenaar, would file a supporting affidavit which would address the substantive
allegations made by the LPC. Ms Wapenaar was appointed in December 2023 to
examine all trust account records and supporting documentation, including all
transactions involving the trust bank account, and to prepare a report on her
findings.

[47] Nonxuba’s answer to the application to have his name struck off the roll of
attorneys is, in broad summary, the following:

[47.1] Whilst conceding that he did not act in accordance with the court
orders in respect of the five medical negligence claims, Mr
Nonxuba’s explanation is that he was in a legal dispute with Absa
Bank and, by extension, the Absa Trust Limited which was
appointed to establish all the trusts. In mitigation, he submitted that
he made loans to the mothers of the minors to pay for the ir medical
treatment a nd daily expenses. These loans were treated as
disbursements against the money received on their behalf.

[47.2] He stated that he did not conduct the business of his practice in the
usual manner. He explained that payments from the trust account
were made to the business account . T hereafter, all payments to
creditors, disbursements, and other business -related expenses
were paid from the business account. Given the volume of work
and accounts payable, he believed that it would be excessively
time-consuming to manage each payment individually from the trust
account. The ‘ estimates’ of the fees and disbursements due to the
firm were transferred out of his trust account and he would produce
the final accounting reconciliation at a later stage.

[47.3] He conc eded that there were ‘errors’ in the trust ledgers and
reconciliation supplied to the LPC and admitted that he did not
‘strictly adhere ’ to the LPC R ules relating to the operation of his
trust account. He stated that Ms Wapenaar w ould explain these
errors and show that the transfers from the trust account to his
business account were for a legitimate purpose and that no theft of
trust funds had occurred. In any event, so he submitted, the trust
account was audited by an independent audi tor who w ould have
scrutinized all accounts, ledgers , and supporting documentation.
Each year, his firm received an unqualified audit opinion in respect
of the trust account. In his view, the unqualified opinions were
significant as it demonstrated that al l funds in the trust account and
transfers from the trust account were legitimately supported and
substantiated.

[47.4] In so far as the issue of the fabricated accounting records in the
suspension application are concerned, he explained that the trust
ledger entries were not aligned with the trust bank account because
the individual transfer transactions were reflected in the business
account of Nonxubo Inc . Thus, t he discord between the trust
ledgers and trust bank account, ac cording to Mr Nonxuba, did not
give rise to an inference that the trust accounting records were
fabricated. Based on the available information , he believed that the
trust reconciliation and trust ledgers for the trust creditors as
prepared and presented in his answering affidavit in the suspension
application, were correct.

[47.5] In so far as the round number transfers are concerned, he
submitted that these transfers reflected how he managed and
operated his practice and his trust bank account. He denied that the
round number transfers from the t rust account to the business
account supported the contention that these funds were
misappropriated; Ms Wapenaar’s would exonerate him and confirm
that no theft had occurred.

[47.6] He denied that there w as any misappropriation of funds and that
any of the ledgers had debit balances. According to him, t he two
ledgers that did reflect negative balances were subsequently
corrected.

[47.7] The Ho wes complaint was also addressed , albeit somewhat
perfunctorily. Mr Nonxuba submitted that the preparation of the
trust account book s was mainly done by his staff together with the
firm’s bookkeeper . The books of account were then endorsed by
the auditor. He stated that Ms Wapenaar had taken cognizance of
all the awards granted in favour of the trust creditors, all transfers
into and out of the trust account, and all disbursements and related
payments. She would deal with these issues in her supp orting
affidavit and report.

[47.8] In so far as the calculation of interest on disbursements was
concerned, Mr Nonxuba said that this was a manual process and
Ms Wapenaar would explain this issue which she had rectified in
the updated trust ledgers.

[47.9] Mr Nonxuba’s response was a bare denial i n respect of the
allegation that he had contravened the Contingency Fees Act in the
Sandi and Mniyane matters by charging fees in excess of 25% of
the capital awards . He submitted that he prepared bills of costs
years ago which had been settled. H is view was that the
appropriate manner to deal with any issues arising in relation to his
fees or bills of costs was through the taxation process before a
taxing master.

[48] Ms Wapenaar delivered a supporting affidavit and a voluminous accounting
report which together exceeded over 450 pages (referred to hereinafter as ‘the
Wapenaar report’). She noted that a substantial number of supporting documents
could not be traced and were not available. Ms Wapenaar indicated that her
review of Nonxuba Inc’s accounting records and entries reveal ed that they were
not of the expected standard . This complicated the task of analysing the
disbursements that were allocated. Mr Nonxuba did not follow the norm and he
operated the practice from the trust and business account as opposed to the trust
account only. Indeed, the round amount transfers between the trust and business
accounts of Nonxuba Inc exacerbated the difficulties in allocating payments to
specific trust ledgers. She stated that based on the information at her disposal,
the majority of the funds transferred to the business account were utilized within
the business and constitute normal business expenses, including payments of
experts and certain service pr oviders. She concluded by stating that she cannot
give an opinion o n theft or misappropriation as she w as not required to conduct
such a review.

Has the offending conduct been established

[49] Against the factual background and submissions of the parties set out above, I
now consider whether the offending conduct has been established.

[50] Mr Nonxuba conceded that he had committed certain transgressions in relation
to the manner in which he kept and maintained his accounting records. On the
evidence before this Court, and in light of his concessions, it is apparent that Mr
Nonxubo has contravened at least the following LPC Rules:

[50.1] Rule 54,6 and 54.14 – keeping proper accounting records;

[50.2] Rule 54.10 – the duty to keep up to date accounting records;

[50.3] Rule 54.11 – the duty to keep trust money separate from other
funds;

[50.4] Rule 54.13 – the duty to make payments to clients within a
reasonable time;

[50.5] Rule 54.14.14 – withdrawals from the trust bank account; and

[50.6] Rule 54.15 – the duty to prepare monthly trust reconciliations.

[51] Furthermore, it is common cause that Mr Nonxuba failed to comply with at least
ten court orders requiring him to establish trusts and to pay over the funds held
by him into these trusts.

[52] The remaining allegations relating to the misappropriation of trust funds and the
fabrication of accounting records were met by a bare denial and a promise by Mr
Nonxuba that the Wapenaar report would exculpate him.

[53] Unfortunately, for Mr Nonxuba, far from assisting in exonerating him, the
Wapenaar report tendered to support the LPC’s contentions . Indeed, the
Wapenaar report underscored the severity and extent of Mr Nonxuba’s
transgressions. The LPC conducted an analys is of the Wapenaar report and its
comments in this regard were furnished in a supplementary replying affidavit; Mr
Nonxuba did not contest the observations made , and the conclusions sought to
be drawn, by the LPC. It is evident from a close scrutiny of the Wapenaar report
that:

[53.1] For the most part, a comparison of the eleven July 2021 trust
ledger accounts initially prepared by Mr Nonxuba and the ledger
accounts referred to in the Wapenaar report are not reconcilable . It
is equally apparent that the discrepancies between each of the
ledgers cannot be attributed to good faith errors or described as
accounting anomalies. If there were errors, what they are, and how
they came to be made, is not dealt with in the Wapenaar report.

[53.2] The tri al balance in the Wapenaar report identifies 84 clients on
whose behalf Mr Nonxuba held, or ought to have held, trust funds.
This is 74 more than what is reflected in the July 2021 trust
reconciliation Mr Nonxuba prepared. As the LPC pointed out, to
exclude 74 trust creditors from the reconciliation cannot be
described as a mere error.

[53.3] One of the missing tr ust creditors identified by the LPC’s was the
trust creditor, Qhubu. According to the Wapenaar report, the LPC is
quite correct that Mr Nonxuba’s July 2021 trust reconciliation
should indeed have included this trust creditor. The Wapenaar
report s hows that Nonxuba Inc held R17 483 407.07 on behalf of
Ms Qhubu as at July 2021.

[53.4] None of the specific fees and disbursements recorded in the
payment summary document appear in the trust ledger account
prepared by Ms Wapenaar. It follows that Mr Nonxuba made them
up when he fabricated the payment summaries.

[53.5] In answer to the allegations regarding the round transfers from the
trust to the bus iness account, the Wapenaar report does not
demonstrate, as Mr Nonxuba stated it would, that the se transfers
were for a legitimate purpose and were authenticated by proper
supporting documentation. The Wapenaar report states that the
round amounts were transferred from the trust account to Nonxuba
Inc’s business account “ which could not be matched to specific
trust ledgers based on the available information ” and that the
“round number transfers between the trust accoun t and business
account of Nonxuba Inc exacerbate the difficulties in allocating
payments for specific trust ledgers.”

[53.6] Most concerning is the analysis of the trust fund shortfall by the
LPC which it based on the Wapenaar report; this analysis was n ot
challenged by Mr Nonxuba and must be accepted by this Court.

[53.7] The Wapenaar report states that as at June 2024, Nonxuba Inc
should have held R273 945 112.23 on behalf of its trust creditors.
This is the total of the clients with trust total balances, less the
entries for ‘rounding’, ‘unknown transactions ’, and the ‘opening
balance’. This also does not include those trust ledger s with debit
balances.

[53.8] The trust bank account cl osing balance as at 31 January 2024 was
R80 506 661.34. To this amount must be added R24 774 918, the
amount that was wrongly taken from the trust account by the South
African Reserve Bank for alleged exchange control irregularities on
14 December 2023 and which apparently is in the process of being
recovered by the LPC. Nonxuba Inc’s trust funds accounted for as
at the end of January 2024 was therefore R105 281 579.34.

[53.9] Based on the evidence of Mr Nonxuba himself, presented through
the Wapenaar report, it is apparent that a trust deficit in excess of
R168 million exists. This trust account shortage is in addition to the
trust deficit reflected in the Wapenaar report calculated as being
R20 828 136.87 in respect of the 20 trust creditors wh ere there
were debit balances (as at June 2024).

[54] In terms of Rule 54.14.9, the firm must ensure that no account of any trust
creditor is in debit. Furthermore, Rule 54.14.14 provides that withdrawal s from a
firm’s trust banking account shall be made only to or for a trust creditor or as
transfers to a firm’s business banking account in respect of money due to the
firm. It follows, therefore, that where a practitioner withdraws money from a trust
banking account in contravention of its provisions, thi s will inexorably lead to a
trust deficit and the practitioner’s conduct may constitute theft of trust funds.
From the evidence before this Court, it cannot be seriously disputed that there is
a considerable deficit in the trust funds entrusted to Mr Nonxuba.

[55] Money in a trust account is not the attorney’s property and any deposit must be
dealt with in accordance with the trust creditor’s instruction. When trust monies
are paid to an attorney, it is his duty to keep it in his possession and to use it f or
no other purpose than that authorized by his client . It is imperative that trust
monies in the possession of the attorney should be available to his client the
instant it becomes payable, and it must be kept in trust if it is not yet payable
(Incorporated Law Society, Transvaal v Behrman 1977 (1) SA 907 (T)). Given
the uncontroverted evidence of the LPC on the trust deficit in Nonxuba Inc’s trust
account, it is difficult not to conclude that Mr Nonxuba engaged in the theft of
trust funds on an industrial scale. That Mr Nonxuba’s own accountant has found
that there are twenty trust creditors to whom over R20 million is owing, is
damning.

[56] It was argued by Mr Nonxuba’s counsel, Ms Killian SC, that he could not be guilty
of theft or misappropriation because the LPC failed to prove any loss. I do not
agree. What is simply required to be proved is that the funds in the trust account
have been u sed without the authority of the persons on whose behalf the funds
were being held and for purposes which did not benefit them. In Law Society of
the Cape of Good Hope v Budricks [2002] 4 ALL SA 441 (SCA) , after
surveying the relevant case law, the SCA quoted with approval the decision of
King JP (with Foxcroft J) in Cape Law Society v Parker 2000 (1) SA 582 (C) at
587 G-H that “the principle as it emerges from the cases, is that the utilization of
funds in a trust account without the authority of the perso n on whose behalf the
funds are held for purposes which do not benefit him and in circumstances where
he has not authorized such use, amounts to misappropriation of trust monies,
which in turn is a form of theft. ” The decision of the court in Parker was it self
based on precedent of considerable pedigree.

[57] As early as the 19 th century, the courts recognized that the misappropriation of
trust money amounts to theft. As Innes CJ concluded in Rex v Rorke 1915 AD
145 at 157, if an attorney deliberately misappropriated monies entrusted to him
for his own use “ the jury was fully just ified in concluding that such
misappropriation was fraudulent, and that he had committed the crime of theft ”
(see also the comments of Chesiwe J in Macheka v S [2019] JOL 458 22 (FB)).
In Budricks, the SCA, reflecting on the interplay between misappropriat ion and
theft, confirmed th e proposition that misappropriation and theft in the context of
the unauthorized use of trust funds by a legal practitioner amounts to the same
thing.

[58] The admission that he transferred estimates of his fees is a strong indi ctment of
Mr Nonxuba’s breach of the LPC Rules. If he had prepared a proper invoice
based on the contingency fee agreement with his client s (as he was obliged to) ,
there would be no ne ed to estimate his fees. In addition, t he estimate of fees
appears to be exceedingly generous given the rand value of the round figure
transfers. In the circumstances, i t is not difficult to conclude that Mr Nonxuba
passed fees to which he was not entitled . This is clearly evident in the Sandi
matter. Mr Nonxuba has not challenged the LPC’s contention that he charged a
fee in excess of the permissible fees in terms of the Contingency Fees Act. This,
if nothing else, is a clear instance of theft; he has taken what he is not entitled to.

[59] On a conspectus of the evidence before this Court, I am satisfied that the LPC
has properly established on a balance of probabilities that Mr Nonxuba has failed
to comply with various court orders, fabricated accounting records, breached a
number of LPC Rules relating to the management and operation of his firm’s trust
account, and engaged in the widespread theft of funds held in trust on behalf of
his clients.

Whether Mr Nonxuba is a fit and proper person to practice as an attorney

[60] The success of our legal system depends not only upon the public having full
confidence in the integrity of the members of the legal profession but also on our
courts being able to depend on the ipse dixit of its practitioners. As observed by
Hefer JA in Kekana v Society of Advocates of South Africa 1998 (4) SA 649
(SCA) at 655I-656B:

“Legal practitioners occupy a unique position. On the one hand they serve
in the interest s of their clients, which require a case to be presented
fearlessly and vigorously. On the other hand, as officers of the court, they
serve the interest s of justice itself by acting as a bulwark against the
admission of fabricated evidence … The preservation of a high standard
of professional ethics having thus being left almost entirely in the hands of
individual practitioners, it stands to reason, firstly that absolute personal
integrity and scrupulous honesty are demanded of each of them and,
secondly, that a practitioner who lacks these qualities cannot be e xpected
to play his part”.

[61] From the evidence placed before this Court , it appears that Mr Nonxubo has not
met the requisite standard to practice as so eloquently sta ted by Hefer JA in
Kekana. Mr Nonxuba is not guilty of a mere moral lapse, but his conduct is
suggestive of a character defect that has severely compromised his integrity. In
his answering affidavit, for example, he prevaricated on whether he breached the
rules of the profession as alleged by the LPC. He initially denied breaching any of
the LPC’s Rules but then in the same affidavit states that he had not acted strictly
in accordance with certain of these r ules. His prevarication speaks volumes
about his integrity , or lack thereof . In my view, his lack of candor and his
prevarications are an indication of his dishonesty and lack of integrity.

[62] The accounting records placed before Nuku J were clearly fabricated, yet this
was consistently denied by Mr Nonxuba even in the face of strong evidence to
the contrary. It was only in this application that he conceded that the accounting
exercise placed before Nuku J was inadequate but offers the explanation that he
had limited time to prepare, and he was hampered by a l ack of information. This
begs the question: if Mr Nonxuba knew that there were deficiencies in what he
placed before Nuku J, why was he prepared to present th is information as fact
under oath, thus signifying that the information provided was accurate?

[63] The failure to keep proper accounting rec ords in relation to the trust account is a
serious offence. The keeping of proper records underpins the legislature’s
endeavors to protect the interests of the public. As succinctly stated by Van
Winsen J in Cape Law Society v Mda 1971 (2) SA 201 (C) at 204H:

“It is not sufficient that trust monies should be misappropriated. It is
equally necessary that an attorney’s dealings with such monies should be
properly recorded… failing that, much of the machinery provided by the
Legislature… for the protection of clients, and, indeed, of the ( Legal
Practitioners Fidelity Fund) is rendered nugatory.”

[64] Mr Nonxuba, in argument before this Court, for the first time suggested that his
ignorance of his accounting duties was a mitigating factor. I cannot agree. Mr
Nonxuba has been practicing as an attorney since September 2002 and has
practiced for his own account since February 2003. His ignorance cannot be
excused. In addition, given the sacrosanct nature of trust funds, removing money
from a client’s trust fund is, and should always be, a memorable, conscious, and
deliberate act that a practitioner carefully considers before carrying out. Mr
Nonxuba’s mishandling and misappropriation of trust funds, in conjunction with
the attempt to deceive the LPC and this Court, cannot but cast grievous doubt
about his fitness to continue to practice.

[65] In his answering affidavit in this application, Mr Nonxuba again refers to the fact
that he obtained clean audit reports for the relevant periods. This submission was
also made before Nuku J and in all Mr Nonxuba’s unsuccessful applications for
leave to ap peal. That he can again make this allegation, and at the same time
concede that he did not comply with the LPC Rules, must count against him. The
fact that a legal practitioner obtains a clea n audit report can never preclude him
from answering issues raised by the LPC.

[66] Mr Nonxuba tried to downplay the seriousness of his actions by blaming his
auditor, his staff, and his bookkeeper. However, he remained accountable for any
misappropriation of trust funds or the trust deficit as the owner of the firm. I n any
event, he, by his own admission , was the only person who managed and
operated the trust account of Nonxuba Inc. In my view, h e has not only
administered his clients’ trust funds in a reckless and cavalier manner, but he has
demonstrated a disdain for the LPC Rules relating to the keeping of books of
account for his practice. He has also, through his deception of his clients, the
LPC, and this Court, shown himself not to be a fit and proper person to continue
to be in practice.

What sanction is to be imposed

[67] In deciding on an appropriate sanction, the court is called upon to decide not
what constitutes an appropriate punishment for past transgressions but rather
what is required for the protection of the public (see, Law Society of Good Hope
v Peter 2009 (2) SA 18 (SCA) at para [18]).

[68] It is appropriate to observe that criminal law sentencing and professional
discipline are quite different matters. The fundamental purpose of criminal law
sentencing is the maintenance of a just, peaceful, and safe society through the
imposition of appropriate sanctions. For the legal profession, the princip al
purpose of professional discipline is to support proper client representation,
promote the administration of justice and the legal system, foster public
confidence in the legal profession , and regulat e the profession through the
imposition of appropriate rules of conduct. Liberty is at issue in sentencing but
not in professional discipline. While removal from the roll or suspension are
certainly serious matters, criminal law sentences are of a fundamen tally different
nature. Thus, in my view, lessons learnt from criminal law sentencing may be
useful, but it serves no use to conflate sentencing for criminal offences with
discipline for professional misconduct.

[69] The relevant factors that a court should take into account will depend on the
nature of the conduct complained of, the extent to which it reflects upon a
person’s character or shows him/her to be unworthy to remain in the ranks of the
profession, the likelihood or otherwise of a repetition of such conduct, and the
need to protect the public.

[70] The legal profession is a n important component of the legal syste m and
attorneys play a valuable role in the administration of justice. As the court
observed in S v Vorster 2007 (2) SACR 283 (E) , the attorneys profession forms
a vital link between members of the public and the courts. The profession of
attorney is an honorable one and, as such, demands complete honesty,
reliability, and integrity from its members (Vassen v Law Society of the Cape of
Good Hope 1998 (4) SA 532 (SCA) ). Practitioners are, therefore, obliged to be
honest in their dealings with their clients, the court, colleagues, and members of
the public in general.

[71] An attorney plays a unique role, as observed by Boshoff J (as he th en was), in
that he is “ … put in a position to conduct matters of trust with the public. He
occupies a position of great confidence and power and the Court is entitled to
demand a very high standard of honour from him in the profession. The law
exacts from him uberrima fides where he acts as agents for others: that is the
highest possible degree of good faith. It is therefore essential that the public
should be able to rely implicitly on the integrity and good faith of any attorney
they may wish to employ ” (Incorporated Law Society, Transvaal v Visse and
Others (1); Incorporated Law Society, Transvaal v Viljoen (2) 1958 (4) SA
115 (T) at 131). As the custodians of the integrity of the profession, the courts
must condemn any deviation from the exacting standa rd required of legal
practitioners.

[72] Misappropriation of trust monies is amongst the most serious offences which an
attorney may make him or herself guilty of since it undermines the very core of
the relationship between an attorney and client. As ap tly stated by Hefer AP in
Law Society of the Cape of Good Hope v Budricks at 17I -H, the
misappropriation of trust funds is “ about the worst professional sin that an
attorney can commit”.

[73] Theft of trust funds by practitioners does not only result in untold hardship for the
victims, but it also brings the legal profession into disrepute. Those legal
practitioners who violate the rules and ethics of the profession by failing to uphold
the highest standards of honest y, reliability and integrity must suffer the
consequences of their nefarious actions.

[74] In this regard, I respectfully agree with the comments of Trollip J (as he then
was) in Law Society, Cape v Marock 1974 (2) SA 204 (C) (at 206H-207A) that:

“(i)t cannot be sufficiently stressed that the careful adherence to the
requirements of the law as to the keeping of clients’ trust accounts and the
proper operation of a trust banking account number amongst the most
important of the attorney’s duties to his clients. The lack of strict
compliance with these rules cannot fail to undermine the confidence of the
public in the profession , a situation which, I hardly need stress, enures to
the detriment of all the members of the profession.”

[75] By practicing as an attorney, Mr Nonxuba proclaimed to the public that he
possessed the expertise and trustworthiness to deal with trust money reasonably
and responsibly. His clients could legitimately have expected that the money
entrusted to him would be safe in his trust account, until instructed otherwise. On
the facts of this matter, it is beyond question that the trust account of Nonxuba
Inc had a shortage and Mr Nonxuba could not provide a proper explanation how
the deficit and trust shortfal l arose. He has in all likelihood caused untold
hardship to his clients by not only failing to timeously pay over the funds due to
them but also misappropriating a substantial portion of their funds.

[76] In mitigation, Ms Killian argued on behalf of Mr Nonxuba that he did not engage
in wholesale misappropriation as alleged by the LPC since the Wapenaar report
indicated that the majority of the funds transferred to the business account was
utilized within t he business and constitute normal business expenses , including
payments to experts and similar service providers. However, far from being
exculpatory of Mr Nonxuba, what the Wapenaar report does, is to confirm that at
least some of the funds transferred to the business account were not utilized
within the business to constitute normal business expenses. The irresistible
inference is that, even on Mr Nonxuba’s own version, at least some of the funds
were misappropriated as the payments had not been authorize d. In any event,
the Wapenaar report was an imperfect exercise at best given the lack of
documentation, the difficulty of uncoupling trust and business payments, and the
paucity of supporting documentation relating to the fees and disbursements
debited by Mr Nonxuba. Nonetheless, this report identified a trust deficit in
excess of R20 million; hardly small change. The true scale of the theft was
considerably more.

[77] Mr Nonxuba has implored this Court to consider his conduct as being less severe
and suggested that he be permitted to remain practicing under supervision,
subject to necessary safeguards being put in place to protect members of the
public and trust creditors. I do n ot agree with this suggestion. I n my view, an
officer of the court whose integrity is severely compromised has no place in the
legal profession. Mr Nonxuba insisted all along that he had only committed an
error or that there were accounting anomalies in his accounting records. The
nature of his conduct and his continued protestations of innocence renders a
repetition a distinct possibility.

[78] In passing, there was a suggestion by Ms Killian that the LPC ought to have
conducted its own disciplinary inquiry and audit before launching an application
for the strike -off of Mr Nonxuba. I do not agree. Ordinarily, the LPC will
investigate a complaint, launch the application, and make representations in
Court. However, it is not preemptory for the LPC to have pursued formal charges
before a disciplinary inquiry is convened if, in its opinion, having regard to the
nature of the allegations of misconduct, a practitioner is no longer fit and proper
to remain on the roll of attorneys ( see, Legal Practice Council v Motlhabani
(UM 14818) [2020] ZANWHC 76).

[79] Indeed, in matters such as the one before this Court, the LPC would have failed
in its duty if it d id not act on the information at its disposal which was obviously
material to the question of Mr Nonxuba’s fitness to continue to act as a legal
practitioner. Mr Nonxuba is an officer of the court, and it is the court that is
enjoined to take action against him in the face of any serious transgressions.

[80] On a conspectus of the facts before this Court, I am of the view that Mr Nonxuba
is clearly not a fit and proper person to continue practicing as an attorney. His
name should, accordingly, be struck fr om the roll of legal practitioners and a
curator bonis be appointed to manage the files and affairs of the public that were
entrusted to him.

[81] The general rule in matters of this so rt is that if unsuccessful, the legal
practitioner should pay the LPC’ s costs on an attorney -and-client scale. There is
no lis between the LPC and the errant practitioner. The LPC is merely performing
its statutory function of placing facts before the court to exercise its disciplinary
powers and should, therefore, not have to bear the costs when acting in the
public interest. I see no reason to depart from the usual practice.

[82] In the circumstances, I would grant the following order:

ORDER

1. The name of Zuko Mack Michael Nonxuba ( ‘the first respondent’) or Nonxuba
Inc (‘the second respondent’) is struck off the roll of legal practitioners of this
Honourable Court;

2. The first respondent shall surrender and deliver to the Registrar of this
Honourable Court his certificate of enrolment as an attorney;

3. Should the first respondent fail to comply with the provisions of the preceding
paragraph of this order within 1 (one) week from date hereof, the Sheriff for the
District in which such certificate of enrolment is, is empowered and directed to
take possession of and deliver the same to the Registrar of this Honourable
Court;

4. The first and/or second respondents shall deliver all books of account, records,
files and documents containing particulars and information relevant to:

4.1. any moneys received, held or paid by the first and/or second
respondents for or on account of any person;

4.2. any moneys invested by the first resp ondent and/or second
respondents in terms of section 86 (3) of the Legal Practice Act
28 of 2014 (“the LPA);

4.3. any interest or moneys so invested which was paid over or
credited to the first and/or second respondents;

4.4. any estate of a deceased per son, or any insolvent estate, or any
estate placed under curatorship of which the first respondent is
the executor, trustee or curator or which the first respondent is
administering on behalf of the executor, trustee or curator of such
estate; and

4.5. the first and/or second respondents’ practice as an attorney;

to the curator appointed in terms of this order, provided that a s far as such
books of account, records, files and documents are concerned, the first and/or
second respondents shall be entitled to have access to them, but always
subject to the supervision of such curator or a nominee of such curator;

5. Should the first and/or second respondents fail to comply with the provisions of
the preceding paragraph of this order within 1 (one) week from the date of this
order the Sheriff for the district in which such books of account, records, files
and documents are, is empo wered and directed to take possession of and
deliver them to such curator;

6. The curator is entitled to:

6.1. hand over to the persons entitled thereto all such records, files and
documents; and

6.2. hand over all such records, files and documents over which the first
and/or second respondents exercised a lien to the persons entitled
thereto as soon as the curator has satisfied himself or herself that the
fees and disbursements in connection therewith, if any, have been paid
or secured, or in the event of any dispute as to the provision of security,
in his or her discretion;

7. 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 first and/or second respondents, 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;

8. Such curator be empowered to require that any such file, the contents of which
he or she may consider to be relevant to a claim, or possible or anticipated
claim, against the curator and/or the first and/or second respondents and/or the
first and/or second res pondent’s clients and/or the Legal Practitioners Fidelity
Fund (hereinafter referred to as “ the Fund ”) in respect of money and/or other
property entrusted to the first and/or second respondents, be re -delivered to
such curator;

9. The first respondent and any other person who was authorised to operate upon
the trust account(s) be interdicted and prohibited from operating on the trust
account(s), as defined in clause 10 below;

10. That the Director for the time being of the Gauteng office of the applicant, be
appointed as curator to administer and control the trust account of the first
and/or second respondents comprising the separate banking accounts opened
and kept by the first and/or second respondents at a bank in terms of section
86(2) of the LPA and/or any separate savings or interest -bearing accounts as
contemplated by section 86(3) and/or 86(4) of the LPA, in which money from
such trust banking accounts have been invested by virtue of the provisions of
the said subsection/s or in which moneys in any manner have been deposited
or credited (the said account(s)) being herein referred to as “the trust
account(s)”) with the following powers and duties:

10.1. subject to the approval of the Legal Practitioners’ Fidelity Fund
Board (hereinafte r referred to as “the Board”), 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 first and/or second respondents
were acting at the date of this order;

10.2. subject to the approval and control of the Board, to recover and
receive and, if necessary in the interests of persons having lawful
claims upon the trust account(s) and/or agai nst the first and/or
second respondents in respect of money held, received and/or
invested by the first and/or second respondents in terms of
section 86(3) and/or 86(4) of the LPA (hereinafter referred to as
“trust moneys ”), to take legal proceedings whic h may be
necessary for the recovery of money which may be due to such
persons in respect of incomplete transactions in which the first
and/or second respondents may have been concerned and
which may have been wrongfully and unlawfully paid from the
trust a ccount(s) and to receive such moneys and to pay the
same to the credit of the trust account(s);

10.3. to ascertain from the first and/or second respondent’s books of
account the names of all persons on whose account the first
and/or second respondents appear to hold or to have received
trust moneys (hereinafter referred to as “trust creditors”) and to
call upon the first and/or second respondents to furnish him,
within 30 (thirty) days of the date of this order or such further
period as he or she may agree to in writing, with the names,
addresses of and amounts due to all trust creditors;

10.4. to call upon such trust creditors to furnish such proof,
information and affidavits as the curator may require to enable
him or her, acting in consultation with, an d 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;

10.5. to admit or reject, in whole or in part, su bject 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;

10.6. having determined the amounts which he or she 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;

10.7. 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 86(5)(a) of the
LPA in respect of any interest therein referred to and,
secondly, without prejudice to the right s of the creditors of the
first and/or second respondents, 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 first
and/or second 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 balance, subject to the
approval of the Board, to the first and/or second respondents,
if they are solvent, or, if the first and/or second respondents
are insolvent, to the trustee(s) or liquidator(s), as the case may
be, of the first and/or second respondent’s insolvent estate(s);

10.8. in the event of there being insufficient moneys in the trust
banking account(s) opened by the first and/or second
respondents in terms of section 86(2) of the LPA from which to
pay the claims of trust creditors in full and after taking
reasonable steps to ascertain the identities of such creditors
and the amounts due to them to distribute pro rata amongst
creditors whos e claims have been proved or admitted, the
amount(s) reflected by the credit balance(s) in said account(s)
provided that the curator shall pay to trust creditors whose
funds are held in separate accounts in terms of section 86(3)
and/or 86(4) of the LPA wh o satisfy the curator that they are
entitled to such funds, the amounts due to such creditors;

10.9. subject to the approval of the Board, 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 first and/or
second respondent in the Fund’s books;

10.10. to refer the claims of all trust creditors to the Board to be dealt
with in terms of the provisions of the LPA;

10.11. to authorise the Board to credit the credit balance(s) referred
to above to its “Paid Claims Account” when the Fund has paid,
in terms of section 55 of the LPA, 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 of moneys of any claim or claims as and
when admitted and paid by it;

10.12. subject to the approval of the Chairman of th e Board, 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
curator; and to render from time to time, as curator, returns to
the Board showing how the trust account(s) has (have) been
dealt with, until such time as the said Board notifies the curator
that he or she may regard his or her duties as terminated;

11. The first and/or second respondent are directed:

11.1. to pay the fees and expenses of the curator, such fees to be
assessed at the rate of R1 552.00 per hour, including travelling
time;

11.2. to pay the reasonable fees and expenses charged by any
person(s) consulted and/or engaged by the curator as aforesaid;

11.3. to pay the costs of and incidental to this application on a scale as
between an attorney and client; and

11.4. within 1 (one) yea r of 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 costs, or otherwise, of the amount of the fees and
disbursements d ue to the first and/or second respondents, in
respect of their former practice, and should the first and/or
second respondents fail to do so, he/it shall not be entitled to
recover such fees and disbursements from the curator without
prejudice, however, to such rights, if any, as he/it may have
against the trust creditor(s) concerned for payment or recovery
thereof.


_____________________
FRANCIS, J
Judge of the High Court, Cape Town

I agree, and it is so ordered.

_____________________
HENNEY, J
Judge of the High Court, Cape Town


APPEARANCES

Counsel for the Applicant Mr S J Koen
skoen@bissets.com

Instructed by: Bisset Boehmke McBlain Attorneys

Counsel for the Respondents Adv Estelle Kilian SC & Adv C McKelvey
advestelle@gmail.com/cthmckelvey@mweb.co.za

Instructed by: Enzo Meyers Attorneys

Heard: 2 August 2024

Judgment delivered. 4 December 2024