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[2019] ZASCA 40
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Johannesburg Society of Advocates v Edeling (326/2018) [2019] ZASCA 40; 2019 (5) SA 79 (SCA) (29 March 2019)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
no: 326/2018
In the matter between:
JOHANNESBURG
SOCIETY APPELLANT
OF
ADVOCATES
and
CHRISTIAAN SERFONTEIN
EDELING RESPONDENT
Neutral
citation:
Johannesburg
Society of Advocates v Edeling
(326/2018)
[2019] ZASCA 40
(29 March 2019)
Coram:
Ponnan, Wallis,
Saldulker and Schippers JJA and Eksteen AJA
Heard:
22 February 2019
Delivered:
29 March 2019
Summary:
Advocate -
re-admission and re-enrolment – whether applicant a fit and
proper person to be admitted as an advocate - applicant
struck off
the roll for serious dishonesty - needing to show genuine, complete
and permanent reformation.
ORDER
On
appeal from:
Gauteng
Division of the High Court, Johannesburg (Modiba and Molahlehi JJ
sitting as court of first instance):
1 The appeal is upheld
with costs including the costs of two counsel.
2 The order of the court
a quo is set aside and replaced by the following order:
‘
The
application is dismissed with costs such costs to include the costs
of two counsel.’
JUDGMENT
Wallis
and Saldulker JJA (Ponnan and Schippers JJA and Eksteen AJA
concurring):
[1]
Mr Christiaan Serfontein Edeling, the respondent in this matter,
presently 64 years old, was admitted as an advocate of the
then
Supreme Court of South Africa on 27 March 1979. He initially
practised at the Johannesburg Bar and then joined the Free State
Bar
in 1984, where he practised until 1993. While there he was admitted
as an advocate in Lesotho. He then re-applied to and was
granted
membership of the Johannesburg Bar and resumed his practice there.
[2]
During
March 1996, the Society of Advocates of South Africa, Witwatersrand
Division (as the present appellant, the Johannesburg
Society of
Advocates (the Society), was then known) applied in terms of
s 7
of
the
Admission of Advocates Act 74 of 1964
, for Mr Edeling’s
striking off. On 11 December 1997 he was struck from the roll of
advocates by order of the Witwatersrand
Local Division (Van Der Merwe
and Du Plessis JJ).
[1]
Aggrieved, Mr Edeling applied for leave to appeal against the
judgment of the high court, but it was refused. His applications
for
leave to appeal to the Supreme Court of Appeal and the Constitutional
Court were also dismissed.
[3]
In 2009, and again in 2015, Mr Edeling, brought
ex
parte
applications
before the Gauteng Division of the High Court of South Africa for his
re-admission and re-enrolment as an advocate.
The Society intervened
and opposed both applications, the first of which was withdrawn at
the Society’s instance after the
second application was
launched. The court a quo (Modiba J, Molahlehi J concurring)
granted Mr Edeling’s application
and made no order as to costs.
The appellant applied for leave to appeal the order, which was
refused by the court a quo with an
adverse order of costs. This
appeal is with the leave of this court.
The
reasons for Mr Edeling’s striking off
[4]
Mr Edeling was struck off the roll largely in consequence of his
dealings with Mr Glyn Rudolph. Mr Rudolph had devised a scheme
under
which properties were sold at vastly inflated prices, with payment
being effected in terms of two promissory notes given
by the
purchaser to the seller. The first of these would be for the
approximate value of the property. The second would be a wildly
inflated figure payable many years in the future. The purpose of
these arrangements was to secure a refund of VAT from the revenue
authorities. In terms of one of these schemes Mr Edeling sold his own
home in Bloemfontein, worth between R850 000 and R1
million, to
Special Aircraft Utilisation (Pty) Ltd (SAU), a company effectively
controlled by Mr Rudolph, for some R73 million.
He also attempted to
purchase a commercial property in Johannesburg, referred to as the St
Margaret’s property valued at
R2.5 million, for R120 million
under a similar scheme, but this fell through. Instead SAU purchased
the property for R158 million,
to be discharged by way of two
promissory notes.
[5]
When Rudolph told him that there were problems in regard to the
purchase of the St Margaret’s property, Mr Edeling drafted
an
agreement, the Condor agreement, with a view to circumventing those
problems. This involved a trust that he had formed in Lesotho,
controlled by him and an attorney, Mr Redelinghuys. The purpose of
the agreement was to acquire the interests of the seller of
the St
Margaret’s property in a manner that would ensure that it would
never be necessary to satisfy the second inflated
promissory note.
This was to be concealed from the revenue authorities. When the
purchases by SAU of Mr Edeling’s home and
the St Margaret’s
property were considered in the Special Income Tax Court, Mr Edeling
gave evidence in support of their
legality. Melamet J held that both
schemes were fraudulent and that Mr Edeling perjured himself in
giving his evidence.
[6]
On 11 December 1997 the high court concluded with regard to the first
transaction that the sale by the respondent of his house
in
Bloemfontein was not a true sale, but a simulated transaction entered
into solely to obtain a tax advantage to which the parties
were not
entitled. This finding implied that Mr Edeling had not been truthful
in his evidence to either the Special Court or the
court hearing the
striking off application. With regard to the second intended
transaction the high court concluded that the offer
to purchase the
St Margaret’s property was a simulated transaction employed
solely to obtain an unconscionable tax benefit
to which the parties
were not entitled. It was not genuine and was intended as a fraud on
the
fiscus.
The high court analysed the Condor transaction in some detail and
concluded that it showed that Mr Edeling had been untruthful
in
regard to his relationship with Rudolph; that he was aware that the
two transactions were simulated; and that his evidence at
a number of
points was untruthful. That was also its conclusion in regard to the
evidence given in the Special Court.
[7]
In his counter-application Mr Edeling attacked a number of senior
members of the Johannesburg Bar in the most intemperate and
insulting
terms without any justification whatsoever. The court concluded that
the insulting statements made by Mr Edeling in his
counter-application concerning the Society, its Bar Council and
certain of its members were not true. The high court viewed these
allegations in a serious light, and held that they were particularly
serious, when made of officers of the court whose honesty
and
integrity had to be beyond question. It concluded that it was clear
that the insulting statements were self-serving and evidence
of an
attempt by the respondent to discourage full and proper investigation
into his conduct.
[8] The high court
concluded that he was not a fit and proper person to practise as an
advocate. It ordered that his name be struck
from the roll of
advocates. It held that Mr Edeling had been party to dishonest and
simulated transactions and that the ‘moment
he perceived the
vulnerability in the VAT Act, he waded in and exploited it to the
hilt’. He displayed a lack of judgment,
which was revealed by
his inability to perceive that he had done anything wrong. Even in
court he had no qualms about the morality
of his conduct. There is no
need to go further into the details of the findings of the court of
which these are a summary. Its
final conclusion was that Mr Edeling’s
evidence overall was a combination of half-truths and lies; facts had
been withheld;
full disclosure had not been made; and he had
concealed the whole truth. These were resounding findings of
dishonesty.
The applications for
re-admission
[9]
In 2009 Mr Edeling launched an application for his re-admission (the
2009 application), which was eventually withdrawn and he
had to pay
the costs. One of the primary grounds of opposition by the Society
was that he had failed to make a full and honest
disclosure to the
court, especially in regard to his having resumed practice as an
advocate in Lesotho. The application dragged
on for a number of years
until he brought the present application for his re-admission in
2015, before withdrawing the 2009 application.
In regard to that
application the respondent says in his present founding affidavit:
‘
By
that time I had already built a good practice in Lesotho and had no
appetite for further confrontation with the Johannesburg
Bar, which I
wished to join should I be readmitted. I knew that I was once again a
fit and proper person and was busy proving as
much in Lesotho. I
decided to let the matter lie for a few years, in the hope that old
resentments would die down, and in the hope
that I might later make a
new application after I had once again built a sound reputation as an
advocate in Lesotho.’
[10] When, in June 2015,
Mr Edeling renewed his application for his re-admission as an
advocate, he said in his founding affidavit
in support of this
application inter alia:
'I
respectfully submit that in considering my application for
readmission this Honourable Court will ask itself simply whether I
am
now, as at the time of the hearing a fit and proper person to
practise as an Advocate. I submit that the court will not approach
the matter as if these were punitive proceedings and that the Court
will not seek to mete out any further punishment for the sins
I
committed nearly 20 years ago. I believe that I have atoned for my
sins and learned from my mistakes. In the course of my work
in recent
years, I have conducted myself in a proper and professional manner.
There have been no complaints against me or concerning
my conduct . .
. I believe that I have learned from the lessons of the past. I have
changed my attitude and my conduct for the
good . . .
The
events leading to the removal of my name from the roll of Advocates
bear upon the conduct of my personal and private tax affairs
and a
bad relationship with certain members of the Johannesburg Bar, and
not with the manner in which I performed my professional
duties to
any of my clients or the Court
.’
(
Emphasis
added.)
[11] Where a person who
was previously an advocate has been struck-off the roll of advocates
on the basis that he is not fit and
proper to practise as an
advocate, and then applies for re-admission, the court adopts the
following approach:
‘
The
fundamental question to be answered in an application of this kind is
whether there has been a genuine, complete and permanent
reformation
on the appellant’s part. This involves an enquiry as to whether
the defect of character or attitude which led
to him being adjudged
not fit and proper no longer exists. Allied to that is an assessment
of the appellant’s character reformation
and the chances of his
successful conformation in the future to the exacting demands of the
profession that he seeks to re-enter.
It is thus crucial for a court
confronted with an application of this kind to determine what the
particular defect of character
or attitude was. More importantly, it
is for the appellant himself to first properly and correctly identify
the defect of character
or attitude involved and thereafter to act in
accordance with that appreciation. For, until and unless there is
such a cognitive
appreciation on the part of the appellant, it is
difficult to see how the defect can be cured or corrected. It seems
to me that
any true and lasting reformation of necessity depends upon
such appreciation.’
[2]
Like
any other applicant for admission as an advocate, Mr Edeling had to
show no more than that he was a fit and proper person to
be admitted,
but he had to discharge that onus against the background of the past
conduct that had exposed serious character flaws
relating to his
integrity.
[12]
In his detailed founding affidavit in this application, Mr Edeling
said that he accepted the findings of the high court that
his conduct
was wrong and it justified the order striking his name from the roll
of advocates. However, he did not explicitly and
in so many words
acknowledge that he had been dishonest; had engaged in dishonest
transactions directed at obtaining tax advantages
to which he and his
associate, Mr Rudolph were not entitled; made misrepresentations to
the revenue authorities; intended to conceal
the true nature of these
transactions from the revenue authorities and lied to both the
Special Income Tax Court and the court
hearing the application for
his striking off. He proffered the following explanation for
concluding the simulated and dishonest
transactions:
‘
My
explanation for concluding the transactions
32
As appears from the judgment, my explanation at the time was;
32.1
The VAT scheme was lawful;
32.2
There is no room for considerations of equity or morality in matters
relating to tax. Since the scheme was lawful there was
no need to
consider other considerations.
32.3
I gave no false evidence
;
32.4
There was no fraud on the fiscus, and no misrepresentations were
made to the Receiver of Revenue
.
32.5
I was dissatisfied with the manner in which certain members of the
Bar Council had acted in regard to my matter, and exercised
what I
believed were my rights to challenge the conduct.
33.
I no longer hold those views which I fought so strenuously at the
time to be upheld, and now realise that they were naïve
and ill
considered. However,
such
views were my genuine bona fide views held by me at the time
.
. . .’ (Emphasis added.)
[13]
The statement in the second sentence in para 33 that ‘such
views were my genuine bona fide views held by me at the time’,
was incompatible and irreconcilable with his statement that he
accepted the ‘findings of the court and that my conduct was
wrong and fully justified the order striking my name from the roll of
Advocates’. Mr Edeling was held to have entered into
simulated
transactions and been aware that they were simulated. That being so
he could not genuinely and bona fide have held the
view that they
were not simulated, were not a fraud on the
fiscus
and involved no
misrepresentations to the Receiver of Revenue. Both the Special Court
and the high court held that he repeatedly
and in a number of
different respects lied under oath. If one is lying under oath, one
cannot at the same time genuinely and bona
fide believe that one is
telling the truth. Either Mr Edeling had no insight into the
fundamental dishonesty of his previous conduct
or believed it to have
been excusable, or he was lying about his state of mind at the time.
None of that was compatible with his
claimed acceptance of the
findings of the high court and his having acquired insight into his
deficiencies and overcome the flaws
in his character that the high
court exposed.
[14]
To bolster his application to be re-admitted Mr Edeling relied on
character references from some six persons, all of which
were dated
either 2008 or 2009, including one from his wife and one from his
attorney. Most of the references were unhelpful and
meaningless,
because all they did was paint a favourable picture of Mr Edeling,
without indicating the extent of their knowledge
of Mr Edeling’s
wrongdoings or whether they knew about the personality traits or
character defects which gave rise to his
misdeeds and led to his
striking off. None referred to the fact that dishonesty lay at the
root of the decision to strike him from
the roll of advocates. In
regard to similar character references Wessels JP said in
Ex
parte Wilcocks
:
[3]
‘
It
is not sufficient to produce before the Court a few certificates from
interested friends or to say that he has led an honest
life. The
evidence with regard to that must be overwhelming: the Court must be
satisfied that it will make no mistake if it reinstates
the
applicant.’
[15] One of the reports
was from a psychologist, Ms Robyn Fasser, who Mr Edeling consulted on
two occasions. She described Mr Edeling’s
character, his
failure to come to terms with his past misdeeds, and to take
responsibility for his wrongdoings in the following
paragraph:
‘
With
respect to positive impression management, his pattern of responses
suggests that he tends to present himself in a consistently
favourable light, and as being relatively free of common shortcomings
to which most individuals will admit. He appears reluctant
to
acknowledge personal limitations and will tend to repress or deny
distress or other internal consequences that might arise from
such
limitations. This tendency will likely lead him to minimize, or
perhaps even be unaware of, problems or other areas where
functioning
might be less than optimal.’
[16]
Ms Fasser’s opinion was prescient, precisely indicating that Mr
Edeling had not, albeit that a number of years had passed
since his
striking off, accepted that the transactions in which he was involved
in were dishonest, fraudulent and an endeavour
to defraud the
revenue. Her summary of his explanation of his conduct reflected that
he thought he was acting lawfully and exploiting
a loophole in the
tax legislation and not that he was acting fraudulently. Furthermore
her report did not state that Mr Edeling
had come to terms with his
dishonesty, addressed it and remedied it, and therefore undergone a
permanent reformation. Although
Ms Fasser’s report was
formulated in 2008 there was nothing in the present application to
suggest that Mr Edeling’s
insight into and perception of his
past failings had altered in the intervening years.
[17]
An advocate is required to be completely honest, truthful and
reliable.
[4]
In applications
such as these the Society acts as the
custos
morum
of the profession. In doing so it acts in the interests of the
profession, the court and the public. It was contended on behalf
of
the Society that the respondent did not disclose matters germane to
the question of his re-admission as an advocate, and that
there was a
pattern of consistent non-disclosure by Mr Edeling, which continued
into this application. It contended that this demonstrated
an absence
of reform on his part as illustrated by the fact that disclosures
were only forthcoming when he was confronted with
facts identified by
the Society. Furthermore his explanations always took the form of
facts that were not independently verified
and could not be confirmed
by the Society.
[18]
The Society opposed the 2009 application for Mr Edeling’s
re-admission. In that ex parte application Mr Edeling failed
to
disclose that he was practising as an advocate in Lesotho despite his
removal from the roll of advocates in South Africa. When
the Society
raised the respondent’s appearance as an advocate in Lesotho,
his response was to say that he had disclosed it
to the Chief Justice
of Lesotho, who raised no objection. There is no independent
confirmation that such a disclosure was made.
Mr Edeling asserted
that he did not regard the fact that he was practising in Lesotho as
relevant; he was an advocate of good standing
in Lesotho and that no
misconduct complaint was ever lodged against him in Lesotho. In the
2015 application he said the following:
‘
From the
effective date of my striking off in late 1999 and up until mid 2010
I had not practised as an advocate in Lesotho or elsewhere.
I
respectfully submit that by the time I started to practice in Lesotho
in 2010 I had once more become a fit and proper person
to practise.’
[19]
Mr Edeling therefore decided of his own accord in 2010 that he was a
fit and proper person to re-commence practise as an advocate
in
Lesotho. This decision, was not voluntarily disclosed until raised by
the Society and was made whilst the 2009 application was
still
pending, and opposed by the Society. He recommenced practice knowing
that his application for re-admission was pending in
South Africa and
opposed by the Society. He did so without reference to the Law
Society of Lesotho or a disclosure to that body
of his situation in
South Africa. Thus he took it upon himself to decide whether he was a
fit and proper person to practise in
that country, disregarding the
local professional body. Apparently he took the view that his
previous conduct was in some way territorially
confined
[20] Mr Edeling’s
conduct in deciding of his own accord to resume practice in Lesotho
demonstrates that he has in fact not
genuinely accepted his
wrongdoing and the consequences. Under s 6(1)(c)(iii) of the
Legal Practitioners Act No 11 of 1983
of Lesotho, a person may be
admitted as an advocate in that country on the basis of their
admission as an advocate in South Africa,
provided they have
practised in this country for a continuous period of five years and
remain on the roll of advocates. Crucially
therefore, because of his
striking off, at the time Mr Edeling chose to resume practice he
would not have qualified to be admitted
as an advocate. Yet again he
was exploiting a loophole, when it suited him to do so. He displayed
an arrogant disregard for the
law, believing that it was permissible
for him and not a court of law to make the decision. This is a
character defect espousing
the belief that Mr Edeling clearly held
that the citizens of Lesotho are not entitled to the protection
afforded to South Africans
against dishonest lawyers. Being a fit and
proper person to practise as an advocate is not territorially
confined. The Constitutional
Court in
Ndleve v Pretoria Society of
Advocates
said in relation to similar conduct in South Africa
that:
‘
The
applicant’s continued practice as an advocate after this Court
dismissed his first application for leave to appeal borders
on
contempt of court. It is certainly unethical unprofessional conduct.
It is especially troubling since the purpose of a court’s
order
striking an advocate from the roll is not simply punishment. It is
rather “the protection of the public
.’’’
[5]
That
is equally applicable to practising in a neighbouring state, which
recognises admission in South Africa as befitting someone
to practise
there.
[21]
Moreover, in neither his 2009 application, when the fact that he was
practising in Lesotho came to light, nor his 2015 application
did Mr
Edeling
disclose
that a Lesotho court had trenchantly criticised his conduct as an
advocate in the course of a matter. In his detailed founding
affidavit in this application he asserted ‘I am unaware of any
complaint about my conduct or the quality of my work in Lesotho
–
whether by a client, attorney, colleague or judge’. This was
clearly untruthful on his part, (made under oath) when
one considers
the following: In a judgment in 2000, the Lesotho Court of Appeal
said:
[6]
‘
This alleged
conspiracy was an issue throughout the hearing. A reading of the
record shows, furthermore, that it is one which Mr
Edeling, on behalf
of his clients, particularly SDM, pursued with a recklessness and an
irresponsibility which can only be described
as breathtaking and with
the total disregard of the proprieties expected of counsel in the
conduct of his client’s case.
Wide ranging and scurrilous
attacks were made on LHDA’s witnesses, on the South African and
Lesotho Governments and on LHDA,
all of which proved in the result to
be baseless. Uncalled for and unwarranted attacks couched in the most
intemperate language
were also made by Mr Edeling on counsel for
LHDA.’
The
court went on to say that ‘the conspiracy issue was pursued in
the most immoderate, irresponsible and scurrilous manner’
and
fully deserved the Chief Justice’s description of it as
‘vexatious’. It concluded by saying that Mr Edeling’s
conduct was deserving of the court’s disapproval ‘in the
most stringent terms’.
[22]
When the Society raised the non-disclosure of these criticisms by the
Lesotho appeal court of
Mr
Edeling’s conduct, he retorted with equal hostility that a
proper consideration of the facts in that matter would lead
to the
conclusion that his conduct was proper. He claimed that a perusal of
the trial record would evidence proper conduct on his
part at all
times. He added that if it had occurred to him to mention the case he
believed that his conduct should have counted
in his favour. He cast
scandalous aspersions on four of the Judges in the Appeal Court,
stating that their respected predecessors,
like them retired South
African judges, had been removed and the bench ‘packed’
for the hearing of the appeal. Reliance
was placed on an opinion by
counsel attacking the judgment on its merits, but that was an attempt
to deflect attention away from
the criticism directed at him. The
opinion did not address the court’s criticism of his conduct.
He claimed that the proceedings
that culminated in the appeal were
currently being challenged as a denial of justice in international
arbitration proceedings.
[23]
Mr Edeling stated that in April 2016,
Swissbourgh
Diamond Mines (Pty) Ltd
(SDM)
had won an award from an International Arbitration Tribunal ordering
Lesotho to submit to fresh proceedings, before a new
arbitration
tribunal. He said the task of the new tribunal was to decide the
claim and the denial of justice alleged by SDM at
both first instance
and appellate level, to the effect that the President of the Court of
Appeal had packed the bench and had made
fundamentally flawed
findings of law.
The
implication was that this would establish the existence of the
conspiracy for which he contended and vindicate his conduct.
That was
incorrect. A reading of the award showed that it arose from the
abolition of the SADC tribunal by the party states. Within
a few days
after the arbitration proceedings were commenced on 17 May 2016
Lesotho commenced proceedings before the Singapore High
Court
(Singapore being the seat of the arbitration) to set aside the
reference for want of jurisdiction. Mr Edeling must have known
this
when he deposed to his replying affidavit, but he neglected to
mention it. Thereafter the Singapore High Court set aside the
reference in a judgment delivered on 14 August 2017.
[7]
That was not mentioned in the heads of argument on his behalf
delivered on 8 October 2018. By then the appeal against this decision
had been argued before the Singapore Court of Appeal, which dismissed
the appeal on 27 November 2018.
[8]
We were not told any of this. When it was raised with counsel there
was no suggestion that Mr Edeling was unaware of these developments.
It would be a surprise if he were because the attorney for SDM was
the same Mr Redelinghuys who was a co-trustee of the Condor
Trust and
deposed to an affidavit in support of Mr Edeling’s
re-admission.
[24]
Although we were invited not to read this material, a perusal of it
and of the two Singaporean judgments disclosed that the
arbitration
proceedings on which Mr Edeling relied as vindicating his conduct
during that trial did nothing of the sort. There
was nothing in the
documents provided to us to suggest that the question of his conduct
was ever reconsidered after the judgment
of the appeal court. Nor was
there anything to support the attacks on the judges beyond
conventional submissions that they had
erred in their view of the
applicable law governing the case. The judgment was delivered about
six years after the events that
gave rise to Mr Edeling’s
striking-off, about three years after he was struck off and some nine
years before he made his
2009 application for re-admission. The
normal conduct required of an advocate, and the duty of full
disclosure required in
ex
parte
applications,
demanded that this judgment be disclosed and explained in the 2009
application and this re-admission application.
Instead it was
extracted by the Society and explained, as with so much of Mr
Edeling’s conduct, by way of denials, deflection
and casting
aspersions on others.
[25]
Another unsatisfactory aspect of Mr Edeling’s affidavits was
the failure to describe in any detail exactly what he had
in fact
been doing between the years 1997 and 2010 when he resumed practice
in Lesotho. In his founding affidavit he stated without
clarification
that he worked as an insolvency consultant, advised liquidators,
attorneys and creditors in regard to the administration
of estate and
related matters. He also stated that he became proficient in various
computer programming languages necessary to
write internet based
database systems which would enable people at different places to
work in the same system and process, and
access information. In this
regard he said he was unable to find any clients who would pay for
any such systems.
[26]
According to the affidavits, after the striking off order in December
1997 Mr Edeling continued to practise as an advocate
for about a year
until all his applications for leave to appeal had been dismissed.
During this period and beyond he continued
to advise the liquidators
of Supreme Holding Ltd, by whom he had previously been retained as
counsel, as a consultant advising
them and their legal team. In 2000
he was appointed to chair a commission of enquiry in an insolvency
case in Lesotho, apparently
after the striking off judgment was
disclosed to the court in that country. He was also appointed to act
as a commissioner in South
Africa in several instances and has acted
as an ‘Insolvency Consultant’ working closely with
‘scores of liquidators,
attorneys and counsel’.
[27]
The next thing we know is that he was appointed as the investor
representative in the
Krion
pyramid scheme matter (
Krion
)
from mid 2002 until end of 2004. The appointment was made by Mr Leon
Lategan, then the Deputy Master of the High Court in Pretoria,
who
was aware of his striking off but regarded Mr Edeling as a ‘respected
member of the insolvency community’. Mr Lategan
deposed to an
affidavit supporting Mr Edeling’s readmission. On 1 April
2004 this court handed down a judgment criticising
Mr Edeling’s
conduct in the
Krion
[9]
matter stating:
‘
The
nature of the evidence presented in the founding affidavit and the
affidavit of the first respondent (Mr Edeling) leaves one
with no
doubt that it was hoped that agreement between the appellants and the
first respondent on all the essential issues would
carry the day.
Relying on authority supposedly given to him by a large number of
investors to consent to the terms of the first
order, the first
respondent agreed that all dispositions by the scheme to creditors
after March 1999 ought to be set aside. There
are many reasons why he
was not competent to have represented the investors or made such an
admission on behalf of investors. They
were debated before us in
argument. He relied first on an appointment or authorization by the
Master to the liquidators to appoint
him to represent investors.
Neither the Insolvency Act nor the Companies Act confers any such
power on a Master. The first respondent's
other ground is that he was
appointed by the Court in terms of the scheme of arrangement. Apart
from the fact that the Court did
not have the power to appoint him,
the worrying feature of the appointment (and that by the liquidators
supposedly authorized by
the Master) is that someone who had been
struck from the roll of advocates was appointed in a fiduciary
position. (The grounds
for his striking off have been
reported:
Society
of Advocates of South Africa (Witwatersrand Local Division) v
Edeling
1998
(2) SA 852
(W) at 898H-899F.) Whether due disclosure of these facts
had been made we do not know. Leaving aside that fact and the grave
doubt
whether the mandate given to the first respondent by investors
was broad enough to permit him to make admissions on behalf of those
whose agent he professed to be, the most fundamental objection to the
first respondent’s representation of a large body of
scheme
investors is that in discharging what was after all a fiduciary duty
he was faced with a major conflict of interest between
those
investors who had lost money in the liquidation of the scheme and
therefore were creditors of the scheme and those who were
not.’
[28]
According to the Society, in the
Krion
matter Mr Edeling
relied upon a letter to the Master which did not adequately or
correctly identify that his name had been struck
from the roll of
advocates. The letter motivating Mr Edeling’s appointment to
the position of investor representative misrepresented
the
circumstances in which Mr Edeling’s name was struck from the
roll. The relevant portion of the letter reads as follows:
‘
Mr
Edeling practised as an advocate for almost twenty years until his
name was removed from the roll arising from his involvement
in a
property transaction in 1993 which was structured to take advantage
of a loophole in the VAT Act. There were divided opinions
as to
whether he acted properly or not. Senior counsel specialising in Tax
matters had given opinions that the property scheme
was lawful and
proper. The Commissioner for Inland Revenue condemned the scheme and
those who had taken part in it. The Johannesburg
Bar Council held
that it was not proper for an advocate. The General Council of the
Bar of South Africa, however, reversed the
decision of the
Johannesburg Bar and held that Mr Edeling had not acted improperly in
any way. Mr Edeling then severely criticised
the Johannesburg Bar and
alleged that they had not properly applied their minds. The
Johannesburg Bar then applied to remove Mr
Edeling’s name from
the roll, relying on his involvement in the property scheme and
adding a further charge that he had insulted
senior members of the
Bar Council. The court held in favour of the Bar Council and removed
Mr Edeling’s name from the roll
of advocates. The facts are
reported in
1998 (2) SA 852.
’
[29]
Virtually the only accurate statements in this summary were that Mr
Edeling had practised as an advocate for almost twenty
years before
his name was removed from the roll and the case reference in the
striking off application. There was not a word about
his dishonesty
in participating in fraudulent transactions intended to procure an
improper VAT advantage. The letter was silent
about the findings by
two courts that he had committed perjury. It misrepresented the
decision by the GCB in regard to his appeal
and ignored the fact that
in important respects the high court made credibility findings that
were inconsistent with those of the
GCB tribunal. His striking off
was described merely as a ‘removal’ from the roll of
advocates. The entire thrust of
the letter was that this arose from a
dispute over an arcane point of tax law. Mr Edeling did not suggest
that he was unaware of
this. Indeed, he annexed the letter to his
affidavit with a view to rebutting the criticisms of him by this
court. The relationship
between Mr Edeling and the liquidators was
described by Conradie JA as ‘incestuous’. That appears to
have been apt.
[30]
When confronted with the criticism of this court in the Krion matter,
Mr Edeling remarked:
‘
Those
aspects were not fully canvassed. Had they been raised in the papers
either in the court below or in the appeal, my attorneys
and counsel
would have ensured not only that the facts relating thereto are fully
set out together with the supporting documents,
but that such facts
are drawn to the attention of the Supreme Court of Appeal by way of
heads of argument and submissions at the
hearing. In such events I
submit that the remarks in question will not have been made.’
The
criticism by this court was well founded as it included a query as to
how a person found to be dishonest could have been appointed
to such
a position. Mr Edeling’s reaction above is similar to his
reaction in the
Swissbourgh
matter saga above.
Once again he was obdurate in insisting that he had done nothing
wrong, displaying a profound reluctance to accept
the findings of the
court against him.
[31]
During 2013 Mr Edeling was instructed by the attorney general of
Swaziland to represent the Government of the Kingdom of Swaziland,
in
a case in that jurisdiction, which he asserted was a complex
liquidation matter. It is not known whether he disclosed to the
Swaziland courts that he was an advocate who had been struck off the
roll in South Africa. A curious feature of the judgment in
that
matter
[10]
is that both in the
body of the judgment and in the record of appearances Mr Edeling was
described as having the status of senior
counsel (SC). When this was
pointed out during the course of the appeal the suggestion proffered
was that this was an unfortunate
transposition of Mr Edeling’s
initials, but that cannot be correct as his name is reflected as
‘Advocate Chris Edeling
SC’. This is a South African
status, as both Lesotho and Swaziland have the status of King’s
Counsel. It is also a
status to which Mr Edeling aspired before he
was struck off. The absence of an explanation of how that designation
was used in
a case to which he referred as demonstrating his fitness
to be readmitted, is disquieting.
[32]
Overall the description that Mr Edeling gives, and the other facts
that can be gleaned from the affidavits suggest, that the
work that
he performed after he was struck off the roll as an advocate was,
apart from appearing in court, almost exactly the same
work that an
advocate specialising in insolvency would perform. The only
difference was that during the period from March 2006
to May 2008 he
was employed at Afrox Safety (Pty) Ltd in various capacities. Since
2009 he has been conducting a busy practice
as an advocate in
Lesotho. Throughout he has explained that his removal from the roll
was due to his participation in a transaction
involving the
exploitation of a loophole in the VAT legislation.
[33]
It is clear that Mr Edeling’s conduct since his striking off
indicates a consistent inability to accept the findings
made against
him by Melamet J and the court that struck him off. Clearly he lacks
remorse, much less the appreciation and acceptance
of his conduct,
and the reformation that is necessary to warrant his readmission as
an advocate.
[34] The judgment of the
high court readmitting Mr Edeling proceeded on the misconception that
its decision was discretionary. It
said:
‘
This
court may readmit Edeling if in its discretion, it finds that he has
once again become a fit and proper person to be re-admitted
and
re-enrolled as an advocate. . .
.
. .
In
these proceedings, as already stated, the objective is not to subject
Edeling to double jeopardy, but to use his past conduct
as a
barometer of his reformation . . .
.
. .
To
refuse this application on the basis that the findings in the
striking off judgment are inconsistent with what is called for
in
respect of the fitness and propriety of a person seeking admission or
re-admission as an advocate would amount to holding against
Edeling
in perpetuity, the findings of the court that struck him off; unless
of course, this court finds that he has not reformed
and that justice
would be served by continuing to protect the public from him by
refusing to re-admit him as an advocate. In that
regard it is
important to balance the factors set out … above to judicially
exercise the discretion whether to re-admit
Edeling or to dismiss the
application.’
This
reflected an incorrect approach to the case. Whether a person who has
previously been struck off the roll of advocates is a
fit and proper
person to be readmitted is a question of fact and the onus of proving
it rests on the applicant. The only issue
before the court is whether
that onus has been discharged. If it has, the court has no discretion
to refuse readmission. Conversely,
if it has not, the court has no
discretion to overlook that failure and admit the applicant. The high
court was misled by its reliance
on
Swartzberg,
which dealt with
the readmission of an attorney, where the statute in express terms
vested the court with a discretion in regard
to the applicant being a
fit and proper person to be readmitted. There is no equivalent
provision in the
Admission of Advocates Act.
[35
] In considering
whether Mr Edeling discharged the onus, the court must:
‘
have
regard to the nature and degree of the conduct which occasioned
applicant’s removal from the roll, to the explanation,
if any,
afforded by him for such conduct which might,
inter
alia
,
mitigate or even perhaps aggravate the heinousness of his offence, to
his actions in regard to an enquiry into his conduct and
proceedings
consequent thereon to secure his removal, to the lapse of time
between his removal and his application for reinstatement,
to his
activities subsequent to removal, to the expression of contrition by
him and its genuineness, and to his efforts at repairing
the harm
which his conduct may have occasioned to others.’
[11]
To similar effect in
Ex
parte Knox
1962 (1) SA 778
(N) at 784 it was said:
‘
The
court’s duty is first and foremost and at all times, to be
satisfied in these matters that the applicant is a proper person
to
be allowed to practise and a person whose re-admission to the ranks
involves no danger to the public and no danger to the good
name of
the profession.’
[36]
Mr Edeling while proclaiming his honesty, integrity, and remorse,
repeatedly failed to acknowledge in express terms that he
was struck
off for dishonesty. Nor did he demonstrate that he appreciated and
accepted this. Indeed his conduct since then has
always been
consistent with an endeavour to downplay the seriousness of his
misconduct. He did not disclose matters germane to
the question of
his readmission as an advocate. This failure undermined his assertion
that he had genuinely, completely and permanently
reformed and that
he could be trusted to carry out the duties of an advocate in a
satisfactory way as far as members of the public
are concerned.
His lack of candour about his
dishonesty and a paucity of information about his reformation was a
fatal barrier for his re-admission
as an advocate. Many years have
passed, and even though Mr Edeling has expressed contrition and
repentance, it is clear that he
has not accepted the gravity of his
conduct. It followed that he failed to discharge the onus of
satisfying the court that he was
a fit and proper person to be
re-admitted as an advocate. The appeal must succeed.
[37] In the result, the
appeal is upheld and the following order made:
1 The appeal is upheld
with costs including the costs of two counsel
2 The order of the court
a quo is set aside and replaced by the following order:
‘
The
application is dismissed with costs, such costs to include the costs
of two counsel.’
______________________
M J D Wallis
Judge
of Appeal
______________________
H K Saldulker
Judge
of Appeal
APPEARANCES:
For
Appellant: J Suttner SC (with him P Cirone)
Instructed
by:
Cliffe
Dekker Hofmeyr, Johannesburg
Phatsoane
Henney Attorneys, Bloemfontein
For
Respondent: K Foulkes-Jones SC (with her P Louw SC, D Goodenough
and S Kanyangarara)
Instructed
by:
Ramsay
Webber Attorneys, Johannesburg
Webbers,
Bloemfontein
[1]
Society
of Advocates of South Africa (Witwatersrand Division) v Edeling
1998
(2) SA 852 (W).
[2]
Swartzberg
v Law Society
of
the Northern Provinces
[2008]
ZASCA 36
;
2008
(5) SA 322
(SCA) para 22. See also
Law
Society, Transvaal v Behrman
1981 (4) SA 538
(A);
Kudu v
Cape Law Society
1977 (4)
SA 659
(A);
Ex parte Knox
1962 (1) SA 778
(N) at 782D-784G;
Ex
Parte Aarons (Law Society, Transvaal, Intervening)
1985 (3) SA 286 (T).
[3]
Ex parte
Wilcocks
1920
TPD 243
at 245.
[4]
Swain v
Society of Advocates, Natal
1973 (4) SA 784
(A) at 790G-791A;
General
Council of the Bar of South Africa v Geach and Others; Pillay and
Others v Pretoria Society of Advocates and Another;
Bezuidenhout v
Pretoria Society of Advocates
[2012]
ZASCA 175
;
2013 (2) SA 52
(SCA);
[2013] 1 ALL SA 393
(SCA) para 126.
[5]
Ndleve v
Pretoria Society of Advocates
[2016] ZACC
29
;
2016 (12) BCLR 1523
(CC) para 10.
[6]
Swissbourgh
Diamond Mines (Pty) Ltd v LHDA
2000
Lesotho LR 432 (CA) at 45. In a related matter in South Africa,
Swissbourgh
Diamonds (Pty) Ltd & others v Government of the Republic of
South Africa & others
1999
(2) SA 279
(T) at 341H-I, Mr Edeling was held to have made similar
submissions recklessly relating to the same alleged conspiracy.
[7]
Kingdom
of Lesotho v Swissbourgh Diamond Mines (Pty) Ltd and Others
[2017]
SGHC 195.
[8]
Swissbourgh
Diamond Mines (Pty) Ltd and Others v Kingdom of Lesotho
[2018]
SGCA 81.
[9]
Fourie NO & others v
Edeling & others
[2005]
4 All SA 393
(SCA) para 11.
[10]
Miller &
others v Government of the Kingdom of Swaziland
[2014]
SZC03 (2014).
[11]
Kudu v
Cape Law Society
supra fn 2 at 345H-346A.