Law Society of the Cape of Good Hope v Booysen (13854/2008) [2009] ZAWCHC 67 (8 May 2009)

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

Case No: 13854/2008

In the matter between:

THE LAW SOCIETY OF THE CAPE OF GOOD HOPE Applicant

and

NICOLAAS CHRISTOFFEL BOOYSEN Respondent

JUDGMENT DELIVERED ON 8 MAY 2009

ALLIE, J

[1] In this application, the applicant in its capacity as the professional governance body of attorneys, notaries and conveyancers

seeks the following relief in the Notice of Motion.

"1. the respondent's name be struck off the roll of attorneys of this Honourable Court.

1.the respondent shall surrender and deliver to the registrar of this Honourable Court his certificate of enrolment as an attorney.

2. should the respondent fail to comply with the provisions of the preceding paragraph of this Order within 2 (two) weeks from date

hereof, the Shehff for the District in which such certificate of enrolment is, be empowered and directed to take possession of and deliver the same to the Registrar of this Honourable Court.

3. the respondent shall deliver his books of account, records, files and documents containing, particulars and information relevant to:

4.1. any monies received, held or paid by the respondent for or on account of any person;

4.2. Any moneys invested by the respondent in terms of Section 78(2) and/or Section 78(2A) of Act No. 53 of 1979 of the Republic of South Africa;

4.3. any interest on moneys so invested which was paid over or credited to the respondent;

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

4.5. the respondent's practice as an attorney, to the curator appointed in terms of paragraph 10 hereof, provided that as far as such books of account, records, files and documents are concerned the respondent shall be entitled to have access to them, but always subject to the supervision of such curator or a nominee of such curator.

4. should the respondent fail to comply with the provisions of the preceding paragraph of this Order within 1 (one) week after service

thereof upon him or after a return by the person entrusted with the service thereof that he has been unable to effect service thereof on the respondent, as the case may be, the sheriff for the district in which such books of account, records, files and documents are, be empowered to take possession of and deliver them to such curator.

5. such curator shall be entitled:

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

6.2. to hand over all such records, files and documents over which the respondent exercised a lien to the persons entitled thereto as soon as he has satisfied himself that the fees and disbursements in connection therewith, if any, have been paid, or secured as contemplated in paragraph 7 below, or, in the event of any dispute as to the provision of security, in his discretion.

6. a written undertaking by a person to whom the records, files and documents referred to in the preceding paragraph are handed to pay such amount as, may be due to the respondent, 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.

7. such curator be empowered to require that any such file, the contents of which he may consider to be relevant to a claim, or possible or anticipated claim, against him and/or the respondent and/or the respondent's clients and/or the

Attorneys' Fidelity Fund (herein referred to and "the Fund") in respect of money and/or other property entrusted to the respondent, be redelivered to such curator,

8. the respondent be interdicted and prohibited from operating on his trust account(s) as defined in the following paragraph.

9. the director for the time being of the applicant be appointed as curator to administer and control the trust accounts of the

respondent comprising the separate banking accounts opened and kept by the respondent at a bank in terms of Section 78(1) of the said Act No. 53 of 1979 and/or any separate savings or interest-bearing accounts as contemplated by Section 78(2) and/or Section 78(2A) of the said Act No. 53 of 1979, in which moneys from such trust banking accounts have been invested by virtue of the provisions of the said sub­section or in which moneys in any manner have been deposited or credited (the said account(s) being herein referred to as "trust account(s)") with the following powers and duties:

10.1. subject to the approval of the Board of Control of the fund, 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 respondent was acting at the date of this order;

10.2. subject to the approval and control of the Board of Control of the fund, to recover and receive and, if necessary in the interests of persons having lawful claims upon the trust account(s) and/or against the respondent in respect of money held, received and/or invested by the respondent in terms of Section 78(1) and/or 78(2) and/or Section78(2) of the said Act No. 53 of 1979 (hereinafter referred to as "trust moneys"), to take legal proceedings which may be necessary for the recovery of money which may be due to such persons in respect of incomplete transactions in which the respondent may have been concerned and which may have been wrongfully and unlawfully paid from the trust account(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 respondent's books of account the names of all persons on whose account the respondent appears to hold or to have received trust moneys (hereinafter referred to as "trust creditors") and to call upon the respondent to furnish him, within 30 (thirty) days of the date of this Order or such further period as he 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 he may require to enable him 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, subject 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 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 78(3) of the said Act No. 53 of 1979, in respect of any interest therein referred to and, secondly, without prejudice to the rights of the creditors of the respondent, 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 respondent to the applicant, and, if there is any balance left after payment in full of all such claims, costs, fees and expenses, to pay such balance, subject to the approval of the Board of Control of the fund, to the respondent, if he is solvent, or, if the respondent is insolvent, to the trustee(s) of the respondent's insolvent estate;

10.8. in the event of there being insufficient trust monies in the trust banking account(s) opened by the respondent in terms of Section 78(1) and (2) of Act 53 of 1979 from which to pay the claims of trust creditors in full, and after having taken reasonable steps to ascertain the identity of such creditors and the amounts due to them, to distribute pro rate amongst creditors whose claims have been proved or admitted, the amount(s) reflected by the credit balance(s) in the said account(s) provided that the curator shall pay to trust creditors whose funds are held in separate accounts in terms of Section 78(2) of Act 53 of 1979, who satisfy him that they are entitled to such funds, the amounts due to such creditors;

10.9. subject to the approval of the Chairman of the Board of Control of the fund, to appoint nominees or representatives and/or consult with and/or engage the services of attorneys and/or counsel, and/or accountants and/or other persons, where considered necessary, to assist such curator in carrying out the duties of curator; and

10.10. to render from time to time, as curator, returns to the Board of Control of the fund showing how the trust account(s) has (have) been dealt with, until such time as the said Board notifies him that he may regard his duties as terminated;

11. the respondent be and is hereby directed:

11.1. to pay the fees and expenses of the curator, such fees to be assessed at the rate ofR300,00 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;

11.4 within a reasonable period after 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 cost, or otherwise, of the amount of the fees and disbursements due (to the respondent) in respect of his former practice, and should he fail to do so, he shall not be entitled to recover such fees and disbursements from the curator without prejudice, however, to such rights, if any, as he may have against the trust creditor(s) concerned for payment or recovery thereof.

12. any person whose rights are affected by the terms of this Order shall be entitled, on notice to the respondent, to make application to this Court for a variation of this Order on good cause shown."

[2] The respondent, a practising attorney duly admitted as such on 20 October 1987, elected not to oppose this application. The respondent deposed to an affidavit on 19 June 2008 which was handed to the applicant. In the affidavit the respondent alleged that he was ill for a period of 18 months and he did not have medical aid cover and paid for his hospitalisation from the trust monies in the account of Zeeman Attorneys. He stated further that he also conducted an estate agency known as West End Properties at the time and he paid that estate agency more than it was entitled to in estate agent's commission from the trust monies of Zeeman Attorneys. He acknowledged that he also used the trust funds to pay his personal liabilities such as home loan instalments, motor vehicle instalments and other personal expenses. He admitted that his conduct was unlawful and unethical and that he had no excuse for his conduct.

[3] The trust funds unlawfully used by the respondent were taken over a period of 15 months and amount to R2 634 490,97. The respondent

attempted to conceal his unlawful use of trust funds by depositing the money into the account of West End Properties, thereby creating

the impression that there was just cause for the deposits, namely estate agents commission.

[4] Section 78(7) of the Attorneys Act No. 53 of 1979 provides as follows:

"No amount standing to the credit of any practitioner's trust account shall be regarded as forming part of the assets of the practitioner, or may be attached on behalf of any creditor of such practitioner: Provided that any excess remaining after payment of all claims of persons whose money has, or should have, been deposited or invested in such trust account, and all claims in respect of interest on money so invested, shall be deemed to form part of the assets of such practitioner."

[5] The Attorneys Act is unequivocal about trust money not forming part of the assets of an attorney until legal costs can be justifiably

raised to prove an entitlement to such money.

[6] As a practitioner for almost 22 years, the respondent clearly appreciated the wrongful and unethical aspects of stealing trust

monies which primarily belong to the client of the attorney.

[7] Such conduct also places an undue burden on the financial resources of the Fidelity Fund which has an obligation to repay a client to whose credit the money stood, a portion of the funds, subject to the provisions of the Attorneys Act 53 of 1979.

[8] In Law Society of the Cape of Good Hope v Budricks 2003 (2) SA 11 (SCA) at para 11 Hefer JA said the following about theft of trust funds:

"Not only did he treat the board's instructions with disdain but in the process committed about the worst professional sin that an attorney can commit by misappropriating trust funds. He did so methodically over a substantial period of time and in respect of large sums of money."

[9] The professional background and the conduct of the respondent in casu is clearly markedly different from the respondent in case of the Law Society of the Cape of Good Hope v Peter 2009 (2) SA 18 (SCA). Peter was a newly qualified attorney operating in substantially different circumstances with a small amount of money over a short period.

[10] Applying the three-stage inquiry set out in Jasat v Natal Law Society 2000 (3) SA 44 (A) in the exercise of the court's disciplinary function as provided for in Section 22 of the Attorneys Act, firstly the offending conduct has clearly been established in as much as it has been acknowledged by the respondent. Secondly the respondent is not a fit and proper person to continue to practise as contemplated by Section 22(1 )(d) of the Attorneys Act in as much as he has breached a fiduciary duty and position of trust that he held as an attorney and as someone entrusted to operate the Trust Account of Zeeman Attorneys. To the extent that the nature and circumstances surrounding the theft of the trust monies in this case are very grave as described earlier, I am of the view that an appropriate sanction that will protect society from such conduct and prevent the respondent from dealing with trust funds until he can satisfy the court that he has rehabilitated, is an order that he be struck off the roll of attorneys.

[11] I would make an order in terms of prayers 1 to 12 of the Notice of Motion.

I agree and it is so ordered

FOURIE, J