Law Society of the Northern Province v Ntobeng and Others (1744/2013) [2014] ZANWHC 50 (25 November 2014)

IN THE HIGH COURT OF SOUTH AFRICA

(NORTH WEST DIVISION, MAHIKENG)

CASE NO: 1744/2013

In the matter between:

THE LAW SOCIETY OF THE NORTHERN

PROVINCE.........................................................................................................................APPLICANT

and

MOTUBATSE RUPHAS NTOBENG.....................................................................1st RESPONDENT

RELEBOGILE MAFRIKA RIKHOTSO............................................................. 2nd RESPONDENT

THE LAW SOCIETY OF BOPHUTHATSWANA................................................3rd RESPONDENT

JUDGMENT

GURA J:

Introduction

[1] The applicant applies that the name of the first and second respondent be struck from the roll of practising attorneys. There is also a prayer for ancillary relief. The application was unopposed.

The First and Second Respondent

[2] The first respondent was admitted as an attorney of the High Court on 29 September 2009 and enrolled as an attorney of this Court on 24 June 2010 and his name is still on the roll. According to the Law Society’s records, he is currently practising as an attorney of this Court for his own account and as a single practitioner under the name and style of M R Ntobeng Attorneys

at House number 2006, Mpolokeng Street, Zone 2, Ga Rankuwa. He is a member of the third respondent.

[3] The second respondent was admitted as an attorney on 31 May 2001 and his name is still on the roll. He previously practised as an attorney of this Court for his own account and as a single practitioner under the name and style of Lebo Rikhotso Attorneys at House number 2006, Mpolokeng Street, Zone 2, Ga- Rankuwa

[4] On 4 June 2010 he (2nd respondent) was suspended from practising as an attorney of this Court. On 24 March 2011 he was suspended from practising as an

attorney for a further period of three months which suspension lapsed on 24 June 2011.

[5] According to the second respondent he is currently employed by his former candidate attorney (the first respondent) and according to the Law Society records he is currently a non-practising attorney. However, he is currently practising as an attorney despite being registered as a non-practising attorney with the Law Society. The first respondent’s current practise address corresponds with the address of the second respondent’s former practice, namely House number 2006, Mpolokeng Street, Zone 2, Ga Rankuwa.

The cause of the Application

[6] The facts and circumstances which prompted the Law Society to bring this application to the Court include the following:

6.1 there is a substantial trust deficit in the firm’s bookkeeping;

6.2 the first and second respondents misappropriated trust funds;

6.3 the first and second respondents effected irregular transfers from the firm’s trust banking account to the business banking account;

6.4 the firm failed to keep proper accounting records in respect of the practice;

6.5 the first and second respondents contravened several provisions of the Attorneys’ Act and Law Society Rules;

6.6 the first and second respondents failed to reply to correspondence addressed to them and communication directed at them.

6.7 the first and second respondents failed to properly account to clients in respect of trust funds;

6.8 the first and second respondents failed to give proper attention to the affairs of their clients; and

6.9 the Law Society received several complaints against the first and second respondents.

Rule 70 Auditor’s Report

[7] The first respondent failed to submit his Rule 70 auditor’s report for the period ending 29 February 2012 to the Law Society timeously. This report had to be submitted to the Law Society on or before 31 August 2012. The purpose of a Rule 70 auditor’s report is to satisfy the Law Society that an attorney’s accounting records are kept in accordance with the provisions of the Rules and the Act and that the attorney handles and administers trust monies entrusted to him by his clients properly and responsibly. By failing to submit his Rule 70 auditor’s report to the Law Society timeously, the first respondent contravened the provisions of Rule 70. According to the provisions of Rule 89.11 the first respondent made himself guilty of unprofessional, dishonourable and unworthy conduct by contravening Rule 70.

[8] The first respondent eventually submitted his Rule 70 auditor’s report for the period ending 29 February 2012 to the Law Society during May 2013, nine months after the due date. To make matters worse the report was qualified and reported irregularities in the firm’s bookkeeping to the Law Society.

Fidelity Fund Certificate

[9] Section 41(1) of the Attorneys’ Act provides that a practitioner shall not practise or act as a practitioner for his own account or partnership unless he is in possession of a fidelity fund certificate. This stipulation is peremptory by nature and a contravention thereof is in terms of section 83(10) of the Attorneys’ Act an offence punishable with a severe fine. The purpose of the issue of a fidelity fund certificate is to protect the general public. The Attorney Fidelity Fund (the fund) was founded for the purpose of reimbursing persons who suffer pecuniary loss as a result of theft committed by a practising attorney. A fidelity fund certificate is mainly issued on the strength of an unqualified auditors’ report which must be submitted annually to the Law Society in terms of Rule 70. This report must be submitted within six months of the annual closing of the accounting records of the firm concerned.

[10] Due to the fact that the first respondent failed to submit his Rule 70 auditor’s report for the year ending 29 February 2012 to the Law Society timeously and due to the fact that the report which was subsequently submitted to the Law Society was qualified, the first respondent was not issued with a fidelity fund certificate for 2013. He nevertheless continued practising as an attorney without a fidelity fund certificate from 01 January 2013. He also practised as an attorney without a fidelity fund certificate during the entire 2012. The second respondent is, needless to say, not in possession of a fidelity fund certificate.

[11] After the firm had failed to submit a Rule 70 auditor’s report for the period ending 29 February 2012 to the Law Society and after the Law Society had received complaints against the firm, inter alia, to the effect that it failed to account in respect of trust funds, the Law Society instructed a chartered accountant and auditor, Mr Deleeuw Swart (Swart), to visit the firm, to inspect the firm’s accounting records and practice affairs and to investigate the complaints. Swart executed his mandate and reported to the Law Society on 13 August 2013.

[12] Swart visited the firm on 5 June 2013, 8 July 2013 and 31 July 2013 respectively. He was under the impression that the first respondent is a single practitioner, but on 5 June 2013 he was met by both the first and second respondents. The second respondent is allegedly in the employ of the firm as a professional assistant.

Nature and structure of practice

[13] The first respondent opened his practice on 26 July 2010 and he was a single practitioner. The second respondent joined the first respondent as a professional assistant during July 2011, after the second respondent’s suspension referred to above had lapsed. The second respondent previously practised as an attorney under the name and style of Lebo Rikhotso Attorneys. He did so until his suspension on 4 June 2010. The first respondent allegedly took over the practice of Lebo Rikhotso Attorneys at the time of the second respondent’s suspension.

[14] The Law Society directed an enquiry at the firm on 16 March 2012 relating to the status of the second respondent. The firm replied on 30 March 2012 and advised the Law Society that the second respondent was in the employ of the first respondent as a professional assistant.

Trust Banking Account

[15] The firm kept its banking account at the Wonderpark Branch of First National Bank. On 30 April 2013 there was an amount of R957 111.96 available in the said account.

Receipts

[16] The firm received all monies in its trust banking account, irrespective of whether the monies were trust or business monies. The firm’s receipts did not reflect that they were in fact trust receipts. The firm used books printed for the Lebo Rikhotso Attorneys, the second respondent’s former practice.

Clients’ ledger accounts

[17] The firm’s bookkeeping system did not produce a list of the firm’s trust creditors. Such list had to be prepared by hand, but it was not prepared by the first and second respondent. No trust creditors’ lists were available for inspection by Swart. The above mentioned failure constitutes a contravention of the provisions of Rule 69.7.1 of the Law Society Rules.

[18] Swart found that a number of the firm’s clients’ ledger accounts reflected debit balances. The existence of the above mentioned debit balances constitute a contravention of the provisions of Rule 69.3 of the Law Society Rules.

Fees journal and transfer procedure

[19] The firm did not prepare and utilise any fee journals.

Trust position

[20] No lists of trust creditors were available for inspection by Swart. In view of the qualifications contained in the firm’s Rule 70 auditor’s report for the period ending 29 February 2012, Swart selected the dates 29 February 2012 and December 2012 respectively to compare the total of the balances of the firm’s trust creditors with the available balances of the firm’s trust account. Swart found that there were trust deficits in the firm’s bookkeeping on both 29 February 2012 and 31 December 2012. These deficits are calculated as follows:

29/02/2012 31/12/2012 List of trust creditors Less: Trust bank account balance Trust deficit 108 529.37 67 814.84 40 714.53 1 050 538.54 738 502.42 312 036.12

[21] The above mentioned trust deficits constitute a contravention of the provisions of Section 78(1) of the Attorneys Act and Rule 69.3.1 of the Law Society Rules.

[22] Swart scrutinised the firm’s trust ledger accounts as at 29 February 2012 and 31 December 2012 respectively. He found that seven of the firm’s trust creditors’ accounts reflected debit balances amounting to R40 714.52 as at 29 February 2012. The records reflected eight creditors’ accounts with debit balances as at 31 December 2012, amounting to R42 648.07.

[23] The debit balances amounting to R 40 714.52 as at 29 February 2012 resulted in a trust deficit in the firm’s bookkeeping in the same amount. The deficit evidences a contravention of the provisions of section 78 (1) of the Attorneys Act and Rule 69.3.1 of the Law Society’s Rules. The trust deficit was corrected by the firm by way of a deposit in the amount of R 40 714. 52 on 4 June 2013.

[24] The debit balances amounting to R 42 648.07 as at 31 December 2012 resulting in a further trust deficit, in an amount of R 42 648. 07. This trust deficit, likewise, constitutes a contravention of the provisions of section 78 (1) of the Attorneys Act and Rule 69.3.1 of the Law Society’s Rules. The last mentioned trust deficit was partially corrected by the firm by way of a deposit in the amount of R 40 714.52 into the firm’s trust banking account on 4 June 2013.

[25] Swart inspected the firm’s trust creditor’s balances as at 29 February 2012 and 31 December 2012 respectively. It was clear to Swart that certain credit balances contained in the firm’s trust creditors’ list which were available in respect of fees were not removed from the firm’s trust creditors’ list by way of the required transfer journals, which journals should have been processed. The failure to process fees contributed to the trust deficits in the firm’s bookkeeping.

[26] Swart identified trust creditors which appeared to him (Swart) to be in respect of fees which have not been debited against trust creditors’ accounts by way of transfer journals. The values of the fees identified were an amount of R 90 823.49 as at 29 February 2012 and an amount of R 108 529.07 as at 31 December 2012. The above mentioned state of affairs constitutes a contravention of the provisions of Rules 68.1 and 68(2) of the Law Society’s Rules.

[27] If the fees referred to by Swart, which appeared to Swart to represent fees which had not been debited against trust creditors’ accounts, are taken into consideration, the firm’s trust position as at 31 December 2012 reflected a trust deficit in an amount of R 167 683.68. This deficit is calculated as follows:

List of trust creditors Less : Fees still to be debited Less : Trust bank account balance Add : Deposit 4 June 2013 Trust deficit 738 502.42 40 714.52 1 050 538.54 103 682.92 946 855.62 779 216.94 167 638.68

[28] The above mentioned deficit constitutes a contravention of the provisions of section 78 (1) of the Attorneys Act and Rule 69.3.1 of the Law Society’s Rules.

[29] Swart enquired from the first respondent as to the cause of the abovementioned debit balances and deficits in the firm’s bookkeeping. The first respondent replied that he was unaware of the errors in the firm’s bookkeeping. Swart’s investigation revealed that most of the firm’s clients were in fact clients of the second respondent and that most of the trust funds held by the firm were held on behalf of clients of the second respondent. The first respondent signed trust cheques on behalf of the firm as and when he was requested to do so by second respondent. The first respondent explained to Swart that he was not in a position to correct and eliminate the trust deficits in the firm’s bookkeeping.

Qualification of Rule 70 Auditor’s Report

[30] The firm failed to submit its Rule 70 auditor’s report for the period ending 29 February 2012 to the Law Society timeously. It had to be submitted on or before 31 August 2012. It was eventually submitted to the Law Society at the end of May 2013. The above mentioned Rule 70 auditor’s report was qualified. It reported that the firm’s accounting records reflected a trust deficit. The auditors also reported to the Law Society that certain creditors’ ledger accounts were overdrawn.

Position of second respondent

[31] In this Court’s judgment in the Law Society’s application for the suspension of the second respondent the Court said the following in its judgement:

“On 4 June the first respondent (Mr Rikhotso) was suspended from practising as an attorney for his own account, or in partnership or as a director of a company pending the outcome of this case. When he addressed Court on the date of the hearing of the present case, he informed the Court that since the day of his suspension he has been employed by his former article clerk who is now practising as an attorney. As the first respondent conceded, this is humiliating experience in his life to be an employee of his one time clerk.

[32] At the time of Swart’s first visit to the firm he found signage at the premises indicating the name of the practice as Lebo Rikhotso Attorneys. Swart requested the first and second respondent to remove the signage. The second respondent assured Swart that the signage would be removed immediately. During Swart’s subsequent two visits to the firm he found that the signage of Lebo Rikhotso Attorneys had not been removed.

[33] Swart discussed the complaints received by the Law Society with the first and second respondents on 5 June 2013. He was advised that all the complaints had been attended to by the second respondent. The second respondent undertook to furnish Swart with the relevant office files for investigation during Swart’s next visit to the firm.

[34] During Swart’s visits to the firm on 8 July 2013 and 13 July 2013 the second respondent was not present. The first respondent advised Swart that the second respondent had not left the relevant office files for purpose of inspection by Swart. Swart was therefore unable to inspect the files. During Swart’s second visit to the firm he handed a copy of his calculations of the firm’s trust positions to the first respondent. Swart requested the first respondent to study the documents and to correct any errors and/or adjustments before his next visit to the firm. The first respondent undertook to do so. During Swart’s third visit to the firm he requested the first respondent to hand to him the calculations and adjustments that would be required. The first respondent replied that he had handed the relevant documents to the second respondent to attend to as he; (the first respondent) was not in a position to know what adjustments had to be made.

[35] The first respondent also explained that the second respondent handled the firm’s bookkeeping, that he attended to all payments on behalf of the firm and that he prepared the statements of accounts rendered to clients. He merely signed trust cheques at the request of the second respondent. He further advised Swart that the second respondent had not communicated with him and that all the relevant documentation was in possession of the second respondent.

[36] On 31 July 2013 the first respondent advised Swart that the second respondent was involved in something in Mpumalanga and that he very seldom attended the office. According to the first respondent the second respondent does not communicate with him. The first respondent was allegedly concerned that the problems relating to the second respondent’s clients would be to his detriment.

Complaint: Ms M J Mokoka

[37] Mokoka submitted a complaint dated 20 September 2012 to the Law Society and alleged the following: She appointed the firm during April 2011 to attend to the administration of the estate of her deceased husband. Upon the finalisation of the estate the liquidation and distribution account dated 27 November 2011 reflected that an amount of R700 045.57 was due and payable to her. Only an amount of R640 570.00 was paid by the firm to Mokoka, on 24 January 2012. An amount of R59 475.57 remained outstanding. According to the firm, another liquidation and distribution account was subsequently prepared which account reflected a lesser amount due to her. The firm failed to provide Mokoka with the alleged new account and failed to communicate and/or correspond with her. The last mentioned failure constitutes a contravention of the provisions of Rule 89.23 of the Law Society’s Rules.

[38] Swart discussed the compliant with both the first and second respondents and they explained as follows: The transfer of the immovable property was registered on 28 November 2011. The second respondent admitted that a further amount was due to Mokoka and that she had been short paid. He was however unable to indicate what the amount due to Mokoka was. He undertook to obtain the relevant information and to make it available to Swart.

[39] Swart received no further communication from the second respondent in this regard. The firm’s list of trust creditors as at 29 February 2012 does not contain an amount for Mokoka.

Complaint: Mr A M Phoko

[40] Phoko submitted a complaint dated 3 August 2011 to the Law Society and alleged the following: Phoko consulted with the firm during March 2010 and instructed the firm to assist him to recover monies from a building contractor. Phoko paid a certain amount to the building contractor for purpose of erecting a dwelling on a property. The building contractor failed to erect the dwelling. Phoko then entered into an agreement with the building contractor in terms whereof the building contractor was obliged to repay his money with interest. The building contractor failed to honour the agreement and to repay Phoko monies.

[41] Phoko paid an amount of R2 000.00 to the firm in respect of a deposit. He attended at the firm on several occasions, but received what he refers to as different stories. He did not receive any correspondence from the firm and he is unaware of the status of his matter. The last mentioned failure is a contravention of the provisions of Rule 89.23 of the Law Society’s Rules.

[42] Swart discussed the complaint with the first and second respondent and they alleged the following: The building contractor’s address was an office located in the Pretoria city centre. The firm was allegedly unable to locate the building contractor at the relevant address. The second respondent advised Swart that the firm’s fee would amount to more than R 2 000.00. The second respondent undertook to account to Phoko and to forward a copy of the statement of account to Swart. The second respondent therefore admitted to the failure to account to Phoko. The last mentioned failure is a contravention of the provisions of Rule 68.7 of the Law Society’s Rules. Swart received no further communication from the second respondent. The firm’s list of trust creditors as at 29 February 2012 does not contain an account for Phoko.

Complaint: Ms N M Masike

[43] Masike submitted a complaint dated 8 June 2012 to the Law Society and alleged the following. She consulted with the firm during February 2011 and instructed the firm to assist her in collecting arrear maintenance payments. She paid to the firm an amount of R1 300.00 in respect of a deposit. She was advised that the firm would institute proceedings in respect of monthly maintenance and collect arrear maintenance.

[44] The matter was set down for hearing on 2 March 2011. Neither the first respondent nor the second respondent nor Masike’s former husband attended the proceedings. The court did however issue a warrant of arrest. On 22 September 2011 Masike and the second respondent attended at the Soshanguve Magistrates’ Court and arranged for a new warrant of arrest to be issued. She did not receive any further communication or correspondence from the firm. The last mentioned failure constitutes a contravention of the provisions of Rule 89.23 of the Law Society’s Rules.

[45] Swart discussed the complaint with the first and second respondents and they explained as follows: The firm was allegedly unable to locate Masike’s former husband, despite the fact that a warrant of arrest had been issued and despite the fact that the second respondent attended Court on four occasions with Masike. The first and second respondent alleged that the matter could not be taken any further. Swart did not receive any further communication from either the first respondent or the second respondent regarding this complaint. The firm’s list of trust creditors as at 29 February 2012 does not contain an account for Masike.

Complaint: Ms M N Ngomane

[46] Ngomane submitted a complaint against the second respondent to the Law Society and alleged the following: She consulted with the firm during June 2011 and instructed it to assist her in the distribution of her joint estate. The Ga-Rankuwa Regional Court appointed the second respondent as the receiver and liquidator of the joint estate with the instruction to distribute the assets between Ngomane and her former husband equally.

[47] The only asset in the joint estate was an immovable property which had to be sold. It was subsequently sold for an amount of R310 000.00 on 6 February 2012. Ngomane paid an amount of R2 500.00 to the firm in respect of a deposit. The firm requested her to submit a claim in respect of the amounts spent by her on the property subsequent to the divorce and prior to the house being sold. The firm also requested Ngomane’s husband to pay his portion of the expenses relating to the property, but he did not co-operate.

[48] The firm failed to pay any amounts to Ngomane and to account to her. She did not receive any communication from the firm either. The last mentioned constitutes a contravention of the provisions of Rule 89.23 of the Law Society’s Rules.

[49] Swart discussed the complaint with the first and second respondents and they explained as follows: The dwelling was unoccupied for a period of time and was allegedly vandalised. In terms of the offer to purchase the seller had to attend to certain repairs to the property. The firm attended to the repairs on behalf of the seller and paid to Baloyi building contractor an amount of R21 650.00 in this regard. The firm Matseke Attorneys attended to the registration of the transfer of the property. The purchase price amounted to R310 000.00 and a bond was registered in favour of Standard Bank. The outstanding balance on the existing bond amounted to R132 594.33, leaving a balance in the amount of R167 405.67.

[50] After the transfer of the property had been registered, Matseke Attorneys accounted to the firm and paid an amount of R100 628.65 into the firm’s trust banking account on 29 March 2012. The firm paid an amount of R21 650.00 to Baloyi building contractor as well as the rates and taxes in an amount of R 2 620.00, an amount of R1 000.00 to one Mandla and an amount of R10 000.00 to the second respondent. An amount of R65 358.64 remained available to be distributed between Ngomane and Mr Ngomane. The firm calculated that an amount of R44 613.37 was due to Ngomane and an amount of R20 745.27 to Mr Ngomane. The firma paid the amount of R44 613.37 to Ngomane on 31 July 2012. The firm also attempted to pay the amount of R20 745.27 to Mr Ngomane, but Mr Ngomane refused to accept the amount calculated by the firm. The amount of R20 745.27 was therefore still reflected in the firm’s trust creditors’ account.

[51] Swart investigated the account of Mr and Ms Ngomane in the firm’s trust creditors’ account and found the payment which had been made to one Mandla in an amount of R1 000.00. He did not find an explanation for the said amount. The account also reflected the payment in the amount of R10 000.00 to the second respondent.

[52] The last mentioned payment to the second respondent is irregular. Any salary due to the second respondent should have been paid from the firm’s business banking account. The said payment to the second respondent constitutes a contravention of the provisions of Rule 69.5 of the Law Society’s Rules. It was clear to Swart that the firm did not keep Mr and Ms Ngomane advised on the sale of the property and the division of the proceeds. This failure is a contravention of the provisions of Rule 89.15 of the Law Society’s rules. The firm furthermore failed to account to Mr and Ms Ngomane. This is a contravention of the provisions of Rule 68.7 of the Law Society’s Rules.

Complaint: Ms R A Ranta

[53] The Law Society received a complaint dated 5 October 2011 from Ranta. She alleged the following: She consulted with the firm and instructed it to assist with the administration of the estate of her deceased husband. The firm was also instructed to transfer an immovable property into the name of Ranta, to collect monies due to the deceased estate and to register a motor vehicle into Ranta’s name. The firm failed to collect the money due to the estate. The firm intended selling the property in order to be able to fund the claim of a child of the deceased against the property and motor vehicle. The firm furthermore requested Ranta to forge a will and sign it (the will) on behalf of the deceased. Ranta refused to comply with the request.

[54] The firm addressed a letter to Ranta on 13 September 2011 and advised her of the following: The firm acknowledged the termination of its mandate dated 12 September 2012. The firm has instructed conveyancers to proceed with the transfer of the property. The firm allegedly did not advise Ranta to sell the property, but informed her that there were two beneficiaries in the estate, in addition to Ranta and that it would be necessary to sell the estate’s assets in order to fund the cash deficit. The firm decided to withdraw due to Ranta’s alleged lack of co-operation; and the firm undertook to pay the

balance of the money to the Master of the High Court after having deducted the firm’s fees from the money held by the firm.

[55] On 15 September 2011 Ranta addressed a letter to the firm in reply and stated the following: She wished the firm’s account to be taxed. She enquired as to why the property had to be sold. She, as the sole heir, expected the firm to handle the administration of the estate without any prejudice and discreetly. She again recorded that she had been requested to forge her late husband’s will.

[56] Ranta addressed an undated letter to the Law Society which the Law Society received on 13 March 2012. She alleged that the firm was holding the title deed of the property, an amount of R82 953.82, the death certificate and certain other documents. She alleged that she had been struggling financially since the deceased’s demise.

[57] The Law Society referred the particulars of the complaint to the firm for purposes of its comments and the firm replied on 29 October 2011. The firm alleged the following: It confirmed that the second respondent attended to the matter on behalf of Ranta. Ranta appointed the firm to assist her with the administration of the estate of her late husband. The firm submitted the necessary forms to report the estate to the Master. The Master’s office then advised the firm that the estate had already been reported by Ranta and that it would be necessary to cancel the existing letter of authority.

This was attended to by the firm. The deceased died intestate. The heirs in the estate were Ranta, a legitimate daughter and an illegitimate son of the deceased.

[58] Ranta insisted that the administration be proceeded with to the exclusion of the two children. The firm was not prepared to do so. If the two children were to receive their child’s share of the estate, the estate would not be in a position to pay each of the children their share due to a cash shortage in the estate. The only solution was therefore to sell the immovable property. Ranta was not prepared to consent thereto. The firm and Ranta were unable to resolve their differences and the firm therefore withdrew from the matter.

[59] Swart discussed the complaint with both the first and second respondents and they alleged the following: The money of the estate was deposited into the estate’s banking account. The second respondent undertook to send Swart a copy of the account, but he failed to honour his undertaking. Ranta terminated the firm’s mandate. Swart received no further communication from the second respondent. The firm’s list of trust creditors as at 29 February 2012 does not reflect Ranta as a trust creditor.

Request: D P Michelle Attorneys

[60] The second respondent was appointed as the liquidator in the matter of M J Mokgosi and M M Mokgosi. An amount of R577 276.57 was deposited into the firm’s trust banking account on 13 September 2012 and the firm acknowledged receipt of the funds. D P Michelle Attorneys applied for the removal of the second respondent as the liquidator and the transfer of the amount of R577 276.57 to its trust banking account. In a letter dated 26 September 2012 the firm advised D P Michelle Attorneys that the firm would put all the proceeds in abeyance pending the finalisation of the application.

[61] D P Michelle Attorneys requested, in a letter dated 26 November 2012, confirmation that the funds were deposited into the firm’s trust banking account. They also enquired as to the amount deposited and the capacity in which the first respondent held the money. The list of the firm’s trust creditors as at 31 December 2012 reflected an amount of R577 267.57 in the Mokgosi Liquidation.

The Court’s Discretion

[62] The question whether an attorney is no longer a fit and proper person to practise as such lies, in terms of section 22(1)(d) of the Act, in the discretion of the Court (Law Society of the Cape of Good Hope v Budricks 2003 (2) SA 11 (SCA)). In regard to an appropriate sanction to be imposed this also is a matter within the discretion of the court (Jasat v Natal Law Society 2000 (3) SA 44 (SCA)).

[63] In exercising its discretion, the Court is faced with a three stage inquiry:

63.1 The first enquiry is for the Court to decide whether or not the alleged offending conduct has been established on the preponderance of probabilities;

63.2 The second enquiry is whether, as stated in section 22(1)(d) of the Act, the practitioner concerned “in the discretion of the Court” is not a fit and proper person to continue to practice. This entails a value judgment;

63.3 The third enquiry is whether in all the circumstances, the practitioner in question is to be removed from the roll of attorneys or whether an order suspending him from practice for a specified period will suffice. Ultimately this is a question of degree.

See Jasat v Natal Law Society, (supra) at 51B–I; Law Society of the Cape of Good Hope v Budricks, (supra) at 13E – 14.

Findings

[64] It is clear on all the facts of this case that this particular firm of attorneys committed various transgressions of the provisions of the Act and the Law Society’s Rules. The following is just but an example of some of the irregularities:

64.1 Rule 69.7.1 of the Rules due to the fact that the firm failed at intervals of not more than three calendar months to extract a list of trust creditors and to compare the total of the list with the firm’s trust cash position;

64.2 Rule 69.3 of the Rules due to the fact that the firm failed to ensure that no account of any trust creditor was in debit;

64.3 Section 78(1) of the Attorneys’ Act read with Rule 69.3.1 of the Rules due to the fact that there was a trust deficit in the firm’s bookkeeping;

64.4 Rules 68.1 and 68.2 of the Rules due to the fact that the firm failed to keep proper accounting records;

64.5 Rule 89.23 of the Rules due to the fact that the firm failed to answer to or to appropriately deal with, within a reasonable time, any communication which required a reply or response;

64.6 Rule 68.7 of the Rules due to the fact that the firm failed to account to its clients;

64.7 Rule 69.5 of the Rules due to the fact that the firm made irregular withdrawals from its trust banking account and effected irregular transfers from the trust banking account to the business banking account.

[65] By failing to submit his Rule 70 report to the applicant timeously the respondent contravened the provisions of Rule 70. According to the provisions of Rule 89.11 the first respondent made himself guilty of unprofessional, dishonourable and unworthy conduct.

[66] Section 41(1) of the Act provides that a practitioner shall not practise or act as a practitioner for his own account or in partnership unless he is in possession of a fidelity fund certificate. This stipulation is peremptory by nature and a contravention thereof is, in terms of section 83(10) of the Act an offence punishable with a severe fine. The seriousness of the latter transgression cannot be over emphasised. Not only did the first respondent commit an offence but he also placed his trust creditors who may suffer pecuniary loss at risk.

[67] Another serious concern is found around the area of trust deficit. On 29 February 2012 and 31 December 2012 the deficit amount was R40 714.53 and R312 036.12 respectively. Whenever there is a deficit in a trust account, of an attorney’s firm, Courts will not insist that either negligence or wilfulness should be an element of breach of a trust duty. Strict liability is applied. An attorney who contravenes the provisions relating to his/her trust account and investment of trust money will be guilty of unprofessional conduct (Law Society, Transvaal v Matthews 1989 (4) SA 389 (T)).

[68] It is clear that the books of account in this firm are not in good shape. The seriousness of this contravention was emphasised in Law Society, Transvaal v Matthews (supra) at 395:

“Failure to keep proper books of account is a serious contravention and renders an attorney liable to be struck off the roll of practitioners

or liable to suspension; and the Courts have repeatedly warned practitioners of the seriousness of such a contravention. See Cirota and Another v Law Society, Transvaal (supra at 193 F–G). The seriousness is again underlined in rule 89 read with rule 89(11) of the applicant’s rules which provides that it is unprofessional and dishonourable or unworthy conduct on the part of the practitioner to contravene the provisions of the Attorneys Act of the applicant’s rules”.

Conclusion

[69] The Court is satisfied on a balance of probabilities that the two respondents have made themselves guilty of unprofessional, dishonourable and unworthy conduct. The behaviour particularly of the second respondent has gone far beyond the mark for him to be regarded as a member of the attorneys’ profession any longer. The behaviour of the first respondent is not anything less reprehensible. With his eyes wide open, he allowed himself to be entangled in this distasteful spider web.

[70] In the case of the Law Society of the Northern Provinces v Relebogile Mafika Rikhotso and Another, Case No 2076/2009 which served before this Court on 24 March 2011 (against the second respondent in the present case), I wrote:

“. . . . .For that reason I am of the view that although he committed several offences (and most of them more than once) he is not a fitting candidate for removal from the roll at this stage. Time will tell whether he mends his ways. . . . .” (Paragraph 89 of the judgment).

[71] It seems to me that he took this warning lightly because there he is (the second respondent) again having committed almost similar irregularities. Clearly time has arrived for him to part with the attorneys’ profession peacefully. It is my view that no other punishment will be suitable for the respondents except the ultimate sanction.

Order

[72] Consequently, it is ordered:

1. That the names of MOTUBATSE RUPHAS NTOBENG (the first respondent) and RELEBOGILE MAFRIKA RIKHOTSO (the second respondent) be struck from the roll of attorneys of this Court;

2. That paragraph 3 to 13 of the order dated 15 November 2013 remain in force;

3. That the first and second respondent be and are hereby directed:

3.1 to pay, in terms of section 78(5) of Act No. 53 of 1979, the reasonable costs of the inspection of the accounting records of the respondents;

3.2 to pay the reasonable fees and expenses of the curator;

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

3.4 to pay the expenses relating to the publication of this order or an abbreviated version thereof; an

3.5 to pay the costs of this application on an attorney and client scale as well as the application on 15 November 2013.

SAMKELO GURA

JUDGE OF THE HIGH COURT

I agree

T J DJAJE

ACTING JUDGE OF THE HIGH COURT

APPEARANCES:

DATE OF HEARING: 01 August 2014

DATE OF JUDGMENT: 25 November 2014

COUNSEL FOR APPLICANT : MR J LEOTIELA

COUNSEL FOR RESPONDENTS : NO APPEARANCE

ATTORNEYS FOR APPLICANT : MINCHIN & KELLY