Law Society of the Northern Provinces v De Wet (Landman) and Others (65036/2011) [2013] ZAGPPHC 332 (10 December 2013)

/LVS

IN THE NORTH GAUTENG HIGH COURT, PRETORIA

(REPUBLIC OF SOUTH AFRICA)

CASE NO: 65036/2011

DATE: 10/12/2013

REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

In the matter between

THE LAW SOCIETY OF THE NORTHERN PROVINCES......................PLAINTIFF

VS

ILLSE DE WET (LANDMAN)..................................................FIRST DEFENDANT

RIAAN JANSEN.................................................................SECOND DEFENDANT

DE WET MCNAUGHTON & JANSE INC...............................THIRD DEFENDANT

JUDGMENT

RANCHOD J:

[1] This matter was initially launched on 29 November 2011 by way of an urgent application by the plaintiff (‘the law society’)

for the suspension from practise as attorneys, of the first and second defendants, pending final determination of the matter. Potterill J granted the order in respect of the first defendant (‘De Wet’) and struck the mater off the roll with costs in respect of the second defendant (‘Jansen’). The reason why the matter was struck off the roll in respect of the second defendant is not clear but nothing turns on this for present purposes. The third defendant (‘the

firm’) is an incorporated company through which the first defendant conducted her practice.

[2] The matter was then re-enrolled for 5 October 2012 before Kubushi J and Kruger AJ when it was referred to trial due to a dispute of facts.

[3] The Judge President convened a full bench of two judges when the matter was ripe for trial and it duly proceeded before us on 9 September 2013.

[4] At the commencement of the trial we were informed that De Wet had consented to a draft order in terms of which she was to be struck off the roll of attorneys of this Court and other ancillary orders. The order was made an order of court.

[5] Ms De Wet in effect conceded that she was unfit to continue to practise as an attorney in that she had, inter alia, misappropriated

trust funds, delayed payment of trust funds and effected irregular and unidentifiable transfers from the firm’s trust banking

account to its business banking account.

[6] The trial proceeded in respect of Jansen, an attorney and conveyancer who was employed as a professional assistant by the firm.

[7] The thrust of the allegations against Jansen were that he - having signing powers on two of the firm’s trust banking accounts - effected irregular transfers from the accounts to the business accounts in order to fund the firm’s business expenses.

Further, that he was instrumental in the creation of the trust deficit and assisted De Wet in the misappropriation of trust funds.

[8] For the reasons that follow it is not necessary to deal with each of the specific instances of alleged transgressions of the applicant’s Rules of Conduct as De Wet has conceded that she was guilty of contravening the Rules.

[9] The crisp question to be answered is whether Jansen, who was only a professional assistant with signing powers on the bank accounts of the firm, was guilty of unprofessional and dishonourable conduct. The law society does not allege that he misappropriated trust funds himself and conceded as much during argument.

[10] From the papers and the evidence it is evident that De Wet had bought into the firm at some stage from its erstwhile directors. The firm’s offices at the time were in Springs. Later, De Wet opened a branch office in Pretoria and spent most of her time there while the Springs office was run by Jansen with the firm’s bookkeeper. De Wet would randomly visit the Springs office.

[11] The law society called two witnesses to testify - Ms Magda Geringer and Ms Candy Hancker.

[12] Ms Geringer testified that she is a legal official in the Monitoring Unit of the law society. She monitors and inspects attorneys’

accounting records. She had interviewed Jansen who had informed her that he had been aware of the deficit in the firm’s trust

accounts and that it was due to there not being enough funds in the firm’s business account to meet its business expenses.

[13] Ms Geringer further testified that Jansen told her he and Hancker would phone De Wet about expenses to be paid and she (De Wet) would authorise them to transfer funds from the trust account. He (Jansen) would thereupon transfer the funds from the trust account to the business account. She understood his explanation to mean that he was aware that business expenses had to be paid and he had informed De Wet, who gave him the authority to transfer funds from the trust account to the business account.

[14] Geringer said she investigated ten complaints from clients of the firm of which five related to conveyancing matters. She presumed that Jansen, who was the firm’s conveyancer, dealt with the conveyancing matters that were the subject of complaints but she was not certain. Under cross-examination Geringer testified that she could not tell which conveyancing matters were dealt with by Jansen. She also said she could not comment on the fact that Jansen disputed the alleged trust account deficits. However, from the papers it is apparent that the complaints relating to the conveyancing matters were against De Wet.

[15] Geringer’s opinion was that if Jansen was aware that there were trust account deficits then he should have informed the plaintiff about it.

[16] It was also put to Geringer in cross-examination that Jansen admits he became aware that De Wet was doing unlawful transfers from the trust account to the business account and that he failed to report it to the plaintiff. He also agrees that that is misconduct on his part and he should be sanctioned for his failure but not to the extent that he should be struck off the roll of attorneys.

[17] Finally, it was also put to Geringer that Jansen will deny having made any unlawful transfers from the firm’s trust account to its business account. Geringer responded that she could not comment and that she could not determine the precise trust account shortfall from the records received from De Wet.

[18] Ms Hancker, the plaintiffs second witness, testified that she was the firm’s bookkeeper since about 2006 and left the firm in October 2010 at the same time as Jansen. She was employed at the Springs office. She said De Wet would draw up a list of creditors and effect transfer of funds from the trust account to the business account. However, Jansen would make the transfers if De Wet was not available to do so. De Wet had an SMS system in place so that she (De Wet) was automatically informed whenever Jansen transferred money from the trust account to the business account. She was of the view that Jansen was suitably supervised by De Wet due to the SMS notification system.

[19] Hancker further testified that Jansen had made De Wet aware of the trust deficit. At one stage he also lent money to De Wet to cover a shortfall in the trust account. Whenever trust to business account transfers were done she was not given a proper schedule and therefore could not identify and debit the correct trust creditors.

[20] Of importance is Hancker’s testimony that she had never received instructions from Jansen to make transfers from the trust account to the business account. The instructions were from De Wet only. She said De Wet - not Jansen - calculated the amounts to be transferred from the trust account to the business account. She could not say whether Jansen caused any of the trust account deficits.

[21] The law society thereafter closed its case and Jansen closed his case without testifying or leading any other evidence.

[22] It has been held in a number of applications for the striking off or suspension of an attorney that it involves a three-stage enquiry. The Court first decides whether the offending conduct has been established. If the answer is yes, a value judgment is required to decide whether the person concerned is not a fit and proper person as envisaged in section 22(1) (d) of the Attorneys Act 53 of 1979 (‘the Act’). If the answer is again in the affirmative, the Court must decide in the exercise of its discretion whether, in all the circumstances of the case, the person in question is to be removed from the roll or merely suspended from practise.1

[23] Section 22(1) (d) of the Act provides:

Any person who has been admitted and enrolled as an attorney may on application by the society concerned be struck off the roll or suspended from practice by the court within the jurisdiction of which he practises ... if he, in the discretion of the court, is not a fit and proper person to continue to practise as an attorney.

1 The Law society of the Cape of Good Hope v Budricks 2003 (2) SA 11 (SC/4,) at 13J-14A.

[24] The law society’s counsel submitted that even though the matter was referred to trial, the proceedings remained disciplinary in nature and Jansen should have assisted the Court by testifying. Counsel conceded that Jansen is not accused of misappropriating trust funds. Plaintiffs submission was that Jansen was aware of the misappropriation of trust funds by De Wet and should have reported it immediately to the plaintiff. The failure to do so constituted unprofessional and dishonourable conduct on his part and was a contravention of rule 89 of the law society’s rules. Jansen’s counsel agreed with the latter submission and that an appropriate sanction may be imposed. In answer to a question from the Court, he said that the Court may take his submission as an admission by Jansen that he was guilty of the offending conduct. Counsel suggested that an order of suspension from practise, which is suspended on suitable conditions, may be appropriate. It has been held that an applicant law society is entitled to apply for a respondent attorney to be called for cross-examination under Uniform Rule 6(5)^. That right may usefully be invoked where the facts alleged in the attorney’s answering affidavit [here in the pleadings] fall peculiarly within such attorney’s knowledge and suspicion attaches to their veracity. (A court could also call for oral evidence mero motu: whatever the position may be in relation to other types of application, in matters such as the present the court is entitled to call for evidence to enable it properly to do so.) If the attorney is not cross-examined then, unless the allegations and denials made in the answering affidavit are so far-fetched or clearly untenable that the court is justified in rejecting them merely on the papers, the case must be decided on the common cause facts and, where there is conflict, on the attorney’s version. Speculation as to what

might really have happened is not permissible. (Footnotes omitted.)

Botha v Law society, Northern Provinces [2008] ZASCA 106; 2009 (1) SA 227 (SCA) at 231 para [4].

[25] The law society did not apply to have Jansen called for cross-examination and we were satisfied in the light of the concession made by Jansen that it was not necessary to do so.

[26] The offending conduct renders Jansen an unfit person to practise. In Botha3 it was held that the decision whether an attorney who has been found unfit to practise as such should be struck off or suspended was a matter for the discretion of the court of first instance.

[27] The evidence before us is that Jansen was admitted as an attorney on 5 September 2000 and as a conveyancer on 10 September 2007. He previously practised as a professional assistant in the employ of the firm until he left in October 2010. He currently practises as a professional assistant in the employ of Baartman Attorneys. There is no evidence to indicate that he has since then contravened any of the provisions of the Act or the applicant’s rules - a period of almost three years by the time this matter came before us, nor has there been any suggestion that he has not conducted himself properly. It appears unlikely that he will repeat the offending conduct in future.

[28] Jansen agreed, and as is usual in applications (in this instance trial) of this nature he should pay the costs of the law society on the attorney and client scale.

[29] The following order is made:

Above rt2, para 24

(1) The second defendant is suspended from practising as an attorney for one year.

(2) The suspension referred to in (1) above is suspended for three years with effect from date of this order on condition that the second defendant is not found guilty of unprofessional, dishonourable or unworthy conduct in terms of rule 89 of the rules of the plaintiff committed during the period of suspension.

(3) The second defendant is to pay the costs of the plaintiff on the scale as between attorney and client.

N RANQjHDDQ

JUDGE OF THE HIGH COURT

I agree:

J KRUGER

ACTING JUDGE OF THE HIGH COURT

Parties:

Plaintiffs Counsel:............................................Mr Leotlela

Instructed by:...................Rooth & Wessels Inc, Pretoria.

Defendant’s Counsel:............... Attorney C R Du Plessis

Instructed by:... Geyser van Rooyen Attorneys, Pretoria.