Law Society of the Northern Provinces v Maiko and Another (495/08) [2008] ZANWHC 45 (20 November 2008)

IN THE HIGH COURT OF SOUTH AFRICA BOPHUTHATSWANA PROVINCIAL DIVISION

CASE NO.: 495/08

In the matter between:

THE LAW SOCIETY OF THE NORTHERN PROVINCES APPLICANT

and

KABELO STUART MAIKO 1 RESPONDENT

LAW SOCIETY OF BOPHUTHATSWANA 2nd RESPONDENT

HENDRICKS J & LANDMAN J

DATE OF HEARING 31 OCTOBER 2008

DATE OF JUDGMENT 20 NOVEMBER 2008

COUNSEL FOR THE APPLICANT ATTORNEY A T LAMEY

COUNSEL FOR THE RESPONDENTS NO APPEARANCE

REASONS FOR JUDGMENT

LANDMAN J:

[1] On 31 October 2008 we granted an order that the name of Kabelo Stuart Maiko, the first respondent, be struck from the roll of practising attorneys of this court and granted ancillary relief. These are the reasons for making the order.

[2] The applicant is the Law Society of the Northern Provinces. The applicant has jurisdiction over practitioners in the area of the former Bophuthatswana (together with the Law Society of Bophuthatswana, the second respondent) by virtue of section 84A of

the Attorneys Act 53 of 1979 (hereafter the "Attorneys Act"). The application was served upon the first respondent on 9 April 2008. The first respondent delivered a notice of intention to oppose the application on 7 May 2008. He did not deliver an answering affidavit. The notice of set down was served on the first respondent's attorneys on 8 September 2008. The first respondent did not appear at this hearing nor was he represented.

[3] The question whether an attorney is no longer a fit and proper person to practise as such lies in the discretion of the court. See section 22(1 )(d) of the Attorneys Act and Law Society of the Cape of Good Hope v C 1986 (1) SA 616 (A) and Law Society of the Cape of Good Hope v Budricks 2003 {2) SA 11 (SCA).

[4] The appropriate sanction, namely a suspension from practice or striking from the roll, also lies within the discretion of the court. See Jasat v Natal Law Society 2000(3) SA 44 (SCA). [5] This application is in the nature of disciplinary proceedings. It follows that a respondent is expected to co-operate and provide, where necessary, information to place the full facts before the court to enable the court to make a correct decision. Broad denials and obstructionism have no place in disciplinary proceedings. See Prokureursorde van Transvaal v Kleynhans 1995 (1) SA 839 (T) at 851E-f. [6] The opinion or conclusion of the Law Society that a practitioner is no longer a fit and proper person to practise as an attorney carries great weight with the court, although the court is not bound by it. See Kaplan v Incorporated Law Society, Transvaal 1981 (2) SA 762 (T) at 781 H. [7] The failure to keep proper accounting records is a serious contravention of the duties of an attorney. An attorney who fails to comply with this obligation is liable to be struck off the roll or to be suspended from practice. See Cirota and Another v Law Society, Transvaal 1979 (1) SA 172 (A) at 193 and Holmes v Law Society of the Cape of Good Hope and Another 2006 (2) SA 139 (C) at 152 B-F. [8] The first respondent failed to submit his auditor's reports for the periods ending 28 February 2002, 28 February 2003 and 29 February 2004 to the applicant. This failure constitutes unprofessional, dishonourable and unworthy conduct. [9] Because the first respondent failed to submit his auditor's report he was not issued with fidelity fund certificates for the years 2003, 2004, and 2005. Notwithstanding this, he continued practising as an attorney for his own account in contravention of section 41 of the Attorneys Act and sections 36(1) and 36(2) of the (Bophuthatswana) Attorney's Notaries and Conveyancers Act 29 of 1984. This constitutes a criminal offence and is regarded as a serious breach of an attorney's duty. See Law Society of the Northern Provinces v Mamatho 2003 (6) SA 467 (SCA) at 470D. [10] The first respondent's failure to submit his auditor's report caused the Law Society to instruct a chartered accountant (Mr Swart) to conduct an inspection of the first respondent's accounting records. Mr Swart visited the offices of the first respondent on 31 March 2005. He found the offices open and unlocked. The offices were deserted. Mr Swart concluded that the offices had not been used for an extended period of time. Several files, correspondence and other documents were found on the desks and client files were found in filing cabinets. [11] Attorneys Kock, Bester & Van Vuuren lodged a complaint with the Law Society on behalf of Mr K S Night, a former client of the first respondent. Mr Knight also lodged a claim with the Attorneys Fidelity Fund. He instructed the first respondent to apply for a liquor licence. On 25 June 2004 Mr Knight paid a deposit of Rl 500.00 to the first respondent in respect of fees and disbursements. [12] A certain Mr T A Monde instructed the first respondent to recover an amount of Rl 800 from a debtor. The first respondent subsequently informed the claimant that the defendant's properties were to be sold in execution. Thereafter Mr Monde was unable to make any further contact with the first respondent. Mr Monde was informed in April 2005 that the first respondent was no longer practicing as an attorney. Mr Monde believes that the first respondent recovered monies from the debtor, but failed to pay them over to him. [13] The applicant submits that prima facie the first respondent misappropriated and stole trust monies. Mr Johan van Staden, the Head of Member's Affairs, of the applicant reported to the Law Society on 17 May 2007 on the state of the first respondent's practice. He reported that there were no accounting

records available in the respondent's practice. There is no indication that the first respondent kept proper accounting records

in accordance with section 73(5)(b) of the Bophuthatswana Attorneys Act and rule 48(1) of the Bophuthatswana Law Society's rules. [14] The applicant has informed this court that, considering all the complaints against the first respondent cumulatively, the first respondent is no longer a fit and proper person to continue to practice as an attorney. His conduct does not meet the standard of behaviour, conduct and reputation which is required of an attorney and an officer of this court. [15] The applicant further submits that the first respondent's conduct has placed the public and Fidelity Fund at risk, especially having regard to the failure to keep any accounting record. The applicant contends that the claims that have been instituted with the Fidelity Fund, especially the one by Mr Knight, provides at least prima facie proof that the respondent has misappropriated or stolen trust monies. This inference is strengthened by the fact that no account records could be found in the practice of the first respondent and the fact that he deserted his practice. [16] I agree that such conduct is improper and highly irregular. It demonstrates that the first respondent is not a fit and proper

person to continue to practise as an attorney. [17] The applicant submits that in the circumstances and having regard to the serious nature of the misconduct of the first respondent and also the prima facie proof of dishonesty that the only appropriate order would be to strike the name of the first respondent from the roll of attorneys of this court. [18] It may have been appropriate to have suspended the first respondent from practice rather than strike his name from the roll of attorneys. But to consider this option we would need to have some insight into his reasons for failing to keep records and his failure to furnish his auditor's reports. He would also have to explain why he practised without being in possession of a Fidelity Fund certificate, what he did in Mr Knight's matter, why he did not account to Mr Monde regarding the money collected on his behalf and why he abandoned his practice. In addition we would need to know what steps, if any, he intends taking to rehabilitate himself. [19] The first respondent did not appear at a disciplinary hearing held by the applicant nor did he appear before us. In the absence of any explanation, striking his name from the roll of attorneys is the only reasonable order which we can make. [20] In the premises the draft order marked "X" was made an order of court. A A LANDMAN JUDGE OF THE HIGH COURT R D HENDRIKS JUDGE OF THE HIGH COURT ATTORNEYS: FOR THE APPLICANT : MINCHIN & KELLY FOR THE FIRST RESPONDENT : HLAHLA MOTLHAMME

[4] The appropriate sanction, namely a suspension from practice or striking from the roll, also lies within the discretion of the court. See Jasat v Natal Law Society 2000(3) SA 44 (SCA).

[5] This application is in the nature of disciplinary proceedings. It follows that a respondent is expected to co-operate and provide, where necessary, information to place the full facts before the court to enable the court to make a correct decision. Broad denials and obstructionism have no place in disciplinary proceedings. See Prokureursorde van Transvaal v Kleynhans 1995 (1) SA 839 (T) at 851E-f.

[6] The opinion or conclusion of the Law Society that a practitioner is no longer a fit and proper person to practise as an attorney carries great weight with the court, although the court is not bound by it. See Kaplan v Incorporated Law Society, Transvaal 1981 (2) SA 762 (T) at 781 H.

[7] The failure to keep proper accounting records is a serious contravention of the duties of an attorney. An attorney who fails to comply with this obligation is liable to be struck off the roll or to be suspended from practice. See Cirota and Another v Law Society, Transvaal 1979 (1) SA 172 (A) at 193 and Holmes v Law Society of the Cape of Good Hope and Another 2006 (2) SA 139 (C) at 152 B-F.

[8] The first respondent failed to submit his auditor's reports for the periods ending 28 February 2002, 28 February 2003 and 29 February 2004 to the applicant. This failure constitutes unprofessional, dishonourable and unworthy conduct.

[9] Because the first respondent failed to submit his auditor's report he was not issued with fidelity fund certificates for the years 2003, 2004, and 2005. Notwithstanding this, he continued practising as an attorney for his own account in contravention of section 41 of the Attorneys Act and sections 36(1) and 36(2) of the (Bophuthatswana) Attorney's Notaries and Conveyancers Act 29 of 1984. This constitutes a criminal offence and is regarded as a serious breach of an attorney's duty. See Law Society of the Northern Provinces v Mamatho 2003 (6) SA 467 (SCA) at 470D.

[10] The first respondent's failure to submit his auditor's report caused the Law Society to instruct a chartered accountant (Mr Swart) to conduct an inspection of the first respondent's accounting records. Mr Swart visited the offices of the first respondent on 31 March 2005. He found the offices open and unlocked. The offices were deserted. Mr Swart concluded that the offices had not been used for an extended period of time. Several files, correspondence and other documents were found on the desks and client files were found in filing cabinets.

[11] Attorneys Kock, Bester & Van Vuuren lodged a complaint with the Law Society on behalf of Mr K S Night, a former client of the first respondent. Mr Knight also lodged a claim with the Attorneys Fidelity Fund. He instructed the first respondent to apply for a liquor licence. On 25 June 2004 Mr Knight paid a deposit of Rl 500.00 to the first respondent in respect of fees and disbursements.

[12] A certain Mr T A Monde instructed the first respondent to recover an amount of Rl 800 from a debtor. The first respondent subsequently informed the claimant that the defendant's properties were to be sold in execution. Thereafter Mr Monde was unable to make any further contact with the first respondent. Mr Monde was informed in April 2005 that the first respondent was no longer practicing as an attorney. Mr Monde believes that the first respondent recovered monies from the debtor, but failed to pay them over to him.

[13] The applicant submits that prima facie the first respondent misappropriated and stole trust monies. Mr Johan van Staden, the Head of Member's Affairs, of the applicant reported to the Law Society on 17 May 2007 on the state of the first respondent's practice. He reported that there were no accounting

records available in the respondent's practice. There is no indication that the first respondent kept proper accounting records

in accordance with section 73(5)(b) of the Bophuthatswana Attorneys Act and rule 48(1) of the

Bophuthatswana Law Society's rules.

[14] The applicant has informed this court that, considering all the complaints against the first respondent cumulatively, the first respondent is no longer a fit and proper person to continue to practice as an attorney. His conduct does not meet the standard of behaviour, conduct and reputation which is required of an attorney and an officer of this court.

[15] The applicant further submits that the first respondent's conduct has placed the public and Fidelity Fund at risk, especially having regard to the failure to keep any accounting record. The applicant contends that the claims that have been instituted with the Fidelity Fund, especially the one by Mr Knight, provides at least prima facie proof that the respondent has misappropriated or stolen trust monies. This inference is strengthened by the fact that no account records could be found in the practice of the first respondent and the fact that he deserted his practice.

[16] I agree that such conduct is improper and highly irregular. It demonstrates that the first respondent is not a fit and proper

person to continue to practise as an attorney.

[17] The applicant submits that in the circumstances and having regard to the serious nature of the misconduct of the first respondent and also the prima facie proof of dishonesty that the only appropriate order would be to strike the name of the first respondent from the roll of attorneys of this court.

[18] It may have been appropriate to have suspended the first respondent from practice rather than strike his name from the roll of attorneys. But to consider this option we would need to have some insight into his reasons for failing to keep records and his failure to furnish his auditor's reports. He would also have to explain why he practised without being in possession of a Fidelity Fund certificate, what he did in Mr Knight's matter, why he did not account to Mr Monde regarding the money collected on his behalf and why he abandoned his practice. In addition we would need to know what steps, if any, he intends taking to rehabilitate himself.

[19] The first respondent did not appear at a disciplinary hearing held by the applicant nor did he appear before us. In the absence of any explanation, striking his name from the roll of attorneys is the only reasonable order which we can make.

[20] In the premises the draft order marked "X" was made an order of court.

A A LANDMAN

JUDGE OF THE HIGH COURT

R D HENDRIKS JUDGE OF THE HIGH COURT

ATTORNEYS:

FOR THE APPLICANT : MINCHIN & KELLY

FOR THE FIRST RESPONDENT : HLAHLA MOTLHAMME