Law Society of the Northern Provinces v Makhetha (13090/2017) [2017] ZAGPPHC 645 (27 June 2017)

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)REPUBLIC OF SOUTH AFRICA

Date of hearing: 2 June 2017

Date of judgment: 27 June 2017

Case number 13090/2017

In the matter between:

THE LAW SOCIETY OF THE NORTHERN PROVINCES

Applicant

and

TEBOHO STEPHEN MAKHETHA

Respondent

JUDGMENT

1. This is an application for the removal from the roll of attorneys, brought by the applicant, the Law Society of the Northern Provinces ("the LSNP), against the respondent, Teboho Stephen Makhetha (" Makhetha"). It was unopposed at the hearing on 2 June 2017.

2. On 2 June 2017, this Court granted an order for the removal from the roll of attorneys of Makhetha Attorneys and Makhetha Incorporated, in the terms set out in the order marked annexure "X" hereto. These are the reasons for the order.

3. The provenance of the striking off order was the launch of an urgent application on 22 February 2017 by the LSNP against Makhetha to remove him from the roll or to suspend him from practice coupled with ancillary relief. The grounds for the relief were two-fold, hamely, that he was no longer a fit and proper person to act as an attorney and that he was guilty of unprofessional, dishonourable and unworthy conduct.

4. The urgent application was served on Makhetha personally on 28 February 2017. A notice to oppose was served on 1 March 2017, by Makhetha personally. His answering affidavit was served on 14 March 2017, and the replying affidavit served on 23 March 2017. The application was enrolled for hearing on 28 March 2017. The matter was argued on 29 March 2017, during the course of which Makhetha

represented himself. Judgment was reserved, and a transcript obtained for the hearing on this date.

5. Ultimately, on 18 April 2017, an order was granted to suspend him from practice coupled with the appointment of a curator bonis to take control of, inter alia, his trust and section 78(1) and 78(2) investment accounts, to take possession of his accounting records, and ancillary relief. The case was postponed to 2 June 2017 for hearing before two judges of this Court. According to an affidavit of service by the LSNP's attorneys, copies of the order and notice of set down for 2 June 2017 were sent to Makhetha on

18 April 2017 by email, and "read report" received on 20 April 2017. Attempts to serve via the sheriff were unsuccessful. Attempts to contact Makhetha telephonically proved fruitless.

6. The LSNP proceeded to investigate Makhetha’s affairs as best it could, completing a curators' report on 22 May 2017.

7. Makhetha was admitted as an attorney of the Kwa Zulu Natal High Court on 13 March 1998, and was enrolled as an attorney of this Court on 20

July 2000. He was admitted as a conveyancer of this Court on 28 September 2000 and as a notary on 10 June 2004. He practised as an attorney other than for the period 4 May 2000 to 9 July 2000, and for the period 31 August 2000 to 9 October 2000 .

8. He commenced practising as a sole proprietor as Makhetha Attorneys, on 1 March 2001, at 16 Cerltauraus Avenue Bloubosrand in Randburg, Gauteng.

9. As a practising attorney, Makhetha was duty-bound to comply with the provisions of the Attorneys Act 53 of 1979 ("the Attorneys Act") and the Rules of the LSNP within whose jurisdiction he has practised and continued to practise. It merits mention that the L.SNP is enjoined to apply, where applicable, what are termed the old rules and the new rules, the latter being applicable from 1 March 2016.

10. In tote, eight offences formed the subject-matter of the urgent application. They are succinctly summarised below, together with the answers given by Makhetha in his answering affidavit, his statements in argument before Court on 29 March 2017, the LSNP's replying affidavit, and the curators' report dated 22 May 2017.

11. He had failed to timeously file his annual audit reports for 2015 and 2016. He had obstructed the office of the LSNP in the investigation of his practice affairs consequent on his failure to file the 2015 audit report. He had failed to pay his subscription fees for 2016 and 2017. Attorneys Klagsbrun Edelstein Bosman de Vries, ("KEBD"), had lodged a complaint against him, and three clients had made independent complaints against him.

12.Makhetha had failed to timeously file an unqualified audit report in terms of Rule 70 for the period ending February 2015; which report confirms that he maintained accounting records and had retained sufficient monies in his trust bank account to defray payment to trust creditors. This report was eventually flied on 30 November 2015, shortly before he was summoned to appear before a disciplinary hearing. This conduct contravened sections 41(1) and 41(2) Of the Attorneys Act, read with rules 70.3 and 70.4 of the old rules and rules 47.3 and 35.23 of the new rules. Makhetha argued that the LSNP Had forgiven him for this offence by excusing him from attending the enquiry.

13.Mr Matome Jackson Modiba ("Modiba") averred that Makhetha had received an instruction in March 2016 to attend to the transfer of certain property which Modiba had acquired from one Mr Mmabedi. Modiba had paid Makhetha the purchase price of R650 000,00 and transfer costs of R16 650,00. Makhetha had failed to attend to the transfer, and Modiba suspected him of having misappropriated the monies. By the date of service of tl'"1e application, the sum of R666 650,00 had not been repaid to Modlba. This conduct contravened rules 89,15, 89.30, 89.7 and 68.8 of the old rules and rules 40.10, 40.13 and 35.12 of the new rules. Makhetha admitted receipt of this complaint in the post. In his affidavit he admitted that these amounts were paid to him and unequivocally stated:

“It ls my intention to repay Mr Modiba the entire amount before the hearing of

this matter on the 28th March 2017.”

14.By the hearing of 29 March 2017, Makhetha averred that he had paid Modiba the sum of R300 000,00. He refused to accept any liability,

averring that Modiba probably needed the money and while the issue was under investigation, he decided not to put Modlba through

"financial hardship". Makhetha said that he would use funds from the sale of his own property to repay the balance to Modiba. He expected registration in April 2017 and undertook to pay the outstanding

balance to Modiba thereafter.

15. On 18 October 2016, KEBD, acting on behalf of SA Horne Loans, wrote a letter of complaint to the LSNP. KEBD had registered a bond over property in Kaalfontein on 10 December 2015 while Makhetha attended to the simultaneous transfer. When asked for the original title deed to submit to SA Horne Loans, Makhetha could not locate it. He offered to apply for a certified copy of the title deed from the deeds office. KEBD complained that Makhetha had failed to answer correspondence from it enquiring about the progress With the application to obtain a certified copy of the title deed, nor had he acted promptly in obtaining same. This conduct contravened rules 89.1S, 89.30, 89.23 and 89.25 of the old rules and rules 40.10, 49.13 and 47.1 to 47,3 of the new rules.

16.Makhetha's primary Issue was the fact that KEBD's complaint was not framed in an affidavit but rather a letter. According to the LSNP, this complaint was sent to Makhetha by email. He denied receipt. He averred that his email address had changed, and that he had notified the LSNP telephonically. No further detail about this notification was proffered by him.

17. The regulation 68 application was registered on 23 November 2016 and delivered on 18 January 2017. This was over a year after the property had been transferred.

18. Ms · Nkomeng Martha Mathuloe ("Mathuloe") instructed Makhetha in October 2015 to attend to the transfer of a property which she had acquired. She paid him a deposit on account of the price, of R295 200,00 and transfer fees of R15 200,00. Makhetha was instructed to invest the deposit in an interest-bearing account. Mathuloe's home loan application was rejected. This notwithstanding, Makhetha had failed to account to her nor to repay her the deposit or transfer fees. On 20 October 2016, she complained to the LSNP, which sent the complaint to Makhetha on 27 October 2016 and 8 December 2016. There was no reply to this correspondence. This conduct contravened rules 89.23, 89.25, 68.7, 89.7, 68.8 of the old rules and rules 35.11, 35.12 and 47.1 to 47.3 of the new rules.

19. Makhetha again complained that Mathuloe's complaint was not received at the correct email address. He averred that he had refunded the deposit and the sum of R15 000,00 of the transfer costs of R15 200,00. The sum of R15 000,00 was refunded on 4 March 2017, after service of the application, from his business account . He undertook to refund the balance of R200,00 when he walked out of Court on 29 March 2017, although he believed that he was entitled to claim wasted costs. He denied any obligation to invest the deposit because he said that the client had never instructed him to invest the money, but he undertook to pay the interest to resolve the problem.

20. On 23 February 2016, Ms Martha Mmoledi ("Mmoledi") preferred a complaint to the LSNP in which she stated that

Makhetha had been instructed to attend to the transfer of property following the sale of the complainant's property. Makhetha had failed to execute his mandate, nor had he issued status reports on its progress. The conduct contravened rules 89.15 and 89.30 of the old rules and 40.10 and 49.13 of the new rules.

21. Makhetha again complained that Mathuloe's complaint was not received at the correct email address. He averred that the property in question was owned by Modirna Qobolo, and that he attended to the transfer and accounted to the client. There were heated Interchanges

between Mmoledi, acting for Mathuloe, and Makhetha when the transfer was initially rejected by the deeds office and he failed to explain the reason for this. He replied that he was prepared to apologise to her and had requested a meeting to this end in an email to her dated 3 March 2017. The complainant indicated she would refer this to the LSNP and revert.

22. The sixth offence pertained to Makhetha's failure to pay his subscription fees totalling R6 042,00 for 2016 and 2017. This constituted a contravention of rule 104.1 of the old rules and rule 2.24 of the new rules. The fees were ultimately paid on 2 March 2017, after service of this application.

23. Concerning the four complaints against him, Makhetha averred that he was not afforded the opportunity to resolve same. He argued that he should have been called to disciplinary meetings prior to the launch of proceedings against him. He stated that he would definitely have settled the complaints amicably "as I always did in my 15 years in practice."

24.The seventh offence pertained to Makhetha's unprofessional conduct In the obstruction of Ms Phosina Kaserera ("Kaserera"), employed to investigate his financial activities in the practice. She complained of difficulties entertained in contacting Makhetha, and even when she managed to contact him and sent him an email, he failed to reply. When Kaserera told Makhetha of a scheduled inspection of his records on 14 December 2016, he cancelled same on the pretext that his bookkeeper had failed to furnish him with the records and was on holiday until January 2017. However, Kaserera managed to establish that the trust account of the firm revealed a trust balance of R8 775,08 at 22 September 2016 while there was a trust deficit of some R657 874,92. In reply, Makhetha alleged that Kaserera had

“derelicted her functions by not scheduling a date with me when I was at the Applicant's offices in early January 2017.”

25. The eighth offence pertains to Makhetha's failure to timeously file an unqualified audit report in terms of Rule 70 for the period ending February 2016. This conduct contravened sections 41(1) and 41(2) of the Attorneys Act, read with rules 70.3 and 70.4 of the old rules and rules 47.3 and 35.23 of the new rules. He was accordingly practisin9 without being in possession of a Fidelity Fund Certificate and, in the result, placing trust creditors at risk.

26. The report dated 22 May 2017 by joint curators Messrs Estelle Veldsman and Johan van Staden reveals the findings made following the suspension order of 18 April 2017.

27. The sheriff had been unable to gain access to M_akhetha's premises to remove the client files, accounting records and certificate of enrolment of Makhetha, to no avail. It was established that he had formed a company registered as Makhetha lncorporated Attorneys 2004/002546/21 but had never notified the LSNP of this fact. The registered auditors, Lacey and Associates, confirmed that they had never performed any accounting work for the firm apart from the trust audit, and the last time this occurred was for the audit for February 2016.

28. Some nine communications and/or phone calls had been received to complain about Makhetha and an additional seven complaints had been referred to the LSNP's disciplinary department.

29. The bank balance on the trust account of Makhetha Attorneys revealed a credit as at 29 April 2017 of R125 076,42. No section 78(2A) accounts had been identified, this despite the fact that Makhetha ran a conveyancing practice. The claims submitted thus far substantially exceeded the trust deficit of R657 874,92 as outlined in Kaserera's report dated 15 December 2016.

30. Makhetha had the option of attending Court personally or through legal representation on 2 June 2017 to defend his case. He elected not to do so.

31. A conspectus of the aforegoing facts, taken cumulatively, demonstrated, overwhelmingly so, that Makhetha was not a fit and proper person to remain on the roll as an attorney, notary and conveyancer. His conduct was characterised by dishonesty, expediency,

obstruction of the administration of justice, and a lack of remorse for his unprofessional and unethical actions.

32. To start with, superficial and unsubstantiated complaints were made concerning the modus operandi of the LSNP in not affording him the chance to address the issues at hearin9s prior to the application, and in not sending three of the complaints to the correct email address. His allegation that he notified the LSNP of the change of his email address was dubious and devoid of detail.

33. In answer to the blatant theft of R666 650,00 from his client, Matolo, he initially admitted liability in unequivocal terms. But at the hearing on 29 March 2017, he reacted with impunity by suggesting that he might not have been culpable for the refund, but would repay the money, without admission of liability.

34. He ran a busy conveyancing practice. Conveyancing, by its nature simpliciter, lends itself to the potential for financial chicanery.

It is plain from the plethora of complaints preferred against him (at least 20 as known at 22 May 2017), that Makhetha had become a professional predator, securing the payment of substantial amounts of money for deposits, purchase prices and transfer costs for conveyancing matters, and falling to execute his mandates and/or account to the parties for the finances on registration of transfer, or to refund monies when loans were not granted.

35. Makhetha also showed a lack of Insight in his unjustifiable and incorrect beliefs that he could charge wasted costs for a transaction

subject to a bond which was not granted, and that the onus was on the client to insist on the investment of trust monies held by him.

36. To compound matters, Makhetha has shown a cavalierly obstructive attitude towards compliance with the order of 18 April 2017. This conduct is irredeemable, and unbecoming of the profession of an attorney.

37. We refer to the case of Law Society of the Northern Provinces v le Roux 2012(4) SA 500 GNP, in which it was proved that attorney Naas le Roux had stolen R450 000 from his employer's firm's trust account. At paragraph 12(b):

"(b)On the evidence presented to us in this matter It would certainly offend against public policy and the public Interest not to consider the ultimate sanction of striking the respondent's name off the roll of attorneys. The uncontested evidence establishes without doubt that he is unfit to be an officer of this court. The respondent-

“committed about the worst professional sin that an attorney can commit by appropriating trust funds...... (Per Heter AP in Law Society of the Cape of Good Hope v Budricks 2003(2) SA 11 SCA at para 11).”

38. In the result, Makhetha has brought the profession into disrepute by acting in a dishonourable and unprofessional

manner.

39. Makhetha was proven to have committed substantial theft of monies. He showed no remorse for this misconduct, and therefore no insight into the wrongfulness of his actions. He had left behind him a trail of aggrieved clients. To compound matters, his irregular conduct continued beyond the date of service of the application and the grant of the suspension order against him. There was warrant for the ultimate sanction,

40. The aforegoing facts justified the relief sought by the LSNP. The application having been successful, costs should follow the result. It is established practice for costs to be awarded on the attorney and client scale.

41. An order accordingly granted in terms of the draft marked " X" .

__________________________________

TD BRENNER

ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

27 June 2017

I agree.

W HUGHES

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

It is so ordered.

Appearances

For the Applicant:

Mr SL Magardie

Instructed by:

Damons Magardie Richardson Attorneys

For the Respondent:

No appearance