Law Society of the Northern Provinces v Msibi v Kgokong and Another (75100/2016) [2017] ZAGPPHC 1101 (1 November 2017)

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

Case number: 75100/2016

Date: 1/11/2017

(1) NOT REPORTABLE

(2) NOT OF INTEREST TO OTHER JUDGES

(3) REVISED

In the matter between:

THE LAW SOCIETY OF THE NORTHERN PROVINCES

APPLICANT

And

SETSHEGO JEREMIAH KGOKONG

FIRST RESPONDENT

S J KGOKONG INCORPORATED ATTORNEYS

SECOND RESPONDENT

JUDGMENT

PRETORIUS J ,

(1) In this application the Law Society of the Northern Provinces apply for the removal of the first respondent's name from the roll of attorneys, alternatively for the suspension of the first respondent from practise as an attorney.

(2) On 14 September 2004 the first respondent was admitted and enrolled as an attorney of this court. He practised as an attorney in various capacities and at various law firms until he started practising as a sole director of his own firm, SJ Kgokong Inc. Attorneys, the second respondent, from 1 April 2014.

(3) Although the application was served on the first respondent personally on 23 January 2017 and the notice of set down on 30 March 2017, the first respondent did not file and serve an answering affidavit. The first respondent accepted service on behalf of the second respondent on both occasions.

(4) The court has to conduct an enquiry to find whether a person is fit and proper to practise as an attorney. This enquiry is threefold. There have been five complaints by five attorney's firms that the respondent had not settled their accounts for rendering professional services after being appointed as correspondents for the respondents.

The first respondent failed to respond to these complaints and contravened Rule 68.9 of the Old Rules, as well as Rule 89.23. These

are serious complaints as he had appointed these correspondents, who as attorneys and colleagues expected him to act in a professional

manner and to pay them for services rendered.

(5) The first respondent failed or neglected to submit the firm's opening audit report from 1 April 2014 and furthermore did not submit

unqualified audit reports for the periods ending February 2015 and February 2016. This resulted in the first respondent not being issued with a Fidelity Fund certificate for the years January 2015 and January 2016 . This placed his clients and the Fidelity Fund at risk. By failing to file the firm's Rule 70 audit reports, the first respondent contravened Rules 70.3 and 70.4. He further contravened section 41 (1) and section 41(2) of the Attorneys Act[1] by practising without a Fidelity Fund certificate. To exacerbate this, the first respondent failed to attend a disciplinary hearing on 1 December 2015 and transgressed Rule 89.25 and Rule 89.23 of the Attorneys Act[2] and the Attorneys Old Rules.

(6) On 4 April 2016 Mr van Rooyen, appointed by the applicant to investigate the affairs of the respondents' practice, attempted toNcontact the first respondent telephonically, to no avail. He visited the practice at the address reflected on the applicant's records, but found the building had been vacated. On enquiry it was found that the landlord

had taken possession of all the files and records of the practice. It appears as if the first respondent had abandoned his practice,

thereby contravening Rule 89.17. This to the detriment of all his clients, as well as his correspondent colleagues.

(7) The first respondent furthermore contravened Rule 3.1 by not informing the applicant of the practice's change of address and contact details. This is also a serious transgression as he had a duty to inform the applicant, as the applicant has to be able to deal with an attorney at all times.

(8) The conduct of the first respondent is in contravention of: Rule 47.1 of the Attorneys Act[3] and the New Rules for the Attorneys Profession, in that he failed to reply to all communications that required answers; Rule 47.2 by not responding to requests for information and documentation; Rule 47.3 by not complying with directions from the applicant; Rule 35.23 by failing to file his firm's unqualified audit reports.

(9) The court finds as a matter of fact that the offending conduct by the first respondent has been established. The court now has to decide whether the first respondent is a fit and proper person to practise as an attorney. The court has a discretion in these circumstances to decide whether the first respondent should be suspended or removed from the roll of attorneys. In Summerley v Law Society, Northern Provinces[4] Brand JA held: "These objectives have been described as twofold: first, to discipline and punish errant attorneys and, secondly, to protect the public, particularly where trust funds are involved."

(10) There is no explanation tendered by the first respondent for his conduct violating all the above-mentioned rules of the applicant. The court cannot find, in the circumstances of this case, that the first respondent has been dishonest, but the finding of the court in the Summerley case[5] is relevant where the court held that the respondents had not necessarily been dishonest, but had contravened several Rules of the

applicant.

(11) The main complaint is that when an attorney practises without a Fidelity Fund certificate, as is the case here, both the applicant and the public are at risk. It is of utmost importance for the public at large to rely on the fact that an attorney has a Fidelity Fund certificate.

(12) The court finds that the first respondent has acted unprofessionally in his practice. The contempt with which the first respondent treated the applicant and his clients, as well as his colleagues, is a serious aggravating fact in the decision whether to strike or suspend the first respondent from the roll of attorneys. The first respondent's conduct is dishonourable, unprofessional and unworthy of a practitioner from whom the highest integrity and trustworthiness are expected. When this court considers the totality of the transgressions by the first respondent then the only sanction must be the striking of his name from the roll of attorneys.

(13) In the result the following order is made:

1. That the name of SETSHEGO JEREMIAH KGOKONG (hereinafter referred to as the first respondent) be removed from the roll of attorneys of this Court.

2. That the first respondent immediately surrenders and deliver to the registrar of this Court his certificate of enrolment as an attorney of this Court.

3. That in the event of the first respondent failing to comply with the terms of this order detailed in the previous paragraph within two (2) weeks from the date of this order, the sheriff of the district in which the certificate is, be authorised and directed to take possession of the certificate and to hand it to the Registrar of this Court.

4. That the respondents be prohibited from handling or operating on his trust accounts as detailed in paragraph 5 hereof.

5. That Johan van Staden, the head: members affairs of applicant or any person nominated by him, be appointed as curator bonis (curator) to administer and control the trust accounts of respondents, including accounts relating to insolvent and deceased estates and any deceased estate and any estate under curatorship connected with respondents' practice as an attorney and including, also, the separate banking accounts opened and kept by respondents at a bank in the Republic of South Africa in terms of section 78(1) of 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 Act No. 53 of 1979, in which monies from such trust banking accounts have been invested by virtue of the provisions of the said sub-sections or in which monies in any manner have been deposited or credited (the said accounts being hereafter referred to as the trust accounts), with the following powers and duties:

5.1 immediately to take possession of respondents accounting records, records, files and documents as referred to in paragraph 6 and subject to the approval of the board of control of the attorneys fidelity fund (hereinafter referred to as the fund) to sign all 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 respondents was acting at the date of this order;

5.2 subject to the approval and control of the board of control of the fund and where monies had been paid incorrectly and unlawfully from the undermentioned trust accounts, to recover and receive and, if necessary in the interests of persons having lawful claims upon the trust account(s) and/or against the respondents in respect of monies held, received and/or invested by the respondents in terms of section 78(1) and/or section 78(2) and/or section 78 (2A) of Act No 53 of 1979 (hereinafter referred to as trust monies), to take any legal proceedings which may be necessary for the recovery of money which may be due to such persons in respect of incomplete transactions, if any, in which the respondents was and may still have been concerned and to receive such monies and to pay the same to the credit of the trust account(s);

5.3 to ascertain from the respondents' accounting records the names of all persons on whose account the respondents appears to hold or to have received trust monies (hereinafter referred to as trust creditors) and to call upon the first respondent to furnish him, within 30 (thirty) days of the date of service of this order or such further period as he may agree to in writing, with the names, addresses and amounts due to all trust creditors;

5.4 to call upon such trust creditors to furnish such proof, information and/or affidavits as he may require to enable him, acting in consultation with, and subject to the requirements of, the board of control of the fund, to determine whether any such trust creditor has a claim in respect of monies in the trust account(s) of the respondents and, if so, the amount of such claim;

5.5 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 or creditors, without prejudice to such trust creditor's or creditors' right of access to the civil courts;

5.6 having determined the amounts which he considers are lawfully due to trust creditors, to pay such claims in full but subject always to the approval of the board of control of the fund;

5.7 in the event of there being any surplus in the trust account(s) of the respondents 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 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 respondents, the costs, fees and expenses referred to in paragraph 10 of this order, or such portion thereof as has not already been separately paid by the respondents to 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 first respondent, if he is solvent, or, if the first respondent is insolvent, to the trustee(s) of the first respondent's insolvent estate;

5.8 in the event of there being insufficient trust monies in the trust banking account(s) of the respondents, in accordance with the available documentation and information, to pay in full the claims of trust creditors who have lodged claims for repayment and whose claims have been approved, to distribute the credit balance(s) which may be available in the trust banking account(s) amongst the trust creditors alternatively to pay the balance to the Attorneys Fidelity Fund;

5.9 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, counsel, accountants and/or any other persons, where considered necessary, to assist him in carrying out his duties as curator; and

5.10 to render from time to time, as curator, returns to the board of control of the fund showing how the trust accounts of the respondents have been dealt with, until such time as the board notifies him that he may regard his duties as curator as terminated.

6. That the respondents immediately deliver the accounting records, records, files and documents containing particulars and information relating to:

6.1 any monies received, held or paid by the respondents for or on account of any person while practising as an attorney;

6.2 any monies invested by the respondents in terms of section 78(2) and/or section 78 (2A) of Act No 53 of 1979;

6.3 any interest on monies so invested which was paid over or credited to the respondents;

6.4 any estate of a deceased person or an insolvent estate or an estate under curatorship administered by the respondents, whether as executor or trustee or curator or on behalf of the executor, trustee or curator;

6.5 any insolvent estate administered by the respondents as trustee or on behalf of the trustee in terms of the Insolvency Act, No 24 of 1936;

6.6 any trust administered by the respondents as trustee or on behalf of the trustee in terms of the Trust Properties Control Act, No 57 of 1988;

6.7 any company liquidated in terms of the Companies Act, No 61 of 1973, administered by the respondents as or on behalf of the liquidator;

6.8 any close corporation liquidated in terms of the Close Corporations Act, 69 of 1984, administered by the respondents as or on behalf of the liquidator; and

6.9 the first respondent's practice as an attorney of this Court, to the curator appointed in terms of paragraph 5 hereof, provided that, as far as such accounting records, records, files and documents are concerned, the respondents shall be entitled to have reasonable access to them but always subject to the supervision of such curator or his nominee.

7. That should the respondents fail to comply with the provisions of the preceding paragraph of this order on 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 respondents (as the case may be), the sheriff for the district in which such accounting records, records, files and documents are, be empowered and directed to search for and to take possession thereof wherever they may be and to deliver them to such curator.

8. That the curator shall be entitled to:

8.1 hand over to the persons entitled thereto all such records, files and documents provided that a satisfactory written undertaking has been received from such persons to pay any amount, either determined on taxation or by agreement, in respect of fees and disbursements due to the firm;

8.2 require from the persons referred to in paragraph 8.1 to provide any such documentation or information which he may consider relevant in respect of a claim or possible or anticipated claim, against him and/or the respondents and/or the respondents' clients and/or fund in respect of money and/or other property entrusted to the respondents provided that any person entitled thereto shall be granted reasonable access thereto and shall be permitted to make copies thereof.

8.3 publish this order or an abridged version thereof in any newspaper he considers appropriate; and

8.4 wind-up of the respondents' practice.

9. That the first respondent be and is hereby removed from office as:

9.1 executor of any estate of which the first respondent has been appointed in terms of section 54(1)(a)(v) of the Administration of Estates Act, No 66 of 1965 or the estate of any other person referred to in section 72(1);

9.2 curator or guardian of any minor or other person's property in terms of section 72(1) read with section 54(1)(a)(v) and section 85 of the Administration of Estates Act, No 66 of 1965;

9.3 trustee of any insolvent estate in terms of section 59 of the Insolvency Act, No 24 of 1936;

9.4 liquidator of any company in terms of section 379(2) read with 379(e) of the Companies Act, No 61 of 1973;

9.5 trustee of any trust in terms of section 20(1) of the Trust Property Control Act, No 57 of 1988;

9.6 liquidator of any close corporation appointed in terms of section 74 of the Close Corporation Act, No 69 of 1984; and

9.7 administrator appointed in terms of Section 74 of the Magistrates Court Act, No 32 of 1944.

10. That the respondents be and is hereby directed:

10.1 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;

10.2 to pay the reasonable fees of the auditor engaged by applicant;

10.3 to pay the reasonable fees and expenses of the curator, including travelling time;

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

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

10.6 to pay the costs of this application on an attorney-and-client scale.

11. That if there are any trust funds available the respondents shall within 6 (six) months after having been requested to do so by the curator, or within such longer period as the curator may agree to in writing, shall satisfy the curator, by means of the submission of taxed bills of costs or otherwise, of the amount of the fees and disbursements due to the first 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. That a certificate issued by a director of the Attorneys Fidelity Fund shall constitute prima facie proof of the curator's costs and that the Registrar be authorised to issue a writ of execution on the strength of such certificate in order to collect the curator's costs.

Judge C Pretorius

I agree.

Acting Judge Crutchfield

Case number

: 75100/2016

Matter heard on

: 17 October 2017

For the Applicant

: Ms Magardie

Instructed by

: Damons Magardie Richardson Attorneys

For the Respondent

:

Instructed by

:

Date of Judgment

:

[1] Act 53 of 1979

[2] Supra

[3] Supra

[4] 2006(5) SA 613 (SCA) at page 620F

[5] Supra