Law Society of the Northern Provinces v Radebe (325/2002) [2015] ZAGPPHC 901 (24 November 2015)

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

REPUBLIC OF SOUTH AFRICA

24/11/2015

CASE NUMBER: 325/2002

NOT REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

REVISED

In the matter between:

THE LAW SOCIETY OF THE NORTHERN PROVINCES Plaintiff

and

MBUSI HAMLIN RADEBE Defendant

JUDGMENT

JANSE VAN NIEUWENHUIZEN J

[1] On 4 January 2002, the plaintiff (then applicant) launched an application to suspend the defendant (then respondent) in his practice as an attorney.

[2] The defendant opposed the application, which opposition eventually culminated in the rather unprecedented trial that came before this court.

[3] The history of the litigation will be dealt with more fully infra.

BACKGROUND

[4] On 13 June 1995, the defendant ("Mr Radebe) was adrnitted to practice as an attorney of this court.

[5] During 1997 Mr Radebe joined Maponja lncoporated ("the firm") as a director. Approximately two years later and during 1999, the University of Limpopo (formerly known as the University of the North) ("the University") became a client of Mr Radebe.

[6] On 11 September 2001 the plaintiff ("the Law Society") received a written complaint from the University in respect of Mr Radebe. The written complaint reads as follows:

"Investigations by the University's internal auditors and their external internal audit consultant, Price Waterhouse Coopers indicate that the University paid fraudulent claims for legal services rendered by Maponya Incorporated. We believe that these fraudulent claims principally emanated from the desk of Mr Radebe, a partner in Maponya Incorporated and were paid by the University of the North in good faith.

We hereby formally request that you investigate the conduct of Mr Radebe with respect to these claims (See Annexure A)."

[7] The complaint ultimately resulted in the application, referred to supra, launched by the Law Society for the suspension of Mr Radebe from practice as an attorney of this court.

PLEADINGS

[8] The declaration filed by the Law Society contains the following allegations:

"It is alleged by plaintiff that defendant has made himself guilty of unprofessional or dishonourable or unworthy conduct to such an extent that he can no longer be regarded as a fit and proper person to continue to practise as an attorney in one or more of the following respects:

6.1. In relation of a matter with tile reference COM20/1998 and on or about 11 January 1999, defendant fraudulently produced and presented for payment or fraudulently caused to be produced and presented for payment, a statement of account in the amount of R 11 830.80 to a client , the University of the North (now known as the University of Limpopo), and hereinafter referred to as "the client'; alternatively, overcharged or overreached the client with fees and disbursements in the said statement of account.

6.2. In respect of a matter with tile reference no L 153198, defendant on or about 11 January 1999 fraudulently produced and presented for payment or fraudulently caused to be produced and presented for payment a statement of account in the amount of R17 821.00 to the client, alternatively, overreached or overcharged the client with fees and disbursements in the sa1d statement of account.

6.3. On or about 25 February 1999, defendant issued a cheque on the account of his firm, Maponya Incorporated in the amount of R11 470.00

in favour of a certain advocate L Thomas, in circumstances where no legal obligation existed to pay the said advocate Thomas the said amount of money and defendant misappropriated funds in the amount of R11 470.00.

6.4. In respect of the matter with reference L32/00 and on or about 16 March 2000, the respondent fraudulently produced and presented for payment or fraudulently caused to be produced and presented for payment a statement of account in the amount of R48 084.20 to the client, alternatively, overreached or overcharged the client in the said statement of account.

6.5. On or about 3 June 2000 respondent fraudulently produced and presented for payment, alternatively fraudulently caused to be

produced and presented for payment a statement of account to the client in the total amount of R82 965.00 in respect various

matters handled on behalf of the client in respect which further particulars of the matters appear from paragraph 3. 1.5 of the report of PricewaterhouseCoopers dated 24 Apnl 2006 (Volume 5 of the application papers on pp 669 - 676), alternatively the defendant overcharged or overreached the client, in respect of fees and disbursements.

6.6. On or about 15 June 2000 defendant issued a cheque or caused a cheque to be drawn on the bank account of Maponya Incorporated in

favour of another firm of attorneys, namely Mankoe & Magabane in the amount of R41 482 50 in circumstances where there was no legal obligation to pay the amount of R41 48250 to the said Mankoe & Magabane and defendant misappropriated funds in the amount of R41 84250.

6.7. In respect of a matter with file reference L58/DD on or about 27 June 2000 defendant fraudulently produced and presented for payment to the client, alternatively fraudulently caused to be produced or presented for payment to the client a statement of account in the amount of R68 229.30, alternatively overreached or overcharged the client in the said statement of account

6.8. On or about 4 August 2000 respondent issued, alternatively caused to be issued. a cheque drawn on the bank account of Maponya lnco1porated J/7 the amount of R32 110.00 in favour of Mankoe & Magabane Attorneys in circumstances where there was no legal obligation to pay the said amount to Mankoe & Magabane Attorneys and defendant misappropriated funds in the amount of R32 110.00.

6.9. On or about 18 July 2000 and in the matter with reference L64/99 defendant fraudulently produced and presented for payment to the client a statement of account In the amount of R21 764.27, alternatively fraudulently caused to be produced and presented such statement of account to the client, alternatively the defendant overcharged or overreached the client fees and disbursements in the statement of account.

6.10. In matter with reference no L292/00 and on or about 6 December 2000 defendant fraudulently produced and presented for payment

to the client a statement of account in the amount of R41 702.60, alternatively, fraudulently caused to be produced and to be presented

for payment the said statement of account, alternatively, overreached or overcharged the client with fees and disbursements in respect of the statement of account.

6.11. On or about 21 February 2001 and in respect of the matter with file reference L288/00, defendant fraudulently produced and presented

to the client a statement of account in the amount of R50 122.30, alternatively, caused to be produced and presented for payment the said statement of account for the said amount to the client, alternatively, defendant overreached or overcharged the client in respect of fees and disbursements in respect of the statement of account.

6.12. On or about 15 March 2001 the defendant caused payment to be made in favour of advocate L Thomas 1/1 the amount of R29 186.40 debited against the account of Maponya Incorporated in circumstances where there was no legal obligation to make such payment to advocate Thomas and where the amount was not owtl7g to advocate Thomas. The respondent thereafter misappropriated an amount R29 186.40 by instructing advocate Thomas to deposit an amount of R29 328 00 into the personal bank account of a certain Mr Phewa, the

former proctor of the University of Limpopo ('the client"). Such misappropriation of funds in favour of the said Mr Phewa occurred to the prejudice or potential prejudice of defendant's former firm, Maponya Incorporated, alternatively, the client.

6.13. On or about 26 March 2001 and in respect of matter L58/00 defendant fraudulently produced and presented for payment to the client a statement of account in the amount R61 064.54, alternatively, defendant caused the fraudulent statement of account in the sa1d amount to be produced and to be presented for payment to the client, alternatively, the defendant overreached and overcharged the client with fees and disbursements in the statement of account.

6.14. On or about 2 May 2001 defendant misappropriated a portion of the amount paid by the client of R61064.54 referred to in 6. 13 above

by causing payment to be made in the amount of R39 263.80 to the firm of attorneys Mankoe & Magabane in circumstances where there was no legal obligation to pay the said amount to Mankoe & Magabane Attorneys.

7

Defendant has also made himself guilty of unprofessional or dishonourable or unworthy conduct in that:

7.1. in the period between January 1999 and May 2001, defendant embarked on a scheme or stratagem in terms of which defendant over the period duplicated or inflated or caused to be duplicated or inflated statements of account, alternatively, overreached or overcharged or caused to be overreached or overcharged the client from time to t!lne during the said period, in respect of the matters and the amounts referred to in Table 1 read w/th the corresponding paragraphs referred to in Table 1 of the forensic report of PricewaterhouseCoopers dated 24 April 2006 and which report forms part of paginated and indexed Volume 5 (pp 641- 839) and read together with paragraphs 6. 1 - 6. 14 above.

7.2. In terms of the said scheme or stratagem defendant appropriated directly or indirectly payments made by the client

in respect of the duplicated, alternatively, inflated, alternatively overcharged statement of accounts for the

direct or indirect benefit of certain beneficiaries, namely:

7.2.1. defendant himself,

7.2.2. Adv L Thomas:

7.2.3. Mankoe & Magabane Attorneys;

7.2.4. Mr C A T Phewa, the former proctor of the client; and

7.2.5. Maponya Incorporated.

7.3. In so doing, defendant misappropriated monies to which none of the aforesaid beneficiaries were entitled.

7.4. Furthermore, in so doing, defendant:

7.4.1. committed a breach of trust vis a vis his client, the University of Limpopo and Ior his firm Maponya Inc; and /or

7.4.2. defrauded the client,· and/or

9.4.3 falsified statements of accounts,· and/or

9.4.4. committed theft of funds of his client m the total sum of approximately .R288 781.64,·

9.4.5 misappropriated monies of the client directly or indirectly in favour of the aforesaid beneficiaries and himself

[10] These allegations are denied by Mr Radebe.

TRIAL

[11] The trial was set down for the week of 19 October 2015. At the inception of the trial, Ms Kekana, Mr Radebe's partner, brought an application for a postponement. The application was opposed by the Law Society and after hearing argument on behalf of both parties, the Court delivered judgment refusing the application.

[12] Mr Radebe, thereafter, indicated that he will represent himself during the trial.

[13] In determining the issues in dispute, Mr Radebe stated that all the evidence to be adduced by the Law Society is in dispute. In view of the aforesaid, the Law Society proceeded to present the evidence of five witnesses. Mr Radebe duly cross-examined some of the witnesses.

[14] At the close of the case for the Law Society, Mr Radebe indicated that he will give evidence under oath. Somewhat surprisingly, Mr Radebe then admitted the evidence tendered on behalf of the Law Society. In the result, I propose to summarise the evidence insofar as the evidence proves the allegations contained in the Law Society's declaration.

[15] Mr- Radebe testified that a certain Mr Phewa, the legal advisor or proctor at the University at the time, was a school friend of his. Mr Phewa, in his aforesaid capacity, appointed Mr Radebe in various legal matters.

[16] It appears from the evidence that statements of account ("the original statements") were duly prepared for submission to the University in respect of the work done. These facts were confirmed by Mrs Rangata, Mr Radebe's professional assistant at the time and Ms Mokgabudi, the office manager of the firm. The original statements were filed in the client files of the University and made available by Ms Mokgabudi to Mr Postma, a forensic investigator in the employ of Price Waterhouse Coopers. Price Waterhouse Coopers were the University's external auditors and were requested by the University to do a forensic investigation into the allegations pertaining to Mr Radebe.

[17] The statements of account ("the fraudulent statements") that were presented by Mr Phewa to the University for payment,

differed from the original statements in that the amounts were inflated. Mr Magala, the interal auditor of the University, confirmed

that the fraudulent statements were presented to the University for payment and further confirmed that payment of these amounts were made by the University to the firm.

[18] Ms Mokgabudi testified that all funds received from the University were paid on Mr Radebe's instructions. This was admitted by Mr Radebe. Mr Radebe testified that he noticed the first overpayment by the University. He knew that his duties as an attorney entailed that he had to inform his client of the overpayment. He thereafter should either have paid the money back to his client, the University, or should have deposited the balance into his trust account to the credit of the University.

[19] Mr Phewa was aware of the overpayment and gave instructions to Mr Radebe in respect of the payment of the excess money. In the ledgers of the firm, it appears that some payments were made to Mankoe & Mogabane, an attorneys firm in Polokwane and others to advocate Lindi Thomas.

[20] From advocate Thomas's bank statements it appears that she received two overpayments from the firm. Advocate Thomas testified that Mr Radebe provided her with the account details into which she had to pay the excess amount. It is clear from her bank statements that one payment was made into the account of Mr Phewa and the other into the personal bank account of Mr Radebe.

[21] It appears from Mr Radebe's personal bank statements that, save for the payment from advocate Thomas, he also received several payments from Mr Phewa, the University and Mankoe and Magabane Attorneys. In addition to the information contained in the bank statements, it also appears that some of the excess money was paid in cash into the accounts of Mr Phewa and Mankoe and Magabane Attorneys. Ms Mokgabudi explained the aforesaid transactions in a letter to the University. The letter is dated 11 September 2001 and the relevant portion reads as follows:

"1.Cheques were drawn up by myself on instructions from one of the senior partners namely Mr Radebe.

The above mentioned cheques were not drawn in favour of a particular nor individual or company, but were drawn as cash cheques. I was then instructed by Mr Radebe to present the above mentioned cheques to Nedbank Pretoria church street. And upon receipt of the cash from the bank, I then on instructions from Mr Radebe deposited cash into Mr Phewa's personal account and the details of his personal account were furnished to me by Mr Radebe.

2. I further wish to state that of deposit slips in respect of R131 577.70 were deposited into the account of Mankoe Magabane Attorneys,

and once again I was acting on instructions from Mr Radebe.

I had no knowledge as to why this sums of moneys were deposited into Mr Phewa's account or Mankoe Magabanes office. "

[22] The total amount of the fraudulent payments is R 239 331,40 and the payments occu1Ted over a period of approximately two years, to wit from January 1999 to March 2001.

[23] Mr Radebe had difficulty in explaining the reason for his participation in the fraudulent scheme. He testified that he did not want to alert the University because he feared that Mr Phewa might lose his job. He further testified that he was uncomfortable with Mr Phewa's requests and reported the matter to his partner Mr Maponja. After the report he did not want to have anything to do with the matter and believed that his partner will sort the matter out.

[24] He, furthermore, insisted during his evidence that he was an innocent bystander and that he was caught up in a situation over which he had no control.

LEGAL FRAMEWORK

[25] The enquiry into the fitness of a person to practice as an attorney is well established and was summarised by Harms DP in Law Society, Northern Provinces v Mogam/ 201 0 (1) SA 186 SCA at para 4 as follows:

"Applications for the suspension or removal from the roll require a three-stage enquiry. First, the court must decide whether the alleged offending conduct has been established on a preponderance of probabilities, which is a factual inquiry. Second, it must consider whether the person concerned is 'in the discretion of the court' not a fit and proper person to continue to practise. This involves a weighing-up of the conduct complained of against the conduct expected of an attorney and, to this extent, is a value judgment. And third, the court must enquire whether in all the circumstances the person in question 15 to be removed from the roll of attorneys or whether an order of suspension from practice would suffice (Jasat v Natal Law Society 2000 (3) SA 44 (SCA) ([2000] 2 All SA 31O); Malan and Another v Law Society, Northern Provinces [2008] ZASCA 90; 2009 (1) SA 216 (SCA) ([2009] 1 All SA 133; [2008]

ZASCA 90) at para 10)."

Offending conduct

[26] Mr Radebe admitted that he had received payment from the Ur1iversity in excess of the amounts contained in the original statements. Mr Radebe admitted that he knew what his fiduciary obligations towards the University, in the prevailing circumstances, were. Mr Radebe admitted that he failed to act in accordance with his professional and ethical duty. He, furthermore, testified th at he paid the excess amounts on instructions of Mr Phewa.

[27] In view of the aforesaid admissions, the Law Society has conclusively proved that Mr Radebe made himself guilty of dishounarable conduct. It is clear from the evidence that Mr Radebe was involved in a scheme to defraud the University. One should bear in mind that it would not have been possible to defraud the University without fvir Radebe's participation.

Fit and proper person

[28] The demands placed on a practicing attorney has been succinctly stated by Eksteen JA in Vassen v Law Society of the Cape of Good Hope [1998] ZASCA 56; 1998 (4) SA 539 SCA at 538 G - I:

"In this regard it must be borne in mind that the profession of an attorney, as of any other officer of the Court, is an honourable

profession which demands complete honesty, reliab!lity and integrity from its members; and it is the duty of the respondent Society to ensure, as far as it is able, that its members measure up to the high standards demanded of them. A client who entrusts his affairs to an attorney must be able to rest assured that that attorney is an honourable man who can be trusted to manage his

affairs meticulously and honestly. When money is entrusted to an attorney or when money comes to an attorney to be held in trust, the general public is entitled to expect that that money will not be used for any other purpose than that for which it is being held, and that it w!ll be available to be paid to the persons on whose behalf it is held whenever it is required. Here once again the respondent Society has been created to ensure that the reputation of this honourable profession is upheld by all its members so that all members of the public may continue to have every condence and trust in the profession as a whole. "

[29] Mr Radebe dismally failed to uphold the high standards that governs his profession. He did not only fail to act in the best interest of the University, but actively participated in a scheme to defraud his client.

[30] In the circumstances, I have no doubt that Mr Radebe is not a fit and proper person to practice as an attorney of this Court.

Appropriate sanction

[31] Whereas the Law Society prays that Mr Radebe be struck from the roll of attorneys, Mr Radebe submitted that he should be suspended from practice for a period of three months and that the court should order him to do pro bono work during the period of his suspension.

[32] In deciding on an appropriate remedy the court exercises a discretion. [See: Law Society, Cape v Peter 2009 (2) SA 18 SCA]

[33] In the Law Society, Cape v Peter matter, the Supreme Court of Appeal took cognisance of the attorney's conduct upon receipt of the complaint from the Law Society. The attorney immediately admitted the offending conduct and made a full and frank disclosure of the facts pertaining to the transgression in her response to the Law Society. In view of her conduct, Farlam JA found that she is not inherently a dishonest person.

[34] Mr Radebe did exactly the opposite. On 14 November 2001, the complaint of the University was brought to the attention of Mr

Radebe. In his response, he unequivocally denied any wrongdoing. His response reads inter a/la as follows:

"I deny that I have had any involvement in any fraudulent activities at the university as is clear from my replying affidavit

aforesaid, to which relevant contents you are referred"

[35] Mr Radebe, furthermore, challenged the Law Society to prove the alleged misconduct.

[36] On 4 January 2002, the Law Society proceeded to launch the application for Mr Radebe's suspension in his practice as attorney. The application was opposed by Mr Radebe and in his answering affidavit, he made the following allegations under oath:

i. "14.1 I deny that I have submitted any fraudulent claims to the University of the North (hereinafter also referred to as "the University") and furthermore also deny that I have been paid by the University of the North in respect of any fraudulent claims. I deny that I have been involved in any fraudulent dealings as alleged "

ii. I pause to mention, that this statement under oath was contradicted by the evidence Mr Radebe tendered under oath during the trial.

iii. '29.3 I so however recall that the payments referred to in the report from Pricewarehouse Coopers came with a letter from the University instructing the firm as to how to deal with the excess amounts upon deducting the amount due to the firm in respect of the statements of account submitted by the firm to the University. It is in accordance with the said instructions that Ms Mokgabudi made the relevant payments including the payment to Mankoe Magabane Attorneys. "

iv. Once again, Mr Radebe was not being truthful with the Court. During the trial Mr Radebe admitted that he paid the excess in accordance with the verbal instructions received from Mr Phewa. The above explanation also fails to disclose to the court that a part of the excess funds were paid into Mr Radebe's personal bank account.

[37] The Law Society set the matter down for hearing on the roll for 30 August 2002. The matter was removed from the roll by agreement

between the parties.

[38] The matter was in limbo for two years, whereafter the Law Society placed the matter on the roll for 13 August 2004. Once again, the matter was removed from the roll by agreement between the parties. Thereafter and during 2006 and 2007, Mr Radebe pursued proceedings in terms of rule 35(12) of the Uniform Rules of court.

[39] 011 17 November 2007, Betielsmann J referred the matter to trial. From 2007 until the trial date, Mr Radebe utilised every conceivable tactic to prevent the matter from going to trial. Eventually, on 5 May 2015, the matter was placed under case management by virtue of a court order issued by Potteril and Mothle JJ.

[40] I have referred supra to Mr Radebe's application for a postponement on the first day of trial. I have also alluded to the fact that Mr Radebe placed all the evidence relied upon by the Law Society in support of the relief claimed, in dispute until the close of the Law Society's case. This resulted in a 5 day trial.

[41] Mr Radebe's attitude all along was to wait and see if the Law Society could proof the allegations against him. Upon being confronted with the overwhelming evidence, he suddenly made a roundabout turn and admitted all the evidence. Notwithstanding the aforesaid admission, Mr Radebe still displays a total lack of insight into the seriousness of his conduct. During his evidence, in his heads of argument and during argument, he persisted that he was actually an innocent bystander.

[42] He, furthermore, conceives the 15 years that he has practiced since the complaint was brought to his attention, as proof that he is a fit and proper person to practice as an attorney. This in the face of the fact that he has, for 15 years, been lying to both the Law Society, the professional body that oversees the ethical conduct of attorneys and to the Court of which he is an officer.

[38] His conduct makes a mockery of the honourable profession of an attorney. He has throughout the prolonged proceedings made it patently clear that he has little, if any, regard for the truth.

[39] In the premises, I am of the view that Mr Radebe should no longer be allowed to be part of the legal fraternity.

ORDER

I propose that Mr Radebe be struck from the roll of attorneys of this court and at an order be granted in terms of the draft attached hereto marked "X".

_____________________________

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

I agree and it is so ordered.

HUGHES J

JUDGE OF THE HIGH COURT OF SOUTH AFRICA GAUTENG DIVISION, PRETORIA

GAUTENG DIVISION, PRETORIA

Case Number: 325 I 2002

LAW SOCIETY OF THE NORTHERN PROVINCES Plaintiff

MBUSI HAMLIN RADEBE Defendant

DRAFT ORDER

HAVING read the documents filed of record, heard counsel and considered the matter, an order is made in the following terms:

1. The name of Mbusi Hamlin Radebe (the defendant) is struck from the roll of attorneys of this Court;

2. The defendant is ordered to deliver and hand over his certificate of enrolment as an attorney to the Registrar of this Court;

3. In the event of the defendant failing to comply with the terms of the order in paragraph 2 above within two (2) weeks from the date of this order, the sheriff of the district in which the certificate is kept, is authorised and directed to take possession thereof and to hand it to the Registrar of this Court.

4. The defendant is ordered to pay the costs of the proceedings, including the costs of the application before it was referred to trial and any costs previously reserved in this matter, on the scale as between attorney and client. The costs furthermore includes the fees of Pricewaterhouse Coopers for the investigation and the report, dated 24 April 2006.

BY THE COURT

Registrar