Law Society of the Northern Provinces v Visser Heppell (15860/2013) [2013] ZAGPPHC 408 (5 December 2013)

IN THE NORTH GAUTENG HIGH COURT, PRETORIA

(REPUBLIC OF SOUTH AFRICA)

CASE NO: 15860/2013

DATE: 5 DECEMBER 2013

NOT REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

In the matter between:

THE LAW SOCIETY OF THE NORTHERN PROVINCES APPLICANT

and

WARRICK LESLIE VISSER HEPPELL RESPONDENT

JUDGEMENT

MOGOTSI AJ:

Introduction

This is an application to strike respondent’s name from the roll of attorneys and alternatively to have him suspended from practice as an attorney on such terms and conditions as the court may deem fit.

The application was served on the respondent on the 22 March 2013. The Respondent delivered his notice of intention to oppose the

application on 27 March 2013. The notice of set down for 8 November 2013 was served on the respondent attorneys on 3 May 2013. Respondent delivered his answering affidavit on 7 June 2013. Respondent filed an application for condonation for the late filing of his answering affidavit on 24 June 2013. Applicant filed his replying affidavit on 24 June 2013. No heads of argument were filed on behalf of the Respondent. Both the applicant and the respondent were represented when the appeal was argued.

2. The Parties

The applicant is the Law Society of Northern Province which exists by virtue of Attorneys, Notaries and Conveyancers Admissions Act 23 of 1934 read with Section 56 of the Attorneys Act no 53 of 1979.

The respondent is Mr Warrick Leslie Visser Heppel a member of the Law Society of Northern Provinces. The respondent was admitted as an attorney on 7 May 1991 and became a partner of the firm Rudolph Booysens and Lourens Attorneys on 1 November 1991. The firm was subsequently incorporated and as such had its name changed to Lourens Heppel Attorneys, 3 Tom Street Klerksdorp, North West Province.

3 Background

3.1 While practising as an attorney with the firm Lourens Heppel and Bezuidenhout Inc. the respondent got involved in several small

business deals. Respondent later on left the practice and concentrated on his businesses. He became the sole member of a Closed

Cooperation that owned bottle stores, a pizza shop, and a video shop. He was also involved in property developments.

Due to the unstable economic climate his income from the business decreased drastically. He could no longer secure lease agreements

with key lessors. He had in the meantime signed sureties for the debts of the closed corporation and other developments in his

personal capacity. The situation worsened until he could no longer pay creditors, he had to close and sell the business and developments

at a loss. He became factually insolvent. He then opened a practice as an attorney under the name and style of Warrick Heppel Attorneys

in September 2010.

3.2 The respondent approached the court on 11 January 2012 and applied for the voluntary surrender of his estate and was duly sequestrated by the High Court. After his sequestration, the applicant instructed Ms Magda Geringer, its official attached to the applicant’s

Monitoring unit, to investigate the circumstances which led to the Respondent’s sequestration. Ms Geringer reported that there was no involvement of Respondent’s practise in any wrong doing and no trust creditors were prejudiced by the respondent’s

sequestration. On the 4 July 2012 there was neither a trust surplus nor a trust deficit in his bookkeeping. No complaints were therefore lodged against the respondent or his firm with regard to the non-payment of trust funds. There is also no evidence to suggest the respondent contravened sections of the Act or Rules of the Law Society.

4. The Law Society’s disciplinary committee considered Ms Geringer’s report and resolved to refer the matter to an investigating committee of the council. The purpose of the referral was to determine whether the Respondent could still be regarded as a fit and proper person to remain on the roll of attorneys, notwithstanding the sequestration of his estate. The applicant contends that the respondent is despite all said above not a fit and proper person to remain on the roll of attorneys. Applicant contends when Respondent applied for the voluntary surrender of his estate he misled the court which granted the order. It is contended that the Respondent failed to disclose to the Court that he is a practising attorney; failed to disclose properly the type of matrimonial regime he is involved in; failed to disclose all the facts relating to his salary - his disclosure in this regard was selective and/or inadequate; he failed to disclose suretyships accurately; and he failed to make a proper disclosure of the current amount of his liabilities. The committee concluded that the Respondent's failure to make a proper disclosure amounted to dishonesty and that the respondent’s name should be removed from the roll of practicing attorneys.

5. The respondent, on the other hand, contends that he did not contravene any section of the Attorney’s Act or Rules of the Law Society. No complaints were lodged against him regarding the handling of trust funds and he does not pose any risk for the Attorneys Fidelity Fund. The respondent maintains that he remained honest with the Court when he applied for the sequestration of his estate and he did not contravene any provision of the Insolvency Act. He is not an insolvency practitioner and he is therefore not acquainted with the applications for voluntary surrender. He caused his statement of affairs to lie for inspection.

In addition to that, the curator appointed has no objection that the respondent should continue to practice as an attorney and operate on his current trust and business accounts. The respondent basically maintains that he never committed acts which constitute such a deviation from the standards of professional conduct that he is not a fit and proper person to continue to practise as an attorney. There is no reason which justifies this Court to order that his name be struck from the roll of attorneys or that he be suspended from practicing as an attorney on any terms and conditions.

6. General Principles

It is generally accepted that utmost integrity (uberrima fides), honesty and good faith is expected from all practising attorneys. The Northern Province Law Society of which the respondent is a member is expected in terms of Section 74 of the Attorneys Act 53 of 1979, the Rules of the Society and the Common law to inter alia maintain and enhance the prestige, status and dignity of the profession. The applicant is also empowered to deal with all matters relating to the interests of the profession, to protect these interests, to uphold the integrity of and to exercise disciplinary jurisdiction over all practitioners; no matter where the conduct which is - or allegedly is - unprofessional or unworthy, is perpetrated.

Section 21(d) of the Attorneys Act determines whether an attorney is still a fit and proper person to practice as such. Applications to remove respondents from the roll of attorneys by Law Societies are sui generis and are of a disciplinary nature. There is no lis between a Law Society and a respondent. The Law Society as custos morum of the profession places facts before a Court for consideration, see Hassim v Incorporated Law Society of Natal, 1977(2) SA 757(A) at 767 C-G, and Prokureursorde van Transvaal v Kleinhans, 1995(1) SA 839 (T) at 851 E-F

The test to be applied by a Court in matters of this nature was set out in Summeley v Law Society of the Northern Provinces, 2006(5) SA SCA 613 BRAND JA held that the application of section 22 (1) (d ) involves a threefold enquiry i.e.:

(a) Whether the law Society has established the offending conduct upon which it relies on a balance of probabilities;

(b) Whether in the light of the misconduct established, the attorney concerned is not a “fit and proper” person to continue to practice as an attorney and this involves weighing up of the conduct complained of against the conduct expected of an attorney, this requires a value judgement; and

(c) The third aspect requires the court in its discretion to decide whether a person who has been found not to be fit and proper to practice as an attorney deserves the ultimate penalty of being struck from the roll or whether an order of suspension from practice will suffice. See also Law Society, Northern Provinces v Mogami, 2010(1) SA 186 (SCA) para 4; Law Society, Transvaal v Matthews, 1989 (4) SA 339 (T) at 420 B-D; and Law Society, Cape of Good Hope v Segall, 1975 (1) SA 95 C at 996. The facts upon which the Court’s discretion is based should be considered in their totality.

7. Evaluation

It is common cause that the respondent's estate was sequestrated on the 11 January 2012.

Section 22 (1) (e) of Attorneys Act provides:

“(1) 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-

(e) if his estate has been finally sequestrated and he is unable to satisfy the court that despite his sequestration he is still a fit and proper person to continue to practise as an attorney”.

It is therefore incumbent upon the respondent to satisfy this Court that he can still be regarded as a fit and proper person to continue to practise as an attorney despite his sequestration.

7.1 The Respondent is an attorney and an officer of this Court. It is therefore expected of him in an application for his sequestration to have been frank and honest. An attorney moving for his own sequestration must satisfy himself that the papers he files are diligently prepared and mirror the characteristics of a fit and proper attorney.

There is in my opinion, a greater risk in a voluntary surrender of an estate application than in friendly and/or forced sequestration

applications. This is so because in ex parte applications, the system may be abused and the interests of creditors may be compromised. See the unreported case of Ex parte Bernard Bekker and Magdaiina Maria Bekker, (2012/6/11) Case no 24420/2012 para 2, where TUCHTEN J held “because this application has been brought ex parte, the applicants are under a duty to the court to show utmost good faith. A failure to disclose fully and fairly ail material facts known to them may lead in the exercise of the court’s discretion to the dismissal of the application on that ground a/one”. See also Schlesinger v Schlesinger, 1979 (4) SA 342 W 348-350B. It is therefore a settled principle that an applicant who approaches the court ex parte must disclose all the facts known to him or her, however prejudicial they may be to the applicant’s case.

7.2 The respondent contends that he made a full and correct disclosure of his liabilities to the Court during the application for his voluntary sequestration. However, in the transcript of the proceedings before the investigating committee he concedes that he is uncertain about the amount of his liabilities. He did not accurately disclose all suretyships given by him. He therefore failed to alert the Court and his creditors to be aware that there are potential liabilities which might have a direct effect on the advantage for creditors in his estate. He also did not accurately disclose the type of marriage he is involved in. Respondent is apparently married out of community of property. As no accurate and full disclosure was made to actual and potential creditors it might have seriously jeopardised the claims of creditors who may end up not receiving any benefit at all. The committee held that the failure to make a proper disclosure amounts to fraud being committed against the creditors of his estate and the Court. The applicant contends that the respondent was under a legal duty to make a full disclosure and he consciously chose not to do that. It is also not known whether the solvent spouse in this matter, is liable for the insolvent spouse liabilities or not.

7.3 For the purpose of this application, it appears there is no clarification about steps taken and or not taken to avoid collusion of hiding the insolvent spouse assets from being attached. It is also not clear whether sequestration documents were also served on the respondent’s wife or not. If a proper disclosure were made the aggrieved creditors might have opposed the sequestration application.

7.4 It could well be that the respondent is married out of community of property. But with the accrual system being part of our law, it might well be that the respondent is the co-owner of some of his wife’s assets. In sequestration applications the necessity to make an honest and proper disclosure of a matrimonial regime is vital.

7.5 The respondent further did not disclose during the sequestration application the fact that he is a practising attorney. He was also

not prepared to take the Court into his confidence thereby fully and fairly disclosing his income or, the extent of his practice expense as a sole practitioner. It is also not clear from the face of the confirmatory affidavits made by his colleagues and clients whether he disclosed to them that he was sequestrated or not. He puts the blame on his lawyer for not making honest, fair and full disclosure of what has been alluded to thus far. This in itself is an acknowledgement of failure to disclose important information. The Respondent claims lack of experience in sequestration applications, yet he conceded to have assisted his clients in such applications before.

7.6 In my view the ex parte application for sequestration was not done in good faith to say the least. Vital information was deliberately withheld. The respondent

could not have done that without a reason. Even at this late stage the Respondent is not prepared to mitigate the circumstances of the case by taking responsibility where he should have. He continues to show a lack of appreciation of the serious nature of his conduct.

7.7 The Respondent tries to create the impression of being fit and proper in a narrow sense of a well-managed trust account. Should that be the position, I would say that during the exchange of pleadings, he should have had time to reflect and to have had a proper perspective. If there has been a mistake on the part of his lawyer, Esmë King, he was in an excellent position to rectify that by filing a statement from his attorney. This was not done.

7.8 The view of our courts cannot be ignored. Where an act of dishonesty has been established, exceptional circumstances must exist before a court can embrace the lesser stricture order of suspension as opposed to striking off. In the matter of Kekana v Society of Advocates of South Africa, [1998] ZASCA 54; 1998 (4) SA 649 (SCA), the appellant who practised as an advocate made a false statement both in his answering affidavit and oral evidence. His name was struck of the roll for perpetuating lies under oath.

7.9 The respondent in this matter is an attorney who is quite senior having practised from 1991 - he should be able to appreciate the

consequences of his conduct. In the case of C Trans Maditon v Maismv & Another, 2002(6) SA (C), the Court had the opportunity of dealing with the phrase “exceptional circumstances” and attaching a meaning to such a phrase. The court concluded that such circumstances would have to be, “out of the ordinary’ markedly “unusual’ or “especially different to constitute exceptional circumstances’'.

7.10 In the present application I have to consider the following factors:

7.10.1 There have never been shortages in respondent’s trust account;

7.10.2 There are no deficiencies in the respondent’s bookkeeping system or the handling of his trust and business accounts as an attorney;

7.10.3 Safe for this matter he never transgressed the Rules of the Law Society;

7.10.4 Ms Magda Geringer in the employ of the applicant’s monitoring unit has found that his attorney’s fidelity fund is not at risk;

7.10.5 The respondent’s curator, just like Ms Geringer, has no objection that the responded be allowed to practice as attorney and operate on his current trust and business accounts; and

7.10.6 The conclusions and/or submissions made by the applicant regarding the Respondent's alleged dishonesty are based on inferences that the Respondent, during the process of applying for the surrender of his estate, failed to play open cards with the Court regarding his salary; his potential liability towards undisclosed creditors; the potential risks created by his failure to make a proper disclosure to his known creditors; the potential risk regarding his marital status; and his failure to take responsibility for his actions by placing the blame on his attorney.

8. Conclusion

The applicant concludes that the abovementioned actions constitute dishonesty, notwithstanding the respondent’s protestations. I am of the view that the applicant’s conclusions are not without merit. The respondent has failed to persuade the Court that his failure to disclose properly is due to a lack of knowledge. In my view the respondent was at least grossly negligent in his failure to make a full and proper disclosure to the Court in his application for the surrender of his estate.

9. Applying the principles emanated by the Rules of the Law Society, the applicable Act and the case law referred to above, I am of the opinion that the respondent is not a fit and proper person to remain on the Roll of practising attorneys without any form of sanction. An order sequestrating a debtor’s estate affects such a person’s status. The respondent had a duty to make a proper disclosure under the present circumstances. Having said that I am of the view that responded can still be rehabilitated and should be granted an opportunity to rethink his actions before being allowed to practice as an attorney. 1 therefore propose that Mr Warrick Leslie Visser Hepell, the respondent in this matter, be suspended from practising as an attorney for a period of six months as from the date of this Order. As far as costs are concerned, the applicant was substantially successful in its application and is entitled to the costs of this application as set out in the Notice of Motion.

Consequently, I propose that the following order be made:

1. That the respondent be suspended from practising as attorney of this Court for a period of six (6) months as from the date of this judgement;

2. That the relief set out in prayers 2 up to and including 12 dated 8 March 2013 is hereby incorporated in this order

3. Further that the respondent should pay costs of this application on the scale of attorney and client.

MOGOTSI AJ

ACTING JUDGE OF THE NORTH GAUTENG HIGH COURT

I agree and it is so ordered.

DE VOS J

JUDGE OF THE NORTH GAUTENG HIGH COURT

On behalf of the Applicant: Adv. J Leotlela

On behalf of the Respondent: Adv. N Davis SC