South African Legal Practice Council v Cheune and Another (21876/20) [2020] ZAGPPHC 774 (22 December 2020)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NO:21876/20

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: YES

(3) REVISED:

DATE: 22 December 2020

In the matter between:

THE SOUTH AFRICAN LEGAL PRACTICE COUNCIL Applicant

And

THABO MAMOKGALAKE CHUENE

First Respondent

MAMOKGALAKE CHUENE INCORPORATED ATTORNEYS

(Registration Number: 2007/000080/21)

Second Respondent

JUDGEMENT

This matter was enrolled for hearing on 24 November 2020. It was dealt with on the papers in terms of Directives of the Judge President of this Division dated 25 march 2020, 24 April 2020,11 May 2020 and 18 September 2020. Accordingly, the judgement and order are published and distributed electronically. The date and time of hand-down is deemed to be 10h00 on 22 December 2020.

Introduction

1. This is an application brought by the South African Legal Practice Council (hereinafter referred to as “the LPC”) for an order removing the name of the First Respondent, Thabo Mamokgalake Chuene, from the roll of practicing attorneys alternatively for an order suspending him from practice as an attorney of the above Honourable Court. This matter

Background facts

2. The First Respondent was admitted as an attorney of this court on 30 April 2002 and his name still appears on the roll of practicing

attorneys. According to the Legal Practice Council’s records. He practiced as a professional assistant at the C O Morolo Attorneys for the period 30 April 2002 until 29 June 2002. He was a non-practicing member of the Applicant for the period 30 June 2002 until 11 January 2004.

3. He practiced as a consultant at Themba Chuene Attorneys for the period 12 January 2004 until 01 January 2007. From 30 May 2005 until 01 January 2007, he was a partner at Themba Chuene Attorneys in Polokwane. He practiced for his own account under the name and style of Mamokgalake Chuene Incorporated Attorneys from 02 January 2007 until 19 July 2007. On 20 July 2007 until 30 June 2008, he was a non-practicing member of the Applicant.

4. With effect from 01 July 2008, he again commenced practicing for his own account under the name and style of Mamokgalake Chuene Incorporated Attorneys situated at Office OF0011 & Patio D003, La Rocca Office Park, 14 Petunia Street, Corner Main Road, Sandton, Johannesburg.

5. The second Respondent is Mamokgalake Chuene Incorporated Attorneys, a company duly incorporated in terms of Company Laws of The Republic of South Africa, with registration number 2007/000080/21 conducting business as a legal practice, with its registered address situated at 92 Country View Gardens, Midrand and its principal place of business situated at Office OF0011 & Patio D003, La Rocca Office Park, 14 Petunia Street, Corner Main Road, Sandton, Johannesburg. (The second Respondent/The firm).

6. The purpose of this application by the Applicant is to submit facts before the court which the Applicant contends justify the Honourable

Court ordering an immediate removal of the First Respondent’s name from the roll of legal practitioners.

7. On 17 June 2020, the First Respondent was suspended from practicing as an attorney. Jan Van Staden, the head of legal practitioners’

affairs was appointed as a cuator bonis to administer and control, inter alia, the trust accounts of the Respondent.

8. The First Respondent was given an opportunity to file his answering affidavit on or before 30 July 2020 which he did not do.

9. Various financial obligations are placed on an attorney in terms of the Legal Practice Council Act, Code of conduct and the Rules of the Legal Practice Council. Failure to adhere to these obligations will result in an action taken against the attorney. Rule 54.6 of the LPC Rules (previously Rule 35.5 of the Rules for the Attorneys Profession) obliges every firm to keep in an official language, such accounting records, which record both business account transactions and trust account transactions, as necessary to enable the firm to satisfy its obligations in terms of the LPA, the Rules and any other law with respect to the preparation of financial statements that present fairly and in accordance with an acceptable financial reporting framework in South Africa, the state of affairs and business of the firm and to explain the transactions and financial position of the firm;

10. Rule 54.23 and 54.24 (previously Rules 35.22 and 35.23 of the Rules for the Attorneys Profession) require every firm to cause its auditor to lodge a report with the Applicant within 6 (six) months of the annual closing of its accounting records or at such other times as the Council may require and subject to any condition that the Council may impose, to the effect that the firm has, inter alia, kept such records as required by the LPA and the LPC Rules and further to the effect that there were at all relevant times sufficient monies in the firm’s trust bank account to cover its liability to trust creditors;

11. The lodging of an unqualified auditor’s report as required by Rule 54.29 (previously Rule 35.22 and 35.23 of the Rules for the Attorneys Profession) is a prerequisite for a legal practitioner to be issued with a Fidelity Fund certificate as required by Section 84(1) of the LPA for the commencement of a new year.

12. Section 84(1) of the LPA provides that every attorney, or any advocate referred to in section 34 (2) (b), other than a legal practitioner in the full-time employ of the South African Human Rights Commission or the State as a state attorney and or state advocate and who practises or is deemed to practice:-

a) for his or her account either alone or in partnership; or

b) as a director of a practice which is a juristic entity, must be in possession of a Fidelity Fund Certificate.

13. The foregoing stipulation is peremptory and a contravention thereof is, in terms of section 93(8) of the LPA, an offence punishable with a fine or imprisonment for a period not exceeding two years or both such fine and imprisonment. Any person convicted on such an offence is, on conviction, liable to be struck off the roll of legal practitioners and is not entitled to any fee, reward or reimbursement in respect of the legal services rendered.

14. In terms of Section 85(1) of the LPA a legal practitioner who is obliged in terms of Section 84(1) to be in possession of a Fidelity Fund Certificate must apply to the Council for such a certificate as determined in the Rules. A Fidelity Fund Certificate is issued on the strength of an unqualified auditor’s report which must be submitted annually to the Council and which report relates to the financial year ending immediately prior to the application for a Fidelity Fund Certificate.

15. A Fidelity Fund Certificate is valid until the 31 December of the year in respect of which such certificate was issued.

Legal Principles

16. It is trite law that applications such as this one, are sui generis and of a disciplinary nature. There is no lis between the applicant and the respondent. The applicant, as custos morum of the profession, simply presents facts before the court for consideration and the matter is left in the hands of the court to

decide. Vide: Hassim vs Incorporated Law Society of Natal, 1977(2) SA 757(A) at 767 C-G: Law Society, Transvaal vs Mathew 1984(4) SA 389 (T) at 393 E; Cirota & Another v Law Society, Transvaal 1979(1) SA 172(A) on 187 H; Prokureursorde van Transvaal v Kleynhans 1995(1) SA 839(T) on 851 E-F.

17. As was stated in Jasat v Natal Law Society 200 (3) SA 44, [2000] 2 AII SA 310 (SCA) at para 10, s 22(1) (d) a three-stage inquiry is contemplated:

The offending conduct:

18. Firstly, the court must decide whether the alleged offending conduct has been established on a preponderance of probabilities, which is a factual inquiry. The First Respondent was suspended on 17 June 2020 and Jan Van Staden, the head of legal practitioners’ affairs was appointed as a curator bonis to administer and control, inter alia, the trust accounts of the First Respondent’s firm.

19. The First Respondent was ordered to furnish the Applicant’s attorneys with his answering affidavit, if any, on or before 30 July 2020. He did not do comply.

20. The Court issued a Rule Nisi calling upon the First Respondent to show cause why his name should not be removed from the roll of Legal Practitioners. There was a prima facie proof of misappropriation of trust funds in the region of at least R9 569 747.73. The Legal Practitioner’s Fidelity Fund and the public were accordingly at risk.

Complaints against the First Respondent

21. The First Respondent has failed and/or neglected to cause his auditor to lodge an unqualified audit report, as required by Rules 54.19 to 54.30 of the LPC Rules read with Clause 16.3 of the Code of Conduct, for the period ending 28 February 2019.

22. Therefore, the First Respondent was not issued with a Fidelity Fund Certificate for the year commencing January 2020. This then meant the First Respondent was not entitled to practice for reward and his clients and the Legal Practitioners’ Fidelity Fund were accordingly at risk.

23. The First Respondent contravened sections 84(1) and 84(2) of the LPA in that he practiced without being in possession of a Fidelity Fund Certificate for the year commencing January 2020, and while practicing or acting as such, received and accepted fees, rewards and disbursements from clients.

24. Furthermore, the First Respondent has failed to effect payment of his membership fees for the years 2019 and 2020. The total amount due and payable to the Applicant is R5275.00. This is a contravention of Rule 6 of the LPC Rules.

25. The Applicant has received a litany of complaints relating to the Road Accident Fund matters handled by the First Respondent. In no order of preference or importance they are the following:

Complaint by Mr. Sekgoramorithi Barnad Maimela

26. On 09 January 2020, the Applicant received a complaint against the First Respondent from Mr. Maimela (“the complainant”). During November 2018 the complainant instructed the First Respondent to institute legal proceedings on his behalf against the Road Accident Fund (“RAF”).

27. The complaint was that the First Respondent failed to give the complainant progress report on his Road Accident Fund (RAF) claim.

Complaint by Ms. Agnes Rebecca M. Mahlangu

28. On 11 December 2019, the Applicant received a complaint against the First Respondent from Ms. Mahlangu (“the complainant”).

The complainant instructed the First Respondent to institute legal proceedings on behalf of her minor child against the Road Accident

Fund (“RAF”), on 05 October 2015.

29. The complaint was that the First Respondent failed to report to her regarding the progress and payment in favour of the complainant after the RAF had paid an amount of R500 000.00, into the First Respondent’s firm’s trust account on 25 March 2019.

30. On 08 January 2020, this complaint was forwarded to the First Respondent for his comment. The First Respondent failed and/or neglected to reply to the correspondence addressed to him by the Applicant about this matter.

31. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

a) Clause 3.8 of the Code of Conduct in that he failed to account faithfully, accurately and timeously for his client’s money which came into his possession, keep such money separate from his own money, and retain such money for so long only as is strictly necessary;

b) Rule 54.12 of the LPC Rules in that he failed, within a reasonable time, after the performance or earlier termination of the mandate received from the complainant, to furnish the complainant with a written statement of account setting out with reasonable clarity:

· details of all accounts received by him in connection with the matter, appropriately explained;

· particulars of all disbursements and other payments made by him in connection with the matter;

· fees and other charges charged to or raised against the client and, where any fee represents an agreed fee, a statement that such a fee was agreed upon and the amount so agreed;

· the amount due to or owed by the client.

c) Rule 54.13 of the LPC Rules in that he failed to pay the amount due to the complainant within a reasonable time;

d) Clause 16.1 of the Code of Conduct in that he failed, within a reasonable time, to reply to all communications which require an answer unless good cause for refusing an answer exists;

e) Clause 16.2 of the Code of Conduct in that he failed to respond, timeously and fully, to request from the Applicant for information and/or documentation which he was able to provide; and

f) Clause 16.3 of the Code of Conduct in that he failed to comply timeously with directions from the Applicant.

Complaint by Mr. Kgaladi Israel Modipa

32. On 22 November 2019, the Applicant received a complaint against the First Respondent from Mr. Modipa (“the complainant”). The complainant instructed the First Respondent to institute legal proceedings on behalf of his brother, Mr. Nhlodi Peterson Modipa,

against the Road Accident Fund (“RAF”).

33. The complaint was that the First Respondent failed to report to the complainant regarding progress and payment in favour of the

complainant’s brother, Mr. Nhlodi Peterson Modipa, in the sum of R350 000.00.

34. The funds were deposited into the First Respondent’s firm’s trust account on 05 October 2018. On 06 December 2019 and again on 21 January 2020, this complaint was forwarded to the First Respondent for his comment.

35. The First Respondent failed and/or neglected to answer the correspondence addressed to him by the Applicant in this regard.

36. Accordingly, the First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Ms. Gloria Njikelana

37. On 01 November 2019, the Applicant received a complaint against the First Respondent from Ms. Njikelana (“the complainant”).

On 12 September 2006, the complainant’s mother-in-law instructed the First Respondent to institute legal proceedings on her

behalf against the Road Accident Fund (“RAF”).

38. The complainant advised that her mother-in-law passed away in 2017. It was established that on 30 November 2018, the RAF paid an amount of R157 350. 00 into the First Respondent’s firm’s trust account. However, the First Respondent failed to account and to effect payment in favour of the estate.

39. On 06 December 2019, this complaint was forwarded to the First Respondent for his comment. The First Respondent failed and/or neglected to reply to the correspondence addressed to him by the Applicant about this matter.

40. Therefore, the First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Ms. Ramadimetja Maria Kekana

41. On 10 October 2019, the Applicant received a complaint against the First Respondent from Ms. Kekana (“the complainant”). During 2017, the complainant instructed the First Respondent to institute legal proceedings on her behalf against the Road Accident Fund (“RAF”).

42. The complaint was that the First Respondent failed to report to her regarding the progress and payment in favour of the complainant after the RAF had paid an amount of R440 000.00 into the First Respondent’s firm’s trust account on 28 February 2018.

43. The complainant approached the firm Senyatsi Attorneys who addressed a letter to the First Respondent. In his response dated 09 September 2019, the First Respondent undertook to effect payment in favour of the complainant by 30 September 2019; however, the First Respondent failed to do so.

44. On 28 November 2019 and 21 January 2020, this complaint was forwarded to the First Respondent for his comment. The First Respondent failed and/or neglected to reply to the correspondence addressed to him by the Applicant about this matter.

45. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Mr. Tshwarelo Sewelane Mosoma

46. On 12 September 2019, the Applicant received a complaint against the First Respondent from Mr. Mosoma (“the complainant”).

47. On 15 October 2015, the complainant instructed the First Respondent to institute legal proceedings on his behalf against the Road Accident Fund (“RAF”).

48. The complaint was that the First Respondent failed to report to the complainant regarding progress and to effect payment in favour of the complainant after the RAF had paid an amount of R450 000.00 and a further amount of R1 494 911.16 into the First Respondent’s

firm’s trust account on 25 March 2019 and 10 April 2018, respectively.

49. On 31 October 2019, this complaint was forwarded to the First Respondent for his comment. The First Respondent failed and/or neglected to answer to the correspondence addressed to him by the Applicant about this matter.

50. On 17 October 2019, the Applicant received a complaint from Gilbert Motedi Attorneys Incorporated (“the firm”), who acted on behalf of the complainant. The firm advised that all their attempts to contact the First Respondent had proven fruitless. On 30 October 2019 this complaint was forwarded to the First Respondent for his comment.

51. In his response dated 13 January 2020, the First Respondent, inter alia, confirmed that payment had been made by the RAF into his firm’s trust account and that payment in favour of the complainant was delayed due to his bill of costs not yet finalized.

52. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Mr. Taba Solomon Molea

53. The Applicant received a complaint against the First Respondent from Mr. Molea (“the complainant”). During 2013, the complainant instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on his behalf.

54. The complaint was that the First Respondent had failed to report to him regarding the progress of the matter and to effect payment in favour of the complainant after the RAF had paid an amount of R245 872.01 into the First Respondent’s firm’s trust account on 08 August 2018.

55. On 31 October 2019. this complaint was forwarded to the First Respondent for his comment. The First Respondent failed and/or neglected to answer to the correspondence addressed to him by the Applicant about this matter.

56. Accordingly, the First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Ms. Lorraine Ndlovu

57. On 15 August 2019, the Applicant received a complaint against the First Respondent from Ms. Ndlovu (“the complainant”). The complainant instructed the First Respondent, on 30 October 2014, to institute legal proceedings against the Road Accident Fund (“RAF”).

58. The complaint was that the First Respondent failed to report to her regarding the progress of the matter and to effect payment in her favour after the RAF had paid an amount of R450 000.00 into the First Respondent’s firm’s trust account.

59. On 20 November 2019, this complaint was forwarded to the First Respondent for his comment. In his response dated 13 January 2020, he confirmed having acted on behalf of the complainant’s minor child, and that he had received R450 000.00 for General Damages from the Road Accident Fund. He advised that he would only account to the complainant upon the completion of the entire matter.

60. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Mr. Seven Tebogo Makutu

61. On 26 June 2019, the Applicant received a complaint against the First Respondent from Lipco which was acting on behalf of Mr. Makutu (“the complainant”). The complainant instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on his behalf, following his accident which occurred on 24 January 2011.

62. The complaint was that the First Respondent failed to report to him regarding the progress of the matter and to effect payment in his favour after the RAF had paid an amount of R1 447 052.00 into the First Respondent’s firm’s trust account in settlement of his claim.

63. On 09 July 2019 and again on 02 August 2019, this complaint was forwarded to the First Respondent for his comment. The First Respondent failed and/or neglected to reply to correspondences addressed to him by the Applicant in this regard.

64. Belatedly, on 04 September 2019, the First Respondent replied confirming having acted on behalf of the complainant and receiving into his trust account payment from the RAF in the sum of R250 000.00 for General Damages and R1 197 052.00 for loss of earnings.

65. The First Respondent advised that the finalization of the bill of costs delayed the payment. However, he had effected payment in favour of the complainant in the sum of R1 025 289.00 on 29 June 2019. On 17 September 2019, 24 October 2019 and 05 December 2019, the Applicant requested the First Respondent to furnish it with a proper statement of account as well as the taxed bill of costs in respect of the complainant’s matter. This did not happen.

66. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Mr. Newekwentsha Elliot Weji

67. On 15 March 2019, the Applicant received a complaint against the First Respondent from Mr. Weji (“the complainant”). The complainant, on 07 December 2014, instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on his behalf, following injuries he had sustained in a motor vehicle accident.

68. The complaint was that the First Respondent failed to report to him regarding the progress of the matter and to effect payment in his favour after the RAF had paid an amount of R360 000.00 into the First Respondent’s firm’s trust account in settlement of his claim on 31 October 2018.

69. On 02 April 2029, this complaint was forwarded to the First Respondent for his comment. He responded on 02 May 2019. The First Respondent,

inter alia, confirmed having acted on behalf of the complainant and that in October 2018 General Damages had, indeed, been settled. He further

stated that his firm was still waiting for the attorney and own client bill of costs in order to account and effect payment in favour of the complainant.

70. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Hlengiwe Khumalo

71. On 19 February 2019, the Applicant received a complaint against the First Respondent from Ms. Khumalo (“the complainant”).

The complainant, on 08 September 2015, instructed the First Respondent to institute legal proceedings against the Road Accident

Fund (“RAF”) on her behalf, following injuries she had sustained in a motor vehicle accident on 05 January 2014.

72. The complaint was that the First Respondent failed to execute the mandate given to him. On 12 March 2019, this complaint was forwarded to the First Respondent for his comment. The First Respondent failed and/or neglected to reply to the correspondence addressed to him by the Applicant in this regard.

73. Rather belatedly on 23 April 2019, the Respondent confirmed having acted on behalf of the complainant. He stated that he had telephonically

advised the complainant, following a consideration of the medical records received from Heidelburg hospital, that her injuries did not justify lodging a claim with the Road Accident Fund. Therefore, his firm could not continue with the matter.

74. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

a) Clause 16.1 of the Code of Conduct in that he failed, within a reasonable time, to reply to all communications which require and answer unless good cause for refusing an answer exists;

b) Clause 16.2 of the Code of Conduct in that he failed to respond timeously and fully requests from the Applicant for information and/or documentation which he was able to provide; and

c) Clause 16.3 of the Code of Conduct in that he failed to comply timeously with directions from the Applicant.

Complaint by Godffrey Shimani Mithileni

75. On 05 February 2019, the Applicant received a complaint against the First Respondent from Mr. Mithileni (“the complainant”).

The complainant instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on his behalf, following injuries he had sustained in a motor vehicle accident.

76. The complaint was that the First Respondent failed to report to him regarding the progress of the matter and to effect payment in his favour after the RAF had paid an amount of R1 202 736.52 into the trust account of the Sheriff Centurion on 05 September 2018.

77. This was after a warrant of execution had been issued against the Road Accident Fund. The Sheriff electronically transferred the sum of R1 200 000.00 into the First Respondent’s firm.

78. On 08 April 2019, this complaint was forwarded to the First Respondent for his comment. He responded on 07 May 2019. The First Respondent,

inter alia, confirmed having acted on behalf of the complainant and that the RAF settled the claim in August 2018. On 03 May 2019 he stated that the complainant was paid R800 000.00.

79. He further stated that the delay was caused by the time it took to finalize the bill of costs. On 27 May 2019 and 28 June 2019, the Applicant requested the First Respondent to furnish it with his statement of account as well as proof of payment in favour of the complainant. Needless to say that the First Respondent did not comply with this request.

80. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by MX. Xolile Vannessa Mngomezulu

81. On 15 January 2019, the Applicant received a complaint against the First Respondent from Ms. Mngomezulu (“the complainant”). The complainant instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on her behalf, following injuries she had sustained in a motor vehicle accident.

82. The complaint was that the First Respondent failed to report to her regarding the progress of the matter and to effect payment in her favour after the RAF had paid. On 15 March 2019, the complainant visited the RAF once again and was informed that a further payment had been made into the First Respondent’s firm’s trust account.

83. On 30 January 2019 and again on 14 March 2019 this complaint was forwarded to the First Respondent for his comment. The First Respondent replied on 27 March 2019. He advised that he had informed the complainant that she would get her funds upon the settlement of the entire matter. He further stated that, on 18 December 2018, he had made a payment of R100 000.00 to the complainant.

84. On 26 March 2019, after deducting 25% for fees, he made a further payment of R575 000.00 to the complainant. To date the First Respondent has failed to account for the remainder of the trust funds which were paid into his trust account.

85. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Ms. Portia Thabo Seokotsa

86. On 17 January 2019, the Applicant received a complaint against the First Respondent from Ms. Seokotsa (“the complainant”). The complainant instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on her behalf, following injuries she had sustained in a motor vehicle accident.

87. The complaint was that the First Respondent failed to report to her regarding the progress of the matter and to effect payment in her favour after the RAF had paid the sum of R2 475 370.00 on 12 January 2018 in settlement of the claim.

88. On 29 April 2019 and again on 28 May 2019, this complaint was forwarded to the First Respondent for his comment. The First Respondent failed and/or neglected to reply to correspondences addressed to him by the Applicant in this regard.

89. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Mr. Ebrahim Jabamo Handiso

90. The Applicant received a complaint against the First Respondent from Mr. Handiso (“the complainant”). The complainant instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on his behalf, following injuries he had sustained in a motor vehicle accident.

91. The complaint was that the First Respondent failed to report to him regarding the progress of the matter and to effect payment in his favour after the RAF had paid the sum of R500 000.00 on 03 October 2018 in settlement of General Damages.

92. On 08 January 2019, the Applicant forwarded this complaint to the First Respondent for his comment. The First Respondent failed and/or neglected to reply to the correspondence addressed to him by the Applicant in this regard.

93. On 14 March 2910, The First Respondent advised that he had informed the complainant that he would only account to him upon the finalization

of the matter. Due to the insistence of the complainant an interim payment was made and subsequently an amount of R356 250 00 was paid to the complainant on 26 February 2019.

94. On 12 July 2019, the Applicant received a letter of complaint from the firm Hamilton’s Attorneys (“the firm”) who acted on behalf of the complainant. The firm advised that criminal charges had been proffered against the First Respondent and that an amount in the region of R1 553 916.65 was still due to the complainant.

95. The complainant further stated that he had not received a detailed statement of account. On 11 June 2019, when the complainant attended

to the offices of the Road Accident Fund, he was informed that a further amount of R99 166. 49 and R1 454 750.16 had been paid into the First Respondent’s Firm’s trust account on 05 March 2019 and 31 March 2019 respectively.

96. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Ratale Mashifane Attorney’s obo Mr. Matsobane Frans Selahla

97. On 08 October 2018, the Applicant received a complaint against the First Respondent from Ratatle Mashifane Attorneys (“the firm”) who acted on behalf of Mr. Selahla (“the complainant”). The complainant instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on his behalf, following injuries he had sustained in a motor vehicle accident.

98. According to the complaint the matter was finalized on 30 August 2017. The First Respondent failed to account and to effect payment in favour of the complainant. Upon receipt of the complainant’s legal representative’s letter, on 15 June 2018, the First Respondent simply advised that they had not yet received the taxed bill of costs from the tax consultant.

99. On 25 October 2018, 04 December 2018 and 11 January 2019, the Applicant forwarded this complaint to the First Respondent for his comment. In his belated response dated 22 January 2019, the First Respondent, amongst other things, advised that a payment of R1 518 224. 22 had been made into the complainant’s attorneys on 19 January 2019.

100. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Ms. Kolobe Bella Choshi

101. On 03 July 2018, the Applicant received a complaint against the First Respondent from Ms. Choshi (“the complainant”). The complainant instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on her behalf, following injuries she had sustained in a motor vehicle accident.

102. The complaint was that the First Respondent failed to report to her regarding the progress of the matter and to effect payment in her favour after the RAF had effected payment in the sum of R283 438.00 into the trust account of Sheriff Centurion East on 10 October 2017.

103. The Sheriff Centurion East effected payment in the sum of R286 210.26 into the First Respondent’s firm’s trust account. On 31 August 2018, this complaint was forwarded to the First Respondent for his comment. In his response dated 28 September 2018, the First Respondent stated that he had fully accounted and paid the complainant on 17 August 2018.

104. In a letter dated 31 October 2018, in which the Applicant indicated its dissatisfaction with the Respondent’s answer, the Applicant requested an explanation with regard to the delay in paying the complainant as well as the amount deducted by the First Respondent with regard to fees.

105. Again, on 15 January 2019, the Applicant penned a letter to the First Respondent requesting to be furnished with a response, however, the First Respondent failed to do same.

106. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Ms. Ntopi Promise Seleta

107. The Applicant received a complaint against the First Respondent from Ms. Seleta (“the complainant”). During March 2015, the complainant instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on her behalf, following injuries she had sustained in a motor vehicle accident.

108. The complaint was that the First Respondent failed to report to her regarding the progress of the matter and to effect payment in her favour after the RAF had effected payment in the sum of R1 000 000.00 into the First Respondent’s firm’s trust account on 15 March 2016 and a further R423 615.00 on 14 December 2016.

109. The complainant indicated that she received the following payments:

· December 2016 – R100 000.00

· November 2017 - R5000.00

· December 2017 – R60 000.00

· March 2018 – R10 000.00

110. On 24 May 2018, this complaint was forwarded to the First Respondent for his comment. In his response dated 26 June 2018, the First Respondent stated that he told the complainant to wait for the bill of costs to be finalized. Since the complainant insisted on an interim payment, he paid her R100 000.00 on 08 December 2016.

111. A discussion took place amongst the First Respondent, the complainant and the complainant’s brother. According to the First

Respondent, it was resolved that the First Respondent should register a Deed of Trust on behalf of the complainant in order to protect her financial interests.

112. The complainant retorted that 19 months had lapsed since the RAF had effected payment and yet no Trust Deed had been formed. When pressed by the Applicant to produce the Trust Deed documents, the First Respondent explained that he had experienced delays with Momentum Trust Limited. On 05 December 2018, the First Respondent dispatched a letter stating that he had engaged the services of Company Partners who were in the process of submitting the Trust Deed to the Office of the Master of the High Court.

113. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by Ms. Magaret Smakaleng Makhafola

114. On 15 January 2018, the Applicant received a complaint against the First Respondent from Ms. Makhafola (“the complainant”). The complainant, on 08 December 2014, instructed the First Respondent to institute legal proceedings against the Road Accident Fund (“RAF”) on her behalf, following injuries she had sustained in a motor vehicle accident.

115. The complaint was that the First Respondent failed to report to her regarding the progress of the matter and to effect payment in her favour after the RAF had effected payment in the sum of R500 000.00 into the First Respondent’s firm’s trust account.

According to the complainant, the First Respondent agreed to make an interim payment of R175 000.00, however only a sum of R150 000.00 was paid. The complainant was told that R150 000.00 was the daily transfer limit of the firm. The First Respondent failed to effect payment of the remainder of the money due to the complainant per their agreement.

116. On 23 January 2018, this complaint was forwarded to the First Respondent for his comment. On 14 March 2018, the Applicant received a letter from the complainant withdrawing the complaint, stating that she had since settled the matter with the First Respondent.

117. On 18 December 2018, the complainant re-opened the complaint as the First Respondent had failed to effect payment as per his undertaking.

A further complaint was furnished by the complainant against the First Respondent on 31 January 2019. This complaint was that the

First Respondent had received a further payment from the RAF into the First Respondent’s firm’s trust account in the sum of R4 054 940.00 on 18 January 2019.

118. The First Respondent had only paid the complainant R200 000.00 on 19 January 2019. On 21 February 2019, the Applicant received a response from the First Respondent in which he advised that an additional consultation was needed; which caused the delay in payment. The First Respondent confirmed that the consultation was held in January 2019 and payment was effected. He further stated that the court directed that a trust be registered in the minor child’s name.

119. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Complaint by the Road Accident Fund

120. On February 2019, the Applicant received a complaint against the First Respondent from Mr. Marius Werner (“Werner”) who is employed as a Senior Forensic Manager at the Road Accident Fund. Werner furnished the Applicant with an external investigation report dated 15 February 2019.

121. In essence, the report related to adverse findings which were made against the First Respondent due to the First Respondent’s

failure to disclose to clients the full amount paid by the RAF on settlement. This also involved the First Respondent’s failure

to account to clients in full. It was recommended that the First Respondent’s conduct be reported to the Applicant and criminal

proceedings be proffered against him; including that the Asset Forfeiture Unit be involved in the recovery of the stolen trust

funds.

122. On 21 May 2019 and 28 June 2019, this report was forwarded to the First Respondent for his comment. The First Respondent failed and/or neglected to reply to the correspondence addressed to him in this regard.

123. The First Respondent violated, inter alia, the following provisions of the Legal Practice Act, the Code of Conduct and the LPC Rules:

Report by Ms Puseletso Rebecca Hlogoana

124. A report by Ms. Puseletso Rebecca Hlogoana (“Ms Hlogoana”), an auditor who is employed in the Applicant’s Risk and Compliance Unit, was commissioned by the Applicant. Ms. Hlogoana has expertise in conducting investigations into attorneys’

practices, especially the manner in which they maintain their accounting records and the manner in which they operate on their

trust banking accounts.

125. Ms. Hlogoana provided the Applicant with a report dated 03 December 2019. Ms. Hlogoana initially experienced difficulties in arranging a meeting with the First Respondent as the First Respondent was out of the country. Ms. Hlogoana had to wait for him to return and schedule a meeting for 21 June 2019 which was cancelled and re-scheduled for 25 June 2019. She met the First Respondent at the firm. The First Respondent confirmed that the firm was established on 01 July 2008 and that the First Respondent was the sole practitioner.

126. The firm’s accounting records were not readily available for Ms. Hlogoana to inspect as same were in the possession of the external bookkeeper, Musa and Associates. It was agreed that on the 15th of July 2019 the firm’s accounting records would be made available for inspection.

127. The firm held separate trust and business accounts at Standard Bank. A trust bank statement dated 28 February 2018 reflected a balance of R4 213 175.16. A trust bank statement dated 31 May 2019 reflected a balance of R865.29.

128. According to the First Respondent, the firm had no investment accounts held in terms of Section 86(4) of the LPA. The First Respondent advised that accounting statements were issued to clients upon finalization of matters. Upon her inspection of the list of trust creditors comparing it to the total bank balances on the dates as reflected hereunder, she found the following substantial trust deficits:

Date Total Trust

Trust Funds debit

Surplus/

Creditors available in

balances

(Deficits)

(R’s) trust banking

Accounts

28/02/2018 R14 700 498.19 R4 213 175.16 R11 475 084.67 (R10 487 323.03)

29/02/2019 R25 900 505.21 R995.67 R45 144 654.88 (R25 899 509.54)

31/05/2019 R21 610 966.92 R865.29 R40 565 010.34 (R21 610 101.63)

129. Ms. Hlogoana expressed the view that the First Respondent transferred fees to the firm’s business account which were in excess of the actual amount due to the firm and that he rolled trust funds. Furthermore, that the First Respondent did not have effective and adequate controls in place over the management and safe-guarding of trust funds.

Complaint by Ms. Kolobe Bella Choshi

130. Ms. Hlogoana questioned why payment in the sum of R202 690.35 was made to Kolobe Bella Choshi on 17 August 2018 when the RAF effected payment on 19 October 2017. She also questioned why the party-party payment made to the First Respondent by the RAF on 19 September 2018 in the sum of R53 060.92 was not disclosed or accounted for to the complainant. The disbursement in this bill only amounted to R823.62.

Complaint by Ms. Seoketsa

131. With regard to Ms. Seoketsa, the First Respondent stated that the delay in paying her was as a result of the bill of costs which was taxed and settled on 20 May 2018, as well as the attorney-client bill of costs which was only received from the cost consultant on 26 June 2019. When Ms. Hlogoana requested a copy of the attorney-client bill of cost, she was advised by the firm’s manager, Ms. Merdy Cobus, that same was never prepared and clients were paid based on a contingency fee agreement. It is clear from this statement that the First Respondent was not honest about the cause of the delay in payment.

132. The matter was settled at R2 475 370.00 according to Ms. Hlogoana. The said amount was paid on 19 February 2019, the transfers were

immediately made to the firms’ business account. The complainant was paid an amount of R1 856 527.50 on 29 June 2019. Ms.

Hlogoana also found that the RAF made duplicate payments in favour of the firm and the First Respondent failed to notify the RAF of same and also failed to repay the RAF.

133. Ms. Hlogoana further found that the RAF settled the bill of costs in the matter of Seoketsa for an amount of R224 648. 77 and R15 516.81 on 01 August 2018. The sum of R131 998.45 related to actual disbursements. Accordingly, the First Respondent should have accounted and paid the balance to Ms. Seoketsa an amount of R108 167.13. However, this was not disclosed to the complainant.

134. The trust bank statements as at 31 May 2019 reflected a balance of R865.29. Accordingly, the trust funds of the claimants were not

available in the firm’s trust account as at 31 May 2019. Ms. Hlogoana was unable to determine the source of the funds which were paid to the complainant on 29 June 2019.

Complaint by Ms. Ntopi Promise Seleta

135. Ms. Hlogoana stated that a sum of R1 000 000.00 was received into the firm’s trust account on 26 August 2016. Three transfers were effected into the firm’s business accounts referenced as “Ntombi Seleta”, Ntombi Seleta and Mva/Ntombi Seleta on 02 September 2016, 05 September 2016 and 30 September 2016. Transfers amounted to R509 000.00.

136. Ms. Hlogoana found that on 11 May 2017, the RAF made a further R423 615.00 payment. No Deed of Trust had been registered on behalf of the complainant as at the date of her visit. This was in contrast to what had been reported by the First Respondent.

137. The trust bank statement as at 31 May 2019 reflected a balance of R865.29, therefore, the trust funds of the complainant in the amount of R892 711.00 were not available in the firm’s trust account as at 31 May 2019.

Complaint by Mr. Mithileni

138. The Respondent advised Ms. Hlogoana that the delay in paying the complainant was caused by the taxing of the attorney-client bill of costs. Ms. Hlogoana confirmed that, the RAF paid R1 200 000.00 on 07 September 2018 under reference “Ts/Mva/00389”. Sixteen transfers were effected to the firm’s business account referenced as “Mithileni Fees” from the period of payment until 15 September 2018.

139. The transfers amounted to R1 325 000.00 which shows that the ledger account had a debit balance of R125 000.00 as at 15 September 2018. Accordingly, the First Respondent transferred fees to the business account which were in excess of what was due to the firm. Hlogoana also found that on 18 December 2018, the RAF paid party-party costs to the tune of R144 055.03. The First Respondent failed to disclose and to account to the complainant.

140. Based on the complaints investigated by Ms. Hlogoana, the trust deficits identified as at 28 February 2019 can be analyzed as follows:

Total creditor’s liability R9 570 743.4 Trust Bank Statements balance as at 28 February 2019 (R995.57) Total trust deficits as at 28 February 2019 (R9 569 747.73)

141. Ms. Hlogoana also found instances where the Respondent charged VAT in addition to minimum fee limited in terms of Section 2(2) of the Contingency Fee Act and thus overcharging clients. She also found that the First Respondent failed to submit his audit report for the period ending 28 February 2018.

142. According to Ms. Hlogoana, the First Respondent has, inter alia, contravened the following provisions of the LPA, the LPC Rules, the Code of Conduct and the Rules for the Attorneys Profession:

· Rule 54.9.2 of the Rules of the LPC in that he failed to retain the trust accounting records at no place other than the firm’s offices or, in the case of electronic accounting records or files, they were not immediately accessible;

· Rule 35.13.7.1 of the Rules for the Attorneys Profession or Rule 54.14.7.1 of the Rules of the LPC in that he did not have effective and adequate controls in place over the management and safeguarding of the trust monies;

· Rule 35.13.9 of the Rules for the Attorneys Profession or Rule 54.14.9 of the Rules of the LPC in that he did not ensure that no account of any trust creditor is in debt;

· Rule 35.13.11 of the Rules of the Attorneys Profession or Rule 54.14.11 of the Rules of the LPC in that he did not immediately report in writing to the society on the debit balances, together with written explanation of the reason for the debit and proof of rectification;

· Rule 35.13.10 of the Rules of the Attorneys Profession or Rule 54.14.10 of the Rules of the LPC in that he failed to immediately report the firm’s trust deficit to the Applicant;

· Rule 35.13.8 of the Rules of the Attorneys Profession or Rule 54.14.8 of the Rules of the LPC in that he failed to ensure that the total amount of the money in its trust banking account, trust investment account and trust cash at any date shall not be less than the total amount of the credit balances of the trust creditors shown in its accounting records;

· Rule 35.13.14 of the Rules of the Attorneys Profession or Rule 54.14.14 of the Rules of the LPC in that he failed to ensure that withdrawals from the trust banking account are only in respect of payments to or for trust creditors or alternatively transfers to the firm’s business banking account in respect of monies due to the firm;

· Rule 49.6 of the Rules of the Attorneys Profession or clause 18.7 of the Code of Conduct in that he overreached the client;

· Rule 35.12 of the Rules of the Attorneys Profession or Rule 54.13 of the Rules of the LPC in that he did not pay the amount due to the client within reasonable time;

· Rule 35.11 of the Rules of the Attorneys Profession or Rule 54.12 of the Rules of the LPC in that he failed to account to the client in writing upon finalization of his mandate; and

· Rule 54.24.1 of the Rules of the LPC in that he did not furnish the audit report within six months of the annual closing of the accounting records of the firm.

143. I am satisfied that the Legal Practice Council has on a preponderance of probabilities established the offensive conduct against which the court should consider whether the Respondent is still a fit and proper person to practice as an attorney.

Whether he is a Fit and Proper person:

144. Secondly, the court must consider whether the person concerned ‘in the discretion of the Court’ is not a fit and proper person to continue to practice. This involves a weighing up of the conduct complained of against the conduct expected of an attorney and, to this extent, is a value judgement.

145. Legal practitioners are officers of the court and must always comply with the Legal Practice Act, the Code of conduct and the Rules of the Legal Practice Council.

146. The court needs to take all the arguments into consideration and arrive at an objective decision in particular when dealing with trust shortage. The approach of the Court in relation to trust shortages and the duty of an attorney with regard to trust money was stated in Law Society, Transvaal v Mathews supra on 394 as follows:

“I deal now with the duty of an attorney in regard to trust money. Section 78(1) of the Attorneys Act obliges an attorney to maintain a separate trust account and to deposit therein money held or received by him on account of any person. Where trust money is paid to an attorney it is his duty to keep it in his possession and to use it for no other purpose than that of the trust It is inherent in such a trust that the attorney should at all times have available liquid funds in an equivalent amount The very essence of a trust is the absence of risk. It is imperative that trust money have available liquid funds in an equivalent amount. The very essence of a trust is the absence of risk.

It is imperative that trust money in the possession of an attorney should be available to his client the instant it becomes payable. Trust money is generally payable before and not after demand. See Incorporated Law Society. Transvaal v Visse and Others; Incorporated Law Society Transvaal v Viliioen 1958 (4) SA 115 (T) at 118 F-H. An attorney’s duty with regard to the preservation of trust money is a fundamental, positive and unqualified duty. Thus neither negligence nor willfulness is an element of a breach of such duty: Incorporated Law Society. Transvaal v Behrman 1977(1) SA 904 (T) at 905 (H). It is significant that in terms of Section 83(13) of the Attorneys Act a practitioner who contravenes the provisions relation to his trust account and investment of the trust money will be guilty of unprofessional conduct and be liable to be struck off the roll or suspended from practice.”

147. Furthermore, in Law Society Transvaal vs Mathews (Supra) on 395 the Court said the following regarding the proper keeping of accounting records by a practitioner:

“failure to keep proper books of accounting is a serious contravention and renders an attorney liable to be struck off the roll of practitioners or liable to suspension; and the Courts have repeatedly warned practitioners of the seriousness of such a contravention. See Cirota and Another v Law Society Transvaal (Supra at 193 F-G). the seriousness is again underlined in rule 89 read with rule 89(11) of the applicant’s rules which provides that it is unprofessional or dishonourable or unworthy conduct on the part of the practitioner to contravene the provisions of the Attorneys Act or the applicant’s rules.”

148. There are absolutely no redeeming qualities from the practitioner if anything he is a poor excuse for a lawyer. It is this type of conduct that not only brings shame to the profession but takes the profession years back in its endeavor to make our constitution a living document in the lives of the people.1

149. A legal practitioner must scrupulously comply with the provisions of the Legal Practice Act especially in relation to the funds of clients which are placed for safe keeping and custody in the control of an attorney. To ravage impoverish peoples’ share of their compensation, as a result of their broken limbs from road accidents, in order to sustain a lavish and luxurious lifestyle is tantamount to robbery.

150. Failure to practice with a Fidelity Fund Certificate puts a legal practitioner in diametrically opposed position to a fit and proper

person. Vide: Law Society of Northern Provinces vs Mogami and others 2010 (1) SZ 186 (SCA) at para 25.

“I have already with reservations concluded that the Respondent are not unfit to continue practicing as attorneys. The particular complaints dealt with indicate a level either of incompetency, inattention or inability to do professional work but the seriousness is not such as to disqualify them from practicing. More seriousness were the failure to submit the auditor’s report and the fact that they practiced without fidelity fund certificates.”

Sanction:

151. And thirdly, the court must inquire whether in all the circumstances the person in question is to be removed from the roll of attorneys or whether an order of suspension from practice would suffice.

152. In Malan and another vs Law Society, Northern Provinces [2008] ZACS 90; [2009] IAII SA 133 (SCA); (Supra) the court at paragraph 6 stated:

“As pointed out in Jassat, the third leg is also a matter for the discretion of the Court of first instance, and whether the court will adopt the one course or the other depends upon such factors as the nature of the conduct complained of, the extent to which it reflects upon the person’s character or shows him to be unworthy to remain in the ranks of an honourable profession, the likelihood or otherwise of the repetition of such conduct and the need to protect the public. Ultimately, it is a question of degree.”

153. The court`s exercise of the discretion is not bound by any Rules or precedents. Each matter is treated on its merits, at paragraph 21 in Naylor v Jansen 2007 (1) SA 16 (SCA). The court held that: If a court were bound to follow a precedent in the exercise of its discretion it will mean that the court has no real discretion.

154. It is clear that where the court finds dishonesty a removal instead of a suspension is on the cards. The character defect and lack of integrity automatically render a person unfit to be on the roll. The Respondent is not only unfit but also does not belong with the respected, learned and honourable professionals. Attorneys are expected to exhibit uberrima fides.

155. Ultimately this is a question of degree. Having regard to all the facts before me and given the First Respondent`s misdemeanors and contraventions ,I find that he is not a fit and proper person to remain in the roll of legal practitioners(Attorneys). His name should therefore be struck from the roll.

Costs

156.The Applicant has a statutory duty to approach the court and present facts which show that legal practitioners have made themselves guilty of dishonourable, unworthy or unprofessional conduct. Therefore, the Applicant should not be burdened with legal cost when launching such applications against legal practitioners. It is practise that the costs are granted on an attorney and client scale. I see no reason why I should rule otherwise.

157.In the result I make the following order:

1.The draft order attached hereto and marked “X” is made the order of court.

M. P. MOTHA

ACTING JUDGE OF THE HIGH COURT

GAUTENG DIVISION, PRETORIA

I agree and so it is ordered,

M.J. TEFFO

JUDGE OF THE HIGH COURT

GAUTENG DIVISION, PRETORIA

DATE OF HEARING: 24 NOVEMBER 2020

DATE OF JUDGEMENT: 22 DECEMBER 2020

Counsel for the Applicant: SL Magardie

Attorney for the Applicant:

Damons Magardie Richardson Attorneys

For the Respondent: None