South African Legal Practice Council v Mahodi (10743/2021) [2021] ZAGPPHC 826 (2 December 2021)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED: YES/NO

Case number: 10743/2021

In the matter between:

SOUTH AFRICAN LEGAL PRACTICE COUNCIL APPLICANT

And

MAROPENE FRANS MAHODI

RESPONDENT

JUDGMENT

PHAHLAMOHLAKA A.J.

INTRODUCTION

[1] The Applicant is the Legal Practice Council (LPC), established in terms of Section 4 of the Legal Practice Act 28 of 2014 (the LPA) as a body corporate with full legal capacity and which exercises jurisdiction over all legal practitioners, and candidate attorneys.

[2] The Respondent Maropene Frans Mahodi is a major male attorney, who was admitted as an attorney of this court on 08 December 2009 and whose name is still on the roll of Legal Practitioners (attorneys). According to the records of the Applicant, the Respondent is practising as an attorney and as a single practitioner under the style Mahodi attorneys.

[3] This is an application for suspension, alternatively striking off the roll of attorneys against the Respondent.

[4] The Court is called upon to determine whether the alleged offending conduct(s) by the attorney has been established. If the court is satisfied that the offending conduct has been established, a value judgment is required to decide whether the Respondent is not a fit and proper person to practice as an attorney, and if the Court decides that he is not a fit and proper person to practice as an attorney, it must decide in the exercise of its discretion within all the circumstances of the case whether the attorney in question is to be removed from the roll or merely suspended from practice.

[5] The Applicant responded to several complaints of improper conduct against the Respondent. Pursuant to these complaints the Applicant commissioned Mr Ashwin Reddy, an Auditor employed in the Risk and Compliance unit of the Applicant, to investigate.

[6] The following complaints were investigated by Reddy and he made observations regarding his investigations

6.1 COMPLAINT BY MR RONALD AJARA

6.1.1 On 13 November 2019 a complaint was lodged against the Respondent by Mr Ronald Ajara. Mr Ajara was interested in purchasing an immovable property and instructed the Respondent to retain his deposit in respect of the purchase price of the property in his trust account until an agreement of sale was finalised. The Respondent was instructed to effect payment to the seller once all conditions of the sale were met. The Respondent failed to effect payment to the seller for a period in excess of a week. Mr Ajara’s new attorneys of record requested a statement of account from the respondent. However, he failed to respond. The Respondent was furnished with the relevant banking details for the payment of the monies which had been deposited into his trust banking account but he failed to refund the monies, despite numerous commitments from him. The Respondent issued Mr Ajara with a cheque, which he was unable to cash due to errors on the cheque.

6.1.2 The respondent made the following representation to Reddy regarding the complaint by Mr Ajara; The respondent was instructed to investigate the immovable property; The respondent discovered that the bond on the property was in arrears and that the Sheriff was going to attach the property; Mr Ajara instructed the respondent not to effect payment to the seller until the arrears on the bond had been resolved; Mr Ajara intended to pay arrears on the seller’s bond and settle the balance of the purchase price in instalment in terms of the Alienation of Land Act; Mr Ajara did not pay the bond arrears as the seller did not provide him with the amount; The seller’s attorneys, Mellet Attorneys, requested that the respondent effect payment into their trust banking account, however, he did not do so as this was not his instruction from his client; The respondent has resolved the matter with Mr Ajara and accounted to him. Mr Ajara disputed a charge of R4 000.00 in order to settle the matter; The respondent’s fees would be set-off against the amount held in trust on behalf of Mr Ajara and the balance would be paid to Mr Ajara;

6.1.3 Mr Reddy inspected respondent’s trust bank statements and confirmed that Mr Ajara had paid an amount of R600 000.00 into the firm’s trust banking account on 4 September2021. The trust bank statement revealed that the respondent had utilised the amount of R600 000.00 to effect transfer to the firm’s business banking account over the period 4 September 2019 to 29 November 2019;

6.1.4 As at 29 November 2019 the trust banking account held a credit balance in the amount of R98.04.According to the firm’s statement of account, fees and disbursements due to the firm amounted to R36 696.50.

6.1.5 According to Mr Reddy the firm’s trust bank statement over the period 1 September 2019 to 30 June 2020 did not reflect any payment to Mr Ajara. The reason for the respondent’s failure to pay trust monies back to Mr Ajara, says Mr Reddy, is simply that the banking account only held a credit balance in the amount of R180.39 as at 30 June 2020.

6.2 COMPLAINT BY MR VINCENT SELLO NKOANA

6.2.1 The Applicant received a complaint against the Respondent from Mr VS Nkoana on 31 October 2021 as follows:

“Mr Nkoana was interested in acquiring immovable property which was being sold by the respondent’s client, Mr Shabangu. The Respondent represented Mr Shabangu in a divorce matter and this property was one of the assets that was being sold. Mr Nkoana instructed the respondent to help facilitate the transfer of the property and paid a cumulative amount of R240 000.00 to the respondent in respect of the purchase price of the property as well as the transfer fees. The respondent failed to register the transfer of the property and did not update him on the progress of the matter. The respondent failed to refund Mr Nkoana’s monies despite him committing to do so on numerous occasions.”

6.2.2 The respondent responded in a letter dated 27 July 2018 to the Disciplinary Department of the Council as follows:

“Mr Nkoana was not the respondent’s client but requested that the respondent facilitate a business deal between Mr Nkoana and Mr Shabangu. Mr Nkoana deposited an amount of R240 000.00 into the respondent s business account and instructed him to pay it over to Mr and Mrs Shabangu. The respondent advised Mr Nkoana that it was not advisable to instruct him to pay over the money to the seller before the transfer of the property took place upon which Mr Nkoana responded that he trusted the seller and that he already had the original title deed in his possession. Mr Nkoana instructed another legal practitioner to attend to the transfer of the property and effected payment of the transfer costs to the said practitioner. Mr Nkoana instructed the respondent to effect payment to the other legal practitioner attending to the transfer to the transfer of the property in respect of municipal rates. The respondent was surprised to hear that Mr Nkoana wanted a refund as he was fully aware that the monies had been paid to Mr and Mrs Shabangu. To the respondent’s knowledge, Mr Nkoana had been refunded directly by Mr and Mrs Shabangu. The respondent did not charge Mr Nkoana and thereof he did not consider his as a client.”

6.2.3 The respondent made the following representation to Reddy:

“Mr Nkoana was not his client. He did receive payment in the amount of R240 000.00 from Mr Nkoana for the purchase of the property. The amount was paid into his business account. He effected payment to Mr and Mrs Shabangu prior to the registration of the property as per his instructions from Mr Nkoana. Mr Nkoana contacted him and requested a refund as the transfer had not been effected. Mr and Mrs Shabangu had refunded Mr Nkoana in full, according to the respondent’s knowledge.’

6.2.4 On 11 March 2020 Reddy requested the respondent to provide proof of all payments effected to Mr and Mrs Shabangu, his statement of account to Mr Shabangu, proof that Mr and Mrs Shabangu had refunded Mr Nkoana and his business bank statements for the period 1 December 2016 to 30 April 2016. The respondent failed to provide the aforementioned documentation to Reddy.

6.3 COMPLAINT BY ADVOCATE CHEWE

6.3.1 The Council received a complaint from Advocate KR Chewe on 30 April 2019. In the complaint Advocate Chewe states/alleges that the respondent owed him an amount of R58 000.00 in respect of his fees. The respondent had instructed him in a matter of MJ Madjika vs Road accident Fund which was heard in Polokwane High Court. He was informed that the respondent’s bill of costs was taxed around January 2019. However, he still had not received any payment from the respondent;

6.3.2 During Reddy’s discussion with the respondent, he informed Reddy that he had effected payment to Advocate Chewe in accordance with the bill of costs. In a letter dated 11 March 2020, Reddy requested the respondent to provide him with the taxed bill of costs as well as proof of payment to Advocate Chewe. The respondent failed to provide Reddy with the information.

6.3.4

According to Mr Reddy the firm’s trust bank statements reflect that an amount of R450 000.00 was received on 23 November 2018 from the road accident fund in respect of the MJ Madjika’s claim. The trust bank statements reflect the following transfers to the firm’s business banking account which contained a reference to Advocate Chewe:

Date Description Amount 28/11/2018 Internet trf to Advocate Chewe fees R37 000.00 30/01/2020 Internet trf to Advocate Chewe R8 000.00 Total R45 000.00

6.3.5 As at the date of Advocate Chewe’s complaint (30 April 2019) it would appear that the respondent had transferred an amount of R35 000.00 to his business account in respect of disbursements incurred yet failed to effect payment to Advocate Chewe.

6.4 COMPLAINT BY Mr TLOU JUNIUS TSIPA AND Ms MAHLODI EMELDA TSIPA

6.4.1 On 13 December 2018 the Council received a complaint against the respondent from Mr TJ Tsipa, which complaint states/alleges that on 8 November 2018 Mr Tsipa’s sister, Ms ME Tsipa, received a call from the respondent’s office requesting her to visit the firm’s office in order to receive payment relating to her minor son’s claims against the Road accident Fund. On 9 November 2018 Mr Tsipa accompanied his sister, Ms ME Tsipa, to the respondent’s offices. During the meeting with the respondent, he provided them with proof amount of R1 534 702.75 into his trust banking account in respect of her minor son’s claim.

6.4.2 According to Mr Reddy the respondent alleged that his clients file was not available at the time and he therefore made an estimation of all expenses he incurred in relation to the claim. The respondent’s calculations included a fee amounting to 25& of the capital plus vat at a rate of 15%. According to the respondent’s calculation a net amount of R978 373.00 was payable to Ms Tsipa. Mr and Ms Tsipa did not object the respondent’s calculations and Ms Tsipa signed an acceptable letter. The respondent informed Mr and MS Tsipa that he was only able to pay in amount of R458 000.00 to Ms Tsipa and that the balance in the amount of R520 373.00 would be paid into a bank account opened in the name of Ms Tsipa’s minor child, Thabo Klaas Tsipa. The respondent informed Mr and Ms Tsipa that it was a legal requirement for the money to be paid into the child’s bank account. The respondent’s only paid an amount R350 000.00 via electronic funds transfer to Ms Tsipa, despite informing her that he would pay an amount of R458 000.00. On the same day, 9 November 2018, the respondent was requested to pay an amount of R100 000.00 to a car dealership as Ms Tsipa wished to purchase a vehicle. The respondent informed Mr and Ms Tsipa that he knew of a dealership in City Deep where he purchased most of his vehicles and that he would take them there to select a vehicle the respondent advised that he would pay dealership directly. They proceeded to City Deep Spares and decided on a vehicle, however, the respondent’s payment to the dealership was unsuccessful as he claimed that he had reached his daily limit after having effected the payment of R350 000.00 earlier in the day. The respondent requested Mr and Ms Tsipa to return the following day, 10 November2018, to conclude the transactions. The respondent arranged accommodation for Mr and Ms Tsipa at City Lodge but did not communicate to Mr and Ms Tsipa who would liable for the costs of the accommodation, which amounted to R1 363.50. On 10 November 2018 they returned to City Deep and then paid R140 000.00 to City Deep for the purchase of two vehicles. The respondent had also purchased a vehicle for an amount of R40 000.00. Mr Tsipa queried why City Deep Spares had not requested their identity documents as the respondent was only effecting payment for the vehicle and would not be the registered owner. The respondent advised that they would not experience any issues with the registration of the vehicle in the Limpopo. The respondent handed them documents for the vehicle and provided Ms Tsipa with an amount of R5 000.00 in cash. Mr Tsipa attempted to register the vehicle in Polokwane at the traffic department but he was told that the vehicle was not yet marked sold. When Mr Tsipa called City Deep Spares, he was informed that the vehicle first had to be registered in the respondent’s name as the invoice was issued to the respondent. Mr Tsipa contacted the respondent who promise to avail himself on 19 November 2018 to assist with the vehicle registration.

6.4.3 On 19 November 2018 the respondent failed to answer Mr Tsipa’s calls. Ms ME Tsipa furnished the respondent with the banking details of the bank account she opened for her son, Thabo Klaas Tsipa, on 19 November 2018. The respondent failed to effect payment and did not inform Ms Tsipa of the reason for the non-payment. On 28 November 2018, when he met with respondent in Polokwane to register the vehicle, the vehicle could not be transferred as the respondent’s other vehicle were registered in Gauteng. On this day Mr Tsipa again provided the respondent with the banking details for Ms Tsipa’s son. On 29 November 2018 Mr and Ms Tsipa attended to the offices of the respondent and he undertook to make payment of the remaining balance on 30 November 2018 as alleged that this would be the only day that he would be free to process the payment. Following the meeting they proceeded to Johannesburg traffic department and the vehicle was successfully registered in the respondent’s name. The respondent provided them with the vehicle registration documents and the license disc and advised them that they could proceed with change of ownership in Polokwane. On 4 December 2018 Mr Tsipa attempted to register the vehicle in his name at Polokwane traffic department but was informed that the vehicle was not marked sold, which was contrary to what the respondent advised. MrTsipa is now in possession of a vehicle that is registered in the respondent’s name, who is not eager to assist in resolving the problem. Ms Tsipa contacted the respondent to follow up on the outstanding payment and he informed her that he would effect payment on 6 or 7 December 2018 as he would need to visit the bank branch to effect payment in excess of R300 000.00. At the date of the complaint, 13 December 2018, the respondent had still not paid the outstanding amount of R520 000.00.

[7] The Disciplinary Department of the Council furnished a copy of the complaint to the respondent and he responded via a letter dated 8 February 2019 that he did not have a client by the name of Mr Tlou Junius Tsipa. His client was Ms ME Tsipa and he said he was assisting her two matter one of which was partly finalised. His client, Ms ME Tsipa, was aware of the progress of the two matters. He received payment on 8 November 2018 and personally contacted Ms Tsipa to notify her of the payment. Ms Tsipa opted to visit the respondent office the following morning. He informed her that his file was still with the cost consultant; however, Ms Tsipa still requested a meeting with him. Ms Tsipa arrived at his office with her brother, MR TJ Tsipa, and he explained the calculations per his statement of account. The respondent informed his client that they would only be doing estimates. After Ms Tsipa signed the statement of account, Mr Tsipa informed the respondent that his sister would like to purchase a vehicle before returning to Polokwane. Ms Tsipa confirmed the instruction and he took them to City Deep to source a vehicle. Ms Tsipa selected a vehicle with a purchase of R100 000.00. Mr Tsipa wanted the car to be the registered in his name and the respondent informed him that he would do it provided that Ms ME Tsipa agreed to the arrangement and instructs him to do so, which she did. The respondent was unable to effect payment due to a payment he made to Ms Tsipa earlier and Ms opted to stay overnight at City lodge. The respondent effected payment to City lodge and they were only able to issue an invoice in his name as he was the payee. Mr Tsipa was not happy with this. All monies due to his client had been paid in full.

[8] Prior to discussing the above matter with respondent, Reddy enquired about the manner in which the firm attended to Road Accident Fund claims. In this regard, the respondent responded that his firm entered into contingencies fee agreements with clients. In terms of their contingency fee agreement, the respondent was entitled to a flat fee equalling 25% of the capital award. The client would receive 75% of the capital. The firm would retain the party and party scale. A bill of costs drawn on attorneys and client scale was not prepared and was not required as the firm’s fees were a fixed 25%.

[9] The following transactions on the firm’s trust bank statements were supposedly payments made to client:

Date Description Amount 09/11/2018 Internet payment to Thabo Tsipa R350 000.00 09/11/2018 Internet payment to Klaas Tsipa R400 000.00 09/11/2018 Internet trf to Mahlodi Tsipa R150 000.00 Total R900 000.00

[10] It is thus clear Ms Tsipa had not been paid in full. The respondent’s representation to the Disciplinary Department of the Council was thus not accurate. Furthermore it is clear that the amount of R150 000.00 was an internal transfer between the respondent bank account (presumably to his business banking account) and not a payment to the client.

[11] It would further appear that the amount of R150 000.00 was utilised by the respondent to pay for the vehicle purchased by the client for an amount of R100 000.00.

According to the complainants, they had received the following payments from the respondent:

Description Amount Payment to Ms ME Tsipa on 9 November 2018 R350 000.00 Purchase of vehicle on 10 November 2018 R100 000.00 Cash advanced to Ms ME Tsipa on 10 November 2018 R5 000.00 Accommodation costs (City Lodge) on 9 November 2018 1 363.50 Total R456 363.50

[12] According to the complaint, neither Ms ME Tsipa nor her son, Thabo Klaas Tsipa, received payment in the amount of R400 000.00 as alleged by the respondent. During Reddy’s discussion with the respondent, he inquired if the court order specified the creation of a trust for the benefit of Mr Thabo Klaas Tsipa or the appointment of a curator. The respondent confirmed that this was not specified in the court order.

[13] Reddy then enquired why the respondent insisted on paying a portion of the monies into a bank account opened in the name of Mr Thabo Klaas Tsipa. The respondent stated that he was of the opinion that the complainant would utilise the monies for themselves, and not of the benefit of the minor child.

[14] The respondent’s responses to Reddy’s queries indicate that the complaints version of events were accurate. The complainants alleged that the respondent only effected partial payment to Ms ME Tsipa and insisted that the balance in the amount of R520 000.00 would be paid into a bank account opened in the name of Thabo Klaas Tsipa. On 9 November, when Ms Tsipa met with the respondent, she had not yet opened a bank account for her son.

[15] According to the complaint, which was signed at SAPS Pretoria Central on 13 December 2018, no suchpayment was received from the respondent. The respondent’s letter to the Disciplinary Department which was received on 8 February 2019 also did not refer to the amount of R200 000.00 being paid to Mr Thabo Klaas Tsipa on 13 December 2018.

[16] An amount of the trust bank account statement over the period of 8 November 2018 to 20 December 2018 revealed that the monies received on behalf of Ms Tsipa were utilised as follows:

Description Amount Balance as at 8 November 2018 R363 969.42 Cr Add: Payment received iro Ms ME Tsipa’s claim against th Road Accident Fund R1 598 285.28 Less: Payments made to or on behalf of Ms Tsipa (R456 363.50) Add: Proceeds received from Road Accident Fund in respect of another client of the firm (M Madjika) R450 000.00 Less: Payment to other trust creditors of the firm (R833 142.40) Less: Payment to Counsel (R312 000.00) Less: Payment to unknown beneficiaries (R600 000.00) Add: Interest (net of bank charges) R699.87 Less: Transfer to business account (R206 136.50) Balance as at 20 December 2018 R5 312.23 Cr

[17] According to Reddy the above analysis highlights the following issues:

The firm’s fees per the statement of account (excl VAT) amounted to R383 675.69. The respondent, however, had only transferred a cumulative amount of R206 136.50 in respect of fees for two successful claims against the Road Accident Fund (Me Tsipa and M Madjika);

Payments to trust creditors, other than the complainant, over the period amounted to R833 142.40. It is thus apparent that a portion of the monies which was received in respect of Ms Tsipa’s claim was utilised to pay other creditors. The opening balance plus the amount received on behalf of the trust creditors only amounts to R813 969.48.

[18] Reddy further avers that complainant alleges that she is still owed an amount of R520 000.00, however, the firm only held a credit balance in the amount of R5 312.23 as at 20 December 2018. All the above mentioned issues indicate the existence of a trust deficit. The trust bank statements also indicated that a further amount of R311 723.31 was received on behalf of Ms Tsipa on 28 February 2020. Reddy was unable to determine what this amount related to. Upon receipt of the amount of R311 728.31 the respondent effected the following trust transfers:

Date Description Amount 28/02/2020 FNB app transfer to Mahodi fees R150 000.00 02/03/2020 Internet trf to Adv Khunong Rt45 000.00 05/03/2020 Internet trf to M Tsipa R74 000.00 07/03/2020 FNB app trf to Dr Nair R5 500.00 09/03/2020 Internet fee Ajara Inv R20 000.00 16/03/2020 FNB app trf to Dr Schair R5 500.00 16/03/2020 FNB app trf to Mahodi R5 000.00 17/03/2020 FNB app trf to X-Rays R2 000.00 19/03/2020 FNB trf to Mahodi Inv R1 000.00 20/03/2020 FNB trf to Mahodi Inv R2 000.00 28/03/2020 FNB trf to Mahodi Inv R500.00 Total R319 000.00

[19] According to the firm’s standard practice, the amount due to Ms ME Tsipa is as follows:

Description Amount Capital received from the Road Accident Fund R1 534 702.75 Interest R63 582.53 Less: Contingency fee + VAT (15%) (R441 226.97) Less: Payment to Ms Tsipa as per 11.13 above (r456 363.50) Amount payable to Ms Tsipa R700 694.81

[20] The above amount represent a minimum amount payable to Ms Tsipa as it does not take into account the amount of R311 728.31 which was received in the firms banking account on 28 February 2020 as per paragraph 5.20 above. The calculation also assumes that the firm was entitled to a contingency fee amounting to 25% of the amount received from the Road Accident Fund.

[21] Despite receiving payment in respect of the client’s claim against the Road Accident Fund in November 2018, the Respondent had failed to effect full payment to Ms Tsipa. The respondent had thus contravened Rule 54.13 of the LPC Rules in that he failed to effect payment to a client within a reasonable time.

TRUST POSITION

[22] According to the Attorneys Annual Statements on the Trust accounts which was submitted by the respondent to the Council, as required in terms of Rule 35.23 of the Rules for the Attorneys Profession, alternatively Rule 54.23 of the LPC Rules, the trust position was as follows:

Date Total Trust Creditors (R’s) Trust Funds available in terms of trust banking accounts Surplus/(Deficit) 28/02/2019 R56 529.25 R56 529.25 R Nil 31/01/2019 R113 605.44 R113 605.44 R Nil

[23] According to Mr Reddy the trust bank statement reflected a credit balance in the amount of R5 659.25, as at 28 February 2019 and a credit balance of R710 562.96 as at 31 January 2018.

[24] Reddy was unable to accurately establish the firm’s trust position due to the fact that he was not in possession of the firm’s accounting records, however, based on the information available to him, it appeared that the firm had a trust deficit as follows:

Trust Creditor Amount Reference in Reddy’s report Mr R Ajara R567 903.50 Paragraph 6.7 Mr S Nkoana R240 000.00 Paragraph 7.11 Mr T Tsipa R700 694.91 Paragraph 9.21 Total R1 508 598.31 Balance available in trust bank account as at 30 June 2020 R180.39 Schedule S4 Trust deficit as at 30 June 2020 R1 508 417.92

[25] On this, Reddy reports that based on the limited information available, the respondent has s trust deficit of at least an amount of R1 508 417.92 as at 30 June 2020. He further says a significant trust deficit was identified after only having considered there trust creditors and it is thus possible that the firm’s trust deficit is higher than the amount of R1 508 417.92.

PRACTICING WITHOUT A FIDELITY FUND CERTIFICATE

[26] Section 84(1) of the LPA provides that every legal practitioner who practices for his own account either alone or in partnership or as a director which is a juristic entity, must be in possession of a Fidelity Fund Certificate.

[27] The applicant contends that the respondent has not been issued with a Fidelity Fund Certificate for 2019 and 2020. Accordingly, the respondent is not entitled to practice for reward and his clients and Legal Practitioners Fidelity Fund are at risk.

[28] In his response the Respondent denied that he as practicing without a Fidelity Fund Certificate and he annexed the certificates as proof.I am therefore satisfied the Respondent indeed held a Fidelity Fund Certificate and therefore he did not contravene any law.

THE RESPONDENT’S RESPONSE

[29] In his answering affidavit the Respondent, among others, responded as follows to the allegations levelled against him:

AD PARAGRAPH 3

I aver that the Applicant failed to institute a disciplinary, wherein I will be able to answer to any complaints raised in line with section 39(6) of the Legal Practice Act. As a result, the contents raised in this paragraph by the Applicant are biased and not in line with audi alteram partem rule.

AD PARAGRAOH 8

Save to admit that Mr Ronald Ajara did lodge a complaint against me with Applicant, I assert that I did pay Mr Ajara I did account to him and I thereafter paid his money back on 11 March 2020. Please see the attached proof of payment and statement of account marked as annexure “MFM 1&2”.

Save to admit that Mr Vincent Sello Nkoana did lodge a complaint against me with the Applicant on 31 October 2017, I assert that the complainant was paid back his money.

In light of the above, the complainant delivered a written letter to the Applicant on 05 September 2018to notify the Applicant of his withdrawal of the complaint…”

AD PARAGRAPH 10

Save to admit that Advocate KR Chewe did lodge a complaint against me with the Applicant on 30 April 2019, I assert that the matter has been settled between me and him….”

I assert that I requested the Advocate to sit in the settlement court roll without a brief being given to him and thereafter he submitted his account which was taxed off and our dispute was on a taxed off amount, which I assert that it has been resolved as per his attached affidavit.

AD PARAGRAPH 11

Save to admit that Mr TJ Tsipa did lodge a complaint against me on 13 December 2018 with the Applicant I assert the owed amount was paid to Mahlodi Emelda Tsipa, the last payment being made on 12 December 2018….”

In light of the above the complainant and the rightful claimant have deposed to affidavits to confirm that I have paid them the owed amount….”

[30] It is abundantly clear from the response by the Respondent that not much is denied but his defence is that the mounts owed to the complainants were paid in full.

[31] Counsel for the applicant argued that the Respondent’s response demonstrates his lack of understanding of how the trust account should be handled. I cannot agree more because an attorney should conduct a trust account in accordance with the law and failure to do that constitutes a breach.

[32] For his failure to provide the LPC with the accounting records the Respondent says the following:

AD PARAGRAPH 12

My inability to provide the LPC with accounting records was due to Lockdown that started on 26 March 2020. However, as seen above, as at 30 June 2020, I had paid all the complainant the owed amount.

As a result, I assert that there was no trust deficit of R 1 508 417.92 as at 30 June 2020.”

[33] According to his response it seems the Respondent had not yet provided the Applicant with the required accounting records despite the fact that the lockdown restrictions had long been relaxed. If he did, they were inadequate according to Mr Reddy.

[34] It must be noted that if attorneys would be allowed to use clients ’monies that are held in their trust accounts as they please and then later pay those clients without any consequences, members of the public who entrust their money to those attorneys would be left unprotected. The Respondent’s clients were fortunate that he could pay them but the Respondent should not expect a pat at the back for correcting his misdemeanours. In fact there is a tacit admission by the Respondent that he did not pay his clients as he was supposed to and he did not gainsay the evidence of Mr Reddy.

[35] I agree with counsel for the Applicant that the Respondent’s supplementary affidavit does not take his case any further.

[36] The Responded contended that the Applicant brought this application prematurely because the Applicant ought to have brought disciplinary proceedings against him first so he could be given an opportunity to defend himself.

[37] I am in agreement with the fact that disciplinary proceedings were supposed to be conducted against the Respondent, however the Respondent did not cooperate when he was asked to furnish the Applicant with information regarding the complaints.

[38] I am satisfied that the alleged offending conducts have been established on a balance of probabilities. A question now arises whether the Respondent is a fit and proper person to continue to practice s an attorney. It appears from the Respondent’s answering affidavit that he does not understand the importance of how to conduct a trust account properly. The Respondent is of the view that he can use money from a trust account as he pleases for as long as his trust account does not have a trust deficit. This is extremely dangerous and it defeats the whole purpose of why the attorneys trust accounts are regulated.

[39] Initially the LPC had asked that the Respondent be suspended from practice but when the matter was heard before me Counsel for the Applicant contended that the name of the Respondent be removed from the roll. I agree with Counsel for the Applicant that the court is not barred from ordering that the Respondent’s name be removed from the roll on the basis that there was no disciplinary enquiry before the matter was brought to court.

[40] The Respondent deposed to an answering affidavit wherein he attempted to raise a defence to the various allegations levelled against him. I am able to make a determination based on the evidence presented by the Applicant as well as the Respondent’s evidence through his answering affidavit. The essence of the Respondent’s defence is that his trust account was not in a deficit as at 30 October 2018, that he paid all the clients their money, that he failed to comply with the Applicant’s directive to submit his accounting records because of covid-19 restrictions and that the Applicant should have started with a disciplinary enquiry before approaching the court.

[41] If one has regard to the answering affidavit it is abundantly clear that the Respondent failed to cooperate with the inspection commissioned by the Legal Practice Council; he failed to report a trust deficit in writing to the Applicant; after having received money for clients from the Road Accident Fund, did not pay such monies over to clients alternatively made partial payments of the amounts due to the clients.

[42] The question that remains is now whether the Respondent should be suspended or struck from the roll. In The Law Society of the Northern Provinces v Morobodi ZASCA 185 at paragraph 25 Zondi JA said the following: ‘..The high court’s reasoning is that it is no peremptory for the Council to have pursued a formal charge before disciplinary committee, if in its opinion, having regard to the nature of the charge, a practitioner is no longer considered to be fit and proper. I cannot therefore faulter the Applicant for having approached this court first instead of instituting the disciplinary enquiry. It is clear that the conduct of the Respondent was not in accordance with how an attorney entrusted with clients’ monies should conduct himself. Consequently I am of the view that the Respondent should be suspended from practicing as an Attorney of this court.

ORDER:

[43] In the result I make the following order:

43.1 The Respondent, Maropene Frans Mahodi is suspended with immediate effect from practicing as an attorney of this court for a period of two years from the date of this order.

43.2 the respondent immediately hands in and delivers his certificate of enrolment as an attorney to the Registrar of this Honourable Court;

43.3 That in the event of the respondent failing to comply with the terms of this order detailed in the previous paragraph within two (2) weeks from the date of this order, the Sheriff of the district in which the certificate and to hand it to the Registrar of this Honourable Court.

43.4 That the respondent be prohibited from handling or operating on his trust accounts as detailed in paragraph 6 hereof.

43.5 That Johan van Staden, the head: members affairs of applicant, or any person nominated by him as curator bonis (curator) to administer and control the trust accounts of the respondent, including accounts relating to insolvent and deceased estates and any deceased estate and any estate under curatorship connected with the respondents practice as attorney and including, also, the separate banking accounts opened and kept by the respondent at a bank in the Republic of South Africa in terms of Section 86(1) of the Legal Practice Act, No 28 of 2014 (hereinafter referred to as “the LPA”) Act No 53 of 1979 and/or any separate savings or interest-bearing accounts as contemplated by Section 86(3) and/or Section 86(4) of the LPA, in which monies from such trust banking accounts have been invested by virtue of the provision of the said sub-section or in which monies in any manner have been deposited or credited (the said accounts being hereafter referred to as “the trust accounts”), with the following powers and duties:

43.5.1 immediately to take possession of the respondents accounting records, records, files and documents, subject to the approval of the Board of CONTROL OF THE Legal Practitioners Fidelity Fund (hereinafter referred to as “the Fund”) to sign all forms and generally to operate upon the trust account/s, but only to such extent and for such purpose as may be necessary to bring to completion current transactions in which the res[pendent was acting at the date of this order;

43.5.2 subject to the approval and control of the Board of Control of the Fund and where monies had been paid incorrectly and unlawfully from the under mentioned trust account, to recover and receive and, if necessary in the interests of person having lawful claims upon the trust account/s and/or against the respondent in respect of monies held, received and/or invested by the respondent in terms of Section 86(3) and Section 86(4) of the LPA (hereinafter referred to as “trust monies”0, to take any legal proceedings which may be necessary for the recovery of money which may be due to to such persons in respect of incomplete transaction, if any, in which the respondent was and may still have been concerned and to receive such monies and to pay the same to the credit of the trust account/s;

43.5.3 to ascertain from the respondent’s accounti9gn records the names of all persons on whose account the respondent appears to hold or to have received trust monies (hereinafter referred to as “trust creditors”) and to call upon respondent to furnish him, within 30 (thirty0 days of date of the service of this order or such further period as he may agree to in writing, with the names, addresses and amounts due to all trust creditors;

43.5.4 to call upon such trust creditors to furnish such proof, information and/or affidavits as he may require to enable him, acting in consultation with the names, addresses and amounts due to all trust creditors;

43.5.5 to admit or reject, in whole or in part, subject to the approval of the Board of Control of the Fund, the claims of any such trust creditor/s, without prejudice to such trust creditors or creditors right of access to the civil courts;

43.5.6 having determined the amounts which he considers are lawfully due to trust creditors, to pay such claims in full subject to the approval of the Board of Control of the Fund;

43.5.7 in the event of there being any surplus in the trust account/s of the respondent after payment of the admitted claims of all trust creditors in full, to utilize such surplus to settle or reduce (as the case may be), firstly, any claim of the fund in terms of Section 86(5) of the LPA in respect of any interest therein referred to and, secondly, without prejudice to the rights of the creditors of the respondent, the cost, fees and expenses referred to in paragraph 1.3 of Part B of the notice of motion of this order, or such portion thereof as has not already been separately paid by the respondent to the applicant, and, if there is any balance left after payment in full of all such claims, costs, fees and expenses, to pay such balance, subject to the approval of the Board of Control of the Fund, to the respondent, if he is solvent, or, if the respondent is insolvent, to the trustee/s of the respondent’s insolvent estate;

43.5.8 in the event of there being sufficient trust monies in the trust banking account/s of the respondent, in accordance with available documentation and information, to pay in full claims of trust creditors who have lodged claims for repayments and whose claims have been approved, to distribute the credit balance/s which may be available in the trust banking account/s amongst the trust creditors alternatively to pay the balance to the Legal Practitioners’ Fidelity Fund;

43.5.9 subject to the approval of the Chairman of the Board of Control of the Fund, to appoint nominees or representatives and/or consult with and/or engage the services of attorneys, counsel, accountants and/or any other persons, where considered necessary, to assist him in carrying out his duties as curator; and

43.5.10 to render from time to time, as curator, returns to the Board of Control of the Fund showing how the trust account/s of the respondent has/have been dealt with, until such time as the board notifies him that he may regard his duties as curator as terminated.

43.6 That the respondent immediately deliver his accounting records, records, files and documents containing particulars and information relating to:

43.6.1 any monies received, held or paid by the respondent for or on account of any person while practicing as an attorney;

43.6.2 any monies invested by the respondent in terms of Section 86(3) and/or section 86(4) of the LPA:

43.6.3 any interest on monies so invested which was paid over or credited to the respondent;

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

43.6.5 any insolvent estate administered by the respondent as trustee or on behalf of the trustee of the Trust Properties Control Act, No 24 of 1936;

43.6.6 any insolvent estate administered by the respondent as trustee or on behalf of the trustee of the Trust Properties Control Act, No 57 of 1988;

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

43.6.8 any close corporation liquidated in terms of the Close Corporations Act, No 69 of 1984, administered by the respondent as or on behalf of the liquidator; and

43.6.9 the respondent’s practice as an attorney of this Honourable Court, to the curator appointed in terms of paragraph 1.6 hereof, provided that, as far as such accounting records, records, files and documents are concerned, the respondent shall be entitled to have access to them but always subject to the supervision of such curator of his nominee.

[44] That, should the respondent fail to comply with the provisions of the preceding paragraph of this order on service thereof upon him or after a return by the person entrusted with the service thereof that he has been unable to effect service thereof on the respondent (as the case may be), the Sheriff for the district in which such accounting records, records, files and documents are, be empowered and directed to search for and take possession thereof wherever they may be to deliver them to such curator.

[45] That the respondent be and is hereby removed from office as-

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

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

45.3 trustee of any insolvent estate in terms of Section 59 of the Insolvent Act, No 24 of 1936;

45.4 liquidator of any company in terms of Section 379(2) read with 379€ of the Companies Act, No 61 of 1973;

45.5 trustee of any trust in terms of Section 20(1) of the Trust property Control Act, No 57 of 1988;

45.6 liquidator of any Close Corporation appointed in terms of Section 74 of the Close Corporation Act. No 69 of 1984.

[46] That the curator shall be entitled to:

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

46.2 require from the person referred to in paragraph 1.12.1 to provide any such documentation or information which he may consider relevant in respect of a claim or possible claim or anticipated claim, against him, and/or other property entrusted to the respondent , provided that any person entitled thereto shall be granted reasonable access thereto and shall be permitted to make copies thereof;

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

46.4 wind-up of the respondent’s practice.

[47] That, if there are any trust funds available, the respondent shall within 6 (six) months after having been requested to do so by the curator, or within such longer period as the curator may agree to in writing, shall satisfy the curator, by means of the submission of taxed bills of costs or otherwise, of the amount of the fees and disbursement due to him (respondent) in respect of his former practice, and should he fail to do so, he shall not be entitled to recover such fees and disbursements from the curator without prejudice, however, to such rights (if any) as he may have against the trust creditor/s concerned for payment or recovery thereof;

[48] That a certificate issued by a director of the Legal Practitioners’ Fidelity Fund shall constitute prima facie proof of the curator’s costs and that the Registrar be authorized to issue a writ of execution on the strength of such certificate in order to collect the curator’s costs;

[49] That the respondent be and is hereby directed:

49.1 to pay, in terms of Section 87(2) of the LPA, the respondent costs of the inspection of the accounting records of the respondent;

49.2 to pay the reasonable fees and expenses of the curator;

49.3 to pay the reasonable fees and expenses of any person/s consulted and/or engaged by the curator ass aforesaid;

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

49.5 to pay the costs of this application on an attorney and client scale for the dates of 4 May 2021 and 12 August 2021.

KGANKI PHAHLAMOHLAKA

ACTING JUDGE OF THE HIGH COURT,

Delivered: this judgment was prepared and authored by the judge whose name is reflected and is handed down electronically and by circulation to the parties/their legal representatives by email and by uploading it to the electronic file of his matter on Caselines. The date for handing down is deemed to be 02 December 2021

HEARD ON

: 12 August 2021

FOR THE PLAINTIFF : Adv Van Der Westhuizen

INSTRUCTED BY : Dyason Atorneys

FOR THE DEFENDANT : Adv Shole

DATE OF JUDGMENT : 02 December 2021