South African Legal Practice Council v Molotsi and Others (347/2021) [2021] ZAFSHC 301 (2 December 2021)

IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Case number: 347/2021

In the matter between:

SOUTH AFRICAN LEGAL PRACTICE COUNCIL Applicant

and

MOTLATSI LEHLOHONOLO JOSEPH MOLOTSI First Respondent

MOLOTSI ATTORNEYS INC.

(Registration Number: 2017/455210/21) Second Respondent

MLJ MOLOTSI INC.

(Registration Number: 2015/416263/21) Third Respondent

CORAM:

MATHEBULA, J et OPPERMAN, J

JUDGMENT BY: MATHEBULA, J

HEARD ON: 02 SEPTEMBER 2021

DELIVERED ON: 02 DECEMBER 2021

[1] This is an application by the applicant to wit the Legal Practice Council for the suspension of the first respondent’s name from the roll of practicing attorneys of this Court and ancillary relief. Although the matter is ostensibly opposed on paper, the first respondent did not make an appearance during the hearing. No reasons were advanced for his failure to appear. Satisfied that he bears knowledge of the date of the proceedings, we ruled that the matter was properly before us and continued with the proceedings.

[2] The amended notice of motion was served personally upon the first respondent on 14 July 2021. The notice to oppose was served on 28 July 2021. On 19 August 2021, Chesiwe J granted the following order per agreement between the parties: -

1. The application is postponed to the opposed roll of the 2nd of September 2021.

2. The First and Third Respondents to file an Answering Affidavit by not later than Thursday, the 19th of August 2021 at 13:00;

3. The Applicant to file a Replying Affidavit by not later than Wednesday, the 25th of August 2021;

4. The wasted costs, on a party and party scale, to be paid jointly and severally by the First and Third Respondents.

It is worth noting that the first respondent complied with paragraph two (2) of the aforementioned Order.

[3] Prior to delving into the facts, this matter took an unexpected and unfortunate twist. We heard the matter under the circumstances sketched out in paragraph one (1) above. We reserved judgment and the task of being the scribe was assigned to me. I prepared a written judgment and when I was about to edit it, I learned that the first respondent has passed on. That put the spanner in the works.

[4] With the kind permission of my Sister Opperman (who was away on Circuit Court), I convened a meeting with attorneys for both parties to wit Messrs J.J. Maree and Z. Moletsane to chart the way forward. It became apparent in the meeting that the latter does not have proper mandate from the deceased’s family (first respondent) to deal with this matter any further. At the time of our meeting the estate of the first respondent was not yet reported at the office of the Master of the High Court. I assume it is still the position because I am not aware of any new developments. It was also apparent that some of the orders sought may be of no practical effect and/or unenforceable. I will deal with this aspect in succeeding paragraphs.

[5] The facts of this matter are not in dispute. The founding affidavit on behalf of the applicant was deposed to by Mr Machinini Ishmael Motloung, its provincial chairperson who averred that, the first respondent is practicing without a Fidelity Fund Certificate from the period 2019 to 2020. The main reason for such a failure is because the first respondent has failed/neglected to file audit reports for 2017/2018 and 2018/2019 financial years ending in February respectively. In terms of the rules of the applicant these were supposed to have been filed within six (6) months after the due date. Notices sent to the first respondent to remedy the situation did not yield positive results.

[6] In his opposing affidavit the first respondent does not take issue with the version of the applicant. He simply makes a point that he considered himself to be a fit and proper person to practice as an attorney of this Court. He confirmed that he is practicing without proper compliance with the rules and regulations of the applicant. In a surprising way, the first applicant does not tender any plausible explanation hindering adherence to the rules on his part. He made a terse statement undertaking to file the required documents on/or before 17 September 2021.

[7] In the heads of argument counsel for the applicant referred to the serious legal consequences against a person who contravenes section 84 of the Legal Practice Act.[1] Proceeding to practice in the manner that he does, the applicant transgresses these provisions. This is untenable an inappropriate for a person in his position as an officer of this Court. What stands apparent is that the first respondent does not seem to appreciate the gravity of his actions. Despite his protestations that he is a fit and proper person to practice, I subscribe to a different viewpoint. He is not.

[8] At the core of the complaints against the first respondent is that he has failed for two (2) years consecutively to file the audit report. It can be accepted as the only logical conclusion that he has not been keeping proper books of account. It has been reaffirmed by our Courts that such failure on its own is a good ground for suspension or striking off.[2] As it is usually the case, such an attorney poses a great risk to the public. That this is a serious consideration, it must be borne in mind that the core function of the applicant is the protection of the public and the profession. As such its attitude in the matter as serious as this once must be given due weight. The same is given to the first respondent who failed to even attempt to explain his shortcomings.

[9] For the afore-going reasons, I am convinced that a proper case has been made justifying the relief sought by the applicant. Although we were of the view that the first respondent must be suspended, such an order will serve no purpose at this point. We cannot suspend a deceased person. The ancillary orders may still be granted purely to enable the applicant to carry out its core functions in terms of the legislation. We deem it appropriate that the applicant be granted permission to approach this court at a later stage on the same papers, duly amplified, to seek further orders. On the same vein, we are of the view that the issue of costs must stand over for later adjudication.

[10] I make the following order: -

10.1. That the first respondent is removed from office as:

10.1.1. Executor of any estate in respect of which he has been appointed in terms of Section 51(1)(a)(v) of the Administration of Estates Act, Act 66 of 1965 or the estate of any person referred to in Section 72(1); and

10.1.2. 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 85 of the Administration of Estates Act, Act 66 of 1965, or the estate of any other person referred to in Section 72(1); and

10.1.3. Trustee of any insolvent estate in terms of Section 59 of the Insolvency Act, Act 24 of 1934; and

10.1.4. Liquidator of any company in terms of Section 379(2), read with Section 379(e) of the Companies Act, Act 61 of 1973; and

10.1.5. Trustee of any trusts in terms of Section 20(1) of the Trust Property Control Act, Act 57 of 1977; and

10.1.6. Liquidator of any Close Corporation appointed in terms of Section 74 of the Close Corporation Act, Act 60 of 1984.

10.2. That the applicant be and is hereby directed to cause a copy of the court order to be served upon the Master of this Court.

10.3. That the Director, Free State Provincial Office of the applicant is appointed as curator to administer and control the trust accounts of the first and third respondents comprising of the separate banking accounts opened and kept by the first and third respondents at any bank institution in terms of Section 86(2) of the Act and/or in a separate saving or interest bearing accounts as contemplated in Section 86(3) and/or in terms of Section 86(4) of the said Act in which monies from such trust banking accounts have been invested by virtue of the provisions of the said sub-section or in which monies in any manner had been deposited or credited (the said accounts being herein referred to as “the trust accounts”) with the following powers and duties:

10.3.1. Subject to the approval of the Legal Practitioner’s Fidelity Fund Board (hereinafter referred to as “The Board of Control”), established in terms of Section 61 of the Act, to sign and endorse cheques and/or withdraw forms and generally to operate on the trust account(s), but only to such an extend and/or for such purpose as may be necessary to bring to completion current transactions in which the first and third respondents were acting at date of this order;

10.3.2. Subject to the approval and control of the Board of Control of the Fund to recover and receive and if necessary in the interest of persons having lawful claims against the Trust account(s) and/or against the first and third respondents in respect of monies held, received and/or invested by the first and third respondents in terms of the aforesaid Sections (hereinafter referred to as “trust monies”), to take legal proceedings which may be necessary in respect of incomplete transactions in which the first and third respondents may have been involved and which may have been wrongfully and unlawfully paid from the trust account(s) and to receive such monies and to pay same into the creditor of the trust account(s).

10.3.3. To ascertain from the first and third respondents’ books of account the names of all persons on whose account first and third respondents appears to hold of have received trust monies (hereinafter referred to as “the trust creditors”) and to determine the names, addresses and the amounts due to all creditors.

10.3.4. To call upon such trust creditors to furnish such proof, information and affidavits as he may be required by the Director to enable the said Director, acting in consultation and subject to requirements of the Board of Control of the fund, to determine whether any such trust creditor has a claim in respect of monies in the trust accounts, and if so, the amount of such claim.

10.3.5. To admit or reject in whole or in part subject to the approval of the Board of Control the claims of any such creditors without prejudice to the trust creditor’s right of access to the Civil Courts.

10.3.6. Having determined the amounts which the Director considers are lawfully due to trust creditors, to pay such claims in full, but subject always to the approval of the Board of Control.

10.3.7. In the event of there being any surplus in the trust account(s) 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 Board of Control in terms of Section 86 of the said Act in respect of any interest therein referred to and secondly, without prejudice to the rights of creditors of the first and third respondents, alternatively the first respondent and further in the alternative of the third respondent and furthermore without prejudice to the rights of the applicant to recover the costs, fees and expenses referred to in this order, or such portion thereof as has not already been separately paid by the first respondent, alternatively the third 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 to the first respondent alternatively the third respondent, if the first respondent was not sequestrated and the third respondent not liquidated. If the first respondent was sequestrated and the third respondent was liquidated, such payment be done either to the Trustee or Liquidator of the Insolvent Estate.

10.3.8. In the event of there being insufficient trust monies in the trust account(s) to pay the claims of the trust creditors reflected in the books of account of the first respondent alternatively the third respondent in full –

10.3.8.1. subject to the approval of the Board of Control to c lose the trust account(s) and pay the credit balances to the Fund and to require the credit balance to be placed to the credit of a special trust suspense account in the name of the first respondent alternatively the third respondent in the Fund’s books;

10.3.8.2. to refer the claims of all trust creditors to the Board of Control to be dealt with in terms of the provisions of the said Act; and

10.3.8.3. to authorise the Board of Control to credit the credit balances referred to in sub-paragraph 6.8.1 above to its “paid claims account” when the Fund has paid, in terms of Section 57 of the said Act admitted claims of the trust creditors in excess of such credit balances, provided that notwithstanding the aforegoing, the said Board of Control shall be entitled in its discretion, to transfer to its paid claims amount the amount or amounts of any claim or claims as and when admitted and paid by it.

10.3.9. Subject to the approval of the Board of Control to appoint nominees or representatives and/or consult with and/or engage the services of attorneys and/or counsel and/or accountants and/or other persons where considered necessary to assist such curator in the execution of the duties of the curator; and

10.3.10. To render from time to time as curator, returns to the Board of Control showing how trust account(s) have been dealt with, until such time as the Board notifies him/her that he/she may regard his/her duties as terminated.

10.3.11. Costs stand over for later adjudication.

M. A. MATHEBULA, J

I concur,

M. OPPERMAN, J

On behalf of the applicant: Adv. M.E. Mojake

Instructed by: Maree & Partners

BLOEMFONTEIN

On behalf of the respondents: No appearance

[1] Section 84 of the Legal Practice Act 28 of 2014 reads as follows: - “84. (1) 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 or state advocate and who practises or is deemed to practise— (a) for his or her own 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. (2) No legal practitioner referred to in subsection (1) or person employed or supervised by that legal practitioner may receive or hold funds or property belonging to any person unless the legal practitioner concerned is in possession of a Fidelity Fund certificate. (3) The provisions of subsections (1) and (2) apply to a deposit taken on account of fees or disbursements in respect of legal services to be rendered. (4) A Fidelity Fund certificate must indicate that the legal practitioner concerned is obliged to practise subject to the provisions of this Act, and the fact that such a legal practitioner holds such a certificate must be endorsed against his or her enrolment by the Council. (5) A legal practitioner referred to in subsection (1) who— (a) transfers from one practice to another; or (b) ceases to practise, must give notice of this fact to the Council and comply with the Council’s relevant requirements in relation to the closure of that legal practitioner’s trust account and in the case of paragraph (b) return his or her certificate to the Council. (6) The Council may withdraw a Fidelity Fund certificate and, where necessary, obtain an interdict against the legal practitioner concerned if he or she fails to comply with the provisions of this Act or in any way acts unlawfully or unethically. (7) The provisions of this section do not apply to a legal practitioner who practises in the full time employ of Legal Aid South Africa on a permanent basis. (8) An advocate, other than an advocate referred to in section 34(2)(b), may not receive or hold money or property belonging to any person in the course of that advocate’s practice or in respect of any instruction issued to the

advocate by an attorney or a member of the public. (9) No legal practitioner in the full-time employ of the South African Human Rights Commission or the State as a state attorney, state advocate, state law adviser or in any other professional capacity may receive or keep money or property belonging to any person, except during the course of employment of such legal practitioner with the State or the South African Human Rights Commission and in such case only on behalf of the South African Human Rights Commission or the State and for no other purpose.”

[1] Section 84 of the Legal Practice Act 28 of 2014 reads as follows: -

“84. (1) 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 or state advocate and who practises or is deemed to practise— (a) for his or her own 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. (2) No legal practitioner referred to in subsection (1) or person employed or supervised by that legal practitioner may receive or hold funds or property belonging to any person unless the legal practitioner concerned is in possession of a Fidelity Fund certificate. (3) The provisions of subsections (1) and (2) apply to a deposit taken on account of fees or disbursements in respect of legal services to be rendered. (4) A Fidelity Fund certificate must indicate that the legal practitioner concerned is obliged to practise subject to the provisions of this Act, and the fact that such a legal practitioner holds such a certificate must be endorsed against his or her enrolment by the Council. (5) A legal practitioner referred to in subsection (1) who— (a) transfers from one practice to another; or (b) ceases to practise, must give notice of this fact to the Council and comply with the Council’s relevant requirements in relation to the closure of that legal practitioner’s trust account and in the case of paragraph (b) return his or her certificate to the Council. (6) The Council may withdraw a Fidelity Fund certificate and, where necessary, obtain an interdict against the legal practitioner concerned if he or she fails to comply with the provisions of this Act or in any way acts unlawfully or unethically. (7) The provisions of this section do not apply to a legal practitioner who practises in the full time employ of Legal Aid South Africa on a permanent basis. (8) An advocate, other than an advocate referred to in section 34(2)(b), may not receive or hold money or property belonging to any person in the course of that advocate’s practice or in respect of any instruction issued to the

advocate by an attorney or a member of the public. (9) No legal practitioner in the full-time employ of the South African Human Rights Commission or the State as a state attorney, state advocate, state law adviser or in any other professional capacity may receive or keep money or property belonging to any person, except during the course of employment of such legal practitioner with the State or the South African Human Rights Commission and in such case only on behalf of the South African Human Rights Commission or the State and for no other purpose.”

[2] Incorporated Law Society, Transvaal v Behrman 1977 (1) SA 904 (T).