Johannesburg Society of Advocates v Edeling

• Jurisdiction: South Africa
• Judge: Ponnan JA, Wallis JA, Saldulker JA, Schippers JA and Eksteen AJA
• Judgment Date: 29 March 2019
• Docket Number: 326/2018 [2019] ZASCA 40
• Hearing Date: 29 March 2019
• Counsel: J Suttner SC (with P Cirone) for the appellant. K Foulkes-Jones SC (with P Louw SC, D Goodenough and S Kanyangarara) for the respondent.
• Court: Supreme Court of Appeal

Wallis JA and Saldulker JA (Ponnan JA, Schippers JA and Eksteen AJA concurring): G

[1] Mr Christiaan Serfontein Edeling, the respondent in this matter, presently 64 years old, was admitted as an advocate of the then Supreme Court of South Africa H on 27 March 1979. He initially practised at the Johannesburg Bar and then joined the Free State Bar in 1984, where he practised until 1993. While there he was admitted as an advocate in Lesotho. He then reapplied to and was granted membership of the Johannesburg Bar and resumed his practice there.

[2] I During March 1996 the Society of Advocates of South Africa, Witwatersrand Division (as the present appellant, the Johannesburg Society of Advocates (the Society), was then known), applied, in terms of s 7 of the Admission of Advocates Act 74 of 1964, for Mr Edeling's striking-off. On 11 December 1997 he was struck from the roll of J advocates by order of the Witwatersrand Local Division (Van der

Wallis JA and Saldulker JA (Ponnan JA, Schippers JA and Eksteen AJA concurring)

Merwe J and Du Plessis J). [1] Aggrieved, Mr Edeling applied for leave to A appeal against the judgment of the High Court, but it was refused. His applications for leave to appeal to the Supreme Court of Appeal and the Constitutional Court were also dismissed.

[3] In 2009, and again in 2015, Mr Edeling brought ex parte applications B before the Gauteng Division of the High Court of South Africa for his readmission and re-enrolment as an advocate. The Society intervened and opposed both applications, the first of which was withdrawn at the Society's instance after the second application was launched. The court a quo (Modiba J and Molahlehi J concurring) granted Mr Edeling's application and made no order as to costs. The appellant C applied for leave to appeal the order, which was refused by the court a quo with an adverse costs order. This appeal is with the leave of this court.

The reasons for Mr Edeling's striking-off D

[4] Mr Edeling was struck off the roll largely in consequence of his dealings with Mr Glyn Rudolph. Mr Rudolph had devised a scheme under which properties were sold at vastly inflated prices, with payment being effected in terms of two promissory notes given by the purchaser to the seller. The first of these would be for the approximate value of the property. The second would be a wildly inflated figure payable many E years in the future. The purpose of these arrangements was to secure a refund of VAT from the revenue authorities. In terms of one of these schemes Mr Edeling sold his own home in Bloemfontein, worth between R850 000 and R1 million, to Special Aircraft Utilisation (Pty) Ltd (SAU), a company effectively controlled by Mr Rudolph, for some R73 million. F He also attempted to purchase a commercial property in Johannesburg, referred to as the St Margaret's property, valued at R2,5 million, for R120 million under a similar scheme but this fell through. Instead SAU purchased the property for R158 million, to be discharged by way of two promissory notes.

[5] When Rudolph told him that there were problems in regard to the G purchase of the St Margaret's property, Mr Edeling drafted an agreement, the Condor agreement, with a view to circumventing those problems. This involved a trust that he had formed in Lesotho, controlled by him and an attorney, Mr Redelinghuys. The purpose of the agreement was to acquire the interests of the seller of the St Margaret's H property in a manner that would ensure that it would never be necessary to satisfy the second inflated promissory note. This was to be concealed from the revenue authorities. When the purchases by SAU of Mr Edeling's home and the St Margaret's property were considered in the Special Income Tax Court, Mr Edeling gave evidence in support of their legality. Melamet J held that both schemes were fraudulent and that Mr Edeling I perjured himself in giving his evidence.

Wallis JA and Saldulker JA (Ponnan JA, Schippers JA and Eksteen AJA concurring)

[6] A On 11 December 1997 the High Court concluded with regard to the first transaction that the sale by the respondent of his house in Bloemfontein was not a true sale, but a simulated transaction entered into solely to obtain a tax advantage to which the parties were not entitled. This finding implied that Mr Edeling had not been truthful in B his evidence to either the Special Court or the court hearing the striking-off application. With regard to the second intended transaction the High Court concluded that the offer to purchase the St Margaret's property was a simulated transaction employed solely to obtain an unconscionable tax benefit to which the parties were not entitled. It was not genuine and was intended as a fraud on the fiscus. The High Court analysed the C Condor transaction in some detail and concluded that it showed that Mr Edeling had been untruthful in regard to his relationship with Mr Rudolph; that he was aware that the two transactions were simulated; and that his evidence at a number of points was untruthful. That was also its conclusion in regard to the evidence given in the Special Court. D

[7] In his counter-application Mr Edeling attacked a number of senior members of the Johannesburg Bar in the most intemperate and insulting terms without any justification whatsoever. The court concluded that the insulting statements made by Mr Edeling in his counter-application E concerning the Society, its Bar Council and certain of its members were not true. The High Court viewed these allegations in a serious light, and held that they were particularly serious when made of officers of the court whose honesty and integrity had to be beyond question. It concluded that it was clear that the insulting statements were self-serving and evidence of an attempt by the respondent to discourage full and proper F investigation into his conduct.

[8] The High Court concluded that he was not a fit and proper person to practise as an advocate. It ordered that his name be struck from the roll of advocates. It held that Mr Edeling had been party to dishonest and simulated transactions and that the 'moment he perceived the vulnerability G in the VAT Act, he waded in and exploited it to the hilt'. He displayed a lack of judgment, which was revealed by his inability to perceive that he had done anything wrong. Even in court he had no qualms about the morality of his conduct. There is no need to go further into the details of the findings of the court of which these are a summary. H Its final conclusion was that Mr Edeling's evidence overall was a combination of half-truths and lies; facts had been withheld; full disclosure had not been made; and he had concealed the whole truth. These were resounding findings of dishonesty.

The applications for readmission I

[9] In 2009 Mr Edeling launched an application for his readmission (the 2009 application), which was eventually withdrawn and he had to pay the costs. One of the primary grounds of opposition by the Society was that he had failed to make a full and honest disclosure to the court, especially in regard to his having resumed practice as an advocate in J Lesotho. The application dragged on for a number of years until he

Wallis JA and Saldulker JA (Ponnan JA, Schippers JA and Eksteen AJA concurring)

brought the present application for his readmission in 2015, before A withdrawing the 2009 application. In regard to that application the respondent says in his present founding affidavit:

'By that time I had already built a good practice in Lesotho and had no appetite for further confrontation with the Johannesburg Bar, which I wished to join should I be readmitted. I knew that I was once again a B fit and proper person and was busy proving as much in Lesotho. I decided to let the matter lie for a few years, in the hope that old resentments would die down, and in the hope that I might later make a new application after I had once again built a sound reputation as an advocate in Lesotho.'

[10] When, in June 2015, Mr Edeling renewed his application for his C readmission as an advocate, he said in his founding affidavit in support of this application, inter alia:

'I respectfully submit that in considering my application for readmission D this Honourable Court will ask itself simply whether I am now, as at the time of the hearing a fit and proper person to practise as an Advocate. I submit that the court will not approach the matter as if these were punitive proceedings and that the Court will not seek to mete out any further punishment for the sins I committed nearly 20 years ago. I believe that I have atoned for my sins and learned from my mistakes. E In the course of my work in recent years, I have conducted myself in a proper and professional manner. There have been no complaints against me or concerning my conduct. . . . I believe that I have learned from the lessons of the past. I have changed my attitude and my conduct for the good. . . . The events leading to the removal of my name from the roll of Advocates bear upon the conduct of my personal and private F tax affairs and a bad relationship with certain members of the Johannesburg Bar, and not with the manner in which I performed my professional duties to any of my clients or the Court.' [Emphasis added.]

[11] Where a person who was previously an advocate has been struck off G the roll of advocates on the basis that he is not fit and proper to practise as an advocate, and then applies for readmission, the court adopts the following approach:

'The fundamental question to be answered in an application of this kind is whether there has been a genuine, complete and permanent reformation H on the appellant's part. This involves an enquiry as to whether the defect of character or attitude which led to him being adjudged not fit and proper no longer exists...