Hewetson v The Law Society of the Free State

• Jurisdiction: South Africa
• Court: Supreme Court of Appeal
• Judge: Cachalia JA, Leach JA and Nicholls JA and Weiner AJA and Hughes AJA
• Judgment Date: 05 May 2020
• Citation: 2020 JDR 0705 (SCA)
• Hearing Date: 07 November 2019
• Docket Number: 948/2018

Nicholls JA (Cachalia JA and Hughes AJA concurring):

[1]

The appellant, Mrs Yolandi Hewetson (Mrs Hewetson), and her husband, Mr Alexander Fowly Hewetson (Mr Hewetson) practised as attorneys in the Free State for many years. They conducted their practice through a company Hewetson Incorporated (the firm) of which they were the sole directors. On 23 June 2016, the Law Society of the Free State (the Law Society) obtained interim relief against them from the Free State high court pending an investigation into the financial affairs of the firm. Thereafter, on 15 December 2017, pursuant to an application by the Law Society for such relief, both Mr and Mrs Hewetson were struck from the roll of practising attorneys and the firm was placed into liquidation. Mr Hewetson did not oppose the application. Only the appellant had opposed the relief sought against her. Whilst conceding that relief against her was justified, she appeals the harshness of the sanction. The appeal is with the leave of this Court.

[2]

Such proceedings are of a disciplinary nature and are sui generis. [1] Their primary purpose is to protect the public from malfeasance of attorneys. As far back as 1934, in Solomon v Law Society of the Cape of Good Hope, [2] this Court described them as follows:

'Now in these proceedings the Law Society claims nothing for itself . . . . It merely brings the attorney before Court by virtue of a statutory right, informs the Court what the attorney has done and asks the Court to exercise its disciplinary powers over him . . . . The Law Society protects the interests of the public in its dealings with attorneys. It does not institute any action or civil proceedings against the attorney. It merely submits to the Court facts which it contends constitutes unprofessional conduct and then leaves the Court to determine how it will deal with this officer [of the court].'

2020 JDR 0705 p4

Nicholls JA (Cachalia JA and Hughes AJA concurring)

[3]

The application in this matter was brought in terms of s 22(1)(d) of the Attorneys Act 53 of 1979 (the Act) which provides that:

'Any person who has been admitted and enrolled as an attorney may on application by the society concerned be struck off the roll or suspended from practice by the court within the jurisdiction of which he or she practices–

. . .

(d) if he or she, in the discretion of the court, is not a fit and proper person to continue to practise as an attorney.'

[4]

The test to determine whether a person is fit and proper is well established and needs no further elaboration. [3] The first enquiry is to determine whether the offending conduct has been proven on a balance of probabilities. Once this is shown, the second enquiry is to determine whether the person is fit and proper taking into account the proven misconduct. The final enquiry is to determine whether the person concerned should be suspended from practice for a fixed period or should be struck off the roll. The last two enquiries are matters for the discretion of the court, which involve a value judgment.

[5]

Only the final stage of the enquiry is relevant in this matter. The appellant, for the purposes of this appeal, has conceded that she is not a fit and proper person to practise and, therefore, the only question that remains is whether the high court was correct in striking her off the roll. The appellant contends that her suspension from practice would have been sufficient.

[6]

Although every case must be determined in the light of its own facts, if a court is of the view that after a period of suspension the person will be fit and proper, the appropriate order ordinarily would be one of suspension. [4] This is because the

2020 JDR 0705 p5

Nicholls JA (Cachalia JA and Hughes AJA concurring)

implications of removing an attorney from the roll for misconduct are serious and far-reaching. It is visualised, prima facie at least, that the attorney will never be permitted to practise again because the misconduct complained of is of such a serious nature that it manifests a character defect and a lack of integrity rendering the person unfit to practise. Any person applying for readmission will have to satisfy a court that he or she is a completely reformed character. [5]

[7]

It is well established that an appeal court has limited grounds to interfere with the decision of a high court in matters such as this. As stated by this Court in Malan v Law Society of South Africa [6] at para [13]:

'(T)his Court has held consistently that the discretion involved is a strict discretion, which means that a court of appeal may only interfere if the discretion was not exercised judicially: Kekana v Society of Advocates SA, 1998 (4) SA 649, [1998] 3 All SA 577 (SCA); Vassen v Law Society of the Cape of Good Hope 1998 (4) SA 532 (SCA) 537. This means that a court of appeal is not entitled to interfere with the exercise by the lower court of its discretion unless if failed to bring an unbiased judgment to bear on the issue; did not act for substantial reasons; exercised its discretion capriciously, or exercised its discretion upon a wrong principle or as a result of a material misdirection. (See also Mabaso v Law Society, Northern Provinces 2005 (2) SA 117 (CC) at para 20; Giddey NO v JC Barnard & Partners 2007 (5) SA 525 (CC) at para 20.'

[8]

In the exercise of its discretion, the high court decided to impose the more stringent sanction of removing the appellant from the roll rather than merely suspending her from practice. However, in doing so, it materially misdirected itself in its finding that the appellant had made 'loans' totalling R305 489.09 to herself from trust creditors' accounts. There was no proof of that fact, and the high court conceded in its judgment in the subsequent application for leave to appeal that it had erred in that regard. It went on to record that its decision to strike off did not 'turn primarily on the error' but that matters not. The high court was clearly influenced by a material and grave error which by its very nature has a substantial effect upon the issue at hand. Essentially it found the appellant had stolen a substantial sum when there was no

2020 JDR 0705 p6

Nicholls JA (Cachalia JA and Hughes AJA concurring)

evidence that she did. In the light of the authorities I have referred to this court is therefore free to exercise its discretion on the issue under s 22(1)(d) of the Act untrammelled by the decision of the high court. Thus it is necessary to examine the facts to consider whether a suspension would suffice in the circumstances of this particular case.

[9]

The appellant and her husband were married in 2001 and soon thereafter set up the law firm of which they were the sole co-directors. The firm's main office was in Welkom with a branch office in Theunissen. In terms of the Rules of the Law Society of the Free State [7] directors in an incorporated company of attorneys are jointly responsible to keep proper books of account, notwithstanding that only one of them may be responsible for the bookkeeping in the firm.

[10]

There is no dispute that the firm failed to keep proper accounting records. Significant sums of trust monies were misappropriated over the period 1 May 2013 to 29 February 2016. Notwithstanding this, the firm was given an unqualified audit by its own auditors, Deane & Thresher, over this period until the 2015/2016 financial year where a trust deficit of R1 069 119.81 was reflected.

[11]

The appellant's defence is that her husband controlled the finances of the firm to her exclusion. Blame for the financial irregularities and the trust deficit was laid squarely at his door. From September 2011 until January 2014 she was away from the practice on extended maternity leave. On her version, towards the latter part of 2015 she began to realise that something was amiss with the trust account. By that stage, the relationship between Mr Hewetson and the appellant had reached the point of no return.

[12]

After an informal investigation within the firm in December 2015, the appellant ascertained that there was a trust shortfall of R 1 789 766.56. She approached her

2020 JDR 0705 p7

Nicholls JA (Cachalia JA and Hughes AJA concurring)

attorney and submitted an affidavit to the Law Society on 15 January 2016, wherein these facts are set out, together with affidavits from staff members. She requested the Law Society to intervene on an urgent basis, assuring them of her full co-operation. At the same time, the appellant instituted divorce proceedings against Mr Hewetson.

[13]

Various staff members deposed to the financial irregularities and Mr Hewetson's utilisation of trust funds for personal gain. Mr Andries Knoetze, an attorney in the employ of the firm, confirmed certain financial irregularities and that the appellant was excluded from financial matters over which Mr Hewetson had sole control. He stated that he overheard a confrontation between the appellant and her husband in October 2015 regarding the irregular payments of trust funds. Ms Jacqui Labuschagne, a candidate attorney who worked in the conveyancing department, stated that she became aware of irregularities on the files assigned to her in November and December 2015 which compelled her to discuss the matter with the bookkeeper. Ms Mandie Janse van Rensburg, the conveyancer at the firm, became aware of financial irregularities in certain files during December 2015. She immediately approached the appellant who took steps to remove Mr Hewetson as the managing partner.

[14]

In February 2016 Mr Ramoro Maleme, a messenger in the firm, submitted an affidavit to the Law Society. He recorded how he had deposed to false statements at the request of Mr Hewetson. He received cash payments which he did not receipt but handed directly to Mr Hewetson. Properties were registered in his name by Mr Hewetson. He was instructed...