Law Society of the Cape of Good Hope v C

• Jurisdiction: South Africa
• Judge: Corbett JA, Miller JA, Galgut AJA, Cillié AJA and Nicholas AJA
• Judgment Date: 02 December 1985
• Citation: 1986 (1) SA 616 (A)
• Hearing Date: 05 September 1985
• Court: Appellate Division

Galgut AJA:

A The respondent practises as an attorney in Cape Town. He was admitted and enrolled in 1982. In 1984 the Cape of B Good Hope Provincial Division, at the instance of the Law Society of the Cape of Good Hope ("the Society"), made an order striking his name off the roll of attorneys. [*] Relevant ancillary orders relating to delivery up of his books of account, the future control of his practice and costs were also made. The orders, other than the cost orders, were, however, C suspended for three years on certain detailed conditions which included the furnishing of periodic certificates by an accountant that he was keeping proper books of account. The Society appeals to this Court against the suspension of the striking-off order and the ancillary orders. The notice of appeal reads:

"The Court a quo erred in not finding that the respondent was D not a fit and proper person to continue to practise as an attorney and that it erred in not striking the respondent's name off the roll of attorneys unconditionally in the light of the following findings of fact made by their Lordships."

The findings by the Court a quo will be detailed later.

The respondent is a man of 50. His professional career is not of long duration. He obtained a BA degree in 1956 and farmed E till 1969. He then joined the Provincial Administration as a clerk. In 1974 he was transferred to the Department of Justice as a prosecutor. He obtained his LLB degree in 1977. Some time thereafter he served articles of clerkship and was admitted to practice in May 1982. He spent a short time as professional assistant to one G. The latter's practice was chiefly a F criminal practice necessitating much time out of the office. G was apparently not interested in office routine or bookkeeping. G died in July 1982. Respondent bought the practice and practised initially under his own name and later under the style of C & G. His practice, like that of G's, also necessitated his being out of office a great deal. The practice G had been badly run by G. In this regard the Court a quo said:

"C had bought potential trouble when he acquired G's practice. He seems to have been ignorant of the precise extent of the disorder in the practice when he took over. In fact the books were in a mess."

In October 1982 respondent decided to change from a "manual" system of bookkeeping to bookkeeping by computer. The work H involved in such a change-over is apparently fairly complicated. The firm's bookkeeper was far from competent. Respondent consulted his auditors. They had also been the auditors to Mr G's firm. Mr Gordon, a partner in the auditing firm Bass, Gordon, Willis, undertook to find a competent full-time bookkeeper. He also arranged that a senior clerk from I his, the auditor's firm, would supervise the change-over to the computer system. The old bookkeeper was dismissed. A senior clerk, Mr Louw, from the auditor's office, was appointed to supervise the change-over to the computer system. For the period 20 January to 28 February 1983 (to use Mr Louw's own words) he became "respondent's de facto bookkeeper".

Galgut AJA

A Mr Gordon then interviewed and appointed a new bookkeeper, Mrs Kotze, who, although a qualified bookkeeper, had no knowledge of what was required in an attorney's practice. She also had no knowledge of how the computer system worked. She was assured that Louw would continue to do the audit and assist B her in the gradual change-over to the computer system.

Practising attorneys are required to keep proper books of account. Section 78 (1) of the Attorneys Act 53 of 1979 ("the Act") provides that:

"(1) Any practising practitioner shall open and keep a separate trust account at a banking institution in the Republic and shall deposit therein the money held or received by him on account of any person."

C Section 78 (4) reads:

"(4) Any practising practitioner shall keep proper books of account containing particulars and information of any money received, held or paid by him for or on account of any person, of any money invested by him in trms of ss (2) and of any interest on money so invested which is paid over or credited to him."

D Rule 13 of the Rules of the Society details how attorneys in the Cape Province shall operate their "trust accounts" and deal with "trust moneys". Save for what is set out below there is no need to repeat the provisions of the Rule. Subrule 13 (2) requires attorneys' firms to furnish annually to the Council of the Society, a certificate (from an accountant) that:

E "The firm has kept for the period under review and is keeping proper books in such manner as enables it to comply with the provisions of s 78 (1) and (4) of the Act."

Subrule 13 (10) reads:

"No firm shall permit the trust account of a client in its books to be in debit."

As will be seen later the Society, because of a report it had F received from Mr Gordon on 13 January 1984, decided to have respondent's books examined. This examination was carried out by an accountant appointed by the Society, a Mr Lancaster. He examined the respondent's books and found the following "irregularities" (the lettering is mine):

"A.

There was no proper clients' ledger.

B.

Excessive amounts were transferred from the trust banking account to the business banking account. G

C.

Debit balances on trust ledger accounts had not been properly corrected.

D.

Salary and other business cheques had been cashed from trust monies."

In his report to the Council, Mr Lancaster also set out the following two matters:

"E.

That on 19 December 1983 respondent deposited his personal cheque for R13 700 into the trust banking account, thereby purporting to make good the shortfall in that account (see B above); that on the same day he, respondent, drew a trust cheque, No 596, for R13 700 payable to himself (C); that the effect was that the shortfall in the trust account remained as it had been; that the counterfoil of the said cheque stated incorrectly that the cheque was for R500 and was payable to Cape Trustees on behalf of a client; that I by filling in the counterfoil incorrectly the respondent had misled his auditors; that he had gained a month's grace; that the amount of the shortfall was only paid into the trust account in January 1984. H

F.

That the auditors had found that, as at 19 November there were trust accounts with debit balances (see C above) totalling R3 322,68; that respondent was told; that he made out a cheque for that amount payable to the trust account; that the accounts which were in debit were credited; that J the cheque was not signed; that this cheque was only signed and paid into the trust account in February 1984."

Galgut AJA

The Society then launched its application to the Court a quo. A It asked that his name be struck from the roll of attorneys on the ground that he was not a fit and proper person to practise as an attorney. It alleged that respondent was "guilty of unprofessional and dishonourable conduct and/or unworthy conduct at common law and/or by virtue of the hereinafter statutory enactments, in that" (what follows is my summary): B

(i)

he was guilty of theft and/or the misappropriation of trust monies;

(ii)

he failed, in breach of s 78 (4) of the Act to keep proper books;

(iii)

he, in breach of Rule 13 (10), permitted the trust account of his clients to be in debit;

(iv)

he failed to maintain recognised professional C standards as an attorney;

(v)

he undermined and brought the attorneys' profession into disrepute;

(vi)

he undermined the confidence of the public in the attorneys' profession;

(vii)

he is not a fit and proper person to D practise as an attorney.

The respondent opposed the application and filed answering affidavits by himself and Mrs Kotze. Because of what was said in these affidavits the Society found it necessary to file replying affidavits including affidavits by Mr Gordon and Mr Louw.

Counsel for the Society stressed the findings by the Court a E quo in regard to the matters in Mr Lancaster's report. He further urged that the fact that it had made a striking-off order implied that it had found that respondent was not a fit and proper person to continue in practice as an attorney. Counsel also relied on two further findings by the Court a quo. These are:

"G.

The respondent's failure to keep proper books of account in F that he did not keep his 'manual' books up to date and, secondly, in failing to run the manual system in tandem with the computer system before abandoning the former.

H.

The respondent sought to avoid responsibility by wrongly and inexcusably blaming his auditors for the state of his books."

Counsel for respondent submitted that the findings of the Court G a quo were not justified; that it expressly stated that it had not found respondent unfit to practise as an attorney. He further urged that in the latter regard it had exercised its discretion in terms of s 22 (1) of the Act and this Court was not free to interfere.

H Because of the above submissions it is necessary to examine the findings of the Court a quo. This is done below.

I pause to mention that, after the application had been launched and after the above-mentioned replying affidavits had been filed, the Society received a letter from the Industrial Council for the Liquor and Catering Trade ("the Industrial I Council") concerning the conduct of the respondent in relation to the affairs of one of his clients, a Mr Martin of the Blue Peter Hotel (Pty) Ltd. The Society was of the view that respondent's conduct in regard to this matter (to which I shall refer as the Industrial Council complaint) was highly improper and then filed further affidavits. As to that aspect more later.

I turn now to deal with the matters raised in A to H above and J the Court's findings in...