Law Society of the Cape of Good Hope v Peter

• Jurisdiction: South Africa
• Judge: Harms JA, Scott JA, Farlam JA, Nugent JA and Heher JA
• Judgment Date: 28 March 2006
• Citation: 2009 (2) SA 18 (SCA)
• Docket Number: 126/05
• Hearing Date: 28 February 2006
• Counsel: A Brink for the appellant. D Gess for the respondent.
• Court: Supreme Court of Appeal

Farlam JA: E

Introduction

[1] The appellant applied to the Cape High Court for, amongst other things, an order striking the name of the respondent from the roll of attorneys. Instead of granting that relief, the High Court suspended the respondent from practice for a year and ordered further that she be F precluded from practising for her own account, either as a principal or in partnership or in association or as a director of a private company conducting an attorney's practice, for a period of one year from the expiry of the suspension. It further ordered that the restrictions applicable after the year of suspension expired would only fall away once she had satisfied the appellant, after the restrictions had been in operation for G a year, that she has the necessary skills and expertise to conduct a conventional legal practice and manage trust accounts. It gave certain further orders dealing with such matters as the appointment of a curator to administer and control the respondent's trust account and to take possession of her books of account, records, files and other documents H relating to her practice and ordered her to pay the costs of the application on the attorney and client scale and to pay the fees and expenses of the curator. The appellant has appealed, with the leave of this court, against the High Court's decision not to strike the respondent's name from the roll.

Facts I

[2] The respondent obtained an LLB degree from the University of the Western Cape at the end of 1999. She sought articles of clerkship from various firms of attorneys in Cape Town but was unable to obtain them. From January to July 2000 she attended the University of Cape Town J

Farlam JA

A School for Legal Practice, after which she obtained the Diploma in Legal Practice. From July 2000 to August 2001 she served under articles for a period of one year at the Centre for Justice in Athlone. From September 2001 to January 2002 she was employed as a paralegal, working for an attorney who practises in Pelican Park. In February 2002 she successfully B wrote the attorneys' admission examination and was admitted as an attorney on 2 August 2002. She was unable to obtain employment as a professional assistant with a firm of attorneys and had no capital with which to start a practice. Shortly after her admission she met an executive member of a trade union and became involved in a relationship with him. He informed her that the union required an attorney's C assistance with some of its matters and that she would be able to assist it in this regard.

[3] She decided to set up practice as a sole practitioner in an office in the building occupied by the union, which lent her a desk and a chair. She used its computer and paid half the salary of two of its employees who D acted as her typist/secretary and messenger. She borrowed the money to pay the first two months' rental for her office, which was payable in advance.

[4] As I have said, she had no capital at all with which to begin her practice. She also did not have any clients: those who came to her were E members of the union, sent by it. They were unable to pay any fees or deposit money in advance for work to be done or in progress. She took work from them on a contingency basis, hoping to be paid, as she put in her affidavit, if the matters were successful. In her affidavit she stated that she had believed that on commencing practice she would earn and be F paid sufficient to meet the basic minimum expenses to keep her office open, particularly in the light of the promises of the union, but this did not happen. Although she had done work for a number of clients, the fee income actually received was utterly insufficient to meet the basic monthly expenses needed to keep her office open. By the end of December 2002 she found herself in a desperate position, unable to pay G the expenses of her practice. In addition she was obliged to leave the place where she was staying and to obtain other accommodation for which it was necessary for her to pay rental and a deposit in advance.

[5] During December 2002 the respondent received various amounts of money in trust which she proceeded to transfer to her business account. H She used these amounts to pay her outstanding practice expenses, and the advance payment for her accommodation. In January and February 2003 she wrongly transferred further sums from her trust account to her business account and used them to pay practice expenses and what she called in her opposing affidavit her essential personal living costs. Initially I trust funds owing to a client named Ajam were misappropriated but these amounts were later retransferred to Ajam's account and paid over to him. Further amounts, including those required for the repayment of Ajam, were misappropriated from trust funds owed to two other clients of the respondents, FJ Solomons and his brother, M Solomons.

[6] The consequence of the respondent having paid business expenses J and living costs was that by 28 February 2003 she only had

Farlam JA

R13 284,36 available in trust, when she ought to have had at least on her A own calculations R22 805,28, the amount then owing to the Solomons brothers. Further sums totalling R11 437,98 were debited to her trust account in March 2003, with the result that at the end of March 2003 she only held a total amount of R2 272,22 in trust. She admitted that she continued the practice of paying her expenses directly from trust B during March.

[7] After March 2003 she committed no further irregularities in relation to money held in trust on behalf of other clients, despite the fact that she had received moneys on their behalf.

[8] On 27 May 2003 FJ Solomons complained to the appellant that he C had not received a full accounting from the respondent regarding the amounts she had received on his behalf pursuant to a settlement between the Solomons brothers and their employer, Electrotech Industries (Pty) Ltd. The appellant sent a copy of the complaint to the respondent on 4 June 2003 and requested her to provide it with a full...