Law Society of the Cape of Good Hope v Budricks

• Jurisdiction: South Africa
• Judge: Hefer Ap, Nienaber JA, Harms JA, Cameron JA and Nugent JA
• Judgment Date: 24 May 2002
• Citation: 2003 (2) SA 11 (SCA)
• Docket Number: 141/2001
• Hearing Date: 02 May 2002
• Counsel: J T Whitehead SC for the appellant. H J van der Linde SC for the respondent.
• Court: Supreme Court of Appeal

Hefer AP:

[1] The respondent practised as an attorney in Port Elizabeth until December 1996 when, by order of the Eastern Cape Division of the High Court, he was interdicted from doing so pending the decision of an application for the removal of his name from the roll. The removal application was filed not much later in the same G Court but, for reasons which are not relevant at present, three and a half years went by before it was eventually heard. Instead of striking the respondent's name from the roll the Court (Jennett and Froneman JJ) ordered his suspension from practice for two years, which order was itself conditionally suspended for three years. The appellant H has now appealed to this Court. Its contention is that the respondent was treated too leniently.

[2] In terms of s 22(1)(d) of the Attorneys Act 53 of 1979 an attorney may be struck from the roll or suspended from practice 'if he, in the discretion of the Court, is not a fit and proper person to continue to practice as an attorney'. The practical I manner in which the Courts exercise their disciplinary powers is trite. As explained in cases like Jasat v Natal Law Society2000 (3) SA 44 (SCA) at 51B - I and Law Society of the Cape of Good Hope v C1986 (1) SA 616 (A) at 637E - G, the enquiry is threefold. The Court first decides as a matter of fact whether the J

Hefer AP

alleged offending conduct has been established. If the answer is yes, a value A judgment is required to decide whether the person concerned is not a fit and proper person as envisaged in s 22(1). And if the answer is again in the affirmative, the Court must decide in the exercise of its discretion whether, in all the circumstances of the case, the person in question is to be removed from the roll or merely suspended from practice. Since the second and third legs of the enquiry involve the lower Court's discretion, the power of a Court of appeal to interfere B is not unlimited.

[3] The proceedings against the respondent arose from the way in which he dealt with funds received from the National Housing Board in terms of an agreement he had concluded with the board as part of the latter's implementation of a State-subsidised housing scheme C for indigent persons. The money was received in monthly instalments over a period of 13 months and earmarked for the acquisition of land and the provision of housing for successful applicants for subsidies. The respondent was expressly instructed to pay the amount due in each case only upon the registration of transfer. In the mean time he D had to invest the money in a separate interest-bearing account and to pay the monthly interest to the provincial board. In return for 'attending to the transfer of the property acquired by any particular applicant, and in return for assisting the National Housing Board in the administration of payment of any particular subsidy' he was E entitled to an inclusive fee of R250 per application.

[4] The Court a quo found that the following allegations against the respondent had been established:

(a)

For about nine months he failed to open a separate investment account and simply paid the money received monthly F from the Housing Board into his general trust account. Interest from that source accrues to the Attorneys' Fidelity Fund but the respondent paid it to the board.

(b)

He appropriated part of each subsidy towards fees he had debited in excess of the agreed R250. His modus operandi G and the extent of this practice are described as follows in the Court a quo's judgment:

'(I)mmediately or very shortly after the receipt of subsidy funds substantial fees were debited and transferred to respondent's business account. . . . (R)espondent received 437 H subsidy amounts in respect of which, at the agreed administration fee of R250 per transaction, fees totalling R109 250 could properly have been debited and transferred when respondent became entitled to do so, whereas in fact respondent had debited and transferred fees totalling R701 373,17.

Respondent's answer to the aforegoing is that the actual implementation of the housing subsidy scheme was not I straightforward and that work extraneous to the actual transfer of title in property was often and, indeed, usually required by the prospective buyers and sellers. . . . In order to cater for this extraneous work respondent would obtain the express instructions of the prospective purchasers and sellers that respondent's fees therefor be debited to them and respondent would J

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debit fees against the subsidies. In other words, despite the terms of respondent's A mandate from the National Housing Board and in particular clause 6 thereof . . . respondent administered the subsidy funds on the basis that he was entitled to apply the subsidies in the manner instructed by his clients which of course he was not entitled to do as the subsidy funds remained held for the benefit of the National Housing Board until respondent became entitled to disburse them in terms of his mandate.' B

(c)

He credited an amount of R379 000 received from the Housing Board, not to the latter's account, but to the account of a company in which he had an interest. His explanation was that undebited fees due to him in respect of Housing Board matters more than covered the amount of the cheque. C

(d)

He issued two trust cheques for a total amount of R71 728,97 for payment of his personal commitments but debited the amounts to the Housing Board's account. His only explanation was that more than the amount in question was due to him in respect of undebited fees in subsidy matters. D

(e)

He made further payments totalling R214 397,10 from the Housing Board's account to repay loans made to his firm. Again his explanation was that a larger amount was due to him in respect of undebited fees.

(f)

In some of the dealings already referred to the respondent committed breaches of the appellant's rules. E

[5] The Court a quo's assessment of the irregularities was expressed as follows in the judgment:

'On what has been placed before us I am not satisfied that any shortfall in any particular amount has been shown to exist in respondent's trust banking accounts. I am, however, satisfied that respondent has committed theft of trust moneys, and that to that extent there must in consequence have been at the time a shortfall in F his trust banking accounts, and that he has administered trust funds in a reckless and cavalier manner and without any regard for his duties as an attorney. . . . Respondent, patently, did not administer trust funds received from the Housing Board in accordance with his instructions or in accordance with his obligations as an attorney. Apart from what has already been set out above, s 78(4) of the Attorneys Act 53 of 1979 requires the following. . . . The records G kept by respondent fall short of this requirement and the "method employed in debiting fees as disbursements" is more than simply "unorthodox" as euphemistically described by Mr Greeff.'

(Mr Greeff was a forensic accountant employed by the respondent.)

'I am satisfied further that respondent has by his conduct shown himself to be not a fit and proper person to continue to practise H as an attorney.'

[6] The reasons for not striking the respondent off or suspending him outright appear from the following passages from the Court's judgment:

'Turning then to the third inquiry, ie whether respondent's name should be removed from...