Questionable Conduct by an Attorney on Finances – What do our Courts say?
On 2 May 2023 the Bloemfontein High Court granted an Order that a particular attorney, Walter Du Toit, was suspended from practicing as a legal practitioner in the High Court of South Africa pending the finalization of a disciplinary hearing instituted against him by the South African Legal Practice Counsel, alternatively an application launched by the Legal Practitioners Council to have his name struck from the roll of legal practitioners of the High Court of South Africa.
Mr Du Toit was prohibited, with immediate effect, from operating and dealing with any of the trust banking accounts of his practice, the banking accounts of any deceased estates of which he was appointed as an executor or Master’s representative and any banking accounts of any insolvent estates in which he had been appointed as a liquidator. He was also ordered to surrender and deliver to the Registrar of that Court his certificate of admission as a legal practitioner.
Brief background of this matter was that Nedbank had lodged a complaint against Mr Du Toit at the Legal Practitioners Council regarding allegations of misconduct and misappropriation of funds belonging to deceased estates. Mr Du Toit had been appointed as an executor or agent of a number of deceased estates and Nedbank complained that he had defrauded those estates or more that R 2m. The investigation committee found that Mr Du Toit had opened several bank accounts with Nedbank for the purpose of administering the deceased estates. During 16 January 2017 to 28 June 2022, he made several requests to Nedbank for payment to two entities, ostensibly for repairs to motor vehicles belonging to the deceased estates. Nedbank had made payments to these accounts based on Mr Du Toit’s requests. In some instances he had requested payment directly into his trust account. Nedbank investigated the matter and revealed that the entities where they had made payment to were not legally incorporated and that the money had been paid to a Ms Suzette Greyling. Some of the vehicles allegedly repaired did not even belong to the deceased estates whilst the vehicles belonging in the estate had not been repaired.
Mr Du Toit did not deny the fraud but he blamed the conduct of his former employee, one Mr Patrick Maleme. Mr Maleme was employed by Mr Du Toit as a messenger, interpreter and assistant in the estates department of Mr Du Toit’s firm. It transpired that Du Toit provided very little or no supervision or oversight in respect of Maleme regarding the deceased’s estates. Furthermore, Du Toit blamed another employee, Ms Bosch, for the manner in which the liquidation and distribution accounts of the respect of the deceased estates were compiled. Transactions relating to the repairs of motor vehicles belonging to the deceased estates were not reflected on the L & D Accounts and Mr Du Toit alleges that he had only verified 40 – 50% of her work – the Court states that “This once again speaks of a lack of oversight and supervision on the part of the respondent”.
The following particular paragraph in the Order of Judge Naidoo, is quite revealing of what I believe the Court’s attitude is towards an attorney’s responsibility in conducting him/herself:
“ The court enquired whether the Fidelity Fund would make good any losses suffered by the deceased estates and/or heirs thereto. Mr Mazibuko expressed doubt that they would, as he was of the view that it was the negligent acts of the practitioner that were insured and not acts of third parties. Mr Steenkamp was not able to take that matter further. Upon a further enquiry from the court regarding the fate of all the client files in the respondent’s practice, a disturbing explanation was tendered. The respondent apparently took all the files and advised his clients of the situation. Some clients terminated his mandate, while others requested him to keep the files. With regard to the work in progress, such as trials, applications and the like, the respondent continues to act in these matters. This, in itself, is improper and unprofessional conduct, which warrants the intervention of the court and the LPC to protect the public interest, failing which the integrity of the profession will most likely be called sharply into question.”
The Court in its judgment further ordered that a curator bonis be appointed on behalf of the practice of Mr Du Toit to administer and control the trust accounts of Mr Du Toit and any accounts relating to insolvent and deceased estates.
Various further orders were issued in respect of the respondent, the manner in which he would be to conduct himself/herself and how funds would be protected in his trust account. For further information on these aspects, you are welcome to contact this practice.
For the writer, the important aspect relating to the aforesaid judgment is that it is important that the general public and clients of attorney practices, as well as entities and beneficiaries involved in respect of insolvent estates should keep a careful eye on the manner on which at attorney is conducting himself.
We are compelled as legal practitioners to keep appropriate record, to account for our financial activities in respect of our funding (in other words fees that we generate) as well as third party funding (in other words monies that are being dealt with through, for example, an insolvent estate).
Therefore, it is clear that there is a mechanism to one’s availability to raise questions and lodge complaints should you deem that there is unprofessional and unethical conduct on the part of a legal practitioner.
Furthermore, we as legal practitioners have onerous duties and should tread the lines of professional conduct carefully, succinctly and without any question of improper conduct.
Michéle Engela is a director at CK Attorneys.
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