SCA Cautions Legal Practitioners Against Alleging Sinister Motives By LPC When Dealing With Misconduct Complaints

In the case of South African Legal Practice Council v Kgaphola and Another, the South African Supreme Court of Appeal ("the SCA") highlighted important principles applicable to applications for postponements and enquiries relating to professional misconduct.

Background

This matter relates to an appeal against the order of the Gauteng Division of the High Court of South Africa ("the High Court") which dismissed the LPC's application to remove Mr Kgaphola from the roll of attorneys, alternatively to suspend him from practice.

Application for postponement

Mr Kgaphola failed to file his heads of argument. At the appeal hearing, his counsel made an oral application for postponement and did not bring a substantive application. The basis for the postponement was that Mr Kgaphola wished to obtain the transcribed record of the oral submissions made in the High Court.

The SCA highlighted the following principles relating to postponement applications:

1. A party applying for a postponement must give a full and satisfactory explanation of the circumstances that necessitate a postponement. Such a party must show a "good and strong reason" for the court to grant such relief.
2. The Constitutional Court in Lekolwane and Another v Minister of Justice held that "The postponement of a matter set down for hearing on a particular date cannot be claimed as a right. An applicant for a postponement seeks an indulgence from the court. A postponement will not be granted, unless this Court is satisfied that it is in the interests of justice to do so. In this respect the applicant must ordinarily show that there is good cause for the postponement".
3. An application for postponement should be sought as soon as a litigant realises the need for it. If the application for a postponement is made closer to the hearing of the matter, there will be a greater risk of prejudice to the other litigants involved in the matter and it will inconvenience the court.

The SCA dismissed the postponement application and reasoned that there was no explanation why Mr Kgaphola did not: (a) engage with the LPC to obtain an agreement for the transcript to be included in the record; and (b) take steps to obtain the transcript prior to the appeal being heard. The SCA also held that not only did the application for a postponement lack merit, Mr Kgaphola also showed a disregard for the rules of the SCA. Consequently, the SCA granted a punitive costs order on an attorney and client scale against Mr Kgaphola.

The Merits of the Appeal

Factual background

Mr Kgaphola was admitted as an attorney on 28 August 2020. In October 2020, he opened a legal practice for his own account ("the firm") and informed the LPC accordingly. On 8 October 2020, the LPC confirmed the

registration of the firm. The LPC also requested Mr Kgaphola to pay his membership fees and furnish it with certain information relating to the firm, including the firm's trust banking details. The LPC informed Mr Kgaphola that a fidelity fund certificate would only be issued upon receipt of the requested information. Mr Kgaphola neither responded to the LPC's letter nor did he provide the LPC with the requested information. As a result, no fidelity fund certificate was issued to him.

The application in the High Court

The LPC launched an application for the removal of Mr Kgaphola's name from the roll of attorneys, alternatively, for his suspension. About six days later, Mr Kgaphola applied for, and was issued, a fidelity fund certificate. The LPC later withdrew this certificate as a result of Mr Kgaphola's failure to submit the firm's opening auditor's report as required by the rules of the LPC. Despite this, Mr Kgaphola continued practising as an attorney.

The LPC raised several complaints against Mr Kgaphola, which included that Mr Kgaphola practiced without being in possession of a fidelity fund certificate (the remaining complaints will be addressed more fully below). The High Court concluded that the LPC had failed to establish that Mr Kgaphola had practised without a fidelity fund certificate. The High Court further found that Mr Kgaphola's infractions were not serious enough to warrant a declaration that he is not fit and proper to practise as an attorney and his removal from the roll of practising attorneys.

SCA proceedings

In this appeal, the LPC submitted that the High Court erred by not conducting a complete factual enquiry to: (1) determine whether the alleged misconduct had been established; and (2) in respect to the portions of the factual enquiry that it conducted, the High Court failed to cumulatively consider Mr Kgaphola's conduct.

The enquiry

The approach to misconduct complaints against legal practitioners involves a three-staged enquiry:

1. The court conducts a factual enquiry to determine whether the complaint has been established on a balance of probabilities;
2. If established, the court enquires whether the practitioner is fit to remain on the roll of legal practitioners; and
3. If he/she is, the court must determine a sanction.

In the second and third stages, a court exercises discretion. A court of appeal may only interfere with this discretion if the discretion was not exercised judicially. This means that if the court a quo failed to bring an unbiased judgment, 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, the court of appeal may overturn the High Court's order.

The SCA held that the High Court materially misdirected itself in the three-stage enquiry and set aside the High Court's enquiry and reasoned that the High Court: (a) did not properly conduct the factual enquiry to determine whether the complaints against Mr Kgaphola had been established. None of the complaints, except practising without a fidelity fund certificate, was investigated by the High Court; and (b) considered irrelevant issues that were not relied upon by Mr Kgaphola in his answering affidavit to reach its conclusion. Consequently, the SCA conducted the three-stage enquiry.

First enquiry: Whether the complaints against Mr Kgaphola were established

The SCA found that the LPC established the following complaints on a balance of probabilities:

1. Mr Kgaphola practiced without a valid fidelity fund certificate. Once Mr Kgaphola opened the firm and a trust banking account and informed the LPC accordingly, he was deemed to have been in practice (without a valid fidelity fund certificate) irrespective of whether or not he had clients during that period. Furthermore, Mr Kgaphola also continued to practice even after being informed that his certificate was withdrawn.
2. Mr Kgaphola contravened Rule 18.7 of the LPC's Code of Conduct. Mr Kgaphola failed to register his firm with the Financial Intelligence Centre ("FIC") despite being required to do so within 90 days from the opening of the firm.
3. Mr Kgaphola failed to immediately notify the LPC of the firm's trust banking account as required by rule 54.16 of the LPC rules. Mr Kgaphola only notified the LPC about three months after opening the trust banking account.
4. Mr Kgaphola failed to open the firm's trust account within the jurisdiction of the firm's main offices as required by rule 54.34 of the LPC rules.
5. Mr Kgaphola failed to pay the prescribed membership fees on or before 31 October 2020 as required by rule 4 of the LPC rules. Mr Kgaphola only paid the fees on 5 April 2021, after the application was launched.
6. Mr Kgaphola failed to reply to the correspondence by the LPC and therefore he contravened rule 16.1, 16.2, 16.3 and 16.4 of the LPC Code of Conduct

Second Enquiry: whether Mr Kgaphola is fit and proper to continue practice

The SCA found that while some of the offences relate to inattentiveness and lack of application, two are regarded as serious, ie practising without a fidelity fund certificate and a failure to respond to the LPC's correspondence.

Practising without a fidelity fund certificate is a serious breach of an attorney's duty and a criminal offence. A failure to respond to the LPC's correspondence is a serious offence for which attorneys have been struck off the roll, as it 'not only speaks of a lack of courtesy but constitutes a breach of professional integrity'.

The SCA also considered Mr Kgaphola's conduct in the proceedings before the High Court and found that instead of addressing the complaints against him, Mr Kgaphola resorted to impugning the integrity of the LPC. For example, he stated that the LPC: (a) brought the application well knowing that its allegations were baseless; (b) was 'clutching at straws' to build a 'non-existent case'; and (c) twisted the facts.

The SCA held that Mr Kgaphola's allegations were clearly intended to convey that the LPC had sinister motives against him. These are serious insinuations and should not be made lightly. Such conducts constitute unprofessional conduct. The SCA warned that "a time will soon arrive when legal practitioners who make themselves guilty of this unprofessional conduct risk being suspended from practice or struck off the roll, solely based on this, as this may be indicative of, or border on, lack of fitness to practise as a legal practitioner".

The SCA also restated the following principles regarding the nature of these proceedings:

"They are neither criminal nor civil proceedings between the LPC and a respondent legal practitioner. The LPC, as a repository of professional norms, places facts before the court for consideration for it to exercise its discretion upon those facts. It is, therefore, expected of legal practitioners against whom allegations of impropriety are made, to co-operate and provide the necessary information, and to place the full facts before the Court to enable it to make a correct decision. Broad denials and obstructionism, as we have seen in the present case, have no place in these proceedings."

The SCA concluded that although Mr Kgaphola is guilty of unprofessional conduct, that does not render him unfit to continue to practise as an attorney.

Third enquiry: the sanction

The SCA held that the sanction that will reflect the seriousness of Mr Kgaphola's conduct is a suspension for a period of 12 months, which is wholly suspended on condition that Mr Kgaphola does not contravene the Legal Practice Act, 2014, the Rules of the LPC and the LPC's Code of Conduct.

Conclusion

The appeal was upheld with costs on an attorney and client scale, and the decision of the High Court was set aside.