PROFESSION – Suspension – Attorneys – Bookkeeper and professional assistant stole from trust account – Two attorneys joining another firm while investigations under way – LPC receiving numerous complaints – Allegation that they were appointed as directors of new firm when not in possession of valid Fidelity Fund Certificates – Not conducting themselves in manner that maintains strict standards of diligence required of them – Nor have they discharged the duty of care owed to their clients – Suspended from practising pending finalisation of investigation – Legal Practice Act 28 of 2014 – Attorneys Act 53 of 1979.
Facts: Mr Steenkamp and Mr Coetzee (respondents) are practising attorneys and while they were directors of Steenkamp De Villiers & Coetzee there was a deficit in their trust account, alleged by the Legal Practice Council (LPC) to be at least R2,5 million. The former bookkeeper employed by the respondents stole a large amount of money from the trust account but repaid an amount and it appears that a professional assistant had also misappropriated trust funds.
Application: The LPC seeks an order for the suspension of the first and second respondents from practising as attorneys pending the finalisation of investigations against them and any disciplinary proceedings to be instituted against them in court by the LPC. The first and second respondents opposed the application.
Discussion: That, while the investigations into numerous complaints and the trust shortfall was ongoing, the respondents joined the firm Steenkamp & Jansen Incorporated, of which Mr Jansen (fourth respondent) is the sole director and he was previously employed by Steenkamp, De Villiers & Coetzee; that the LPC alleges that it received numerous complaints against the respondents, as well a director and the professional assistant, and that such complaints number approximately 127; and that the respondents do not deny that a large amount of money was stolen from their trust account by their employees over a period of many months and that they placed their bookkeeper in a position of full control, without supervision or oversight, which enabled her to steal almost R1 million.
Findings: An area of concern is what appears to be the summary closure of the firm of Steenkamp De Villiers & Coetzee, without following the stipulated process and procedures. The allegations by the LPC that the respondents were appointed as directors of Steenkamp & Jansen, at a time when they were not in possession of valid Fidelity Fund Certificates, and that they appear to be acting as directors there, creates a sense of unease and disquiet that requires investigation. They have not conducted themselves in a manner that maintains the strict standards of diligence required of them, nor have they discharged the duty of care owed to their clients. The various complaints which were lodged against the respondents and which are still under investigation highlight the need for the LPC to conduct proper investigations into those complaints and to do so unhindered.
Order: Mr Steenkamp and Mr Coetzee are suspended from practising as a legal practitioners pending the finalisation of the investigation against them by the LPC and any subsequent disciplinary proceedings which may be instituted in court.
NAIDOO J (MAHLANGU AJ concurring)
CONTRACT – Property sale – Estate agent commission – Amendment reducing commission made after offer to purchase – Buyers contending that purchase was subject to daughter’s approval – No prejudice in reduced commission – Purchasers bound under caveat subscriptor doctrine – No evidence to support a defence based on iustus error – Magistrates court finding for estate agent and granting judgment for payment of commission – Appeal dismissed.
Facts: Ms Badsey is an estate agent employed by Wakefields and testified that she had a mandate from the sellers, the Reubens, to sell their immovable property which was described as “a renovators dream”. Mr Naidoo contacted her and they arranged to meet at the property. The offer to purchase was completed in the office boardroom with Mr and Mrs Naidoo. Ms Badsey advised the Reubens that she had an offer which was less than their asking price so she agreed to reduce her commission to R40,000 and this was an annotation made at clause 17 of the agreement. Mrs Reuben then came into the offices to sign the acceptance of the offer to purchase. Mr Naidoo later indicated that the renovations of the property would cost too much and that he was declining his offer to purchase.
Appeal: Against the judgment of the magistrates court in favour of Wakefields for the claim for estate agent’s commission. It was common cause that Wakefields, represented by Ms Badsey, was the effective cause of the sale. The court a quo rejected the Naidoos’ defences. The Naidoos contended that it was never their intention to enter into a purchase and sale agreement as they were purchasing the property for their daughter and that the purchase of the property was subject to her approval as well as an assessment of the cost of renovations.
Discussion: Whether a failure by one of the sellers, Mrs Reuben, to sign the purchase and sale agreement twice (on her behalf as well as on her husband’s behalf) invalidate the agreement; whether the alteration by Ms Badsey and Mrs Reuben of the amount of commission payable impacted on Wakefield’s right to claim commission; whether Wakefield’s failure to communicate to the Naidoos expressly its acceptance of a commission payable in terms of the written agreement precluded it from claiming the commission; whether Ms Badsey induced the Naidoos to sign the purchase and sale agreement through misrepresentation; and whether the Naidoos’ mistake that led them to signing the purchase and sale agreement was iustus.
Findings: Mrs Reuben had a power of attorney authorising her to act on behalf of her husband. Clause 17 amounts to a stipulatio alteri which is a benefit for a third party. The amendment had the effect of reducing the amount of commission and the appellants benefitted from such reduction and consequently were not prejudiced thereby. There is no mention made in the purchase and sale agreement that it is subject to the Mr Naidoo’s daughter’s approval for the property. The purchase and sale agreement also contains a “whole agreement” clause. If the appellants were mistaken as to the contents of the purchase and sale agreement it was due to their failure to properly read the sale agreement before signing the document. They are bound under the caveat subscriptor doctrine and there is no evidence to support a defence based on iustus error.
Order: The appeal is dismissed with costs.
HENRIQUES J (MLABA J concurring)
CONTRACT – Consensus – Whether concluded – Appellant contended that valid agreement concluded with municipality for litigation support services – No letter of instruction or order issued and no authorisation for deviation from procurement requirements – No agreement regarding scope of specific litigation support – No price was agreed and duration of agreement not specified – Accordingly no agreement which was capable of enforcement – Appeal struck off the roll.
Facts: Amajuba Municipality’s auditors conducted an audit of its procurement processes and identified a number of serious irregularities and unauthorised expenditure. Its findings implicated a number of persons, including officials in the employ of Amajuba. The findings were, however, preliminary. The then municipal manager of Amajuba, Mr Afrika, obtained authorization for a deviation from the procurement regulations in order to appoint IFS to undertake the further investigation. IFS produced the report and a dispute arose, resulting in IFS issuing summons against Amajuba for payment of two claims. The first was for payment of an amount arising from the audit investigation agreement and this was settled. The second was for payment of three amounts arising from a further agreement to provide litigation support services to the National Prosecuting Authority and the Directorate of Priority Crimes on behalf of Amajuba. The second is the subject of the appeal.
Appeal: The trial court found that no valid agreement for the provision of litigation support had come into being. It therefore dismissed IFS’s claim with costs. The full court dismissed the appeal. It found that no valid and binding agreement with terms sufficiently certain to give rise to a binding obligation in law was proved.
Discussion: That Amajuba pleaded that no agreement was concluded, alternatively, it denied that Mr Afrika had the requisite authority to conclude the alleged agreement and further it denied the lawfulness of the alleged agreement; that in its replication, IFS raised an estoppel in relation to the lack of authority defence; that the issue before the trial court was whether a valid agreement had been concluded between the parties which was capable of contractual enforcement in respect of the second claim; and that Mr Saunders for IFS believed that agreement had been reached on the essential terms and that he had agreed to continue providing services at the same rate IFS had previously charged.
Findings: The undisputed evidence of the municipal manager was that no letter of instruction or order was issued by Amajuba for the work performed by IFS. There was no authorisation for a deviation from the procurement requirements and no budget provision was made for such work. The cumulative effect of the evidence of Mr Afrika and Mr Saunders was tantamount to evidence of an unenforceable agreement to agree. The trial court found that the evidence did not prove that a valid and binding agreement had been concluded. The full court confirmed the finding. Its conclusion was that there was no agreement regarding the scope of specific litigation support to be provided, no price was agreed for the provision of the services and the duration of the agreement was not specified. There was accordingly no agreement which was capable of enforcement.
Order: The appeal is struck off the roll with costs, including the costs of two counsel.
GOOSEN JA (PONNAN JA, MABINDLA-BOQWANA JA, WINDELL AJA and KEIGHTLEY AJA concurring)
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