The Johannesburg High Court has dismissed an application by the South African Legal Practice Council (LPC) to have four attorneys removed from the roll of legal practitioners due to financial misconduct.
In a judgment handed down electronically on Monday, Judge Stuart Wilson said there was no clear evidence presented that the attorneys should be struck off the roll.
Wilson heard the application from the LPC on August 29.
The application was brought against attorneys Jan Gysbert Louw (first respondent), Judith William (second respondent), Katlego Pooe (third respondent), Yolandi Marguerite Watson (fourth respondent), and Nhlabathi Gys Louw Inc (fifth respondent).
In the evidence presented in court, the council argued that Louw ran a dishonest scheme where he was the de facto managing partner of the firm Nhlabathi Gys Louw Inc.
Annual fee income
The council argued that the scheme involved understating the firm’s annual fee income by paying its expenses directly from a trust account and drawing down the professional fees due to the firm after the expenses had been deducted from them.
This permitted the firm to state its annual fee income at just below R50-million. At the relevant time, the firm’s true fee income was in excess of R100-million.
According to the council, the purpose of this scheme was to avoid attracting the more onerous broad-based black economic empowerment requirements that would have been applied to the firm had its reported fee income exceeded R50-million and with which the firm could not comply.
Wilson agreed with the council that indeed the scheme was dishonest.
“There is no serious dispute before us that this scheme is dishonest and that Mr Louw implemented it deliberately to achieve the purpose I have set out,” said Wilson.
“Beyond that, however, the facts on which the LPC claims a striking off order become considerably murkier … I have no doubt that the deceptive nature of the scheme leaves Mr Louw with a lot to answer for, but I cannot say that his striking off is inevitable without a fuller picture of the firm’s affairs and his role in them.”
Fit and proper to practise
He stated further: “Moreover, unlike in a standard case of theft or another plainly unlawful misappropriation, it is not clear to me that the other former directors misconducted themselves, and, if they did, whether they nevertheless remain fit and proper to practise.
“Its application for the first to fourth respondents’ striking off will be dismissed, but nothing stops the LPC from approaching the court again with a record of the disciplinary inquiry and a reasoned motivation for the first to fourth respondents’ striking off that is justified on the basis of that record.”
Wilson ordered that the council must convene a disciplinary inquiry in terms of Section 37(4) of the Legal Practice Act 28 of 2024 before it takes further steps to suspend the first to fourth respondents from practice or strike the first to fourth respondents from the roll of legal practitioners on the basis of the prima-facie evidence of misconduct identified by its investigating committee in April 2023.
The LPC was also ordered to pay the respondents’ legal fees.
