Phosa insists ENSAfrica executives are guilty of misconduct

Top law firm ENS Africa has submitted before the Legal Practice Council (LPC) ahead of the hearing on Thursday that its lawyers are not guilty of misconduct, as former ANC treasurer-general Mathews Phosa alleged in a complaint under investigation.

The law firm said its executives, Senzo Mbatha and Tumi Modubu, have provided a reasonable explanation for Phosa’s three complaints, namely the service of a fraudulent notice to abide before the court, misleading the court by failing to cite a party of interest, and assisting a client to commit a crime.

ENS Africa said most of the incidents that precipitated the complaints were “insignificant”, and therefore there was no reasonable prospect that the council would successfully prosecute a misconduct charge.

“The laying of complaints is vexatious, or in all circumstances, it is not appropriate to charge the respondents with misconduct,” according to the law firm in the heads of argument sent to the LPC.

Prima facie evidence

But Phosa disagrees, saying in his heads of argument that if the LPC investigating committee found that prima facie the respondents were guilty of misconduct, it ought to refer the matter to the LPC or its disciplinary committee for disciplinary proceedings.

“It is submitted that strong prima facie evidence exists that ENS’ conduct set out above ought to be referred to the LPC disciplinary committee for disciplinary proceedings,” Phosa charged.

The dispute has its genesis in the transaction between mining companies Transasia 1 and 11 Miles (Pty) Ltd (’11 Miles’), who bought mining rights for Cambrian and Malonjeni coal mines in KwaZulu-Natal from Umsobomvu Coal (Pty) Ltd and paid about R14-million.

Umsobomvu later claimed that it had cancelled the agreement because Transasia allegedly took too long to transfer the mining rights.

Transasia disputed the lawfulness of the cancellation, which led to acrimonious litigation in various courts and now the LPC.

The litigation has been ongoing for about eight years, during which Umsobomvu and its sole director, Hector Kunene, were represented in the litigation by Mbatha and Modubu.

Phosa, who has an interest in the Transasia group of companies (this includes, inter alia, Transasia 1 (Pty) Ltd (‘Transasia 1’), Transasia Minerals (Pty) Ltd (‘Transasia Minerals’), and Transasia 444 (Pty) Ltd (‘Transasia 444’), submitted complaints to the LPC concerning Mbatha and Modubu’s conduct.

Ministers dragged into the matter

One of the complaints before the LPC, under the heading “notice to abide”, was the claim that ENSAfrica cited Minister of Mineral Resources Gwede Mantashe and Police Minister Bheki Cele as respondents in a high court matter but failed to serve them.

Instead, Aubrey Milford, an official in the state attorney’s office who has allegedly resigned, issued a notice to abide on behalf of the two ministers without their knowledge.

Based on the information before the court, Kunene secured a court order in his favour, but a fraud case was opened against ENSAfrica.

Phosa said in his papers that ENS knew from the Sheriff’s Return of Non-Service that the application was not served on any of the state respondents.

He said ENS never disclosed this to the court as well as to the LPC.

“Under these circumstances, there appears to be merit in the complainant’s contention that ENS colluded with Milford to obtain the Notice of Intention to Abide.

“Alternatively, the Notice of Intention to Abide constitutes prima facie evidence that ENS misled the court … This constitutes prima facie evidence of misconduct.”

ENSAfrica said Phosa’s allegations of “fraud” were not supported by any evidence.

“His complaint morphed and shifted from being primarily concerned with the service of the application and the validity of the Notice to Abide at the outset to ultimately devolving into ‘free for all’ accusations against the respondents.”

Ethical standards

In the second complaint under the heading “non-joinder of Transasia”,  ENSAfrica was accused of dishonesty.

It was alleged that he compromised the ethical standards prescribed by the code or any other ethical standards recognised by the legal profession.

The claim was about a default high court order that ENSAfrica got for Kunene to see documents about the transfer of the disputed coal mining rights to Transasia.

Transasia was not a party to the proceedings but had an interest in them.

Transasia alleged that the intention was to gain access to the company’s confidential records, including financial statements.

Phosa said in the submission for Thursday: “ENS submits that its non-joinder of Transasia is a purely legal issue and at best could amount to an error in law.

“However, under the circumstances, the context displays a carefully crafted attempt by ENS to gain access to Transasia documents, which ENS knew Transasia claimed to be confidential and the production whereof it would have opposed.”

ENSAfrica said Mbatha and Modubu acted on counsel’s advice and believed neither Transasia 444 nor Transasia Minerals, nor any other Transasia entity, was a necessary party to these proceedings.

Phosa questioned why the record of such advice by counsel had not been submitted.

The drone issue

The third complaint under the heading “drone issue” focused on allegations that ENSAfrica advised Kunene to “knowingly make an untrue statement”.

Phosa alleged that ENSAfrica gave unlawful instructions to their client to sign that the [mine] land belonged to their client; otherwise, the drone operator would not be authorised to deploy the drone over the property.

He claimed that ENSAfrica allowed Kunene to illegally collect information on the mine property using a drone.

Kunene had visited the coal mining site and allegedly flown a drone into the premises to take pictures as part of his evidence.

ENSAfrica said there was no evidence that either Mbatha or Modubu advised Kunene to do anything, but Phosa said there was an e-mail correspondence between ENS and the drone operator showing that the law firm misrepresented to the operator that Umsobomvu owned the land and that they knew that the operator required the landowner to consent to the drone flight. 

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