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Possibly reportable

In the High Court of South Africa

(Eastern Cape Division)

(Grahamstown High Court) Case No 1257/2004

Delivered:

In the matter between

FRANCOIS JOHANNES BUDRICKS Applicant

and

THE LAW SOCIETY OF

THE CAPE OF GOOD HOPE Respondent

SUMMARY: Application for the readmission of the applicant as an attorney – applicant previously struck off the roll for misappropriation of trust moneys – court holding that he had not discharged the onus of proving that he is a fit and proper person to be readmitted.

CORAM: JONES & LEACH JJ

JUDGMENT

JONES J:

[1] This is an application for the applicant’s readmission as an attorney of this court.

[2] The applicant was admitted as an attorney of the Supreme Court of South Africa (Transvaal Provincial Division) on 19 February 1985. He was enrolled as an attorney in the Eastern Cape Division on 16 January 1987. Thereafter he practised as an attorney in Port Elizabeth until 5 December 1996. On that date the Law Society of the Cape of Good Hope, the intervening respondent, was granted an interdict prohibiting the applicant from practising pending an application to strike him off the roll of attorneys. Shortly thereafter the applicant was sequestrated. A striking off application was launched on 10 June 1997, but it was not heard and disposed of until 20 July 2000. The delay was caused primarily by the performance of a forensic audit of the applicant’s books at his instance, which was in turn delayed by the unexplained disappearance of some of the books of account and records after they were removed by the Law Society.

[3] The striking off application eventually came before Jennett and Froneman JJ on 19 June 2000. On 20 July 2000 that court issued an order suspending the applicant from practising as an attorney for a period of two years. The suspension order was itself suspended for a period of three years on certain conditions. An application by the Law Society for leave to appeal to the Supreme Court of Appeal was dismissed. The applicant set about resuming his practice, and with that end in view brought an application against the Law Society for an order requiring it to furnish him with a fidelity fund certificate. Despite opposition from the Law Society this court granted the application (see the judgment in Budricks v Law Society of the Cape of Good Hope [2001] 1 All SA 112 (E)). The applicant resumed practice as an attorney in Port Elizabeth in December 2000 and practised for some 18 months thereafter. On 23 January 2002 he successfully applied for his rehabilitation under the Insolvency Act 24 of 1936.

[4] In the meantime the Law Society submitted a petition to the Chief Justice for leave to appeal to the Supreme Court of Appeal against the suspension order made by Jennett and Froneman JJ on the ground that it treated the applicant too leniently. The Law Society was given leave to appeal. The matter came before the Supreme Court of Appeal in May 2002. Judgment was delivered on 24 May 2002 (see Law Society of the Cape of Good Hope v Budricks 2003 (2) SA 11 (SCA). The Supreme Court of Appeal upheld the appeal with costs on the scale as between attorney and client, set aside the court a quo’s order suspending the applicant from practising, and ordered instead that his name be struck off the roll of attorneys, with appropriate ancillary relief. The applicant then ceased to practise.

[5] The applicant issued the notice of motion presently before us on 15 September 2004. In it he applied for his readmission as an attorney. The application is opposed by the Law Society on the ground that the applicant has not adduced ‘credible evidence from which it can be concluded that he has discharged the onus of establishing on a balance of probabilities that he has reformed himself and that he is now a fit and proper person to be readmitted as an attorney’.¹

[6] The readmission and re-enrolment of an attorney is dealt with by section 15(3) of the Attorneys Act 53 of 1979 which provides:

A court may, on application made in accordance with this Act, readmit and re-enrol any person who was previously admitted and enrolled as an attorney and has been removed from or struck off the roll, as an attorney, if-

(a) such person, in the discretion of the court, is a fit and proper person to be so readmitted and re-enrolled; and

(b) the court is satisfied that he has complied with the provisions of subsection (1)(b)(ii).

I am satisfied that he applicant has complied with the provisions of section 15(3)(b). This court may therefore, in its discretion, order his readmission and re-enrolment if he can satisfy the court that he is a fit and proper person as required by section 15(3)(a). The onus is squarely on him to satisfy us on a balance of probabilities that he can be trusted in the future if he is readmitted. In Law Society, Transvaal v Behrman 1981 (4) SA 538 (A) Corbett JA said at 557A-C:

Where a person whose name has previously been struck off the roll of attorneys on the ground that he was not a fit and proper person to continue to practise as an attorney applies for his re-admission, the onus is on him to convince the Court on a balance of probabilities that there has been a genuine, complete and permanent reformation on his part; that the defect of character or attitude which led to his being adjudged not fit and proper no longer exists; and that, if he is readmitted, he will in future conduct himself as an honourable member of the profession and will be someone who can be trusted to carry out the duties of an attorney in a satisfactory way as far as members of the public are concerned (see Lambert v Incorporated Law Society 1910 TPD 77; Ex parte Wilcocks 1920 TPD 243; W v Incorporated Law Society, Transvaal 1953 (4) SA 189 (T) at 191A - B; Kudo v Cape Law Society 1977 (4) SA 659 (A) at 676A - E). In Kudo v Cape Law Society 1972 (4) SA 342 (C), which was the applicant's first (and unsuccessful) application for re-admission, VAN WINSEN J stated (at 345H - 346A):

"In considering whether this onus has been discharged the Court will have regard to the nature and degree of the conduct which occasioned applicant's removal from the roll, to the explanation, if any, afforded by him for such conduct which might, inter alia, mitigate or even perhaps aggravate the heinousness of his offence, to his actions in regard to an enquiry into his conduct and proceedings consequent thereon to secure his removal, to the lapse of time between his removal and his application for reinstatement, to his activities subsequent to removal, to the expression of contrition by him and its genuineness, and to his efforts at repairing the harm which his conduct may have occasioned to others. These considerations are not necessarily intended to be exhaustive and the weight to be attached to them must naturally vary with the circumstances of the case. They all, however, relate to the assessment of the applicant's character reformation and the chances of his successful conformation in the future to the exacting demands of the profession he seeks to re-enter."

As Cloete JA explained in para 37 of his dissenting judgment² in Swartzberg v Law Society of the Northern Provinces (as yet unreported, 83/2007 [2008] ZASCA 36 (March 2008)), the discretion conferred by section 15(3)(a) involves a value judgment which requires weighing up all the relevant facts referred to in the Kudo judgment approved and quoted above (which should not be regarded as exhaustive), and even if the applicant clears that hurdle the court still has a discretion to refuse readmission if that is what the good administration of justice requires (per Ackermann J, Ex parte Aarons, Law Society intervening 1985 (3) SA 286 (T) 290C-G).

[7] How does an applicant redeem himself where his integrity has been found wanting in serious respects, where he has made himself guilty of dishonest and unprofessional conduct, and where he has evinced defects of character which show beyond question that he was not a fit and proper person to be an attorney? The answer can only be by adducing credible evidence of sufficient quality to ‘convince’ the court of the applicant’s ‘genuine, complete and permanent reformation,’ that ‘the defect of character’ which caused the transgression ‘no longer exists,’ and ‘that he can in the future be trusted to carry out the duties of an attorney in a satisfactory way as far as members of the public are concerned’ (to use the language of Corbett JA supra in Behrman’s case). The onus must be discharged by the ordinary civil standard of proof on a balance of probabilities, but because the applicant has already demonstrated by the way he conducted his attorney’s practice in the past that he was not a fit and proper person to be an attorney, the evidence of his reformation must indeed be of good enough quality to be truly convincing. As Ponnan JA put in paragraph 32 of the majority Swartzberg judgment supra:

Where a person is struck-off the roll for the kind of conduct encountered here [theft of trust moneys], he must realise that his prospects of being re-admitted to what after all is an honourable profession, will be very slim indeed. Only in the most exceptional of circumstances, where he has worked to expiate the results of his conduct and to satisfy the court that he has changed completely, will a court consider readmission at all (Visser v Cape Law Society 1930 CPD 159 at 160).

[8] The only evidence of reformation came from the applicant himself. He gave evidence of his financial reliability since May 1996 when he was first interdicted from practising. He stated that while he was permitted to practise for the 18 month period between his suspension and the order of the Supreme Court of Appeal striking him off the roll, he was required to submit his books for an auditor’s report every three months, that the reports showed no irregularity, and that the Law Society saw fit to renew his fidelity fund certificate during that period. Since he was struck off he has carried on business selling timeshare in leisure property, initially as an agent, and thereafter on his own account. Once again, there is no suggestion of any financial irregularity. Furthermore, he has administered a few deceased estates to the satisfaction of the Master of the Supreme Court. After relating the above, his affidavit alleged remorse and reformation in the following terms:

18. I regret the conduct which led to my suspension as an attorney, striking from the roll and sequestration. I have admitted that I had done wrong. I have had to accept the consequences of my actions. I will not do anything which may remotely place me at risk of similar censure in the future.

19. I have had to endure severe financial restraints since December 1996, when I was interdicted from practising, and I have had to budget very carefully in order to survive. Apart from my wife’s assistance, I also lived off an inheritance from my late father (who passed away during November 1997), of approximately R150 000.00 during this period.

20. I furthermore wish to point out . . . that I accept that I did wrong at the time of my being interdicted from practice, and submit further that I never challenged the findings of this Honourable Court on appeal to the Supreme Court of Appeal.

21. I further submit that I have practised for 18 months from December 2000 to May 2002, and that the books of my practice during this time indicate no irregularities whatsoever, and that I was a fit and proper person to practise during this period and the Law Society issued me with fidelity fund certificates from time to time as set out above.

22. I humbly submit that I have suffered greatly as a result of my own doing, and, save for the period of 18 months referred to above, I have not practised as an attorney for seven years. This has caused me great financial hardship, as well as much embarrassment, since my suspension and striking off received publicity in the press.

23. I have learnt a lesson the hard way and submit that I am a fit and proper person to be readmitted as an attorney, as I was also able to demonstrate during the period December 2000 to date. I have furthermore kept abreast of recent developments in the law by reading De Rebus on a monthly basis, as well as each month’s volume of the law reports.

24. I further submit that I satisfy all the other requirements necessary to be admitted as an attorney, since I was previously admitted as such in this Honourable Court.

25. I further submit that I will conduct myself honestly and honourably in the future and have no objection to the Law Society inspecting my books as often as they deem necessary, in order to satisfy themselves that I am indeed reformed.

[9] Mr Ford argued for the Law Society that the applicants’ ipse dixit is insufficient for the discharge of this onus. His argument was not that an applicant’s evidence, standing alone, is never enough to discharge the onus. But he submitted that all that the applicant has put up in this case is a protestation of contrition, and that more than that is required in the circumstances. Whether or not this argument is valid depends upon the quality and sufficiency of the applicant’s evidence as set out above, measured against the nature, extent and gravity of the conduct leading to his striking off, his explanation for it, the conduct of his case in the striking off proceedings, and his conduct thereafter. Also relevant is his present attitude to his misconduct, and the other considerations outlined by Van Winsen J in Kudo’s case supra.

[10] The conduct which led to the application for striking off included misappropriation of trust funds, the irregular drawing of trust cheques, and the failure to invest trust moneys in an interest bearing account as required by section 78(2A) of the Act. Its seriousness is left in no doubt by the terms of the judgment in the Supreme Court of Appeal (per Hefer JA at 17I-18C paragraph 11 of the judgment supra):

. . . I take a much more serious view of the respondent's conduct [than the court a quo]. Not only did he treat the board's [his client’s] instructions with disdain but in the process committed about the worst professional sin that an attorney can commit by misappropriating trust funds. He did so methodically over a substantial period of time and in respect of large sums of money. It does not avail him to say that he merely misused the Housing Board's money to pay fees he had earned or in anticipation of fees he would still have earned; for it is quite clear that he regarded his agreement with the board as a stroke of good fortune enabling him to establish a lucrative practice amongst a large group of people entirely free of risk by using the board's money as a handy source for the prompt payment of his fees. Moreover, we must not lose sight of the fact that he misused public money earmarked for the upliftment of the poor; nor that he maintained all along that he had done no wrong until he accepted the Court a quo's findings in opposing the application for leave to appeal, and that there was not a word of contrition in his opposing affidavit. Bearing in mind further that the possibility of a repetition of his conduct if he were to be allowed to continue practising has not been excluded, the only appropriate penalty will, in my view, be to strike him from the roll despite the dire consequences of such a step to him.

To make matters worse for the applicant, the picture presented in this application is more serious than in the striking off application. The trial court in that application was not able to conclude on the papers that any person had been impoverished by the applicant’s misconduct, and this finding of fact was not disturbed on appeal. That was the basis on which the Supreme Court of Appeal measured the extent of his wrongdoing for the purposes of that application. In this application the Law Society made the positive averment that the Attorneys’ Fidelity Fund had by 20 May 2006 paid claims in excess of R2 000 000-00 arising out of the applicant’s theft of trust funds, and alleged therefore that his clients in fact suffered substantial loss as a result of his disgraceful conduct. These allegations are not denied or placed in issue. In reply, the applicant merely refers to paragraph 9 of the Supreme Court of Appeal’s judgment in which the learned judge of appeal commented that although none of the applicant’s clients had been shown to have suffered any loss, his conduct was nevertheless reprehensible, as if that remark absolved him of any duty to meet a further allegation based on new facts, i.e. substantial claims by clients. The applicant also refers to the loss of some of his books of account, without however suggesting that this could somehow account for these claims. His inability to deny that his clients indeed suffered this loss, and his failure to deal with the effect thereof on his application for readmission does nothing to advance his cause. Mr Van der Linde for the applicant submitted that it is not proper at this stage to retry the applicant on further charges. That argument misses the point. The applicant is not being retried. He is seeking to convince the court that he is a fit and proper person to be readmitted. By this time there is further evidence of the extent of the damage caused by his previous misconduct. His failure to give his reaction to it and to show how he has come to terms with the consequences of his misconduct on others raises the question whether it can really be said that he has a full understanding of his wrongdoing. Can it really be said with conviction that the public will not once again be seriously prejudiced if he is allowed to resume practice?

[11] The applicant now acknowledges that his conduct was wrongful and culpable. That is undeniably so. He not only misappropriated trust moneys earmarked for the upliftment of the poor. The trial court also found as a fact that he had administered trust funds in a reckless and cavalier manner without any regard for his duties as an attorney. The explanation that he offered before was that he had done no wrong because he would have been entitled to debit the amounts as fees against other persons after they had been paid the amount due to them out of the trust moneys. This explanation does not help him at all. Nor does the conduct of his defence in the striking off proceedings. As Hefer JA put it (at 16F-H paragraph 7), he ‘insisted all along that he had only done what he was entitled to do. The nature of his conduct and his protestations of innocence rendered a repetition a distinct possibility’. It was not until the application for leave to appeal (which the applicant opposed in person), when he was specifically asked by Froneman J whether he felt any remorse, that he gave the expression of contrition which is repeated in this application.

[12] In dealing with the facts of this case the Supreme Court of Appeal stressed the importance of the protection of the public, and postulated at the time of the appeal that a repetition of this kind of conduct by the applicant could not be ruled out. Viewed against this possibility, his attempt in the past to justify his misconduct, and his suggestion that it was less blameworthy, assumes critical significance. There is force in Mr Ford’s argument that it was necessary for the applicant to satisfy us that he had come to a proper appreciation of the gravity of his misconduct, and that he had insight into the defects in his character and make-up which caused him to behave as he did. It is a necessary part of personal rehabilitation that he now understands how and why it all happened. Only once he does so can he take meaningful steps to ensure it does not happen again. Nothing of this nature is to be found in the affidavits before us. Mr Ford is correct that the applicant’s evidence amounts to no more than empty protestations of contrition and reformation, which are not backed up by any circumstantial facts and detail to enable us to evaluate whether or not they are genuine. The material portion of the applicant’s affidavit is quoted in paragraph 8 of this judgment. It is interesting to contrast the adequacy of the explanations and expressions of contrition and remorse therein contained with the detail given in the applicant’s affidavit in Swartzberg v Law Society of the Northern Provinces supra. Cloete JA’s dissenting judgment reproduces passages from that applicant’s affidavit which go to greater lengths than the affidavit before us in an attempt to show that that applicant had an awareness of the enormity of what he had done, of its effect on his clients and on the reputation of the legal profession, and how he came to gain insight into the causes of his behaviour and why it was not justifiable. In addition, there were supporting affidavits from persons who knew him well enough to testify to his character and to the changes they observed in his attitude. They were sufficient to persuade Cloete JA that the applicant had reformed. But not sufficient to persuade the majority. The majority considered that significantly more was required of an applicant before he could be said to have discharged the onus. Ponnan JA expressed the majority view of what was required of an applicant in paragraph 22:

The fundamental question to be answered in an application of this kind is whether there has been a genuine, complete and permanent reformation on the appellant’s part. This involves an enquiry as to whether the defect of character or attitude, which led to him being adjudged not fit and proper, no longer exists. (Aarons at 294H.) Allied to that is an assessment of the appellant’s character reformation and the chances of his successful conformation in the future to the exacting demands of the profession that he seeks to re-enter. It is thus crucial for a court confronted with an application of this kind to determine what the particular defect of character or attitude was. More importantly, it is for the appellant himself to first properly and correctly identify the defect of character or attitude involved and thereafter to act in accordance with that appreciation. For, until and unless there is such a cognitive appreciation on the part of the appellant, it is difficult to see how the defect can be cured or corrected. It seems to me that any true and lasting reformation of necessity depends upon such appreciation.

Amongst the matters to which a court must have regard are the nature and gravity of the conduct which occasioned the appellant’s removal from the roll and the explanation given by him for such conduct (Behrman at 558G). The moral reprehensibility involved in the appellant’s conduct is self-evident. The nature of the appellant’s conduct involves very serious dishonesty and deception. He did not succumb to a sudden temptation and his fall from grace was not in consequence of an isolated act. His was deliberate and persistent dishonesty for personal financial gain over a protracted period.

This is also a case of a persistent course of seriously dishonest conduct over a period of many months, rather than one of succumbing to sudden temptation to commit an isolated act. It is also, like Swartzberg, a case of an applicant seeking readmission relatively shortly after being struck off, without first demonstrating a cognitive appreciation of his misconduct and without showing remorse until this was pointedly taken up with him by a judge. Again, Ponnan JA’s remarks (paragraphs 25 and 26) are appropriate:

To his credit the appellant has expressed contrition and repentance. And whilst those expressions appear to be genuine and are usually a sound indicator of reformation or rehabilitation, they do not without more prove or establish such reformation or rehabilitation in this case. It is indeed so that the appellant’s name was struck from the roll on 13 August 1999 and from his perspective eight long years have since passed. That ordinarily would have weighed heavily with a court confronted by an application of this kind. In this case, however, on the appellant’s own version it was only after the judgment of Daniels J that he realised that his acts of dishonesty demonstrated a material defect of character. It thus took almost six years for the appellant to come to terms with the fact that he had behaved in a scandalous and dishonest fashion. Even then it was only after scathing criticism by a judge who refused his application for readmission that the scales finally fell from his eyes. And yet, only some 13 months were to pass before he deposed to the founding affidavit in this matter. Given the seriousness of his misdeeds and his obduracy in coming to terms with them, this can hardly be regarded as sufficient time for the kind of critical introspection and reflection that must obviously precede an application of this kind.

In the light of the extent of the moral reprehensibility involved, the absence of introspective evaluation and the haste with which the application was launched, I entertain substantial reservations as to whether the appellant has, even as yet, properly and correctly identified the defects of character and attitude involved in his misdeeds.

[13] I have pointed out certain similarities between this application and the unsuccessful application in the Swartzberg appeal. I have also suggested that the applicant in this case placed even less information before the court in this case than did the unsuccessful applicant in the Swartzberg appeal. Having done so, I must make it clear that no two cases are completely comparable, and that the attitude of the Supreme Court of Appeal to the facts of the Swartzberg matter is in no more than a guide to the attitude of this court to the facts of this case. I recognize that it is necessary to consider whether the onus in this application has been discharged in the light of its own particular facts and circumstances. In summary, the important considerations in this case are the seriousness of the professional misconduct committed by the applicant, the period of time over which he transgressed, his initial persistence in justifying what he had done, the real possibility of a repetition of dishonesty referred in the Supreme Court of Appeal’s judgment dated 24 May 2002, the absence of any evidence from the applicant of the kind of introspective self-examination required for proper remorse and reformation, the absence of any supporting evidence of a change in attitude, and the time lapse between the misconduct, the striking off order and the application for readmission. Bearing these factors in mind, the case put up by the applicant in my opinion falls short of being sufficiently compelling to convince a reasonable mind that the applicant should be readmitted. The standards of the attorneys’ profession are exacting. This court is now asked to give the applicant its stamp of approval by declaring that he is a fit and proper person who, despite what happened before, can now be trusted to measure up to those standards in the future. The information he has placed before the court is inadequate for that purpose. The applicant has not discharged the onus of convincing the court of his genuine, complete and permanent reformation.

[14] The application is dismissed with costs. There is no reason to depart from the usual order in these applications that those costs be on the scale as between attorney and client.

RJW JONES

Judge of the High Court

21 April 2008

LEACH J I agree.

LE LEACH

Judge of the High Court

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