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Law Societies of the Cape of the Good Hope v McPerson and Others (13855/08) [2009] ZAWCHC 154 (15 October 2009)

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IN THE HIGH COURT OF SOUTH AFRICA

(WESTERN CAPE HIGH COURT, CAPE TOWN)

CASE NO: 13855/08

In the matter between:

THE LAW SOCIETY OF THE CAPE OF GOOD HOPE Applicant


and



ROBERT ANDREW McPHERSON 1st Respondent

MARTIN WILLIAM DE VILLIERS SHEARD 2nd Respondent

PHILLIP DU TOIT STEYN 3rd Respondent

JONATHAN CHRISTOPHER CLEMENT STEYTLER 4th Respondent



JUDGMENT: 15/10/2009 VAN REENEN, J:


1] The applicant, which is hereinafter referred to as the Law Society, is in terms of the provisions of the Attorneys Act, No 53 of 1979 (as amended) (the Attorneys Act) vested with, inter alia, disciplinary jurisdiction over attorneys, notaries and conveyancers practising in the Western Cape Province.




2] The first-, second-, third- and fourth respondents have at all material times practised as attorneys and conveyancers in a professional company as contemplated in section 23 of the Attorneys Act. The original firm in which they practised namely Buchanan Boyes Incorporated is now known as Smith Thabata Buchanan Boyes Incorporated. For the sake of convenience the firms in which the respondents have and are practising at present shall hereinafter be referred to as Buchanan Boyes.




3] The four respondents and Mr Andre Louis Nesbitt Berrange (Berrange) were directors of and constituted the Executive Committee (the Exco) of Buchanan Boyes. The Exco was a committee of directors (Cf Oscar Britzius: South African

Company Secretarial Practice, 614/5) of Buchanan Boyes to whom their co-directors had entrusted the task of managing its affairs.




4] Buchanan Boyes until 2005 operated as semi-autonomous branches located at Cape Town, Wynberg, Claremont, Bellville, Fish Hoek, Table View and Somerset West, but a centralised management structure was introduced later. The first respondent Mr Robert Andrew McPherson (McPherson) has been in charge of the Wynberg-, the second respondent Mr Martin De Villiers Sheard (Sheard) of the Claremont-, and the fourth respondent Mr Jonathan Christopher Clement Steytler (Steytler) of the Bellville branches of Buchanan Boyes respectively, and Berrange was in charge of the Cape Town branch. It appears to be common cause that the function of Berrange, who in the papers is described as "the de facto leader" of the firm, was predominantly a marketing one and he, in the words of the third respondent Mr Philip Du Toit Steyn (Steyn), "had little time to practise law".




5] Berrange is no longer a director of Buchanan Boyes. In a judgment handed down on 9 June 2005 by Desai, J (with whom HJ Erasmus J concurred) pursuant to an application instituted in this court by the Law Society on 4 May 2005, he was suspended from practising as an attorney for a period of two years on the basis of a finding that he had made himself guilty of unprofessional conduct. That judgment has been reported as Law Society, Cape of Good Hope v Berrange 2005(5) SA 160 (C) (the Berrange case). A timeously brought application for leave to appeal was refused on 30 May 2007 and a petition to the President of the Supreme Court of Appeal for leave to appeal, suffered a similar fate on 21 August 2009.

6] The gravamen of the Law Society's complaint against Berrange was that he, representing Buchanan Boyes, entered into and implemented agreements with Seeff Residential Properties (Seeff) on 16 December 1999 and Pam Golding Agencies (PGA) on 9 February 2000 respectively, (the marketing agreements) in conflict with the provisions of Rule 14.6.1 which had, during 1976 been promulgated in terms of the provisions of section 74(1) of the Attorneys Act. The said rule, as amended on 24 April 1998, provides as follows: -

"14.6 Sharing of fees

14.6.1 A member shall not, directly or indirectly, enter into any express or tacit agreement, arrangement or scheme of operation, the result or potential result whereof is -

14.6.1.1 to secure for the member professional work solicited by an unqualified person; ..."

7] The court in Berrange's case, at 173 E - G, found that the most probable inference that could be drawn from the evidence was that he had devised and implemented a scheme in terms whereof Buchanan Boyes rewarded Seeff and PGA in amounts of R271


500 and R273 000 respectively for the referral by

them of conveyancing work to it and that such conduct amounted to the securing of professional work solicited by unqualified persons.




8] I find myself in full agreement with the submission of Mr Gauntlett SC (who with Mr Dickerson SC and Advocate Janisch) appeared for the respondents, that the finding that Berrange had made himself guilty of unprofessional conduct was predicated on, not only the concluding of such agreements per se, but a composite scheme which also included the conclusion of secondary agreements or the reaching of understandings with the two estate agencies in question as regards the nature and purpose of the payments to be made to them (hereinafter referred to as the secondary agreements/arrangements).




9] By contrast, the Law Society in the present proceedings seeks the suspension of the respondents from practising as attorneys for a period of two years, solely on the basis that their complicity in the conclusion of the said agreements per se, constituted an infringement of the provisions of Rule 14.6.1 and constituted unprofessional, dishonourable and unworthy conduct. I am also in agreement with the submission of the respondents' counsel that it would be impermissible to simply impute Berrange's professional misconduct to their clients and that it needs to be shown, on a balance of probabilities, that they individually made themselves guilty of conduct of such a nature (See: KwaZulu-Natal Law Society v Davey and Others 2009(2) SA 27 (N) at paragraph 130).




10] Because of the absence of any direct evidence thereanent, the Law Society has been constrained to accept that the respondents, unlike Berrange, were not directly involved in the conclusion of any secondary agreements/arrangements with Seeff and PGA and that the relief sought against them may be granted only if it could be found that the securing of professional work for Buchanan Boyes solicited by unqualified persons, was the result or potential result of the conclusion of the marketing agreements per se.




11] Both of the agreements concluded between Seeff (represented by Andrew Smith) and PGA (respresented by Andrew Golding) and Berrange bear the heading "Marketing Agreement" and are identical save that the agreement with Seeff is backdated to 16 December 1999 and the one with PGA to 9 February 2000. The terms thereof are as follows: -


"WHEREAS


A. Seef* conducts the business of operating Estate Agencies ("the Agency") in the Cape Peninsula.


B. Buchanan Boyes is desirous of entering into a business relationship with the Agency in terms whereof the Agency will actively promote, market and advertise the professional services Buchanan Boyes provides. (sic)

NOW THEREFORE IT IS AGREED AS FOLLOWS

1. The Agency shall, inter alia,:

1.1. permit Buchanan Boyes to incorporate its name in certain appropriate advertisements placed by the Agency on behalf of clients;

1.2. display and distribute Buchanan Boyes' Information brochures on property and conveyancing related topics.



[*Pam Golding Properties in the other Agreement]

1.3. permit Buchanan Boyes to host Training Sessions and to arrange lectures for the Agents employed by the Agency from time to time and/or its clients.

1.4. Where possible and if so requested incorporate the name of Buchanan Boyes in directories and or other Marketing material distributed to its clients.



2. Buchanan Boyes shall:

2.1. In consideration for the promotion and marketing of their professional services, disburse to the Agency a suitable consideration plus VAT to cover the cost of the services and facilities provided above, which disbursement shall be calculated on commercial principles and shall relate to the support received by Buchanan Boyes, as well as the market exposure enjoyed by Buchanan Boyes both directly and indirectly as a result of the services/facilities referred to in 1 above.

2.2. Reach agreement as to the consideration paid in terms of 2.1 above with the Agency from time to time."


12] The background circumstances probably present to the minds of the representatives of Seeff and PGA and Buchanan Boyes respectively, when they contracted the marketing agreements; explain the genesis and purpose thereof (See: Coopers & Lybrand and Others v Bryant 1995(3) SA SA 761 at 768 B - C); and may permissibly be taken into account in construing the meaning thereof, (See: Van der Westhuizen v Arnold 2002(6) SA 453 (SCA) at paragraph 23) are the following:

  1. Close personal and business relationships existed between Seeff and Buchanan Boyes' Wynberg branch and between PGA and Buchanan Boyes' Claremont branch prior to and at the time the marketing agreements were concluded and implemented.

  2. Seeff and PGA at all material times operated as estate agents as defined in the Estate Agency Affairs Act, No 112 of 1976 (as amended) in that they, for the acquisition of gain, held themselves out as being available to inter alia, sell or purchase immovable property on the instructions of or on behalf of clients.

  3. In terms of the provisions of section 2(1) of the Alienation of Land Act, No 68 of 1981 any agreement for the alienation of land is invalid unless embodied in a deed of alienation signed by the parties thereto or their agents acting on written authority.

  4. For reasons that are self-evident, estate agents are ordinarily involved in the completion of (mostly pre-printed) deeds of alienation as well as the signing thereof by sellers and purchasers.

  5. The transfer of ownership in land from a seller to a purchaser pursuant to a concluded deed of alienation is in the Republic of South Africa required to be effected by means of registration in the Deeds Office for the area in which the property is situate.

  6. It is required that deeds of transfer should be in a form prescribed in the regulations promulgated in terms of the provisions of the Deeds Registries Act, No 47 of 1937 and that they must be prepared and executed by a conveyancer i.e. an attorney who, in terms of section 18 of the Attorneys Act, has been admitted to practice as such by a judge of the High Court after having passed a practical examination.

  7. Buchanan Boyes viewed itself as a predominantly conveyancing practice and sought to promote itself as such, in circumstances where, because of increasing competition which coincided with the advent of mortgage bond originators, pressure was being placed on conveyancing attorneys to participate in joint marketing and other activities for the generation of business.

  8. The seller of land is legally obliged to transfer ownership thereof to the purchaser at his or her own cost (See: Aymard v Webster 1910 TPD

123 at 128; Blundell v McCawley 1948(4) SA 473 (W) at 478) and is entitled to nominate the conveyancer who should attend thereto even if in terms of the provisions of the deed of alienation the purchaser is bound to pay the conveyancer's fees and disbursements (See: James v Liquidators of the Amsterdam Township Co


1903 TS 653 at 656).

• In deference to that right the Estate Agency Affairs Board, established under section 8(b) of Act 112 of the Estate Agency Affairs Act, on 24 December 1992, published a Code of Conduct under Government Notice R3415 in terms whereof it, inter alia, decreed that failing good and sufficient cause, no estate agent shall indirectly or directly solicit, encourage, persuade or influence any party or potential party to any pending or completed transaction, to utilise or refrain from utilising the services of a particular attorney, conveyancer or firm of attorneys.




13] The effect of the amendment of Rule 14.15 by Rule 14.6.1 was that, as from 24 April 1998, its ambit was widened by prohibiting also the conclusion of any agreement, arrangement or scheme of operation the potential result whereof is to secure professional work for an attorney solicited by an unqualified person (See: Berrange's case at169C -D, paragraph 22 at page 25).




14] Mr Gautchi SC (who with Mr Sawyer) appeared for the Law Society, submitted that in the context of Rule 14.6.1 the concept "solicit" bears its ordinary dictionary meaning which, inter alia, is "to make a request, application or entreaty to (a person for business, support etc)" (Collins English Dictionary (Complete and Unabridged), Sixth Edition, 2003). Mr

Gauntlett, in turn, submitted that the ordinary dictionary meaning of "solicit" is sufficiently wide to bring even conventional marketing and advertising practices of attorneys within the ambit of the prohibition embodied in Rule 14.6.1 and that as such a result could not have been intended, because those marketing and advertising practices as have already received the Law Society's imprimatur would then be encompassed thereby, it should be assigned a narrower meaning compatible with the context namely, conduct amounting to what is commonly known as touting. Whilst the concept "solicit" could clearly not have been intended to encompass approved advertising practices, and the rule prohibiting touting, eo nomine, had not been re-enacted, the inference that the provisions of the amended rule 14.6.1 were intended to be as restricted as submitted by counsel, is not warranted. I say so because its reach was clearly amplified so as to also prohibit any agreement etcetera, the potential result whereof would be to to secure work for an attorney solicited by a lay person.




15] As was accepted by the court in Berrange's case, at 172 J - 173 A, the Law Society, in order to succeed in obtaining the relief claimed against the respondents, needs to do no more than show that the contents of the marketing agreements were such that they had the potential of incentivising Seeff and PGA to refer conveyancing work to Buchanan Boyes. There admittedly, is no express provision in the marketing agreements obliging Seeff or PGA to solicit professional work for Buchanan Boyes, but that they had the potential of so incentivising them may be proved inferentially, if that is the most plausible inference that can be drawn (See: Cooper and Another NNO v Merchant Trade Finance Ltd 2000(3) SA 1009 (SCA) at paragraph 7).

16] As is apparent from paragraph B of the preamble to the marketing agreements, the nature of the "business relationship" that Buchanan Boyes envisaged establishing with Seeff and PGA was not only that they should individually promote, market and advertise the former's professional services, but it is categorically stated that they had to do so "actively" ie. "with effective or vigorous action; energetically, busily; briskly, nimbly" (See: The Oxford English Dictionary, Volume 1, sv. "activity"). Save perhaps as regards the distribution of Buchanan Boyes' information brochures on property and conveyancing-related topics, the predominantly passive obligations assumed by Seeff and PGA in clauses 1.1 to 1.4 thereof namely, permitting the incorporation of Buchanan Boyes' name in "appropriate" advertisements placed on behalf of clients; the displaying of Buchanan Boyes' brochures; the permitting of Buchanan Boyes to host and arrange training sessions for the agencies' agents and/or clients; and the incorporation of the name of Buchanan Boyes in directories and other marketing material distributed to the said agencies' clients, "if possible and requested," are strikingly incongruent with the active nature of the relationship envisaged in the preamble.




17] The obligations of Buchanan Boyes under the marketing agreements are delineated in clause 2 thereof. Clause 2.1 sets out the basis of its liability to Seeff and PGA for the payment of a "suitable consideration" as a quid pro quo for the rendering of the services/facilities enumerated in clause 1, and clause 2.2 places a duty on Buchanan Boyes to reach agreement with Seeff and PGA individually, from time to time, as regards the consideration to be paid to them.

18] Mr Gautschi submitted that on a proper construction of the wording thereof, clause 2.1 conveyed that the "suitable consideration" referred to therein was to be directly related to the volume of work received by Buchanan Boyes from Seeff and PGA respectively. That submission was predicated thereon that although, on a superficial reading thereof, the said clause may indicate that the consideration payable by Buchanan Boyes was merely to cover the costs of the services/facilities enumerated in clause 1, the remainder of its contents negates that very concept. He submitted that the concept "to cover the cost" is reasonably susceptible of only one meaning namely, that whatever costs were incurred by Seeff and PGA respectively, would be reimbursed and that as the quantum thereof could be determined in absolute and finite terms, no room is left for the exercising of any discretion. In stark contrast thereto, the remainder of clause 2.1 by providing for "a suitable consideration plus VAT", "calculated on commercial principles" and "shall relate to the support received by Buchanan Boyes and the market exposure enjoyed by Buchanan Boyes both directly and indirectly as a result of the services/facilities referred to in 1 above", introduced a discretionary yardstick difficult to reconcile with the notion of a full reimbursement of costs.




19] The amount of compensation payable by Buchanan Boyes to Seeff and PGA respectively is in clause 2.1 signified as "consideration" (when viewed from the latters' perspective?) and as a "disbursement" (when viewed from the former's perspective?). It provides that such consideration is to be calculated "on commercial principles", but the ambit of that rather imprecise concept is narrowed down somewhat by the requirement that the quantum thereof shall "relate" to two specific criteria, namely on the one hand, the support received by Buchanan Boyes and on the other hand, the market exposure enjoyed by it, both directly and indirectly, as a result of the services/facilities to be provided by Seeff and PGA respectively. In the context, the inference that the concept "relate" intended to signify a direct association between the obligation to pay such consideration and compliance by Seeff and PGA with the specified criteria, in my view, is inescapable (See: Collins English Dictionary sv. "relate").




20] As the second of the aforementioned criteria entailed a subjective assessment of the extent to which Seeff and PGA, in the discharge of their clearly delineated contractual obligations, enhanced the "market exposure" of Buchanan Boyes, directly or indirectly, the need for the inclusion of the first criterion is difficult to justify on any basis other than that payment of consideration was envisaged for the rendering of services/facilities additional to those specifically enumerated in paragraph 1 of the marketing agreements. I do not agree with the submission that such a conclusion would amount to an unjustifiable leap of logic.




21] Bearing in mind that clause 2.1 dealt with the consideration payable by Buchanan Boyes to Seeff and PGA for the promotion and marketing of its professional services, the reference therein to the "support received" by it, when viewed against the background circumstances which have been set out in paragraph 10 above, in my view, leads to the ineluctable conclusion that it was envisaged that the quantum of the consideration payable would be dependent on the number of transactions in which the said firms acted as estate agents and in which Buchanan Boyes was nominated by their clients as the conveyancing attorneys. That that is what was envisaged, is fortified by the fact that on the facts enumerated in Berrange's case, that is exactly how the parties thereto understood and implemented the marketing agreements. In the circumstances it is unsurprising that Berrange - the architect of the scheme - in an affidavit filed in opposition to the application for his suspension, articulated his understanding of how the quantum of the compensation payable by Buchanan Boyes would be arrived at, in the following manner -

"The reference to "commercial principles" meant that we would pay amounts related to the worth to our company of the estate agency's promotional and marketing efforts on our behalf. The most obvious tangible measure of effectiveness would be the extent to which sellers of properties through the estate agency appointed us as conveyancers, and this would naturally influence the amount of the payments."


22] The introduction of the phrase "or potential result" in Rule 14.6.1 was self-evidently intended to obviate the need on the part of the Law Society to show that professional work was actually solicited by an unqualified person for an attorney and to categorise also the mere entering into of any agreement, arrangement or scheme of operation aimed at securing professional work by an unqualified person as unprofessional, dishonourable or unworthy conduct, irrespective of whether such work was actually secured or solicited as a result, but subject to the caveat that such potential result is consonant with what is envisaged by the terms of the agreement, arrangement of scheme of operation.



23] I, in view of the aforegoing, incline to the view that on a proper construction of the provisions clause 2 thereof, the marketing agreements were intended to and were understood to have conveyed that Buchanan Boyes would pay consideration to Seeff and PGA respectively on the basis of the number of transactions handled by them and in which sellers nominated it as the conveyancing attorney.




24] The Law Society in having brought the present proceedings exercised its function as the custodian of the dignity of the attorneys' profession and for the purpose of protecting the public's interests in their dealings with attorneys (See: Law Society, Cape v Koch 1985(4) SA 379 (C) at 396 G; the Berrange judgement at 164 D - E) and in a capacity other than an adversarial one (Cf: Van der Berg v General Council of the Bar of SA [2007] 2 All SA 499 (SCA) at paragraph 12). As such, its sole purpose was to place all the relevant facts before the court with a view to enabling it to exercise its inherent disciplinary powers as supplemented by section 22(1)(d) of the Attorneys Act, if warranted by the facts. It is for that reason that proceedings such as the present have been categorised as sui generis

(See: Cirota and Another v Law Society, Transvaal 1979(1) SA 172 (AD) at 187 H) in which, as was observed by Nugent JA in Van der Berg's case (supra) at 101 e, the conventional approach to the assessment of the evidence in particular instances might require modification and, as was held by the court in Malan and Another v Law Society Northern Provinces 2009(1) SA 216 (SCA) (at 222 B, 225 J - 226 A, the mere denial of allegations is not considered to be sufficient, but must be met head-on even in the absence of underlying support. It is against that backdrop that consideration must be given to Mr Gauntlett's submission that, failing a finding that Rule 14.6.1 imports strict liability, any violation of its provisions should give rise to professional sanctions only where the prohibited conduct was intentional and accompanied by a realisation of its impropriety ie. mens rea (a concept well-known in a criminal law setting).




25] Mr Gauntlett, whilst accepting that the present proceedings are not criminal of nature, contended that an approach similar to that which is adopted in criminal proceedings should be followed, as contraventions of the Law Society's rules of professional conduct (promulgated in terms of Section 74(1)(a) of the Attorneys Act) could have serious ramifications for practitioners and for that reason necessitate the recognition of a presumption against strict liability and in favour of proof of mens rea. As happened in the case of the submission that disciplinary offences are traditionally approached in that manner, that submission too was not supported by references to authorities. The statement that serious consequences follow upon transgressions of the Law Society's rules of professional conduct cannot be supported as they appear to encompass a wide spectrum of misdemeanours: some of which are serious and others less so.




26] The respondents' counsel in their heads of argument referred to a long line of decided cases (eg Incorporated Law Society of the Transvaal v Visse 1958(4) SA115 (T); Incorporated Law Society, Transvaal v Goldberg 1964(4) SA 301 (T) at 304 A -B)in which it had been held that contraventions of section 33 of the Attorneys, Notaries and Conveyencers Admission Act, Act 23 of 1934 - in terms whereof attorneys were obliged to open and keep a separate trust banking account as well as proper books of account - would in future attract strict liability, as constituting oblique support for the proposition that a subjective state of mind akin to mens rea is a requirement for contraventions of the Law Society's rules of professional conduct. If that submission was intended to imply that "mens rea" is required in all instances of professional misconduct, including the present equivalent of section 33 of Act 23 of 1934 namely, section 78(1) of

the Attorneys Act, it is unconvincing in my view. I say so for two reasons. First, the dicta on which reliance is being placed originated in the context of the sounding of warnings by courts to practitioners that any failure to adhere to the statutory requirements as regards the keeping of trust accounts would in future be considered in a serious light. Secondly, that as regards the removal or suspension of attorneys from the roll, the architecture of the then extant legislation has undergone material changes in that Act 23 of 1934 as from 17 June 1964 was amended by the insertion by section 14(1) of Act 60 of 1964 of section 28 bis, the material provisions whereof were re-enacted as section 22 of the Attorneys Act, which after its amendment by section 9(c) of the Attorneys

Amendment Act No 108 of 1989, provides as follows:




"22(1) Removal of attorneys from roll. - (1) Any person who has been admitted and enrolled as an attorney may on application by the society concerned be struck off the roll or suspended from practice by the court within the jurisdiction of which he practises - (d) if he, in the discretion of the court, is not a fit and proper person to continue to practise as an


attorney; or" (underlining provided)




27] What is immediately apparent is that, whereas the Law Society's rules of conduct categorise specified conduct on the part of attorneys as unprofessional, dishonourable or unworthy, the jurisdictional requirement for the striking off or suspension of an attorney in terms of subsection 22(1)(d) of the Attorneys Act, is a finding that he or she is not a fit and proper person to continue to practice as an attorney. It follows logically that the removal or suspension of an attorney from the roll of attorneys does not automatically follow upon a finding that a specific rule of conduct of the Law Society has been contravened, but that a finding of unfitness, which is dependant on the exercise of a discretion by the court, is interposed.




28] It is firmly established that subsection 22(1)(d) of the Attorneys Act contemplates a three-stage enquiry (See: Jassat v Natal Law Society 2000(3) SA 44 (SCA) paragraph 10; Malan and Another v Law Society, Northern Provinces 2009(1) SA 216 (SCA) paragraph 4); Law Society of the Northern Provinces v Mogami and Others (588/08 [2009] ZASCA 107 (22 September 2009)), formulated as follows by Cloete JA in Botha v Law Society, Northern Provinces 2009(1) SA 227 (SCA) paragraph 2,

"First, the court must decide whether the alleged offending conduct has been established on a preponderance of probabilities, which is a factual inquiry. Second, the court must consider whether the person concerned 'in the discretion of the court' is not a fit and proper person to continue to practise. This involves a weighing-up of the conduct complained of against the conduct expected of an attorney and, to this extent, is a value judgment. Third, the court must inquire whether in all the circumstances the attorney is to be removed from the roll or attorneys or whether an order of suspension from practice would suffice."



29] Not only is any reference to fault as a requirement conspicuously absent from the learned Judge of Appeal's formulation, but assuming, as was stated by Holmes JA in S v Qumbella 1966(4) SA 356 AD (at 364 D - G) that "... the fundamental principle of fairness" is the rationale for the requirement of mens rea in criminal cases in order to obviate the punishing of faultless violations, that objective is accommodated in the second and third legs of the enquiry which entail a value judgment and the exercise of a discretion based on a comparison of an attorney's conduct against the conduct expected of an attorney, as well as all the facts and circumstances of a particular case and would encompass, inter alia, a consideration of the presence or absence of blameworthiness. Such an approach to me appears to be the most persuasive explanation for the fact that, despite a thorough search, no decisions reported since the amendments enumerated in paragraph 26 above have been made, no express reference to strict liability for contraventions of the Attorneys Act and its predecessor or of the rules of professional conduct of law societies, could be found. I, accordingly, incline to the view that the notion that something akin to mens rea is required for contraventions of the Law Society's rules of conduct is at odds with the provisions of section 22(1)(d) of the Attorneys Act as enunciated by our courts. Accordingly the respondent's counsels' submissions in that regard stand to be rejected. The submission that mens rea should be a requirement for contraventions of the Law Society's rules of professional conduct and that as they had obtained senior counsel's advice, the respondents lacked any intention because they had no reason to doubt the lawfulness thereof, was predicated on the premise that mens rea is such a prerequisite, but that submission has been deprived of its thrust by my earlier finding that it is not. I, must however, not be understood to be propounding the view that the fact that legal advice had been sought is irrelevant as, in my view, it undoubtedly is a factor that should be taken into account as a factor during the second- and third legs of the enquiry.




30] In terms of the provisions of Section 23(2) of the Attorneys Act the respondents, as admitted attorneys and shareholders in Buchanan Boyes, were automatically directors thereof. That firm had seventeen directors at the time. The most plausible construction on the facts before this court is that the five members of the Exco, as already observed in paragraph 3 above, constituted a committee of directors to whom the other directors had entrusted the task of managing the affairs of the different practices of which Buchanan Boyes consisted. It is in that capacity that they gave consideration to the matter of entering into marketing agreements with Seeff and PGA and after deliberation decided to do so. According to Steyn, the question of "advertising and the sharing of promotional costs", arose during a meeting of the Exco, shortly after he had joined Buchanan Boyes in the latter part of 1999, in the context of a discussion of that firm's relationships with Seeff and PGA. That the need for such a discussion arose is difficult to reconcile with the fact that in the papers the nature thereof is described as a close personal and business one. I pause to observe that, despite the fact that mention is made in a letter addressed by the respondents' attorneys to the applicant on 15 February 2008, that similar issues had arisen in respect of mortgage originators, in particular Mortgage SA, and had not been pursued, not a single one of the respondents has seen fit to take this court into their confidence thereanent.




31] To properly understand the discussions relating to the entering into of the marketing agreements and the events that ensued, it is necessary to step back in time. Steyn joined Buchanan Boyes in July 1999 when, in order to "increase its market share" it acquired the conveyancing practice of the firm Arnot Griffiths Rabie and Steyn (Arnot Griffiths) in which he had until then practised as a conveyancer, specialising in correspondent- and property development work. Steyn and one of his erstwhile partners Paul Griffiths, during September 1996, approached Ms Susan Aird (Aird), the Law Society's then Director for Professional Affairs for advice in relation to the question of "permissible advertising and professional conduct in general". Particulars of that discussion and the outcome thereof are encapsulated in two letters. The contents of the first, addressed by Arnot Griffiths to the applicant on 10 September 1996, are as follows:


"PROFESSIONAL CONDUCT/ADVERTISING

Thank you for taking the time to chat to Philip and I last Thursday on the issue of advertising and professional conduct in general.



As discussed we confirm your advice that provided we adhere to general principles of professional conduct we may contribute to the monthly advertising costs of an existing client on the following basis:

a) Our firm's name will feature in our client's advertisements;

b) Our contribution to the cost of such advertising will be arrived at on a commercial basis, will relate to the volume of work referred to us by our client and will be negotiated with our client from time to time;

c) Our advertising will also take the form of informative brochures on the topic of property and conveyancing. These brochures will be placed in designated areas in our client's offices at an agreed rental;

d) Our firm's name and possibly the professional services which our firm renders may also feature in directories published and circulated by our client."



The second was Ms Aird's response thereto, dated 10 October 1999, the contents whereof are as follows:

"Professional Conduct / Advertising

We acknowledge receipt of your letter of 10 September 1996 and write to confirm that the relationship contemplated between you and your client, with regard to advertising costs, is a business relationship and that the cost of any such advertising will not be included in disbursement accounts rendered in respect of individual conveyancing transactions."



32] In the present proceedings, Steyn amplified the said discussions with Ms Aird, by having incorporated by reference in his affidavit, parts of what he and she had deposed to thereanent in the Berrange application, more in particular, that she added the qualification that "in a conveyancing transaction the seller's freedom to appoint a conveyancer of choice was not fettered". It in my view, is clear from a reading of the above correspondence that Aird placed her imprimatur on the payment by a firm of attorneys of a contribution to the monthly advertising costs of an existing estate agency client in respect of advertisements in which also its name featured. That her approval was understood to have been so confined is apparent from Steyn's affidavit in the Berrange application. He stated therein that Aird had told him and Griffiths that "[t]he propriety of payment for marketing services with reference to, inter alia, conveyancing instructions" received from such client was acceptable and that it elicited the response from her to the effect that she would not have said that it would be permissible for an attorney to conclude an agreement with an estate agent in terms whereof the latter would advertise the services of the former on the basis of the payment of a "fee" calculated with reference to the extent to which the former referred clients to the latter. That Steyn had not been led astray by Aird's references in an earlier paragraph in the said affidavit to "marketing" and "joint marketing" is apparent from the following statement in paragraph 47 of the affidavit deposed to by him in the present proceedings, namely,

"I do not understand there to be any difference between Ms Aird and myself on what was permissible and what not. We were not discussing the buying of instructions, but rather joint advertising matters, and I accept what Ms Aird says as quoted above."



As is apparent from the aforegoing, Steyn could not have laboured under any misconception as regards the exact nature of the transaction Aird had approved of namely, the making of a contribution by an attorney to the monthly advertising costs of an estate agency client in respect of advertisements in which also the name of such an attorney's firm featured, the quantum whereof was to be determined with reference to the volume of work such client referred to such an attorney.




33] Steyn in his affidavit in these proceedings states that when questions regarding "advertising and joint marketing with estate agents" arose at the Exco meeting, in the broader context of discussions that were taking place among estate agents, attorneys and mortgage originators about demands on the part of the latter for the reduction of fees and the payment of commissions, he conveyed his understanding of his discussions with Aird to the other members of the committee and handed the entire file of Arnot Griffiths thereon to Berrange. Full details of the discussions that took place at that meeting have not been divulged to this court as the respondents, contrary to what one would have expected, were content to limit their averments thereanent to a single laconic paragraph consisting of only six type-written lines. Steyn says that he at that meeting conveyed his understanding of the discussions with Aird, the contents whereof have been carefully set out in the preceding paragraph, and continued to state -incorrectly in my view - that "[a]ll of this related to joint marketing and advertising". What happened next was that after the contents of the said file had been considered, it was decided that Berrange would consult senior counsel and seek his advice on "the propriety or otherwise" of "the possibility of concluding marketing and advertising agreements with Seeff and PGA", more in particular, whether "any such arrangement" risked falling foul of the Law Society's rules of professional conduct and thereafter to give effect thereto and implement them (presumably if the outcome was favourable). That modus operandi accords with the evidence that tasks were routinely delegated to particular directors of Buchanan Boyes who were expected to execute them within the parameters of the mandate.




34] On the basis of what Steyn says he had conveyed to them, the members of the Exco would have been aware that Aird had given her blessing to the entering into of an arrangement in terms whereof attorneys could make contributions to an estate agency in respect of expenditure incurred for advertisements featuring also the name of an attorney's firm. The fact that it in the circumstances was considered necessary to obtain senior counsel's advice as regards the "propriety" of the agreements that were envisaged is susceptible of only one inference namely, that there was a realisation that such agreements entailed the sharing of not only advertising, but also marketing and promotional costs and in those respects were different from that which had already been approved. Despite such realisation; an alleged ongoing controversy and debate within the attorneys' profession about what was appropriate as regards advertising, marketing and promotional activities; and an alleged "... difficulty in some instances of distinguishing between permissible solicitation by means of advertising and marketing activities and impermissible soliciting or touting", the respondents - other than McPherson -showed no interest whatsoever in acquainting themselves with the contents of the marketing agreements as drafted; the manner in which they were to be implemented; and the payments that were to be made in terms thereof. Their collective and individual lack of concern is epitomized by Sheard who, despite having been called upon to witness the PGA agreement, failed to utilize the opportunity of reading a document consisting of only a single page! Against that backdrop Steyn's statement - confirmed by the other respondents -that Berrange implemented the marketing agreements in a manner that "wholly altered their nature, effect and purpose" engenders a high degree of scepticism.




35] Steyn states that he on an occasion was required to accompany Berrange to a consultation with a particular senior counsel so that he could provide background information as regards conveyancing matters in general and the correspondence with Aird in particular. During the consultation an agreement, apparently drafted by Berrange but not previously tabled at an Exco meeting or showed to anyone of its members, was considered by senior counsel. After he had made certain changes to the wording thereof, ostensibly to bring it in line with the Aird correspondence, counsel is reported to have expressed the view that it did not fall foul of the Law Society's rules of professional conduct and the guidelines thereto.




36] Berrange subsequently reported at an Exco meeting, without elaborating thereon, that senior counsel had settled and approved the envisaged marketing and advertising agreements but none of those present at the meeting are capable of recalling whether such agreement(s) were tabled or not. As marketing was Berrange's responsibility, the members of the Exco appear to have accepted that he alone would attend to the formulation, conclusion and implementation of the envisaged marketing and advertising agreements without any clearly delineated mandate, save that they were to regulate the question of the sharing of advertising, marketing and promotional costs with Seeff and PGA and inevitably would have entailed the making of payments to them.

The aforegoing facts, in my view, are reasonably susceptible of the inference that the members of the Exco, having decided in favour of entering into such agreements, provided Berrange with a mandate consisting of juristic as well as non-juristic components and which possessed all the classic attributes of a contract of mandate (mandatum "lasgewing").




37] The legal notion "mandate" in the instant case manifested itself in two separate but interrelated guises namely, an undertaking on the part of Berrange to perform certain tasks at the request or on the instructions of the Exco ie. the drafting of the agreements and the obtaining of counsel's advice and upon completion thereof, authority to represent Buchanan Boyes in the conclusion and implementation of such agreements (See Generally: JC de Wet & AH van Wyk: Kontraktereg en

Handelsreg (5th Edition) 386 et seq; Lawsa (2nd Edition) Vol 17 paragraphs 2 and 3; Wille's Principles of South African Law (9th Edition) 985 et seq). As the acts of a mandatory are in law considered to be those of the mandator (See: Pothier's Treatise on the Contract of Mandate (translated by B.G. Rogers) paragraph 10) and the acts of a representative (agent) are in law deemed to be those of the principal (See eg: J.M. Silke: The Law of Agency in South Africa (3rd Edition) page 11), the respondents individually, in their capacity as members of the Exco, and despite disavowal of knowledge of the contents thereof, were parties to the formulation and the conclusion of the marketing agreements (Cf: KwaZulu-Natal Law Society v Davey and Others (supra) at paragraph 130) which - as has already been found - constituted a contravention of Rule 14.6.1 of the Law Society's rules of professional conduct in that on a proper construction thereof they conveyed an intention that Buchanan Boyes would compensate Seeff and PGA on the basis of the number of transactions relating to the sale of land handled by them and in which the sellers nominated that firm as the conveyancing attorney.

In any event, as the respondents in their capacity as members of the Exco deputed the performance of certain of their functions in respect of the marketing agreements to Berrange, in my view, it would not be inapposite to impute his knowledge of the contents of the marketing agreements to them on the basis of privity and identity of interest (Cf: Northern Province Development Corporation v Attorneys Fidelity Fund Board of Control 2003(2) SA 284 (T) at 294 E - F). To do so would not only resonate society's sense of justice and fairness ("die billikheidsgevoel van die regsgemeenskap") (See: D.J. Joubert, "Die kennis van 'n Verteenwoordiger",

1988 De Jure, at page 15; See also: A.J. Kerr: The Law of Agency (3rd Edition) pages 286 - 289), but would also serve public policy considerations. As is apparent from the architecture of the Attorneys Act, and the Law Society's rules of professional conduct promulgated thereunder, the obligation to comply with their provisions is imposed upon attorneys individually. The interests of maintaining the high ethical standards required of the attorneys' profession (See eg: Law Society, Transvaal v Matthews 1989(4) SA 389 (T) at 395 H - A) dictate that no attorney should be permitted to shift the responsibility of conforming to such standards on to his/her partners or co-directors (See eg: Incorporated Law Society, Transvaal v K and Others 1959(2) SA 386 (T); Incorporated Law Society (O.F.S.) v V 1960(3) SA 887 (O) at 890 C; 891 C - D) because, if that were to be allowed, it would create a convenient avenue to escape the consequences of unprofessional, dishonourable or unworthy conduct by the contrivance of the delegation of particular tasks which have have the potential of being categorised as conduct of such a nature.




38] The finding that the respondents, by having authorised Berrange to enter into the marketing agreements per se contravened the provisions of Rule 14.6.1. implies that senior counsel's advice that the said agreements did not fall foul of its provisions is unsupportable. But that conclusion must be viewed against the background that the evidence adduced as regards the obtaining thereof reflects a casualness which is difficult to reconcile with the conduct one would have expected from experienced attorneys who were serious about complying with the ethical standards of the honourable profession of which they are members. Save that it must be inferred that the composition thereof was left entirely in the hands of Berrange, there is an alarming absence of details of the discussions at the meeting of the Exco as regards the nature, structure and contents of the agreements that were to be submitted to senior counsel for his consideration. As no agreement appears to have been in existence at the time, not even preliminary opinions could have been formed by the members of the Exco as regards whether the provisions of rule 14.6.1 would be offended against or not. In the circumstances the desire to obtain counsel's advice is difficult to comprehend, unless it was actuated by a degree of cautiousness irreconcilable with the casual nature of the discussions that had preceded it. As the respondents have not claimed ignorance of the Law Society's rules of professional conduct, it is fair to assume that, as has already been alluded to above, the need for Berrange to have obtained senior counsel's advice was actuated by an acknowledgement of the possibility that the intended agreements could offend against one or more of such rules. It is against that backdrop that I find it surprising that there is no indication whether senior counsel had been briefed timeously; whether he enjoyed the benefit of the assistance of junior counsel; what documents he had been briefed with (more in particular whether he had been provided with copies of all the law society's past and then extant rules of conduct and guidelines); and whether he had been requested to provide a considered opinion in writing or merely to provide oral advice. The only hint about what senior counsel had been briefed with is provided by Steyn who said that a draft agreement, was tabled and discussed and that changes were made thereto in order to bring the wording thereof in line with the Aird correspondence. It is in that context that one would have expected to be told exactly what rules and guidelines he had been briefed with, especially, as is now known, such correspondence firstly, predated the April 1998 amendment of rule 14.6.1 which amplified its operation so as to also encompass agreements the potential result whereof is to secure professional work for an attorney solicited by an unqualified person and secondly, dealt with an agreement materially different to the one embodied in the draft agreement that had to be considered by him. In view of the generally known good reputation of the counsel involved, it is difficult to reconcile the opinion attributed to him with his having been fully briefed with all the then relevant extant rules and guidelines. For some inexplicable reason, the person best qualified to provide such particulars namely, Berrange, has not been required to depose to an affidavit.

39] A further aspect that does not appear to have been considered to be deserving of any mention in the papers is why, the respondents had not considered approaching the Law Society, instead of senior counsel, with a view to obtaining its advice as regards the propriety of the marketing agreements. That self-evident modus operandi which, to their knowledge, had in the past been followed by Arnot Griffiths, would have provided expeditions and irrefutable proof of the propriety of what they intended doing. The invocation of that self-evident precaution is what one would have been expected from the members of the Exco in the circumstances, especially, in view of all the alleged uncertainties regarding what was permissible and, as alluded to by Steyn, the negative rumours about Buchanan Boyes that were circulating at the time.

40] I in view of the aforegoing incline to the view that the Law Society has discharged the onus of showing on a balance of probabilities that the respondents have acted in contravention with the provisions of rule 14.6.1.1 and accordingly are guilty of unprofessional, dishonourable or unworthy conduct.




41] Having concluded that the respondents have made themselves guilty of unprofessional, dishonourable or unworthy conduct, the next step is to enter into the second and third legs of the enquiry and to consider, by comparing their aforementioned conduct against what is normally to be expected of an attorney, whether they are fit and proper to continue practising as attorneys and, depending on the outcome of that enquiry, to inquire into whether, in all the circumstances, they should be removed from the roll of attorneys or whether suspending them from practising as attorneys would suffice.

42] Although I share the reservations expressed by Harms ADP about the "precedental value" of other cases of a similar nature, as articulated in Malan and Another v Law Society, Northern Provinces (supra) at 225 A, the reality is that this court in Berrange's case (supra), at 173 G - I, desisted from making a specific finding as regards his fitness to continue practising as an attorney and accordingly omitted to express any views as regards whether he should be struck from the roll of attorneys. The court instead, appears to have exercised its inherent disciplinary jurisdiction to censure him by suspending him from practising for a period of two years. The Law Society by having restricted the nature of the relief sought against the respondents to an order that they be suspended from practising as attorneys in all possible capacities for a period of two years, impliedly conceded that their involvement in the contravention of which they have been found guilty is not of such a serious nature that it warrants their being struck from the roll of attorneys. Although not bound thereby, Courts generally take cognisance of the views of Law Societies due to their role as the watchdog of the attorneys' profession (See: the Berrange case (supra) at 174 G).




43] In my view, the law society's stance as regards the nature of the sanction that would be appropriate to the facts of this matter, cannot be faulted. As is apparent from what has been set out earlier in this judgment, when considering whether the alleged offending conduct has been established, Berrange was the main actor in the formulation, conclusion and implementation of the marketing agreements with Seeff and PGA and accordingly, his involvement was considerably more far-reaching than that of the respondents who stopped short of the actual implementation thereof and furthermore, did not play any role in the negotiation of the impermissible payments that were made. It is for that reason that, unlike Berrange, whose conduct was found to have actually achieved the result prohibited by rule 14.6.1, their conduct merely had the potential of achieving such a result. Berrange's conduct self-evidently constituted a more serious manifestation of the contravention of the said rule than that of which the respondents have been found to have made themselves guilty. In my view it would in the circumstances, be wholly inappropriate to even consider striking the respondents from the roll of attorneys. But, a finding that any of the respondents are not fit and proper to continue practising as attorneys, after a finding of being guilty of unprofessional, dishonourable or unworthy conduct, is not an essential prerequisite for the granting an order suspending one or more of them from practising (with or without conditions) or to reprimand them (See: Malan and Another v Law Society, Northern Provinces (supra) at paragraph 5 and the cases therein mentioned).




44] Whilst the conduct of which the respondents have been found to have made themselves guilty of, when compared to that of Berrange, constitutes a less serious manifestation of the prohibitions contained in rule 14.6.1.1, it in my view, nevertheless warrants the imposition of a disciplinary sanction more severe than a mere reprimand. I say so because the purpose of the marketing agreements was the promotion of conduct that constituted part of a scheme, which in Berrange's case (supra) was categorised as a way of touting and described as "... a serious contravention 'which should be eradicated'" (at 174 C). In the circumstances I incline to the view that the appropriate form of sanction in the instant case would be the suspension of the respondents from practising as attorneys for an appropriate period of time, the upper limit whereof should not exceed the two year period imposed in the case of Berrange.




45] It in my view is axiomatic that where, as in the instant case, there are a number of participants who have been found guilty of conduct that amounts to a contravention of one or more of the Law Society's rules of professional conduct, the nature of the punishment to be imposed should be fashioned to suit the personal circumstances of each individual and furthermore be proportionate to the nature and extent of each individual's involvement in the prohibited conduct. Bearing in mind that it has been found that the respondents' conduct constituted a less serious manifestation of the contravention of rule 14.6.1.1, when compared to that of Berrange's; that it must be accepted that the respondents took the precaution of mandating Berrange to seek senior counsel's advice; that the respondents had taken the initiative to terminate the marketing agreements; and that the respondents have been allowed to continue practising their profession for a period of in excess of six years since disciplinary proceedings against Berrange were commenced, without any complaints of a similar nature having been made against any of them, since, I incline to the view that it would be appropriate in the circumstances of this case to suspend any period of suspension that is to be imposed, subject to appropriate conditions.




46] Other than McPherson, who acknowledged having read one or more of the marketing agreements but failed to take any steps to distance himself therefrom because he held the view that it did not offend against any of the Law Society's rules of professional conduct, there is no basis on which, as regards the period for which they should be suspended from practising or the conditions of suspension, any differentiation could be made between the respondents.




46] In view of the aforegoing the following order is made:


46.1 Each of the respondents is suspended from practising for his own account or as a director of a professional company contemplated in section 23 of the Attorney's Act 53 of 1979, as amended, or as a professional assistant in the employ of an attorney or otherwise as a practitioner for the following periods calculated from the date of the granting of this order -

46.1.1. McPherson, 12 months

46.1.2. Sheard, Steyn and Steytler, 9 months, but such periods are suspended for a period of 5 years from the date of the granting of this order on condition that they are not found guilty of any contravention of the provisions of rule 14.6.1.1 committed during the period of suspension.

46.2 The respondents are ordered to pay the costs of this application on the scale as between attorney and client and shall include the costs incurred in the employment of two counsel.



D. VAN REENEN



ALLIE J:

I agree.


R. ALLIE