The Supreme Court of Appeal (SCA) on Friday set aside a judgment of the Free State High Court, which had upheld a disciplinary sanction suspending an attorney who admitted to misappropriating client funds.
The SCA overturned the five-year suspension imposed by a disciplinary committee and instead ordered that the attorney, Johann Oosthuizen, be struck from the roll of legal practitioners.
Oosthuizen was admitted as an attorney in 2009 and began practising as a professional assistant at Van Deventer & Thoabala Inc (VDT) in Bloemfontein — an incorporated firm of attorneys, notaries and conveyancers. He became a director of VDT in June 2010 and remained in that position until his resignation in August 2020.
The case arose from a complaint lodged by Morchim Aroonslam with the Legal Practice Council (LPC) in 2018, alleging misappropriation of trust funds by VDT.
Aroonslam’s complaint stemmed from a property transfer handled by VDT. A credit refund of R51,500, which was transferred into the firm’s trust account, was never paid to him. In addition, R22,500 was deducted from his funds without his approval after the transfer was completed.
An investigation committee from the Free State office of the LPC, appointed to look into Aroonslam’s complaint, recommended that the matter be referred to the LPC’s disciplinary committee for action against Oosthuizen.
In November 2021, Oosthuizen was summoned to appear before the disciplinary committee. He pleaded guilty to all three charges related to the misappropriation of funds.
The committee suspended him from practising or being on the roll for five years, ordered him to pay a fine of R15,000 to the LPC, and directed him to facilitate payment of R100,000 to Aroonslam. Oosthuizen subsequently paid both the fine and the compensation.
However, when the LPC became aware of the disciplinary committee’s sanction, it expressed dissatisfaction, stating that the punishment did not reflect the seriousness of Oosthuizen’s misconduct. The LPC resolved to apply to the high court for Oosthuizen’s name to be struck from the roll.
The Free State High Court dismissed the application, finding that the LPC had not based its case on an allegation that the sanction was too lenient.
The SCA disagreed.
“In its founding affidavit, the LPC squarely raised the inappropriateness of the lenient sanction of suspension imposed on Mr Oosthuizen, instead of the more onerous sanction of being struck off the roll of legal practitioners,” wrote judge of appeal Pieter Meyer in a unanimous judgment of the full bench.
Meyer emphasised that the court remained the final arbiter in determining whether a practitioner should be removed from the roll or merely suspended.
“The sanction of suspension imposed by the disciplinary committee is not final and binding on the LPC. The committee, in any event, did not have the legal authority to impose a suspension,” Meyer stated.
He said Oosthuizen’s conduct reflected a lack of integrity and honesty.
“Mr Aroonslam addressed various letters to Mr Oosthuizen imploring VDT to pay the money owing to him. Mr Oosthuizen simply failed to respond,” Meyer said.
Aroonslam eventually appointed new attorneys, who also wrote to Oosthuizen on February 21, 2017, demanding payment — again to no avail.
The SCA further noted that after Aroonslam lodged his complaint, Oosthuizen submitted a sworn statement to the LPC denying that the funds had been received in VDT’s trust account or paid out improperly.
“Despite admitting in these proceedings that he made withdrawals from VDT’s trust account for his own benefit, though he was not a trust creditor, he denies that he misappropriated trust funds. I agree with the LPC that this denial exhibits his lack of insight into his conduct,” Meyer said.
The SCA accordingly ruled that Oosthuizen’s name be struck from the roll of attorneys. It also ordered Oosthuizen to pay the costs of the application.
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