Nicola Mawson|Published
A Roodepoort attorney accused of misappropriating almost R800,000 from a deceased estate has been ordered to remain suspended from practice after the Supreme Court of Appeal (SCA) found that his conduct warranted measures to protect the public.
Johan Bouwer had challenged a Pretoria High Court ruling suspending him for 18 months following allegations that money belonging to the estate of Erica Steenberg had been transferred into various accounts, including his firm’s trust account.
Although the SCA set aside the fixed suspension, it replaced it with an interim suspension pending further proceedings by the South African Legal Practice Council (LPC), which must be heard within six months.
The dispute dates back to the death of Steenberg in June 2013, when her husband, Willem Adriaan Steenberg, was appointed executor of her estate. Bouwer was instructed to assist with its administration.
According to the judgment, Steenberg’s daughter, Renate Louw, and son, Ernst Adriaan Steenberg, met Bouwer in March 2018 to discuss the inheritance.
No account
Bouwer told them an estate account had been opened at Mercantile Bank but that certain matters still needed to be resolved with the Master of the High Court before the money could be distributed.
In the meantime, Bouwer said, the funds had been invested in an interest-bearing account through his firm’s trust account. However, Louw told the LPC that she received no explanation during 2018 and 2019 about why her inheritance had not been paid.
After attempts by another law firm to intervene proved unsuccessful, she lodged a complaint with the LPC in August 2020.
The regulator alleged that R809,720.14 had been deposited into the deceased estate account in 2014 and that Bouwer subsequently misappropriated almost all the money through transfers into various accounts between 2014 and 2015.
By August 2022, the estate account had a debit balance of R1,201.32, according to the LPC’s evidence. Bouwer denied misappropriating the money.
Nothing wrong
Bouwer maintained that he had acted on the executor’s instructions and had invested some of the funds by lending money to other clients to purchase property, expecting substantial returns. However, the High Court found that his conduct fell short of the standards expected of an attorney.
In findings reproduced in the SCA judgment, the High Court described the handling of the funds as “a classic case of misappropriation of such funds”. It also found that Bouwer had failed to provide sufficient details of the transactions or explain how he intended to repay the money.
“He has failed to take the court into his confidence,” the High Court said.
The High Court concluded that Bouwer was no longer fit and proper to practise but stopped short of striking him from the roll, partly because he was working as a consultant and no longer handled trust funds.
Bouwer appealed, challenging both the findings against him and the procedure followed by the LPC.
The lawyer argued that the regulator should have conducted disciplinary committee investigations before approaching the court and disputed the authority of the LPC’s Gauteng provincial chairperson to initiate the case.
Court erred
The SCA rejected those arguments.
Writing for a unanimous bench, Judge of Appeal Mocumie found that the High Court had applied the wrong approach when granting a fixed suspension rather than considering the interim protection sought by the LPC.
The appeal court found that the regulator had established grounds for Bouwer to be suspended while the allegations were dealt with in further proceedings.
It noted that Bouwer had not produced all the records relating to the estate funds, including documentation supporting his claims that money had been invested for the beneficiaries.
“On his own version, he has not produced all the documents or books in respect of the trust fund in general, nor the amounts he alleged he had invested for the benefit of, or on the instructions of, his client to gain interest,” Mocumie said.
The court was also concerned that Bouwer had continued providing legal advice as a consultant after his previous firm closed. It found that members of the public could remain vulnerable while the allegations against him were unresolved.
Hand it over
The SCA ordered Bouwer to surrender his certificate of enrolment within two weeks and prohibited him from operating a trust account. He must also hand over accounting records and other documents relating to his practice, with the sheriff authorised to intervene if he fails to comply.
Pending the further proceedings, Bouwer may not serve as an executor, trustee, curator, guardian or liquidator. The court ordered him to pay the legal costs of the appeal on the attorney-and-client scale, citing his conduct throughout the proceedings.
“He did not play his cards openly with the National LPC during the investigations, or with the High Court during the proceedings. An officer of the court must maintain the highest ethical standards and assist the National LPC by providing documents when called upon,” Mocumie said.
The LPC must now pursue its application for final relief, which could result in Bouwer being struck from the roll or permanently suspended.
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