Hepple v Law Society of the Northern Provinces

The first and second appellants were directors of an incorporated law firm, Hepple Attorneys Inc, practising in Gauteng. Following an investigation by the Law Society of the Northern Provinces, serious accounting and trust account irregularities were uncovered dating back to at least 2005. These included persistent trust deficits, misappropriation of trust funds, failure to account for and pay over trust interest as required by s 78(3) of the Attorneys Act 53 of 1979, manipulation of bank reconciliation statements to conceal deficits, failure to keep proper accounting records, late and qualified auditor’s reports, and the use of trust funds to pay interest to investors in an investment practice conducted by the firm. Although Earle accepted primary responsibility for the financial management and admitted a trust deficit of approximately R400 000, Hepple denied knowledge and sought to distance himself from the administration, despite evidence that both benefited and that deficits and manipulations occurred over many years. The High Court ordered that both attorneys be struck from the roll and granted ancillary relief, including the appointment of a curator to administer the trust accounts. The attorneys appealed to the Supreme Court of Appeal.

The appeal was dismissed. The order of the North Gauteng High Court striking the first and second appellants from the roll of attorneys, prohibiting them from operating trust accounts, and appointing a curator was confirmed. Costs were ordered to be paid jointly and severally by the appellants on the attorney-and-client scale.

This case is significant for restating and applying the strict approach of South African courts to trust account violations and professional misconduct by attorneys. It confirms that misappropriation of trust funds, manipulation of accounting records, and lack of transparency strike at the heart of the profession and will ordinarily justify striking off. The judgment underscores that directors of incorporated law practices cannot avoid responsibility for trust account compliance by internal delegation and reinforces the protective, disciplinary nature of striking-off proceedings.