Hewetson v The Law Society of the Free State

Mrs Yolandi Hewetson and her husband Mr Alexander Hewetson practised as attorneys in the Free State through Hewetson Incorporated, a company of which they were sole directors. On 23 June 2016, the Law Society of the Free State obtained interim relief following an investigation into the firm's financial affairs. On 15 December 2017, both were struck from the roll of practising attorneys and the firm was placed into liquidation. Mr Hewetson did not oppose the application, but Mrs Hewetson opposed it. Over the period from 1 May 2013 to 29 February 2016, significant sums of trust monies (ultimately over R1.7 million) were misappropriated by Mr Hewetson. Mrs Hewetson claimed she was excluded from financial control by her husband. In January 2016, she reported the misappropriation to the Law Society after discovering irregularities in December 2015, though evidence suggested she became aware of irregularities earlier, including a November 2015 WhatsApp message stating she had "finally had enough of your use of trust money for your personal gain". The firm failed to keep proper accounting records as required by the Rules of the Law Society of the Free State.

• Whether the appropriate sanction for an attorney who failed to ensure proper maintenance of trust accounts and accounting records was striking off or suspension from practice
• Whether the appellant was a fit and proper person to continue practising as an attorney under s 22(1)(d) of the Attorneys Act 53 of 1979
• When the appellant first became aware of her husband's misappropriation of trust funds
• Whether the appellant was dishonest in her dealings with the Law Society and the court
• Whether the appellant delayed unreasonably in reporting trust fund deficiencies to the Law Society
• The appropriate standard of care and responsibility expected of co-directors in an incorporated firm of attorneys regarding trust accounts

The appeal was upheld to the extent that the high court's order of 15 December 2017 was set aside only insofar as it referred to the appellant. The high court's order of 23 June 2016 insofar as it applied to the appellant was reinstated pending finalisation of the application to strike her from the roll. The application was referred to a freshly constituted bench of the Free State High Court for determination after hearing oral evidence regarding: (a) when the appellant first became aware of her husband's abuse of trust funds; (b) the extent of her knowledge; (c) whether she agreed to or was party to the withdrawal of trust funds from Mr Ahmed Nabil's account; and (d) her explanation for any delay in reporting trust fund deficiencies. The appellant was suspended from practising as an attorney pending the outcome of the hearing. The appellant was ordered to pay the Law Society's costs on the scale as between attorney and client.

An attorney who is a co-director of an incorporated firm cannot escape responsibility for ensuring proper maintenance of trust accounts and accounting records by claiming that financial matters were entrusted to the other co-director. Each attorney/director has a fundamental statutory duty under the Attorneys Act and Law Society Rules to ensure trust accounts are properly maintained, regardless of internal arrangements for division of responsibilities. Where a high court materially misdirects itself on a key factual finding in exercising its discretion in disciplinary proceedings under s 22(1)(d) of the Attorneys Act, an appeal court is free to exercise the discretion afresh. In sui generis disciplinary proceedings, where there are material contradictions and gaps in evidence on crucial issues such as knowledge of misconduct and dishonesty, and where these allegations cannot be fairly determined on the papers alone, it may be appropriate to refer the matter for oral evidence rather than making final findings on affidavit evidence, particularly where the sanction of striking off is sought. The primary purpose of attorney disciplinary proceedings is protection of the public, not punishment of the attorney.

Nicholls JA (majority): It is sympathetic to a spouse who delays reporting wrongdoing of their husband for about a month when the consequences extend beyond professional life, though longer delays of many months or years would be difficult to exonerate. An attorney's affidavits from staff members supporting their version should be given weight where credibility is in issue. The minority (Leach JA): Dishonesty and remaining on the roll are "mutually exclusive" - lies under oath constitute a "fatal barrier" to practice as an attorney. Attorneys cannot adopt an adversarial position in disciplinary proceedings but must cooperate and provide all information so full facts are before the court. The discretion to suspend rather than strike off must be conservatively exercised - courts should adopt a "conservative rather than a 'kid-gloves' approach" and not be influenced by "maudlin sympathy". A mere suspension holds the potential hazard of returning errant attorneys to practice without having to prove they have reformed. Striking off is not reserved solely for cases involving dishonesty - attorneys have been struck off for failing to reply to correspondence. Not only integrity but also loyalty to the Law Society is expected from an attorney. Sarcastic responses to the Law Society show lack of professional integrity. The views of the Law Society are of "great importance" due to its special position in relation to its members. The appellant's failure to appreciate her duties "speaks volumes" and renders suspension wholly inappropriate.

This case is significant for clarifying the duties and responsibilities of co-directors in incorporated firms of attorneys regarding trust accounts under the Attorneys Act 53 of 1979. It emphasises that attorneys cannot abdicate responsibility for trust accounts to a co-director or partner - each attorney has a fundamental duty to ensure proper maintenance of books and trust accounts regardless of internal arrangements. The case illustrates the importance of material errors in factual findings leading to misdirection in the exercise of judicial discretion in disciplinary matters. It demonstrates the court's willingness in sui generis disciplinary proceedings to refer matters for oral evidence where there are significant gaps or contradictions that cannot be resolved on the papers alone, particularly where dishonesty is alleged. The split decision reflects different approaches to the question of when suspension versus striking off is appropriate where an attorney has failed in trust account duties but where the extent of knowledge and dishonesty is disputed. The case reinforces that disciplinary proceedings are primarily about protecting the public rather than punishing the attorney.