KwaZulu-Natal Law Society OFFICE OF THE CHIEF EXECUTIVE OFFICER

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1 KwaZulu-Natal Law Society OFFICE OF THE CHIEF EXECUTIVE OFFICER YOUR REF : OUR REF : CEO 11/2/04 Please Quote Our Reference 12 March 2004 FIRST FLOOR, 200 BERG STREET P.O. BOX 1454 PIETERMARITZBURG 3200 FAX: (033) DX: 25 TELEPHONE: (033) info@lawsoc.co.za Website: CIRCULAR 02/2004 ALL PRACTISING MEMBERS OF THE SOCIETY Dear Member 1. COMPLAINTS ABOUT PROBLEMS WITH THE REGISTRAR'S OFFICE From time to time members complain about problems concerning cases conducted in the High Court. Some of these complaints are related to the Registrar's Office. The Executive Committee of the Society meets with the Judge President on a regular basis to discuss matters of mutual concern and to iron out problems. The Judge President has requested that any complaints about or suggestions for improvement in the Registrar's Office should be referred to him to enable him to take it up with the Registrars in Durban and Pietermaritzburg. Members are encouraged in the first instance to discuss their problems with the Registrar. In instances where the Registrar is unable to deal with the matter, or fails to solve the problem or to come up with an answer, the matter should be referred to the Society for discussion with the Judge President. Clearly the Society is looking for the more serious complaint, especially problems that occur repeatedly.

2 CIRCULAR 2/2004 Page 2 If you have such a problem please let me have the particulars thereof. All contributions will be accumulated for discussion with the Judge President. 2. SCHEDULE OF DISCIPLINARY ACTION The following information about disciplinary action taken by the Society is published for your information: 1. Mr B C Samuels (Bernard C Samuels) (Durban) (C2/D.831/02) Fined R2 500 for having received money for bail and having effected payment thereof in his name thereby exercising improper control over the funds against the will of the depositor, having failed to represent his client properly in his criminal case, having addressed the Prosecutor in abusive and offensive terms and having been disrespectful towards the Court. 2. Mr I B G Ngcobo (I B G Ngcobo & Co) (Durban) (C5/I.1307/03) Fined R2 000 for failing to attend to the Society s requirements for the closure of his practice on 08/07/ Mr M R Tenza (Tenza Attorneys) (PMB) (C4/T.642/03) Fined R7 000 for having failed to appear in Court after the tea interval and during the afternoon session to represent his accused client on 11/09/02, having failed to appear on time at Court at the contempt proceedings on 16/10/02, having misled the Court on 16/10/02 as to the reason why he did not appear to represent his client on 11/09/02 and having made a false statement to the

3 CIRCULAR 2/2004 Page 3 Court by stating that his candidate attorney had not informed him that the Magistrate required his attendance on 16/10/02. R5 000 of the fine was suspended for a period of 2 years. 4. Mr S P du Toit (Steve Du Toit Attorneys) (Durban) (E/S.1327/02) Fined R1 500 for failing to reply to a complaint. 5. Mr D Kritzinger (Deon Kritzinger Attorneys) (Newcastle) (C5/D.1335/03) Fined R2 000 for failing to lodge his 2002 Audit Report in the new format. 6. Mr I B G Ngcobo (I B G Ngcobo & Partners) (Westville) (C5/I.1468/03) Fined R2 000 for failing to explain the qualifications that had been raised in his 2002 Audit Report. 7. Mr R R Singh (Attorneys Roy Singh) (Durban) Fined R3 000 for, in attending to a third claim, continuing to act in the matter after his mandate to act had been terminated, including in his bill of costs items for which he was not entitled to charge fees and failing to attend to the matter in a professional and diligent manner during the period when he had been mandated to attend to the claim. 8. Mr G J Pienaar (G J Pienaar Inc) (Empangeni) Mr Pienaar s name was, in terms of a High Court Order dated 12/05/03, struck-off the roll of attorneys because of the misappropriation of trust money. 9. Ms N S Paruk (Naeema Paruk & Associates) (Durban)

4 CIRCULAR 2/2004 Page 4 Ms Paruk was, in terms of a High Court Order dated 27 October 2003, suspended from practising as an attorney for a period of 3 years because she had inter alia overreached certain clients in respect of fees charged, allowed her trust account on numerous occasions to be overdrawn and failed to keep proper accounting records. 10. Mr R H Maharaj (Attorneys Rajesh H Maharaj) (Durban) At an enquiry on 22/10/03 Mr Maharaj was found guilty of unprofessional conduct in that in attending to his clients insolvency applications he failed to give his clients a candid opinion on the case, failed to assist them with care and diligence and, without the consent of one of his clients, he had disclosed to another client what had been communicated to him by his first client. He was fined R5 000, R3 000 of which was suspended for 3 years and he was ordered to pay the enquiry costs. 11. Ms F J B Smith (F Smith & Co) (Durban) Ms Smith was, in terms of a High Court Order on 28/11/03, suspended from practising as an attorney because of inter alia her insolvency and having failed to lodge an Audit Report. 3. FAST TRACKING OF CASES ON CIVIL COURT ROLLS: RULE ON EXPEDITED HEARING

5 CIRCULAR 2/2004 Page 5 There has been concern for quite a while because of the delay in the finalisation of civil cases, especially in the Durban High Court. A Committee comprising two members of the Judiciary, two members from the Bar and two from the Attorneys' profession, has given attention to this. The result is a draft Rule that is currently being considered by the three branches of the Law. A copy of the draft Rule is attached, marked "3.A1-3". Members practising in the High Court, especially those in Durban are requested to give their input. The question is really whether the Rule is practical and workable. Ref. C.2238/ AUDIT REFORM SUPPORT SYSTEM: PILOT PROJECT Enclosed is the Audit Reform and Support System Pilot Project Handbook, marked "4A" for information. 5. REGISTRAR OF THE HIGH COURT: SERVICE OF PROCESS IN FOREIGN COUNTRIES (PAYMENT FOR SERVICE) In a letter dated 5 March 2004 the Director-General of Justice and Constitutional Development advised as follows:

6 CIRCULAR 2/2004 Page 6 "(1) The Director and his Deputy of the Directorate: International Affairs in the Department of Justice and Constitutional Development met with the officials of the Consular Service of the Department of Foreign Affairs to discuss fees payable by attorneys on documents to be served in foreign countries. (2) It was agreed that foreign missions acting on behalf of the Department of Foreign Affairs shall meet the relevant payments and the Department of Foreign Affairs shall debit the Department of Justice and Constitutional Development. Fees payable for services rendered shall be stated in the Sheriff's account received from the Department of Foreign Affairs, and shall be paid by the attorneys on record at the Registrar's Office. (3) The Registrar of the High Court shall credit the Department of Justice and Constitutional Development, Paymaster General Account: PMG on behalf of the Objective Code: Legal Services; Responsibility Code: International Affairs. (4) There should be strict adherence to diplomatic channels when serving process in foreign countries, as is the case when foreign process is served in South Africa. (5) Your co-operation will be appreciated." 6. NET TRUST INTEREST INCOME OF THE ATTORNEYS FIDELITY FUND CONCOMITANT (12.5%) AGENCY FEES OF THE KZN LAW SOCIETY Enclosed is the above, marked "6A", for information.

7 CIRCULAR 2/2004 Page 7 7. PRACTICE MANAGEMENT COURSE 2004 Enclosed is the information on the Practice Management Course offered by Legal Education and Development (L.E.A.D.) of the Law Society of South Africa, marked "7A", for information. 8. BONDS OF SECURITY IN INSOLVENCY MATTERS: MASTER OF THE HIGH COURT At a meeting held in Durban on 3 March 2004, the Master of the High Court announced that with effect from 1 April 2004, only the Durban Offices would issue Bonds of Security in insolvency matters. The Pietermaritzburg Office of the Master will no longer attend these. In the circumstances it is necessary that members involved with insolvency matters should take note of this. It is expected that the Deputy Master in Durban will provide the Society with further information regarding their operations, which will be included in the next Circular. FRANS VAN DER MERWE CHIEF EXECUTIVE OFFICER Encl.

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9 AUDIT REFORM & SUPPORT SYSTEM PILOT PROJECT HANDBOOK Kwa-Zulu Natal Law Society INTRODUCTION The Audit Reform program will be implemented as from the 01 st March 2004 as a pilot project in Kwa-Zulu Natal on the basis of voluntary participation as approved by the membership at the Annual General meeting of Members have been advised of the details of the application of this program at various levels and this handbook seeks to provide a succinct guide to the operations of the program. Participating firms will be granted an exemption from the submission of a Rule 21A Certificate for the financial period commencing 01 st March 2004, in lieu of the Rule 21B Accounts Certificate. APPLICATION FOR PARTICIPATION Application forms will be distributed to all members as an inclusion in our March 2004 Circular and a copy may be found in this handout as an annexure. Annexure A MODUS OPERANDI OF THE PROJECT The project operates basically on two levels; 1. The submission of a bi-annual Accounts Certificate by the firm, which replaces the Rule 21A Audit Report and therefore place the onus on the firm to certify that the books and records are in order. 2. The conducting of a routine inspection by the Inspectorate of the Law Society on the books and records of the firm. The outcome of these routine inspections may lead to re-inspections if deemed necessary. PRACTICAL OUTWORKING OF THE PROJECT This involves the following steps; 1. The selection of participants at the discretion of the Council. 2. The preparation of a simple guide to the KZNLS accounting requirements for distribution to participants. 3. Letters informing participants of the dates for submission of the Accounts Certificates and the proposed inspection dates. 4. Formalising the appointment of the Cash-room partner of the participating firm as proposed in your application form. 5. Educating the participants on demand from April to June 2004 by hosting two day bookkeeping courses throughout the province.

10 Page 2 6. Administering the timeous submission of the Accounts Certificates, enforcing strict adherence to the deadlines. 7. Arranging the inspections, which are to commence from 01 st September This will include a notice of such inspection and detail requirements to facilitate the inspection viz. an engagement letter, a blank accounts certificate, a bank mandate, a blank internal control questionnaire and a list of books and records required for inspection purposes. 8. To assist the inspectors with their inspection a work programme will be followed, which is along the lines of the SAICA guidelines for minimum audit procedures. 9. On completion of the inspection, a report thereon will be submitted to the Council, which will establish whether the firm has complied with the provisions of the Act and the Society s rules or whether a re-inspection is necessary. THE RELEVANT RULE AND SCHEDULES RELATED THERETO AS GAZETTED ON 05 th DECEMBER 2003 Rule 21B Accounts Certificate (1) A firm may make application to the Council to participate in the Society s Audit Reform and Support System pilot project, in lieu of compliance with Rule 21A. The Council assesses such application to determine its suitability based on criteria determined by the Council which include, but is not be limited to a firm s trust interest contribution, geographical location, nature of practice and its period of existence. The Council has the right to limit the number of applications to be granted, and has the sole right to accept or refuse such application. A firm whose application has been approved is exempted from compliance with Rule 21A. (2) A participating firm shall deliver to the Council within one calendar month of the completion of each accounting period a Certificate in respect of the period. (3) In respect of an accounting period for which no client monies have been held the Certificate shall be in the form set out in the Tenth Schedule to these rules and in all other cases shall be in the form set out in the Ninth Schedule to these rules. (4) The Council may, in its discretion and on such conditions as it may stipulate, on written application by a firm relating to a particular Certificate, extend the period of one calendar month within which a Certificate is required following a balancing of books, but such extension shall in no case exceed three months from the date on which the Certificate should have been delivered. (5) Two partners must sign the Certificate under these rules, one of whom must be the current Designated Cashroom partner, unless the practitioner is a sole practitioner.

11 Page 3 (6) In the case of a firm, which has two or more offices, where any branch maintains a separate trust banking account, the firm is obliged to lodge a separate Certificate for each such branch.

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13 AUDIT REFORM & SUPPORT SYSTEM PILOT PROJECT Kwa-Zulu Natal Law Society APPLICATION FORM FOR PARTICIPATION IN THE PILOT PROJECT ` FIRM S NAME : (List Branch(es) if separate Trust Banking Accounts are held thereat) COMPOSITION OF PRACTICE : (i.e. Sole Practitioner or No. of Partners/Directors) GEOGRAPHICAL LOCATION : (City/Town) NATURE OF PRACTICE : (1) (2) (3) (i.e. Main specialised areas of Practice Limit to three areas) PERIOD OF EXISTENCE OF FIRM : GROSS TRUST INTEREST CONTRIBUTION: (For the Last Financial Year) DO YOU HOLD MONIES IN TRUST? (Necessary to determine the type of Schedule applicable) NAME OF DESIGNATED CASHROOM PARTNER OR SOLE PRACTITIONER (i.e. Person responsible for signing the Accounts Certificate) NB: Kindly complete this application in order for the Council to consider your participation in the project. The Council has the right to limit the number of participants. ANNEXURE A