A Roodepoort attorney accused of misappropriating almost R810,000 from a deceased woman’s estate has been suspended from practising law until the Legal Practice Council’s application to have him struck off the roll is decided.
The Supreme Court of Appeal (SCA) on Friday replaced an 18-month suspension imposed by the Pretoria High Court in January 2024 with an interim suspension that will remain in force until the striking-off application is determined.
The court ordered that the hearing must take place within six months.
Johan Nicolaas Bouwer must also stop acting as an executor, trustee, curator or liquidator. He has been ordered to hand over his accounting records and files, failing which the sheriff may search for and seize them.
Bouwer must surrender his attorney’s enrolment certificate within two weeks and pay the Legal Practice Council’s legal costs on the punitive attorney-and-client scale.
The appeal arose from a complaint by Renate Louw, whose mother, Erica Steenberg, died on 8 June 2013.
Louw’s father, who was the executor of the estate, approached Bouwer in 2013 for assistance with its administration.
According to the Legal Practice Council (LPC), Bouwer opened an estate account in 2014 into which R809,720.14 was deposited.
The council alleged that Bouwer misappropriated almost all the money between 2014 and 2015 through a series of transfers, including payments into his own trust account.
By 31 August 2022, the estate account had an overdraft of R1,201.32.
Bouwer said the money was reinvested
In March 2018, Bouwer told Louw and her brother that the money had been invested in an interest-bearing account. He said it would be paid out once he had resolved certain issues with the Master of the High Court.
Louw told the court that she heard nothing further from him for the next two years.
In 2019, she approached another law firm, Snymans Incorporated Attorneys, to intervene. Its attempts to obtain a response from Bouwer were unsuccessful.
By 29 May 2020, the heirs had still not received their money. Louw then lodged a complaint with the LPC.
Bouwer denied misappropriating the funds. He argued that he had acted on the executor’s instructions and said his practice was to withdraw money from deceased estate accounts and reinvest it elsewhere.
He told the court that he had invested some of the estate money by purchasing property for other clients in exchange for what he described as substantial returns.
The LPC’s investigation, however, found that he had failed to account properly for the funds, including the payments made and interest allegedly earned on investments.
In January 2024, the Pretoria High Court rejected Bouwer’s explanation and found that his handling of the estate funds amounted to misappropriation.
The court found that he had moved the money and used it for other purposes, including lending it to clients to purchase immovable property and pay for clearance certificates.
Bouwer had argued that he did not believe there was any risk in these transactions, but the High Court noted that he had failed to provide details of the investments.
It also questioned his offer to repay the money, saying he had not explained where the funds would come from or provided a breakdown.
“He has failed to take the Court into his confidence,” the High Court said.
The court concluded that the conduct involved dishonesty and fell short of the standards expected of an attorney.
However, instead of striking him off the roll, it imposed an 18-month suspension. It reasoned that Bouwer was working as a consultant and did not handle trust funds at the firm where he was then based. Bouwer appealed against the order.
In a unanimous judgment written by Judge of Appeal Mocumie, the SCA found that the High Court had applied the wrong legal test.
The appeal court said the immediate question was not whether Bouwer was fit and proper to remain an attorney, but whether the LPC had established grounds for his interim suspension while its application for final relief was pending.
The SCA explained that the question of whether Bouwer should be struck off the roll would be decided at the next stage of the proceedings.
It found that Bouwer had failed to refute the serious allegations against him.
Instead, he argued that the LPC had approached the High Court without first giving him an opportunity to respond to the allegations. He also said he had refused to disclose information about the estate’s finances to a person appointed to investigate them.
“This is no defence at all,” the SCA said.
The court also criticised what it described as Bouwer’s “obstructionist conduct”, finding that he had not been open with the LPC during its investigation 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,” the judgment said.
The SCA said Bouwer had continued providing legal advice as a consultant after his own firm closed and he no longer had a fidelity fund certificate.
It found that members of the public, particularly in Roodepoort where his consultancy was based, remained vulnerable to his conduct.
The court said the risk extended to the possible mismanagement of deceased estates and the use of money held in trust accounts to the potential detriment of clients who were unaware of the ongoing investigation.
The SCA concluded that the LPC had established the requirements for an interim suspension to protect the public.
It ordered Bouwer to stop practising as an attorney pending the final determination of the LPC’s application. He is also prohibited from operating a trust account, subject to the appointment of a curator bonis to take control of the relevant records and affairs.
The court ordered that the remaining proceedings be expedited, giving the LPC six months to pursue its application for final relief.
Bouwer was admitted as an attorney in 1985 and operated his own practice from 1989.
In 1996, he sold the practice to Bouwers (Roodepoort) Incorporated, where he was the sole director. In a footnote, the SCA observed that he appeared to have sold the firm to himself under a different name.
He stopped practising in February 2018, and the firm closed in June that year.
Since October 2018, he has worked as a consultant at Bouwer Malherbe Attorneys in Roodepoort, the firm that represented him in the appeal.
The SCA set aside the High Court’s 18-month suspension and replaced it with the interim order pending the determination of the LPC’s application to have him struck off the roll or permanently suspended.
