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After a years-long battle, the appeal court has set aside a Legal Practice Council (LPC) report against large Gqeberha law firm Greyvensteins Inc, finding that the investigation committee overstepped its powers and created a reasonable perception of bias.
Conveyancing department directors Liesel Greyvenstein, Alan Charles Els and Rohan Greyvenstein Jnr had approached the Makhanda high court to have the investigation committee’s report and findings reviewed and set aside before disciplinary proceedings could commence.
Initially unsuccessful, they took the matter on appeal.
Commenting on Sunday, LPC provincial director for the Eastern Cape Alfred Hona said they noted and respected the judgment.
“However, we will start the investigation afresh once a new investigation committee has been established,” he said.
The investigation was launched when the then-Cape Law Society (CLS) — since taken over by the LPC — received complaints about Greyvensteins’ advertising practices and relationships with estate agents.
In October 2022, Greyvensteins received the report of the investigating committee which found them prima facie guilty of misconduct, warranting referral to a disciplinary committee for adjudication.
Greyvensteins had taken issue with local attorneys reportedly being appointed to the investigation committee.
Overturning the initial decision to dismiss Greyvensteins’ court bid, judge Gerald Bloem, with two other judges agreeing, said the investigation committee had either acted in contravention of the Legal Practice Act or lacked the authority to make findings of culpability.
By finding the appellants guilty of misconduct, the investigation committee had acted outside its powers, Bloem said.
“In this case, the investigation committee did not have the power to determine [Greyvensteins’] culpability.
“At most, the investigation committee was obliged to refer the matter to the LPC only if it had satisfied itself that, on the available prima facie evidence, the appellants ‘may’ be guilty of misconduct.
“The finding that the appellants ‘are’ guilty of misconduct could only be made by the disciplinary committee if there was evidence to support it.”
Bloem further found the committee’s report to be procedurally tainted in that Greyvensteins was not given a proper hearing.
Among the allegations was that the conveyancing department had marketed the firm’s services via estate agents and paid for the agents’ advertisements in full.
It was alleged that their “buying of work” was achieved by paying for 10 estate agents to fly to Sun City in February 2015 for a conference, and the sponsoring of a Christmas party at a cost of more than R25,000 in November 2015.
The firm was further accused of paying for branded rubbish bins, bus shelter advertisements and pole adverts for the estate agents.
Court papers state that the complaint against Greyvensteins stemmed from BLC Attorneys, one of their main competitors.
The complaint related to Greyvensteins’ Givers Gain campaign, which has since come to an end.
The firm said despite the complaint allegedly being sent to the CLS by attorney David Geard, a consultant to BLC, he was appointed to the investigating committee.
Liesel said the Givers Gain campaign was a fundraising initiative in conjunction with estate agents, where prizes were offered.
She said the firm had entered into co-advertising agreements or arrangements with a number of estate agents and agencies — and that this was not novel.
In its court papers, the LPC denied that the complaint originated from BLC, saying it had in fact received several complaints from various firms.
The CLS at the time had appointed a forensic accountant to investigate Greyvensteins’ marketing practices between March 2009 and September 30 2016.
Greyvensteins, in turn, instructed forensic auditors Global Projects to assist with the investigation to ensure compliance.
The preliminary report by Global Projects was finalised in July 2017 and provided to the CLS’s forensic accountants.
It concluded that the marketing and sales of Greyvensteins were sound.
In February 2018, the CLS informed Greyvensteins that it had also appointed PwC to investigate.
In May 2018, when Greyvensteins became aware that a committee of local attorneys had been appointed to oversee the probe, they objected to it and withdrew their further co-operation.
Greyvensteins said the firm would only co-operate if the committee comprised attorneys from outside Gqeberha.
In July 2018, PwC submitted two reports to the CLS.
The first report related to the marketing strategies of Greyvensteins and the second to the Givers Gain campaign.
One report showed that, in instances where Greyvensteins placed advertisements with estate agents, the agents allegedly did not contribute to the costs of the co-advertisement.
The investigation committee reported that, based on the information available to it — which it deemed sufficient — it was able to make a prima facie finding that some form of “arrangement” or “operational scheme” existed.
This arrangement, it said, created the potential for estate agents to solicit work for referral to Greyvensteins.
It found further that there was no plausible reason for the firm to have made the considerable payments in question, other than to enjoy some benefit.
It said the obvious benefit was that the estate agents would use their influence over clients to instruct Greyvensteins to do the necessary conveyancing work.
“The appellants instituted the court application before the establishment of a disciplinary committee to adjudicate the complaint against them,” Bloem said.
“The duty and powers of an investigation committee are different from those of a disciplinary committee.
“In short, an investigation committee investigates a complaint against a legal practitioner.
“After the investigation, it does not make a finding of guilt or misconduct.
“It must either dismiss the complaint or refer it to the LPC.
“Upon receipt of the outcome of the investigation, the LPC will establish a disciplinary committee where necessary.
“Unlike the investigation committee, the disciplinary committee must make a finding on guilt and impose a sanction.
“It is against the above factual background and the legislative frameworks that the appellants instituted [the court action].”
The three directors had brought the application in terms of the Promotion of Administration Justice Act (PAJA).
They also relied on the principle of legality.
“Before instituting a review application, an applicant must identify what conduct or decision they seek the court to review.
“If it is administrative action, the application must be instituted in terms of PAJA.
“If it is other exercises of public power, such as executive power to be reviewed, the application must be instituted on the basis of the principle of legality.
“In short, administrative action in terms of PAJA means a decision or failure to take a decision that adversely affects the rights of any person.
“The finding by the investigation committee that the appellants are guilty of misconduct constitutes administrative action because that finding adversely affects the appellants’ rights in a manner that has a direct and external legal effect.”
Bloem said under PAJA, administrative action taken by an administrator reasonably suspected of bias was susceptible to review.
“A reasonable suspicion of bias is assessed against the perception of a reasonable, objective and informed person.
“The onus is on the affected person to establish that the administrator might be biased.”
Bloem said Greyvensteins had complained about Geard’s involvement in the investigation.
According to them, when Geard received the 2017 Global Projects report — which found no irregularities in their conveyancing practices — he allegedly regarded the documentation on which the report was based as having been “sanitised” to exonerate Greyvensteins.
Bloem said the investigation committee ignored the possibility that there could be a reasonable explanation for why Greyvensteins had made large payments without a clear return.
In the committee’s view, Greyvensteins made the payments to get estate agents to influence sellers.
“The exclusion of other possible explanations creates the reasonable impression that the investigation committee prejudged [Greyvensteins’] culpability.
“That impression is strengthened by Geard’s note that the documents upon which the Global Projects report was based were sanitised.
“There was no factual basis for that allegation.
“In the light of the above, I’m of the view the appellants have established that, based on reasonable grounds, they reasonably suspected Geard might be biased.
“The report, its findings and ratifications, are therefore reviewed and set aside.”
Bloem further ordered the LPC to cover the costs of the case.
Contacted for comment, Liesel said it had been a long road and that the judgment spoke for itself.
Sonja Tifloen, managing director of BLC, said they had noted the judgment.
“We wish to place on record that BLC Attorneys was not a complainant in this matter,” Tifloen said.
“The LPC confirmed this in its court papers.
“We have full confidence in the LPC and its processes, and we respect the role of our courts in upholding the rule of law and procedural fairness for all legal practitioners.
“The disciplinary process will continue through the appropriate channels.
“We trust that it will do so in a manner that serves the public interest and the integrity of the profession.
“BLC remains committed to the highest standards of professional conduct and to the communities we serve.”
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