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Durban - A Durban attorney narrowly escaped being struck off the roll after admitting that he had drastically overcharged a client – billing her R150 000 for simply filling in two forms – and bungled the winding up of her late husband’s estate.
“He has demonstrated that he is not fit and proper to practise as an attorney. But the facts demonstrate that he has learnt a hard lesson and there is no reasonable danger of the events recurring,” Judge Rashid Vahed said in his ruling in a case brought by the KwaZulu-Natal Law Society against Deena Moodley.
The judge said there were “far too many cases involving lawyer greed”.
He said that on the day that argument was presented in this matter, he heard another “striking-off application” involving financial dishonesty.
Ntombifikile Mkhize had approached Moodley’s law firm for assistance in winding up the estate of her husband, who was shot and killed in October 2005.
This involved pursuing two life insurance claims, worth R600 000, and finalising the estate. The only asset was a house in Isipingo.
Mkhize was assisted by a clerk in Moodley’s office and in March 2007 she received a bill for R150 000 that said this was “as per fee agreement of 25 percent” and for the successful claiming of the insurance policies.
Mkhize lodged a complaint with the law society. Initially Moodley attempted to justify the fee, saying it was “fair and reasonable”.
The law society inspected his files. During this inspection it was pointed out that the Contingency Fees Act did not apply to the two claims against the insurance policy as nothing was in dispute and it was “nothing more than a form-filling exercise”.
It was also pointed out that the fees applicable in winding up an estate were regulated separately.
Moodley then changed his story.
Judge Vahed said he submitted a statement to the society undertaking to “come clean” and saying the fees issue had been handled badly and his understanding of the contingency agreement was skewed.
“He admitted he had made a mistake and wanted to repay Mkhize, with interest.”
The judge said the report of the inspection team disclosed that the clerk had advised Mkhize that because the insurance claims exceeded R100 000 the money had to be placed into the firm’s trust account, which was not true.
This “distortion” was indicative that they wanted access to the money to get the fees.
On top of this, the estate was not handled properly, there was no immediate advertising and the delay resulted in additional interest on the bond.
“The conduct of the attorney is admittedly manifestly unprofessional and worthy of censure.
“He disgracefully overreached in the fee charged, mismanaged the winding up and then initially had the temerity to justify his wrongdoings,” Judge Vahed said.
“However, it has been argued that this was a momentary lapse of judgement. Mrs Mkhize had already been repaid R100 000 and arrangements have been made to pay her the balance, with interest, which is another R100 000.
“The ultimate penalty in my view would be too harsh.”
Judge Vahed suspended a one-year suspension from practice for three years on condition that Moodley immediately pay Mkhize R50 000 and then R10 000 a month from this month.
He ordered that Moodley pay the costs of the application.