Claws out in battle of legal eagles

Top Gqeberha law firm Greyvensteins Inc is fighting allegations of buying work and touting its conveyancing services through estate agents — including funding flight tickets and sponsoring a Christmas party.

Three of its directors are now embroiled in a court bid to challenge a report of the Legal Practice Council (LPC) investigation committee before disciplinary hearing proceedings can commence.

They want the report and the findings set aside.

Argument was heard in the Makhanda high court last week, where prominent attorney Liesel Greyvenstein and co-directors Alan Els and Rohan Greyvenstein Jnr, launched the review application in terms of the Promotion of Administrative Justice Act.

Judgment was reserved.

The investigation, meanwhile, dates back years.

After receiving complaints about Greyvensteins’ advertising practices and relationship with estate agents, the then-Cape Law Society (CLS) — now the LPC — first authorised the investigation in November 2015.

PwC was further appointed to conduct a forensic investigation and submitted its first report in July 2018.

According to documents before court, PwC said that Greyvensteins:

• Budgeted about 10% on advertising and marketing, which equates to about R7m a year;
• Co-advertised with estate agents to reach its target market; and
• Had many contracts with (a Johannesburg media company), which related to co-advertisements, but did not recoup any of the costs from the estate agents.

Greyvensteins was accordingly found to have brought the profession into disrepute for “buying work” and “touting”.

It is alleged this was done by marketing its services via estate agents, and by paying for the said estate agents’ advertisements in full.

PwC identified 1,759 transactions totalling R11,459,234 over the review period which was allegedly paid by Greyvensteins for co-advertising.

According to the report, the alleged buying of work was achieved by paying R35,524 for 10 estate agents to fly to Sun City in February 2015 for a conference, and for the sponsoring of a Christmas function 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.

Based on the findings of PwC, the council of the former Cape Law Society committee resolved to bring an application to strike the names of the directors of Greyvensteins from the roll of attorneys.

The application was launched in the Cape Town high court after the coming into effect of the Legal Practice Act, which established the LPC as the regulator of the legal profession in SA.

What followed was an urgent application by Greyvensteins to interdict the LPC from doing so because it had not been afforded a fair disciplinary process.

The LPC agreed, rescinded the decision to move for striking from the roll, and referred the issues to the investigation committee.

In a letter dated November 9 2020 to the senior partners of Greyvensteins, LPC Eastern Cape director Alfred Hona said the council had resolved to continue the investigation into possible misconduct.

On December 4 2020, an attorney representing Greyvensteins responded to object to the appointment of a local attorney to the investigation committee.

The committee comprised lawyers from Gqeberha, East London, Qonce and Mthatha.

In an affidavit, attorney, conveyancer and director of Greyvensteins, Liesel Greyvenstein, said the firm had other departments, including a litigation department, and that the court action should not affect the other directors.

“[We] seek orders declaring unconstitutional and invalid the decisions made by the LPC; and the reviewing and setting aside of those decisions.

“The applicants’ rights have been adversely affected by these decisions.

“The applicants seek to review and set aside the report and resultant findings made by the investigating committee.”

She said Greyvensteins had been the subject of various investigations by the LPC and its predecessor, the CLS.

These processes stemmed from a complaint made to the CLS in 2015, which allegedly originated from BLC Attorneys, a main competitor of Greyvensteins.

“The complaint related to the Greyvensteins’ Givers Gain campaign, made by Peter Bowes, an attorney and director of BLC.

“Bowes’ email was addressed to David Geard, who in turn addressed the complaint to the CLS.”

She said despite the complaint allegedly having been made by Geard, he was appointed to the investigating committee.

Geard, according to Liesel, is a BLC consultant.

“As chair of the investigating committee, Geard authored the report dated June 6 2022, which ultimately found that [Greyvensteins’] alleged misconduct should be referred to the council for adjudication by a disciplinary committee.

“It is clear Geard was conflicted and ought not to have assumed any role in relation to the investigation or prosecution of the complaint.”

Greyvensteins had first become aware that it was under investigation by the CLS in September 2016 when it was approached by investigators appointed to probe its marketing practices between March 1 2009 and September 30 2016.

Greyvensteins was allegedly not provided with the complaints.

“On October 5 2016, I attended a meeting at which clarification was sought on what was referred to as the Givers Gain campaign,” Liesel Greyvenstein said.

“This was a fundraising initiative undertaken by Greyvensteins in conjunction with estate agencies, where prizes were offered.

“Greyvensteins gave its full co-operation, despite [it being] costly and time-consuming.”

On February 9 2018, Greyvensteins was contacted by a PwC forensic accountant and investigator. 

“During April 2018, Greyvensteins became aware that the CLS had established a committee of attorneys to oversee the investigation.

“Many of the committee members were practising attorneys who competed directly with Greyvensteins.

“Greyvensteins objected to the appointment of these members and withdrew its further co-operation.

“On May 21 2018, Greyvensteins wrote to PwC, reiterating the lack of impartiality of the committee and required a new committee be established comprising attorneys from outside Gqeberha.

“In the meantime, and unbeknown to Greyvensteins, PwC finalised a report relating to [our] marketing strategies and in relation to the Givers Gain campaign.

“Copies of these reports were only furnished to Greyvensteins nearly three years later.”

She said when the LPC came into effect in 2019, it refused to issue the attorneys at Greyvensteins with certificates of good standing, effectively attempting to suspend them from practice.

During May 2019, it transpired that this alleged refusal was due to the ongoing investigation and the LPC’s intention to bring an application for the striking from the roll of various directors.

On November 9 2020, the LPC wrote to Greyvensteins, advising the firm of a new investigation into possible misconduct between March 2016 and November 2020.

“Extraordinarily in the circumstances, the LPC advised that Geard was a member of the new investigating committee.”

Greyvensteins objected to the new investigation.

“There is no basis in law for the LPC to have conducted an investigation into the advertising practices of Greyvensteins,” she said.

On October 18 2022, Greyvensteins was provided with the report of the investigating committee which found the firm prima facie guilty of misconduct, which warranted a referral to a disciplinary committee for adjudication.

The report, dated June 6 2022, was signed by Geard as chair.

Liesel Greyvenstein said one of the findings was that Greyvensteins had been buying work by paying airfares for a Re/Max agency, and for the payment of a Christmas function. (See Re/Max agent’s response in sidebar).

“PwC specifically records that they did not interview the relevant Re/Max agent to ascertain whether those payments were for advertising purposes.

“Again, no evidence was put forward to prove solicitation or that the agents were induced to ‘buy work’ for Greyvensteins,” she said.

“In certain respects, there exists a privity of interest between estate agents and attorneys as both benefit from property sales.

“With this in mind, Greyvensteins entered into co-advertising agreements or arrangements with a number of estate agents and agencies.

“Again, this is not novel. It is a business practice successfully employed by many large conveyancing firms. Greyvensteins has been advertising in this manner for years. The CLS was aware of this.

“Various firms advertise in this manner, including BLC, who made the initial complaint,” she said.

On March 27 2023, Greyvensteins was provided with the resolution.

The resolution “ratified” the decision to refer the applicant’s alleged misconduct for further adjudication by the disciplinary committee. 

“The applicant was provided with the report on October 18 2022, in which it was found that Greyvensteins was prima facie guilty of misconduct, which warranted a referral to a disciplinary committee for adjudication.

“It is this report, and its findings, which this application seeks to review and set aside.

“This will effectively set aside the ‘ratification’ of the resolution furnished to the applicant on March 27 2023,” she said.

In a responding affidavit, LPC chair Janine Myburgh said the investigating committee report was a recommendation only.

“It is accordingly contended that the applicants have failed to appreciate that the preliminary opinion and report of the investigating committee can never be classified as administrative action, as a final decision having direct legal consequences for the applicants.

“The relief sought to review and set aside that document is misconceived.

“It is noted that only three of the nine directors of Greyvensteins have joined in launching this application. Greyvensteins has nine directors.

“I deny that this application does not affect the position of the other six directors.”

Myburgh added: “I deny that the complaint originated from BLC attorneys.

“In truth, allegations were received from a group of conveyancers in Gqeberha regarding the way Greyvensteins was procuring work from estate agents.”

Myburgh asked that the application be dismissed with costs.

The Herald