Please turn your device to landscape mode
Part 3 of the Act: Keeping of Accounts
KEEPING OF ACCOUNTS BY LEGAL PRACTITIONERS
25 .Legal practitioners' books of accounts and power of Council to inspect
(1) Every legal practitioner who in terms of this Act is required to hold a fidelity fund certificate shall keep, exclusively in respect of his or her practice, such books of account as may be necessary to show and distinguish in connection with such practice-
(a) moneys received and moneys paid on his or her own account;
(b) moneys received, held or paid by him or her for or on account of another person;
(c) moneys invested by him or her in a trust savings or other interest-bearing account referred to in section 26(2) or (3) and interest on moneys so invested which is paid over or credited to him or her;
(d) any interest on moneys deposited in his or her trust banking account opened in terms of section 26(1) and which is paid over or credited to him or her.
(2) In order to ascertain whether the provisions of subsection (1) and section 26 have been or are being complied with, the Council, acting either on its own motion or upon a written complaint lodged with it, may appoint a registered accountant and auditor who is a member of the Institute of Chartered Accountants of Namibia to inspect the books of account of a legal practitioner referred to in subsection (1).
(3) An accountant and auditor appointed in terms of subsection (2) shall report to the Council in such a manner as not to disclose confidential information entrusted to the legal practitioner whose books of account he or she has inspected.
(4) If, upon an inspection in terms of subsection (2), it is found that the legal practitioner has not complied with any of the provisions of subsection (1) or of section 26, the Council may recover from the legal practitioner concerned the costs of the inspection.
(5) For the purposes of subsections (1) and (2) "books of account" includes any record or document kept by or in the custody or under the control of a legal practitioner which relates to-
(a) money invested in a trust savings or other interest-bearing account referred to in section 26(2) or (3) or interest on money so invested;
(b) an estate of a deceased person or an insolvent estate or an estate placed under curatorship, in respect of which such legal practitioner is the executor, trustee or curator or which he or she administers on behalf of the executor, trustee or curator; or
(c) such legal practitioner's practice.
26. Opening of trust banking account
(1) Every legal practitioner who holds or receives moneys for or on behalf of any person shall open and keep a separate trust banking account at a banking institution in which he or she shall deposit all such moneys.
(2)(a) A legal practitioner may invest in a separate trust savings or other interest-bearing account opened by him or her with a banking institution or building society moneys deposited in his or her trust banking account which is not immediately required for any particular purpose.
(b) A trust savings or other interest-bearing account referred to in paragraph (a) shall contain a reference to this subsection.
(3) A separate trust savings or other interest-bearing account-
(a) which is opened by a legal practitioner for the purpose of investing therein, on the instructions of any person, any moneys deposited in his or her trust banking account by that person; and
(b) over which the legal practitioner exercises exclusive control as trustee, agent or stakeholder or in any other fiduciary capacity,
shall contain a reference to this subsection.
(4) A legal practitioner shall, at the time and in the manner prescribed, pay over to the fund-
(a) the interest, if any, on moneys deposited in such legal practitioner's trust banking account in terms of subsection (1); and
(b) the interest on moneys invested by such legal practitioner in a separate trust savings or other interest-bearing account in terms of subsection (2).
(5) The investment by a legal practitioner of any moneys referred to in subsection (1) in a trust savings or other interest-bearing account referred to in subsection (2) or (3) shall not relieve such legal practitioner of any liability in respect of such moneys.
27. Trust account moneys not part of the assets of legal practitioner
(1) Subject to subsection (2), an amount standing to the credit of a legal practitioner's trust account shall not-
(a) be regarded as forming part of the assets of the legal practitioner;
(b) be liable to attachment at the instance of or on behalf of a creditor of that legal practitioner.
(2) Any excess amount remaining on a legal practitioner's trust account after payment of-
(a) all claims of persons whose moneys have, or should have, been deposited or invested in such trust account; and
(b) all claims in respect of interest on moneys so invested, including a claim of the fund in respect of interest due to it in terms of section 26(4),
shall be deemed to form part of the assets of that legal practitioner.
28. Control of operation of trust account
(1) The Court may, on application made by the Council, and on good cause shown, prohibit any legal practitioner from operating in any way on his or her trust account, and may appoint a curator bonis to control and administer such trust account with such rights, duties and powers in relation thereto as the Court may deem fit.
(2) If a legal practitioner-
(b) becomes insolvent;
(c) in the case of a professional company, is liquidated or placed under judicial management, whether provisionally or finally;
(d) is struck off the Roll or suspended from practising;
(e) is declared by a court of competent jurisdiction to be incapable of managing his or her own affairs; or
(f) abandons his or her practice or ceases to practise,
the Master of the High Court may, upon application made by the Council or by a person having an interest in the trust account of that legal practitioner, appoint a curator bonis to control and administer that trust account with such of the prescribed rights, duties and powers as the Master may deem fit.
(3) A person aggrieved by a decision of the Master in terms of subsection (2), may, within 30 days after the decision becomes known to him or her, appeal against that decision to the Court, and the Court may confirm or vary the decision or give such other decision as in its opinion the Master ought to have given.
(4) Nothing contained in subsection (1) or (2) shall be construed as preventing any legal practitioner who was practising in partnership with a legal practitioner referred to in subsection (2) from continuing to operate on the trust account of the partnership.
29. Rights and duties of banking institutions and building societies with respect to trust accounts
(1) A banking institution or building society at which a legal practitioner keeps his or her trust account or a separate account forming part of his or her trust account shall, whenever so directed by the Council, furnish the Council with a signed certificate which indicates the balance of such account at the date or dates designated by the Council.
(2) A banking institution or building society referred to in subsection (1), shall not-
(a) by reason only of the name or style by which a trust account referred to in that subsection is distinguished, be deemed to have knowledge that the legal practitioner is not entitled to all moneys paid into or credited to such account;
(b) have or obtain any recourse or right, whether by way of set-off, counter-claim, charge or otherwise, against moneys standing to the credit of any such account in respect of a liability of the legal practitioner to the banking institution or building society which is not a liability arising out of or in connection with that account.
(3) The provisions of subsection (2)(a) shall not be construed as relieving a banking institution or building society from a liability or obligation to which it would be subject apart from this Act.
30. Rights of legal practitioner with respect to moneys in trust account
The provisions of this Part shall not be construed as taking away or affecting any just claim, lien, counter-claim, right of set-off, or charge of any kind which a legal practitioner has against or on any moneys held or received by him or her on account of another person.
31. Offences in relation to trust accounts
A legal practitioner who contravenes or fails to comply with any of the provisions of section 25(1) or section 26(1), (2)(b), (3) or (4) shall be guilty of an offence and liable on conviction to a fine not exceeding N$200,000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.
Go to top of page
23 December 2016JUDGE JP KARUAIHE (JPK) TRUST: LEGAL EXCELLENCE AWARDS
23 December 2016LSN COUNCIL 2016 - 2017
23 December 2016International Institute of Law Association Chief Executives 2016 conference
08 April 2016Vacancy Manager: Finance & Human Resources
08 April 2016CALL FOR EXPRESSION OF INTEREST