Barred KZN attorney who misappropriated R2m in trust funds to ‘prop up lifestyle’ loses case to be readmitted

A former KwaZulu-Natal (KZN) attorney, who misappropriated R2 million in trust funds, has been dealt with a blow in his attempt to be reinstated as a legal practitioner.

Thivendra Moodley’s application for readmission as attorney was recently rejected by the KZN High Court in Pietermaritzburg.

KZN attorney barred for misappropriating funds

Moodley was disbarred 15 years ago for the unauthorised use of trust funds.

Both the Legal Practice Council (LPC) in KZN and the Legal Practitioners Fidelity Fund (LPFF) opposed the application.

He previously filed similar applications for readmission in 2013 and 2018, but these were either withdrawn or abandoned.

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Moodley was admitted to practice as an attorney in December 2002 after completing his articles of clerkship and passing the requisite board examination.

He practised for his own account until the LPC struck him off the roll of attorneys in early 2009.

This followed a report to the LPC by Gengan Naidoo in 2006, who accused Moodley of misappropriating R657 000.

After being disbarred, Moodley faced periods of sporadic employment.

Moodley’s version

In his application for readmission, Moodley outlined the circumstances surrounding the misappropriation of funds, totalling R2 065 240.84.

He explained that he had hired a senior lawyer for a complex criminal case, with the advocate initially estimating fees of R350 000.

However, Moodley was only able to pay R150 000, which he transferred to the senior counsel.

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The advocate later reduced the outstanding balance of R200 000 to R152 000, a sum that Moodley ultimately paid by misappropriating funds from his trust account.

The accused were fined R500 000 at the end of the trial.

As the client could only provide R337 000, Moodley used an additional R173 000 from the trust account to cover the remaining amount of the fine.

Regarding the R657 000, it is believed that the amount was gradually taken in smaller sums as Moodley used the trust account to settle his personal debts.

High Court judgment

In a ruling on February 14, Acting Judge William Nicholson indicated that Moodley failed to provide a detailed account for the misappropriation of the R657 000, describing his explanation as vague.

“The applicant further states, without mentioning how much or when, that out of desperation, he resorted to taking loans from money lenders at very high interest rates to repay the misappropriated monies,” the judgment stated.

“At the time of his removal from the roll, he had an outstanding debt of R550 000 to money lenders and was making monthly repayments of R65 000 by misappropriating monies from the trust account.

“The timing and amount of these loans, as well as the extent of the repayment before accessing the trust account to service the debt, remain unclear.”

No prosecution for barred KZN attorney

The LPC opposed Moodley’s readmission on the basis that he had not kept abreast with the law, among other reasons.

However, Nicholson observed that Moodley had made progress since then.

“It appears that before filing this application, the applicant has indeed undertaken work at a law firm to reacquaint himself with practice and update his legal knowledge.”

The acting judge also noted that Moodley had taken steps to find from the Director of Public Prosecutions (DPP) in KZN on whether he could be charged for misappropriating funds.

“It has been confirmed that there is no intention to prosecute the applicant. Therefore, these matters have been addressed satisfactorily.”

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Nicholson highlighted that while Moodley’s “relative inexperience and youth” could be considered mitigating factors, his actions and character at the time were not sufficient to meet the standards required to be considered a “fit and proper person” to manage client affairs.

“The applicant’s version suggests that he is unable to make a full account of the misuse of the trust monies, save to say he dipped into the trust account to service a personal loan, demonstrates that the misuse of his trust account was so entrenched in his practice, which makes his transgression even more inexcusable.

“The applicant’s transgression was not only a blight on himself, but on the profession as a whole.”

Failed payments

Nicholson also said Moodley had brief periods of employment between 2011 and 2023, but he did not disclose his income during these times.

Moreover, he failed to make any significant payments toward his debt to the LPFF, despite agreeing to a “generous” repayment plan of R2 000 per month.

“He claimed he resigned to work on his readmission application, but since it’s not a full-time job, he could have been employed from 2017 to 2020 and used that income to repay the second respondent.

“The applicant has only repaid R10 500 to the second respondent. Despite this, he extensively travelled abroad in 2018, 2019, 2021, and 2022, sharing his travels on social media.

“He claims his wife funded the trips and his family supports him, but his online display of his travels, without meeting payment terms, shows a lack of remorse and contrition.”

Nicholson concluded that Moodley had not proven he was fit for readmission as a legal practitioner, as he used trust funds to “prop up his lifestyle”.

He, therefore, dismissed Moodley’s application with costs.

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