KZN municipality sues ‘rogue’ debt collector

In an ironic turn of events, KwaDukuza municipality sued its own debt-collecting law firm for failing to hand over R2 million collected from a defaulting ratepayer.

In papers before the Durban High Court in September, KDM, represented by the Durban firm of Shepstone & Wylie Attorneys, said Asmal and Asmal Attorneys Inc of KwaDukuza failed to pay over R2 million which it collected on May 31, 2019 and June, 18, 2019 on their behalf relating to a debt collection matter.

The affidavit stated that Asmal and Asmal, which serves on KDM’s panel of attorneys, did not disclose the payments for more than a year and only recently admitted having received the sum of R2 million which has been held in their trust account.

According to the affidavit, KDM instructed its attorneys in June 2018 to recover arrears rates from a particular client, by legal proceeding if necessary.

The value of the debt was in the region of R11 million.

The papers stated that from time to time, the attorneys would report on the ongoing process of recovery.

It came as a surprise to KDM when the defaulting ratepayer applied for a rate clearance certificate in respect of various properties.

The ratepayer said R2 million had been paid to Asmal and Asmal in May and June 2019, and provided proof of payment.

KDM said the payments had not been disclosed, reported on or reconciled by Asmal and Asmal as it was contractually obliged to do.

KDM said that despite numerous attempts to contact the principal attorney, Mr Asmal, no response was received.

According to the affidavit, “their efforts were in vain as Mr Asmal seemingly avoided the calls, claiming he was either elsewhere or not available and could not deal with the calls”.

When KDM did finally received a response, it was through another attorney hired by Asmal and Asmal to act on their behalf against their own client.

As at the date of deposing, the affidavit KDM had still not received any undertaking for payment from the respondent nor had any payment been received.

KDM claimed 2 months had passed since their correspondence and still no payment had been forthcoming.

The order sought by KDM was confirmed by the court and made final.

An application by Asmal and Asmal Attorneys Inc for leave to appeal was dismissed.

Asmal and Asmal Attorneys Inc’s legal representatives indicated that they would be petitioning the Supreme Court of Appeal for leave to appeal.

However, no papers have been delivered or filed.

This article was republished from Northcoast Courier with permission

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