Legal Assistance Trust review: Scam 4

FIRST PRELIMINARY REPORT

By the Workers Advice Centre

LEGAL ASSISTANCE TRUST IS NOT A LEGAL TRUST

“The Trustees of the Legal Assistance Trust (LAT) oversee the work of the Legal Assistance Centre.
We, the Legal Assistance Centre, being a public interest law centre, collectively strive to make the law accessible to those with the least access, through education, law reform, research, litigation, legal advice, representation and lobbying, with the ultimate aim of creating and maintaining a human rights culture in Namibia.”

This is what the Legal Assistance Trust claim on their website.

History:

In 1985, The Legal Assistance Trust (LAT) was established as a registered charity (public interest) in West Sussex, England, UK. The English LAT formed a partnership with the Legal Resource Centre (LRC) in South Africa.

A group of persons in Namibia (3 years after the LAT in the UK), purportedly established a Legal Assistance Trust (LAT) in Namibia, claiming to be a public interest organization. The LAT then purportedly created a Legal Assistance Centre (LAC). They knew human rights violations were lucrative business in a country that was undergoing the traumas of Apartheid. International donors donated funds to the LAT on the basis of the trust instrument’s stated objects above.

Illegal Trust:

However, The LAT is not registered as a trust at the Office of The Master of the High Court in accordance with the Trust Monies Protection Act 34 of 1934 and all other relevant laws governing trusts. Trusts are governed and regulated by statute and common law. A trust becomes legal only after registration with the Master of the High Court. The express purpose of the Trust Monies Protection Act 34 is to ‘provide for the protection of trust moneys’.

The LAT did not and could not lodge any variations (amendments) to its deed of trust with the Master of the High Court as it was not registered.

Invalid Trust:

The LAT is further an invalid trust in the following regard:

The Master of the High Court determines the validity of a trust and the corresponding deed of trust. If the trustees are not constituted in accordance with the deed of trust the Master may disqualify one or more of the trustees. The LAT produced a copy of an unregistered deed of trust in the Supreme Court of Namibia in the case Hamevan and Another v Minister of Home Affairs 1996 NR380 (SC). They did not disclose that it was not registered with the Master of the High Court.

The current board of trustees is a mixture of politicians, lawyers and journalists amongst others.

Any transaction made by the trust before registration will automatically be invalid, void and/or a nullity. The consequence of this is that any transaction made by the LAC under the control of the LAT since 1988 is thus invalid and should be legally regarded as such.

Moreover, the LAC was established by the invalid LAT. The LAC is therefore a not a law centre in terms of the Legal Practitioner’s Act.

Sham trust:

The LAT is in addition a sham trust in the following regard:

The LAT is used by the board of trustees to operate as a law firm but with the benefits (tax exemptions) of a charitable trust controlling a legal centre. The annual financial reports of the LAC show that they receive payment for legal services rendered under the guise of donations.
When a trust conceals its sources of income and operate in violation of its deed of trust it is termed a sham trust.

The PEACE TRUST:

In terms of its deed of trust, the PEACE Trust was created to assist people to cope with the negative impact that organised violence, including war, has had on the lives of thousands of Namibians. Namibian society has, over the last years, witnessed a steady increase in suicides and violent crimes, some of which might have been attributed to unresolved trauma.

The financial reports of the LAC for 2007 specifically show a donation of N$ 44 787 made by the PEACE Trust to the LAC.

Extract from financial reports of the LAT

But, this was payment for legal services rendered in a labour case Beukes v Peace Trust, LC 41/2002. The LAC had taken over representation of the Peace Trust in 2007. The PEACE Trust exists through donations for medical and mental rehabilitation of victims of trauma and therefore could not further donate monies legally to other trusts. The services of the LAC were utilized by the PEACE Trust and payment was made in the guise of a donation.. In the USA these types of trusts are labelled, Abusive Trust Tax Evasion Schemes.

The inter-trust payment is regarded as one form of concealment of sources of income and tax evasion. The concealment of the true sources of payment is considered as money-laundering, a criminal form of economic sabotage.

In South Africa, these types of trusts are said to be actively being exposed for their criminal nature. Turberville and Henning of Investec Trust give the following warnings:

‘The South African courts have shown their commitment to penalising founders of sham trusts and have voided sham transactions, a bit like piercing the corporate veil" says Henning. "Ignorance is not an excuse in South African law”. The consequences of a sham trust or an improperly administered trust can be far reaching, not only in the form of unexpected tax liabilities but in some cases, criminal prosecution.

The LAT’s principals will not be able to claim ignorance of the law.

Tax Evasion:

Money transferred between trusts is tax-free and therefore constitute tax evasion. The “sacred” nature of a trust allows for a substantial reduction in tax. This however does not mean that a trust does not pay tax at all. A trust must be expressly exempted from paying a certain portion of tax from the relevant authorities. A group of people may not decide by themselves that they have a trust and that they are exempted from paying any tax.

The LAC claims the following on their website:

“Taxation:
The Legal Assistance Trust is constituted as a trust with a not for gain motive and as such is not liable for income tax. Therefore the Trust and its projects are not registered for income tax and the financial statement does not have to disclose income tax, tax liabilities and deferred tax.”

It is therefore clear that the LAT board of ‘trustees’ decided by themselves that since they claim to be a trust, they are therefore exempted from all forms of tax. The LAC does not claim that they were exempted from paying tax by the Inland Revenue. All they claim is that they constitute a trust and therefore they do not need to register their trust for income tax.

The Master’s Powers and Measures to Protect Trust Moneys:

The express purpose of the Act is to “provide for the protection of trust moneys”. Thus, section 4 of the Act gives the Master wide powers to require a trustee at any time to provide a satisfactory account of the administration of the trust money and accrued income, and the power to require a trustee to deliver to him any books or documents relating to the trust money, to answer any inquiry relating to such money, and the power to appoint any fit and proper person to conduct an independent investigation into the administration of the trust money.

LAT in particular

Dave Smuts, now a High Court judge, founded the trust and acted as its director of LAC from 1988 to 1992 when he resigned to act as human rights advocate. He nevertheless remained as chairman of the board of trustees of the LAT.

Smuts commissioned himself regularly as counsel instructed by the LAT. He was the Chairmen of the LAT. Large amounts of money were thus directed to himself, which constitutes corruption in terms of Chapter 4 of the Anti-Corruption Act of 2003.

But, the LAT solicited funds from abroad on the following basis in its unregistered deed of trust:

The trust did not keep to its unregistered instrument:

One such case which stands out is the Magistrates Commission’s case against Magistrate Leah Shaanika in the High Court in 2009. The LAC was purportedly instructed by the Magistrates’ Commission (a directorate of the Ministry of Justice which may not litigate on its own as it is a legal non-entity). The LAC accepted the instruction on grounds of public interest and instructed Smuts as counsel. Smuts accepted his own instruction. This is a typical case in which the left hand applies for the tender and the right hand approves the application.

LAC was not a legal law centre as it was created by the non-existent, illegal board of trustees. The Legal Practitioner’s Act requires a “law centre” to be established by a non-profit organization. An organisation is a legal entity.

Another method used was to misrepresent the notion of “public interest” to justify the use of donations for cases against public interest. In the Shaanika case, they extended legal representation to the Magistrates’ Commission, a State directorate who could not litigate on its own as it was a legal non-entity, to get the dismissal of Magistrate Shaanika. The case purported to seek the enforcement of statutes of the Magistrates’ Act. The case was not about public policy or fundamental rights nor anything that could remotely be termed public interest.

Acting Judge Kobus Miller is reported to have paid an undisclosed amount presumably to Legal Assistance Centre for a judgment in favour of the Peace Trust while he was a legal advisor with the Trusco Group.

The truth about the LAC is that they are running a massive scam which dwarfs into insignificance many of the other rampant and raging scams in Namibia.

HISTORY 2

Smuts from 1988 to 1992 built an international reputation as a human rights activist.

But, his main cases were anti-constitutional rights defences:

Smuts in 2003 acted as counsel to have the South West Africa Building Society (SWABOU) merged with the First National Bank. The SWABOU was State-owned and controlled more than 60% of the housing market. Despite the fact that the Building Society’s Act prohibited the merger between a bank and a building society, Smuts obtained the permission by legal misrepresentation from the Minister of Finance for the merger.

In 2009 Dave Smuts, together with his colleague Ms. Esi Schimming-Chase represented the Africa Personnel Services (Pty) Ltd in the well publicized Labour Hire case, while the Government was represented by Matthew Chaskalson, son of the well known human rights lawyer and Constitutional Judge of South Africa, Arthur Chaskalson. The case was labelled as equivalent to slavery by the International Labour Organization (ILO) and Human Rights Organizations in Namibia and South Africa and quoting Mr. Chaskalson in the same case from an extract in the Namibian Newspaper:
“….according to the argument of Matthew Chaskalson, representing Government in the appeal, labour hire is offensive because it turns labour into a commodity. Labour hire, he said, is fundamentally destructive to the dignity of persons affected by it. It is “the sale of human beings without regard to their dignity, ”he charged.
Chaskalson argued that labour hire is a scheme to circumvent the protection that labour laws give to employees in Namibia. By using labour hire, the user company disavows its responsibilities to employees in terms of labour laws, he argued.”
A brief profile of Matthew Chaskalson’s father, Arthur, is quoted below:
In 1963, Chaskalson, along with Bram Fischer, Joel Joffe, Harry Schwarz and George Bizos, was part of the former President Nelson Mandela's defence team in the Rivonia Trial, which saw Mandela sentenced to life imprisonment. He later left a very successful legal practice to become a human rights lawyer, helping to establish the Legal Resources Centre, a non-profit organisation seeking to use the law to pursue justice and human rights around South Africa.
Chaskalson served as the centre's director from 1978 until 1993, and was leading counsel in a number of cases which challenged the implementation of apartheid laws. He was a formidable opponent of the apartheid government in Court, with a soft voice but commanding presence.
A comprehensive analysis of the ‘Labour Hire’ case in the Supreme Court can be read on www.workersadvicecentre.webs.com .
From 2008 Smuts represented a South African company Momentum against the TCL workers who litigated to recover their stolen pension fund. In January 2011 while a judge in the High Court, he continued representing Momentum as a counsel in the hearing.
Returning to the LAT: Smuts together with a present acting judge in the High Court, Esi Schimming-Chase, Norman Tjombe and Dr Akweenda amongst others served on the ‘board’. Tjombe acted as the ‘director’ of the LAC.
Besides disapproving numerous applications for assistance in fundamental rights violations, it very soon became Public perception that the LAC itself was established to diffuse fundamental rights challenges and was indeed an anti-constitutional institution.

By about 2005/6, a community group Ada /Gui brought a ‘water’ case to court to establish that access to running water by households was a fundamental right. The action was prompted by amongst others such actions of the municipality to cut off running water to a dying woman in a shack in a squatter camp in Windhoek. Hundreds of persons commissioned the action.

The LAC approved their application for legal assistance.

Tjombe on the eve of the hearing withdrew the case without the knowledge or consent of the applicants. Thus a matter of immediate concern to both squatter communities and home owners was quashed.

The ‘water’ case characterised the one method by which the LAC diffused fundamental rights. It initiated human rights cases for its resumé. But, it then quashed the said cases.

THE LAT ON THE LEGALITY OF TRUSTS

The legal assistance trustees themselves explained on their webside that the non-registration of a trust was illegal.

From the website of the Legal Assistance Trust the principals of the LAT explain themselves ... www.lac.org.na

Corbett and Daniels of the LAC and LAT, two trustees advise others organisations on how to create a trust legally.

It seems that these two were unaware of the fact that Dave Smuts as the founder was running a trust without registration.

I 1257/2005, Kapurunje Uirab v Ministry of Basic Education Sports and Culture.

In this case, the plaintiff was a minor who was meted out corporal punishment so brutally that he developed epilepsy.

The LAC approved legal assistance to him and sued the Ministry for N$35, 000.00 damages. It however forced the mother to sign an agreement that legal fees would be paid by the plaintiff.

The LAC won the case, but the registrar declined to award costs of counsel to be billed to the Ministry. The LAC withheld payment of the award and took the matter back to the High Court, which also declined. The LAC applied for leave to appeal. The appeal is pending and the plaintiff has not been paid the award. The award was for pain, suffering, discomfort, violation of psychological integrity, dignity and self esteem.

However, the Supreme Court has in the mean time given costs to the LAC in another case.

It is likely that the plaintiff’s award will be gulped by the costs and he will still owe the LAC.
The judge in the High Court pronounced himself as follows:

In the leave to appeal application, the judge referred to an amendment of the deed of trust. The amendment allowed the LAT to charge full legal fees, which it was permitted to do by the Law Society according to the statement in the amendment.

However, the amendment was not lodged with the Master neither was the Law Society legally authorised to permit income from services. This only the Minister of Finance could allow with the approval of the Master of the High Court.

In the Supreme Court, SA 25/2008, Namib Plains Farming and Tourism versus Valencia Uranium (Pty)Ltd, Min of Agriculture, Water and Forestry, Ministry of Environment and Tourism and Others, the Court awarded costs to the LAT.

Case No SA 13/2004, Waterberg Big Game Hunting Lodge Otjahewita (Pty)Ltd versus The Minister of Environment & Tourism. Smuts and Dicks on instruction from Government Attorney. Same year Ministry of Environment and Tourism paid fees to the LAT, which it entered as a donation.

CONCLUSION

The LAT receives donations internationally for legal costs of fundamental rights cases. These donations are not taxed in terms of the Income Tax Act of 1981. It receives costs awarded in favour of its clients. Such costs are also tax free. It receives full legal costs from its clients. This is not taxed. The latter two items it entered as donations.

All the cases in court in which it represented parties are void in law.

This investigation was done by the Workers Advice Centre. The report as it is expanded can be read at the website: www.workersadvicecentre.webs.com

The Legal Assistance Centre’s Iron Grip on 13 year old beaten Kapurunje Uirab’s award money:
“KATUTURA, Namibia -- When Kapurunje Uirab, 13, was accused of stealing a classmate's cell phone, his sixth-grade teacher beat him with a heavy metal pipe until he could barely walk. His family took him to a clinic where he was treated for lacerations and sore kidneys, according to medical records. "It really hurt to move my legs, " said Kapurunje, speaking by phone from the distant town of Rundu, where he now attends a different school. "He had bleeding welts on his back and more on his legs, " said his mother, Rita Uirab, 40, a housekeeper. "And his face, it had changed from a boy's face to a serious face of a man. We had to do something." “
The Legal Assistance Centre (LAC), represented Uirab in the High Court of Namibia. Judgment was granted in favour of Uirab, a 13 year old boy who was subjected to severe corporal punishment. Uirab through the LAC claimed damages of N$ 50 000.00 but was instead awarded N$ 35 000.00 for pain, suffering and discomfort he suffered as well as his psychological integrity, dignity and self-esteem that were injured as a result of this beating from his school teacher.
“The amount of money that he was awarding to Uirab as damages had to show that the courts are serious about what is in the Constitution and about what the country's courts have laid down in the past, the Acting Judge said”
The Attorney General in 1991 approached the Supreme Court of Namibia in the matter of Ex-Parte Attorney General: Corporal Punishment by Organs of State 1991 NR 178 (SC), asking the Supreme Court to give directions on all corporal punishment by State Organs, which included corporal punishment in schools. The issue was therefore fully canvassed and argued. A legal precedence in Namibia was established.
The LAC lawyers instructed an Advocate to represent the boy. It is common knowledge that Advocates charge close to 35 times more than normal lawyers (see Afshani v Vaatz Case NO SCR 01/2004).
This appeal, he says, “is simply to answer the question whether a legal practitioner (who also has the right to call himself ‘advocate’) is entitled to charge 35 times as much as a legal practitioner (who also has the right to call himself ‘attorney’).”
The boy was only 13 years at the time of going to court. His mother, as legal guardian, therefore had to sign a document that would ensure the LAC to recover all moneys paid to represent the boy from the award that he might receive; this included the Advocate’s fees. The document stipulated that should the court choose not to allow the LAC to recover such monies according to their status as a charitable non-profit organisation, the LAC would be entitled to recover such monies from the award given to the boy for his pain and suffering and psychological integrity etc.
The Government challenged the LAC in court over the costs issue and whether or not the LAC is entitled to recover legal expenses including Advocate’s fees as a known charitable non-profit organisation. The argument in open court went as far as to include the issue of the Advocate’s fees consuming the award allotted to the boy for his suffering. The boy’s monetary award would therefore be exceeded by the Advocate’s fees. This would mean that the boy or his legal guardian (his mother) may eventually owe money to the LAC.
Leave to Appeal was granted and the case is currently pending in the Supreme Court of Namibia. According to the court papers, the boy has not received his award for pain and suffering.
The Master of the High Court of Namibia has confirmed that the Legal Assistance Trust (LAT) was never registered as a trust according to the Trust Monies Protection Act, of 1934. The LAT is therefore operating illegally in Namibia. Acting Judge Heathcote who has been instructed by the LAC as Advocate on countless times in previous cases gave judgment which claimed the following in the Uirab case:
“[5] It is common cause between the parties that after the decision of the Supreme Court in the matter of Hameva and Another v Minister of Home Affairs 1996 NR 380 (SC) (which held that the Legal Assistance Centre in terms of its deed of trust was not entitled to recover costs or even disbursements), the LAC’s trust deed was amended as follows:

“Without derogating from the generality of the aforegoing [i.e. that the Centre provides free legal services without charge], the Trust is authorized to recover costs in the form of disbursements, and insofar as it may be authorized thereto by the Law Society, to recover full legal costs, and furthermore that the Centre may require prospective litigants to undertake to pay the actual disbursements paid by the Centre in relation to any litigation.””

The purportedly new deed of trust claim not to “derogate from the generality of the aforegoing”. The aforegoing stipulate that they receive donations to provide free legal fees to those that cannot afford it. The trust deed further claims that the Law Society has the power to authorise themselves to “recover full legal costs”. The Law Society is not a statutory body and has no legal powers to allow or disallow any person to recover legal costs. Quoting further from the Uirab case:

“[6] An important background which serves as a motivation for the application for leave to appeal against the costs order in this matter is the reasoning of Heathcote AJ in part of his judgment where he deals with the matter of costs as follows:
“As to cost I was requested to order the first and second defendants to pay the costs of the plaintiff, including, but limited to, disbursements incurred by briefing counsel. The Magistrate’s Court Rules allow for such an order and I can see no reason why a superior court cannot make a similar order. I say this particularly because Mr Swanepoel indicated during argument that the second defendant will not pay counsel’s costs in the absence of a ruling made by the Registrar to that effect. He indicated that the argument will be (i.e. before the Registrar) that counsel’s costs are not the costs of the plaintiff but are costs incurred by the Legal Assistance Centre. This case lasted for a number of days and in all probabilities counsel – disbursements will exceed the monetary award. By virtue of the Supreme Court’s decision in Hameva and Another v Minister of Home Affairs, Namibia 1996 NR 380 (SC), an order of cost would include counsel’s disbursements in the normal circumstances, but not where the client does not incur any expenses in relation to counsel’s fees. This issue was raised by Mr Swanepoel (for the first defendant) during argument for the first time. He stated that the plaintiff is funded by the Legal Assistance Centre, and that the fees paid to counsel are not the plaintiff’s disbursement. If this was raised in the pleadings, the plaintiff could have dealt with the issue during evidence by presenting the document referred to Ms Vivier during argument in this aspect. Ms Vivier described this document, which Kapurunje’s mother had to sign when the Legal Assistance Centre was appointed, as having the effect that any disbursements, if not taxed, should be repaid to the Legal Assistance Centre from any award made to the plaintiff. The approach of the second defendant, not to raise this issue pertinently on the pleading but, to keep quiet and then ask the Registrar to determined legal issues, smacks, with respect, of opportunism. I will not allow it. If this aspect was raised in the pleadings, the evidence could be dealt with; the relevant documents handed up and this issue could have been more properly addressed in argument. Nevertheless, Mr Swanepoel did not dispute the description of the document referred to by Ms Vivier.”

The LAT deed of trust was purportedly amended after the 1996 Supreme Court case (see Hameva and Another v Minister of Home Affairs 1996 NR 380 (SC))where they were refused recovery of costs for their instructing Advocate. All the cases thereafter that the LAC handled and given cost orders in their client’s favour, the LAT successfully recovered such costs. It was only in 2009, approximately 13 years of recovering full legal fees from opposing litigants (including mostly the Government) that the issue of the LAC claiming recovery of full legal fees for the Trust and the Advocate(s) was raised.
As an example of the LAC’s operations, in Namib Plains Farming and Tourism cc v Valencia Uranium (PTY)Ltd & 5 Others SA 25/2008, the applicants were represented by the Adv’s Heathcote and Dr.Akweenda on instruction from the Legal Assistance Centre (LAC). Adv Viviers represented Valencia Uranium (Pty)Ltd and Mr. Swanepoel represented the Government Attorneys. The following cost order was given:
“7. The respondents (excluding the 5th respondent) are ordered to pay the
appellant’s costs of the appeal jointly and severally, the one paying the
other to be absolved, such costs to include the costs of two instructed
counsel and one instructing counsel.”
The court thus gave costs in favour of the appellant’s represented by the LAC (instructing council) and two instructed council’s. The LAC like any other law firm therefore recovered their full legal costs incurred. The cost of the LAC employed lawyer was therefore also covered in this cost order. To illustrate how this costs were recovered it is best to look at the LAC’s annual financial accounts (see www.lac.org.na ).
“Taxation
The Legal Assistance Trust is constituted as a trust with a not for gain motive and as such is not liable for income tax. Therefore the trust and its projects are not registered for income tax and the financial statements does not have to disclose income tax, tax liabilities and deferred tax.”

It is important at this stage to remind the reader that the Master of the High Court of Namibia has confirmed the non-registration and therefore the illegal existence of the trust. The purported trustees therefore exempted themselves from all tax and claim that they do not have to register themselves for income tax.
Comming back to the Uirab case and the award for pain and suffering that is still trapped in an illegal battle between the LAC and the Governemnt. A similar case to that of the 13 year old boy was decided in the Supreme Court of Namibia (see F. Y. Shaanika v The Ministry of Safety & Security SA 35/2008). Miss Shaanika was awarded 50% of N$ 60 000.00. The following order was given:
“Costs
[38] The issue of costs to be awarded where a claimant is represented by the Legal Assistance Centre is on appeal and due to be heard during the next session of this Court in the case of Minister of Basic Education, Sport and Culture v Uirab. Although the defendant is not claiming costs both plaintiff and the defendant, in regard to his cross-appeal, were to a certain extent successful. As the parties could not anticipate the orders of the Court and given the fact that the appeal in Minister of Basic Education, Sport & Culture v Uirab is of relevance to the order of costs to be made in the present case it seems to me that it would be fair that the Court let the issue of costs stand over pending the outcome of the appeal in the Minister of Basic Education case and to afford any of the parties the right, thereafter, to set the matter down and argue the issue of costs if so advised.”

It is clear from the above case that Mrs. Shaanika and her minor son will not receive the award for loss of their husband and father respectively. It should be noted that Mrs Conradie represented the LAC in the above case. She is also a permanent employee at the same Centre with a monthly salary. The issue as to whether or not she should recover her legal fees for representing the appellant stands over. She will therefore be paid a salary as well as a lawyer’s fee. The fee will be tax free as the Centre and the trust entre their income generated from full legal fees recovered as donations.