Bobroffs provisionally sequestrated

Assets may be unearthed that will benefit creditors – judge.

The Johannesburg High Court this week placed the estates of personal injury lawyers Ronald and Darren Bobroff under provisional sequestration.

The father and son duo are fugitives from justice who fled to Sydney, Australia, last March when the Hawks requested that they hand themselves over to be arrested. 

Applicants

The application for the provisional sequestration of the Bobroffs was brought by two former clients of Ronald Bobroff & Partners (RBP) who have judgments totalling R3 million against the Bobroffs.

Christine Maree, a 78-year-old Pretoria widow, was the victim of medical negligence and Yasmin Motara, a 31-year-old Springs teacher, was the innocent party in a catastrophic and life changing motor vehicle accident. They had hired the Bobroffs to prosecute their claims.

Insolvency

RBP was registered as a company. The Attorneys Act stipulates that the directors of an incorporated law firm cannot hide behind the corporate veil to avoid payment to creditors. It was on this basis that the two applicants asked the court to provisionally sequestrate the Bobroffs. 

The Bobroffs opposed the application.

The applicants told Acting Judge Etienne Theron that although they believed that the Bobroffs were insolvent, they had nevertheless committed an act of insolvency.

Bobroffs fee regime

The applicants’ claims against the Bobroffs flows from RBP’s illegal common law contingency fee agreements, which significantly overcharged clients. Several courts have found that this agreement was unlawful and ordered RBP to repay clients.

The Bobroffs have steadfastly defended their fee regime. They persistently defended every case brought against them on the same grounds that they had defended the matter that went to the Constitutional Court.  In so doing they were the subject of judicial rebuke. 

Here are but a few examples:

  • Judge Haseena Mayat: RBP is abusing this court’s process, as a recalcitrant debtor, simply with a view to delaying the inevitable payment.
  • Judge Kenneth Matojane: The Bobroffs are each ordered to pay a fine of R100 000 [for their contempt of court].
  • Judge John Murphy: This application was resorted to as a calculated decision by the Bobroffs to delay disciplinary and investigative processes.
  • Judge Brian Spilg: There is documentation which indicates that the first agreement was implemented even after the second agreement was purportedly concluded per RBP in 2010 and similarly the second agreement does not appear to have been implemented prior to the date when the applicant contends that she signed it.

Read: Ronald and Darren Bobroff found guilty of contempt of court

Lost its identity

The Bobroffs were eventually forced to allowed a forensic audit by the Law Society of the Northern Provinces (LSNP). It uncovered multiple serious irregularities. The most damning finding was that the Bobroffs trust account had “lost its identity”. They had mixed their clients’ money with their own.

Once the Bobroffs fled South Africa as fugitives, the LSNP took immediate steps to place RBP under curatorship and froze all its bank accounts. This resulted in the Bobroffs being suspended from practice.

In December of last year they were struck from the Roll of Attorneys.

Judge’s reasoning

In granting the provisional order of sequestration Judge Etienne Theron noted: I am prima facie of the opinion that there is, based on the evidence before me, reason to believe – not necessarily a likelihood, but a prospect not too remote – that as a result of investigation and inquiry, assets might be unearthed that will benefit creditors.”

Seizing the Bobroffs foreign assets

Anthony Millar, the attorney for Maree and Motara, as well as many other RBP claimants, told Moneyweb: “The Bobroff’s have run out of rope and I am confident that the liquidator will locate assets both here in South Africa, Australia, Israel and Hong Kong so that the millions due to their victims will be recouped.”

Millar explained that there are cross-border insolvency provisions and that the provisional sequestration order would be enforced in every jurisdiction where the Bobroffs or their family members or companies or trusts held assets and that the funds would be repatriated for the benefit of the victims of the Bobroffs overcharging.

Darren Bobroff’s house in Victory Park, Johannesburg, will go under the hammer at a judicial sale later this month.

The Bobroffs also need to respond to a R24 million defamation claim this week. The claim was brought by various parties including this journalist and Millar. The claim will not be affected by the provisional sequestration.  It is the second defamation claim made against them in recent times.

Ronald Bobroff did not responded to Moneyweb’s request for comment.

Darren Bobroff responded in a lengthy e-mail, most of which is defamatory in nature and will therefore not be published. He informed Moneyweb that the judgment would be appealed.

Provisional orders, such as the one granted against the Bobroffs, are not appealable. Only final court orders are appealable.

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well let me say one thing – their numerous property investments in Australia will be safely out of the liquidators touch – but no doubt the liquidator will spend million of investors rands trying to recover them!

End of comments.

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