8 August 2022

International Cases

Leysath v The Legal Practitioners’ Fidelity Fund Board of Control

South Africa



Onus is on claimant to establish that money had been entrusted on his behalf to the attorney

The Appellant, a practising advocate made an application to the high Court for an order compelling the Respondent, the Legal Practitioners’ Fidelity Fund Board of Control to reimburse him a sum of R472 666, in terms of Section 26(a) of the Attorneys Act, 1979 (the Attorneys Act). The Appellant contends that the money was held in trust on his behalf by the firm, M F Martins Costa Attorneys (Costa Attorneys), as cover for his fees but instead, the firm had misappropriated it.

On 17 July 2018, the Appellant lodged his claim with the Respondent. After extensive correspondence between the parties, the respondent repudiated the claim on the grounds that the appellant had failed to establish that the funds had been entrusted to Costa Attorneys on his behalf and that his claim consequently did not fall within the ambit of Section 26(a) of the Attorneys Act. Dissatisfied with this finding, the appellant made an application to the high court. The high court found that the monies deposited by clients to ensure that there were sufficient funds available to pay counsel’s fees were ‘entrusted’ to Costa Attorneys as envisaged by Section 26 of the Attorneys Act. However, it reasoned that since the Appellant did not deposit the money, it can never be said that the money entrusted as deposits by Costa’s clients was so entrusted on the Appellant’s behalf. The high court concluded that, an advocate’s claim for outstanding fees lied against the attorney and not the client. It was based on this finding that the matter was brought before present Court.

The Appellant was required, in terms of Section 26(a) of the Attorneys Act, to prove that: (a) he had suffered pecuniary loss; (b) by reason of theft committed by Mr Costa; (c) of money entrusted by or on the appellant’s behalf; (d) in the course of Mr Costa’s practice. It was incumbent on the appellant to prove, on a balance of probabilities, the exact amounts that clients had paid to Costa Attorneys in respect of each of the matters in which he had rendered tax invoices and had sought reimbursement. Instead, the Court held, the appellant relied only on hearsay evidence.

The Appellant's recourse to Section 3 of the Law of Evidence Amendment Act was misguided because as a practicing advocate, he should have known that references in his affidavits to what he had been told by Mr Costa's clients constituted inadmissible hearsay evidence. Thus, he was obligated to introduce such evidence properly, if he sought to rely on it.

Appellant relied on bald statements by clients to the effect that they had paid money to Costa Attorneys in respect of his and the attorneys’ fees. However, no details of the exact amounts that have allegedly been entrusted to Costa Attorneys on his behalf were provided.

The Court found that, the Respondent would be seriously prejudiced if the hearsay evidence were allowed as it would put undue pressure on the Respondent to consider general allegations relating to unspecified amounts paid to and misappropriated by Mr. Costa. Therefore, it would not be in the interests of justice to allow such evidence. Appeal dismissed.

Tags : Funds Entrustment Claim

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