Fourie v Van der Spuy & De Jongh Inc and Others

• Jurisdiction: South Africa
• Citation: 2020 (1) SA 560 (GP)

Fourie v Van der Spuy & De Jongh Inc and Others
2020 (1) SA 560 (GP)

2020 (1) SA p560

Citation	2020 (1) SA 560 (GP)
Case No	65609/2019
Court	Gauteng Division, Pretoria
Judge	Klein AJ
Heard	August 30, 2019
Judgment	August 30, 2019
Counsel	SD Wagener SC for the applicant.; AJ Schoeman for the respondents.

Flynote : Sleutelwoorde

Legal practitioners — Attorney — Rights and duties — Duties — Duty to execute mandate with required standard of diligence, skill and care — Cybercrime — Payments by law firm, using money held in trust on behalf of client, purportedly on latter's instructions — Emails in fact from unknown third parties who had hacked client's account — Failure of attorney to employ measures to ensure attorney and client safe from online fraud — Failure to exercise requisite skill, knowledge and diligence of average practising attorney, and thus failure to discharge fiduciary duty to client.

Legal practitioners — Attorney — Rights and duties — Duties — Cybercrime — Duty to employ measures to ensure attorney and client safe from online fraud.

Headnote : Kopnota

This matter highlighted the risk posed by cybercrime to the attorneys' profession and the duty to employ safeguards when transacting online. The applicant had entered into a contract of mandate with his attorney, the second respondent, of the first-respondent law firm (the firm), instructing her to keep certain moneys belonging to him in her trust account, until further instruction. The second respondent later received emails, purportedly from the applicant, requesting the firm to make certain payments into identified bank accounts. It did so. However, it came to light that such emails had in fact not been sent by the applicant; his email account had been hacked; client as well as attorney had apparently been the victims of cybercrime. In the present application proceedings heard before the Pretoria High Court, the applicant sued his attorney, the firm, as well as the other attorney in the firm — the third respondent — for payment of the aforementioned amounts. The question to be answered, the court held, was: Who must take the knock for the loss described? The attorney? Or the client?

Held, that the second respondent, by transacting via email without employing any measures to ensure that both she and her client would not fall victim to fraud [*] — knowing full well that it was prevalent in her profession — acted negligently and failed to exercise the requisite skill, knowledge and diligence of an average practising attorney, and thus failed to discharge her fiduciary duty to her client. (See [30].)

Held, that the second respondent had failed to meet her obligation, as principal, to account to her client for the funds held in the firm's trust account on such client's behalf (see [15], [21] and [31]). In this regard, it was no defence to claim that payments were erroneously made to the wrong person (see [15], [21] and [31]).

Held, accordingly, that the second respondent as attorney was liable for the loss suffered by the applicant and that the respondents be ordered to pay him the amount claimed (see [31]).

2020 (1) SA p561

Cases cited

Administrator, Transvaal, and Others v Theletsane and Others 1991 (2) SA 192 (A) ([1990] ZASCA 156): dictum at 204G – 205E applied

Bruce, NO v Berman 1963 (3) SA 21 (T): applied

Frikkie Pretorius Inc and Another v GG 2011 (2) SA 407 (KZP): dictum in para [19] applied

Fuhri v Geyser and Another 1979 (1) SA 747 (N): referred to

Hirschowitz Flionis v Bartlett and Another 2006 (3) SA 575 (SCA) ([2006] 3 All SA 95): applied

Joubert Scholtz Inc and Others v Elandsfontein Beverage Marketing (Pty) Ltd [2012] 3 All SA 24 (SCA) ([2012] ZASCA 6): applied

Jowell v Bramwell-Jones and Others 2000 (3) SA 274 (SCA) ([2000] 2 All SA 161; [2000] ZASCA 16): applied

Jurgens and Another v Volschenk [2019] ZAECPEHC 41: compared

Khumalo v Director-General of Co-operation and Development and Others 1991 (1) SA 158 (A): dictum at 168A applied

Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty) Ltd 1985 (1) SA 475 (A) ([1984] ZASCA 132): dictum at 499A applied

Margalit v Standard Bank of South Africa and Another 2013 (2) SA 466 (SCA): dictum in paras [23] and [24] applied

Media 24 Books (Pty) Ltd v Oxford University Press Southern Africa (Pty) Ltd 2017 (2) SA 1 (SCA): dictum in para [36] applied

Metallurgical and Commercial Consultants (Pty) Ltd v Metal Sales Co (Pty) Ltd 1971 (2) SA 388 (W): referred to

Mouton v Die Mynwerkersunie 1977 (1) SA 119 (A): applied

Nissan South Africa (Pty) Ltd v Marnitz NO and Others (Stand 186 Aeroport (Pty) Ltd Intervening) 2005 (1) SA 441 (SCA) ([2006] 4 All SA 120): referred to

Phillips v Fieldstone Africa (Pty) Ltd and Another 2004 (3) SA 465 (SCA) ([2004] 1 All SA 465; (2004) 25 ILJ 1005; [2003] ZASCA 137): dictum in para [27] applied

Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) ([1984] ZASCA 51): dicta at 634 – 635 applied

Potgieter v Capricorn Beach Homeowners Association and Another [2012] ZAWCHC 66: dictum in para [6] applied

Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others 2005 (2) SA 359 (CC) (2005 (4) BCLR 301; [2004] ZACC 20): dictum in para [53] applied

Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T): dicta at 1163 and 1165 applied

Soffiantini v Mould 1956 (4) SA 150 (E): dicta at 154F and 154G applied

Stellenbosch Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C): dictum at 235 applied

Wypkema v Lubbe 2007 (5) SA 138 (SCA): compared.

Case Information

SD Wagener SC for the applicant.

AJ Schoeman for the respondents.

An application for payment of moneys owing to applicant, and placed in trust with attorney, erroneously paid by latter into bank accounts of third parties.

Order

1.

The respondents, jointly and severally, the one to pay the other to be absolved, are to pay R1 744 599,45 (one million, seven hundred

2020 (1) SA p562

and forty-four thousand, five hundred and ninety-nine rand and forty-five cents only) to the applicant.

2.

Interest on the said amount at a rate of 10% per annum a tempore morae to date of final payment.

3.

Costs of the application.

Judgment

Klein AJ:

[1] This is a judgment on a matter pertaining to cybercrime; it is a matter of innocent people being dragged into cases where emails are hacked and payments are made to unknown hackers. The victims then litigate against one another.

[2] In this matter the applicant claims payment of R1 744 599,45 from the respondents, jointly and severally, the one to pay the other to be absolved. The amount claimed represents the balance due to the applicant as a result of certain mandates done by second respondent for the applicant. The applicant was her client.

[3] The first respondent is a law firm of the second and third respondents, who are practising attorneys. The Attorneys Act 53 of 1979, s 23(1)(a), is applicable, [1] and rules that all present and past shareholders, partners or members, as the case may be, are liable jointly and severally, together with the company, for the debts and liabilities of the company contracted during their period of office.

[4] It is...