THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Not reportable

Case No: 770/2021

In the matter between:

LINDON CLIFFORD LEYSATH                                                     APPELLANT

and

LEGAL PRACTITIONERS’ FIDELITY FUND
BOARD OF CONTROL

RESPONDENT

Neutral Citation: Leysath v Legal Practitioners’ Fidelity Fund Board of Control
(770/2021) [2022] ZASCA 115 (28 July 2022)

Coram:
PETSE DP, ZONDI and MABINDLA-BOQWANA JJA and
SMITH and SAVAGE AJJA

Heard:

31 May 2022

Delivered:
28 July 2022

Summary:
Claim for reimbursement in terms of s 26 of the Attorneys Act
53 of 1979 – appellant alleging that deposits paid by clients to instructing attorneys’
firm as cover for counsel’s fees constitute an entrustment in terms of s 26 –  alleged
payment disputed - onus on claimant to establish that money had been entrusted on
his behalf to the attorney –onus not discharged – appeal dismissed with costs.

__________________________________________________________________
ORDER
__________________________________________________________________
On appeal from: Gauteng Division of the High Court, Pretoria (Van
Nieuwenhuizen AJ, sitting as court of first instance):

The appeal is dismissed with costs.
__________________________________________________________________
JUDGMENT
__________________________________________________________________
Smith AJA (Petse DP, Zondi and Mabindla- Boqwana JJA and Savage AJA
concurring)

Introduction
[1] This is an appeal against the judgment of the Gauteng High Court, Pretoria
(the high court), dismissing the appellant’s, Mr L C Leysath’s, application 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 s 26(a) of the Attorneys
Act 53 of 1979 (the Attorneys Act).

[2] The appellant, a practising advocate, contended that the money was held in
trust on his behalf by the attorneys’ firm, M F Martins Costa Attorneys (Costa
Attorneys), as cover for his fees and had been misappropriated by the firm. The high
court granted leave to appeal to this Court on the ground that s 17(1)(a)(ii) of the
Superior Courts Act 10 of 2013 may be applicable since the appellant contended that
the high court had impermissibly overturned binding legal precedent.

[3] Although the Attorneys Act was repealed by the Legal Practice Act 28 of 2014
(the Legal Practice Act), which came into effect on 1 November 2018, the latter
statute has no retroactive application. Because the facts which gave rise to the
appellant’s claim occurred before 1 November 2018, the matter must be decided in
terms of the provisions of the Attorneys Act.

[4] The respondent is the successor in title of the Attorneys Fidelity Fund Board
of Control, which ceased to exist on 1 November 2018. It was established in terms
of s 61 of the Legal Practice Act and is responsible for the management and
administration of the Legal Practitioners’ Fidelity Fund.

The facts
[5] 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 s 26(a) of the Attorneys Act.

[6] The appellant’s claim comprised 51 of unpaid tax invoices that he had
allegedly rendered to Costa Attorneys in respect of professional services performed

by him for various clients during February to June 2018. He claimed that clients had
paid funds to Costa Attorneys as cover for his fees and that those funds had been
entrusted to the latter on his behalf, as contemplated by s 26(a). He further alleged
that the managing partner, Mr Manuel Fernando Martins Costa (Mr Costa),
misappropriated the monies, causing him to suffer pecuniary loss in the claimed sum.

[7] Mr Costa absconded after the Legal Practice Council (the Council) established
that there was a deficit exceeding R30 million in the firm’s trust account. The
appellant first became aware of the misappropriation of the funds by Mr Costa on 9
July 2018, when Mr Wayne Teich, an attorney employed by Mr Costa told him about
it. Mr Costa’s estate has since been sequestrated.

[8] The appellant claims that he has had a long professional relationship with
Costa Attorneys, spanning over 10 years. Throughout this period, his accounts were
paid within 97 days. He was aware of the firm’s policy to the effect that it would
only engage counsel once a client had paid sufficient funds into its trust account. He
was present on several occasions when clients were advised to provide cover for
counsel’s fees.

[9] In support of this assertion, he relied on the confirmatory affidavit of Ms
Glynis Wall, who was, at all material times, employed by Costa Attorneys as Mr
Costa’s personal assistant. Although Ms Wall was able to confirm that she had on
many occasions contacted clients prior to the appellant’s engagement to secure
funds, she could not verify how much was paid prior to the appellant’s engagement
because she did not have direct access to Costa Attorneys’ accounts and systems,
‘such being tightly controlled by [Mr Costa]’.

[10] The appellant attached, to his founding affidavit, the tax invoices on which he
had based his claim. He conceded that in seven of those matters, there was no proof
that clients had paid the claimed amounts to Costa Attorneys, and that he was
consequently not entitled to reimbursement in respect thereof. In respect of one of
the matters, he asserted that a reduced amount was paid. As a result, his initial claim
of some R537 475 was reduced to R472 666.

[11] In respect of the rest of the invoices, he asserted that in each of those matters
clients had informed him that they had made payments to Costa Attorneys as cover
for his fees. He also attached copies of proof of payments by clients and provided
the respondent with the respective clients’ cellular phone numbers. He explained that
he was constrained to follow that route since he was unsuccessful in his attempts to
obtain the relevant information from the Council.

[12] The appellant also relied on an affidavit that Mr Teich had deposed to, in order
to assist the Council with the investigation into the affairs of Costa Attorneys. The
affidavit was neither made in support of the appellant’s founding affidavit nor was
it a confirmatory affidavit. In any event, Mr Tiech stated that he worked mostly on
conveyancing matters and had no access to any of the firm’s records or books of
account. The affidavit accordingly does not support either the appellant’s or Ms
Wall’s assertions regarding the firm’s briefing policy, nor does it shed any light on
monies that clients paid as cover for counsels’ fees. It appears that the affidavit was
primarily intended to assist the Council in establishing the extent of the
embezzlement by Mr Costa.

[13] In addition, the appellant relied on affidavits filed by Mr Gary Abkin and Mr
Richard Vaz behalf of their respective companies, who were both clients of Costa

Attorneys. Mr Abkin made his affidavit in support of a charge of theft against Mr
Costa, lodged on behalf of Norman and Gary Abkin Dunswart Properties (Pty) Ltd
(the company). He stated that the company had paid R13 800 to Costa Attorneys as
cover for the appellant’s fees and a further R23 000 as cover for his fees in respect
of drafting of heads of argument, as well as cover for Costas Attorneys’ own fees.
Mr Abkin also mentioned that the company had paid R240 000 to Costa Attorneys
with instructions to hold the money in trust for attorneys’ and counsel’s fees.
However, no mention is made of the appellant in regard to this payment.

[14] Mr Abkin alleged that the company entrusted the sum of R276 800 to Costa
Attorneys and that the company had suffered pecuniary loss because of Mr Costa’s
misappropriation of the funds. The company accordingly sought reimbursement of
that amount.

[15] In his affidavit, Mr Vaz, in his capacity as a director of Annsden Property
Holdings (Pty) Ltd, stated that during May 2018 he had caused a sum of R100 000
to be transferred from his company to Costa Attorneys’ trust account. Mr Vaz stated
that these funds were for the ‘specific and sole purpose of payment of the invoices
of the two advocates’, namely the appellant and Mr Ralph Kujawa, ‘whose services
had been utilised in litigation against a third party’. He stated, further that he had
expressly made it known to Mr Costa that the payment was for that purpose only.
The money was therefore not paid as cover for counsels’ fees, but to settle the
appellant’s and Mr Kujawa’s accounts in respect of services rendered by them.
However, Mr Vaz did not specify what amount his company paid in respect of the
appellant’s fees and claimed that it was his company that suffered the pecuniary loss.

The findings of the high court
[16] Despite the respondent’s unequivocal assertion that the appellant had failed to
establish that clients paid deposits to Costa Attorneys as cover for his fees, the high
court, nevertheless, decided the matter based on that assumption. It furthermore
assumed that Mr Costa had committed theft in the course of his practice. The high
court then embarked on an extensive discussion regarding the question whether
monies paid by a client to a practising attorney as cover for counsel’s fees in respect
of services to be rendered, constituted an entrustment as envisaged in s 26.

[17] It 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 s 26. 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’. It reasoned that:
‘It may well be that its purpose was to ensure that counsel’s fees were covered, but it would be
farfetched to suggest that deposits were paid with the sole purpose only of covering counsel’s fees
as a disbursement and not other disbursements, such as sheriff’s costs, correspondent’s fees,
messenger’s fees and the like, (including at least part of the attorney’s own initial fees)’.

[18] The high court concluded that an advocate’s claim for outstanding fees lies
against the attorney and not the client. If the attorney’s estate was sequestrated, the
claim lay against his or her insolvent estate. It followed, the court held, that the
appellant did not suffer pecuniary loss due to the alleged theft of any monies paid by
clients to Costa Attorneys. The appellant’s loss, as indicated, arises due to Mr
Costa’s breach of the agreement between him and the appellant.

The appellant’s submissions
[19] A substantial portion of the appellant’s heads of argument focused on the
criticism that the high court misconstrued the dispute between the parties. He
submitted that the high court therefore decided the matter on a wrong basis and failed
to deal with the real dispute between the parties. In this regard, the appellant
contended that the respondent had accepted that the monies paid by clients to Costa
Attorneys as cover for his fees constituted entrustments as envisaged by s 26. The
only issue, according to him, that was still alive before the high court was the
respondent’s contention that the appellant had failed to prove that clients had in fact
paid the monies to Costa Attorneys as cover for services rendered by him.

[20] In any event, so contended the appellant, in pronouncing on the issue of
entrustment, the high court ignored the fact that there was a tripartite contractual
relationship between counsel, client and the attorney, and erroneously found that
there existed a debtor and creditor relationship between him and the instructing
attorney. In doing so, the high court impermissibly overturned binding precedent
that established that a client is contractually liable for counsel’s fees, and that there
is no ‘hardened rule’ that an attorney ‘stands in’ for counsel’s fees. Those cases
confirmed that funds held by an attorney in respect of counsel’s fees are in not held
by the attorney as his or her own funds or in respect of services to be rendered by
him or her, and they are held on behalf of counsel.1

[21] In addition, the appellant submitted that the high court was wrong in refusing
to follow the dictum in Serrurier and Another v Korzia and Another,2 to the effect

1 See Bertelsmann v Per 1996 (2) SA 375 (T), at 381E-F; Minister of Finance and Another v Law Society, Transvaal
1991 (4) SA 544 (A) at 556I – 557B.
2 Serrurier and Another v Korzia and Another 2010 (3) SA 166 (W) para 17.

that in the event of a client paying an attorney for counsel’s fees and the attorney
failing to pay counsel, ‘the fidelity fund would in all probability pay the counsel’.

[22] Regarding the adequacy of the proof of payments into Costa Attorneys’ trust
account, the appellant contended that the respondent had, in correspondence between
the parties, set out the frame of reference and parameters in which information in
support of the claim was to be relayed to it. In terms of that frame of reference, the
respondent indicated that it required generic information and supporting documents,
and to the extent that they were insufficient, it would request further information.
The respondent did not challenge the supporting documents that he submitted to it
nor did it request any further information or documents. Therefore, the respondent
was estopped from challenging the adequacy of the evidence that the appellant had
submitted in support of his claims. Consequently, the respondent impermissibly
raised that issue for the first time in its answering affidavit, so the argument went.

Discussion
[23] Section 26(a) of the Attorneys Act reads as follows:
‘Subject to the provisions of this Act, the fund shall be applied for the purpose of reimbursing
persons who may suffer pecuniary loss as a result of –
(a) theft committed by a practising practitioner, his candidate attorney or his employee, of any
money or other property entrusted by or on behalf of such persons to him or to his candidate
attorney or employee in the course of his practice or while acting as executor or administrator in
the estate of a deceased person or as a trustee in an insolvent estate or in any other similar capacity.’

[24] The appellant was thus required 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.

[25] In Industrial and Commercial Factors (Pty) Ltd v The Attorneys’ Fidelity
Fund Board of Control (Industrial and Commercial Factors),3 this Court held that
not all monies paid into an attorney’s trust account constitute an entrustment as
envisaged by s 26. The term is also not limited to cases where the money or property
was subject to a ‘trust’ in the legal technical sense of the word. The court further
explained that ‘[i]f money is simply handed over to an attorney by a debtor who
thereby wished to discharge a debt, and the attorney has a mandate to receive it on
behalf of the creditor, it may be difficult to establish an entrustment’.

[26] The court cited with approval, the dictum in British Kaffrarian Savings Bank
Society v Attorneys, Notaries and conveyancers Fidelity Gaurentee Fund Board of
Control,4 to the effect that entrustment comprises two elements namely: ‘(a) to place
in the possession of something, (b) subject to a trust. As to the latter element, this
connotes that the person entrusted is bound to deal with the property or money
concerned for the benefit of others . . .’.

[27] In the context of the factual matrix of this case, it is logical that the starting
point must be whether the appellant has established, on a balance of probabilities,
that clients paid money to Costa Attorneys as cover for his fees. This was also the
main ground on which the respondent had joined issue with the appellant in its
answering affidavit. The respondent stated, upfront, that its main reason for rejecting
the appellant’s claim was that he was unable to discharge the onus of proving that
the funds were entrusted to Costa Attorneys on his behalf.

3 Industrial and Commercial Factors (Pty) Ltd v The Attorneys’ Fidelity Fund Board of Control 1997 (1) SA (A) 136
at 143-144.
4 British Kaffrarian Savings Bank Society v Attorneys, Notaries and Conveyancers Fidelity Gaurentee Fund Board of
Control [1978] 3 All SA 522 (E); 1978 (3) SA 242 (E).

[28] The appellant has correctly submitted that the high court did not have any
grounds for deciding the matter on the assumption that the funds were paid by Costa
Attorneys’ clients as cover for his fees, since the respondent unambiguously denied
that assertion in its answering affidavit. Moreover, as I have mentioned earlier,
where a client’s payment to an attorney has been put in issue, the court must, as a
first step, resolve that dispute. It is only once that issue has been determined that it
becomes necessary to consider the other requirements mentioned in s 26, namely,
the issues of entrustment and theft of the funds. The appellant’s assertion that the
respondent conceded the issue of entrustment is misplaced. The appellant’s
submissions in this regard were not factual in nature, but were legal conclusions
without a factual foundation. In any event, the question as to whether the payments
to Costa Attorneys constituted entrustments as contemplated by s 26 is a legal issue
which must be determined by this Court – if and when it becomes necessary – and
any concessions made by the respondent in this regard are of no moment.

[29] Before I turn to consider the adequacy of the proof submitted by the appellant
in support of his claims, it is necessary to emphasise that s 26 provides for
reimbursement in respect of pecuniary loss suffered by victims of theft by an
attorney in the course of his or her practice. It was therefore 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. In my view, this Court is not bound by
an agreement between the respondent and the appellant that has the effect of
relieving the latter of the obligation to prove the factors mentioned in s 26 on a
balance of probabilities.

[30] As I have indicated earlier, the appellant relies only on hearsay evidence in
support of his assertion that clients paid money to Costa Attorneys as cover for his
fees. In this regard, he stated that the relevant clients had informed him that they
made payments to Costa Attorneys in respect of his fees. However, he did not obtain
confirmatory affidavits from them, but merely provided the respondent with their
contact details, expecting the latter to verify his claims.

[31] In this regard, the affidavits of Ms Wall, or Messrs Abkin, Tiech and Vaz were
of no assistance to the appellant. Ms Wall merely confirmed that Costa Attorneys
had a policy to brief counsel upon receipt of funds by clients. It is common cause,
however, that she was unable to shed any light on actual payments made by clients
in respect of the appellant’s fees. In any event, the existence of such a policy does
not take the matter any further in the absence of sufficient proof that the relevant
clients actually paid money to Costa Attorneys as cover for the appellant’s fees.

[32] Mr Abkin’s affidavit also did not shed any light on specific amounts paid in
anticipation of services to be rendered by the appellant.  Instead, it concentrated on
proving pecuniary loss suffered by his company.

[33] Mr Tiech’s affidavit also does not refer to any specific amounts paid to Costa
Attorneys on behalf of the appellant. It was only proffered to establish that Mr Costa
had misappropriated trust funds.

[34] The appellant submitted that it would be in the interests of justice to admit the
hearsay evidence. He argued that in considering whether to admit the hearsay
evidence in terms of s 3 of the Law of Evidence Amendment Act 45 of 1988 (Law

of Evidence Amendment Act)5, the court must have regard to the following facts.
First, he is a practising advocate and since he has conceded claims in respect of
which he was unable to provide proof, there is no reason why the respondent should
doubt the probity of his claims. Second, the respondent has chosen the frame of
reference in respect of the evidence it required in support of the claims. Third, he did
not have access to Costa Attorneys’ trust account records and it would have been
relatively easy for the respondent to access Costa Attorney’s books of account in
order to confirm whether the payments were made. And last, he has provided the
respondent with the contact details of the respective clients, placing it in a position
to confirm the veracity of his assertions.

Findings and order
[35] The appellant's recourse to s 3 of the Law of Evidence Amendment Act is
misguided. As a practicing advocate, he could not have been oblivious to the fact
that references in his affidavits to what he had been told by Mr Costa's clients
constituted inadmissible hearsay evidence. Thus, it behoved him to introduce such
evidence properly, if he sought to rely on it, assuming that such an avenue was open
to him.  He apparently knew of the identities of the persons who, according to him,
provided him with this information.

5 In terms of s 3 of the Law of Evidence Amendment Act, a court has discretion to allow hearsay evidence if it is of
the opinion that such evidence should be admitted in the interests of justice, having regard to the following factors:
(a) the nature of the proceedings;
(b) the nature of the evidence;
(c) the purpose for which the evidence is tendered;
(d) the probative value of the evidence;
(e) the reason why the evidence is not given by the person upon whose credibility the probative value of such evidence
depend;
(f) any prejudice to a party which the admission of such evidence might entail; and
(g) any other factor which should, in the opinion of the court, be taken into account.

[36] In my view, the established facts militate against the admission of the hearsay
evidence. As I have mentioned earlier, the purpose of s 26 is to reimburse victims of
theft by a practising attorney in respect of specific amounts entrusted to the attorney.
The first hurdle a claimant relying on the section must therefore overcome is to prove
that the monies were in fact paid to an attorney on his or her behalf. Since attorneys
are by law required to keep proper books of account and records of trust ledgers, this
is usually not a difficult hurdle for a claimant to surmount. This is so because the
relevant receipt or trust ledger would invariably establish whether the funds were
entrusted to the attorney. In a case such as this, where the claimant does not rely on
the attorney’s trust records but on the say-so of a client, the latter must file a
confirmatory affidavit setting out the relevant information that would enable the
respondent to determine whether the money had indeed been entrusted to the
attorney. The appellant has failed to produce any such evidence.

[37] He has instead 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,
he provided no details of the exact amounts that have allegedly been entrusted to
Costa Attorneys on his behalf.  While the appellant lamented about the ‘arduous’
task he was compelled to undertake in order to obtain the relevant information from
clients, he did not explain why he was unable to procure supporting affidavits from
the latter.

[38] The further difficulty facing the appellant is that the hearsay evidence is in
any event of doubtful probative value. For the reasons that I have set out above, I am
of the view that even if the hearsay evidence were to be admitted, it would not assist
the appellant in proving that clients paid specified sums of money to Costa Attorneys
as cover for his fees.

[39] The appellant also complained that he was hamstrung by the Council’s
unreasonable refusal to allow him access to the relevant records. However, even if
the Council has unfairly refused him access to documents that he required to sustain
his claim, that does not necessarily entitle him to reimbursement in terms of s 26. At
best, he would be entitled to an order compelling production of the relevant
documents in such circumstances.

[40] Apart from all else, the respondent would be seriously prejudiced if the
hearsay evidence were allowed. The respondent is a statutory body, whose powers
to reimburse victims of theft by practising attorneys are carefully circumscribed by
s 26. The section requires the respondent to reimburse affected persons in respect of
specific amounts entrusted to an attorney and stolen by him or her in the course of
practice. If the hearsay evidence were allowed, it would put undue pressure on the
respondent to consider general allegations relating to unspecified amounts paid to
and misappropriated by Mr Costa. I am therefore of the view that it would not be in
the interests of justice to allow the hearsay evidence.

[41] This finding effectively means that the appellant has failed to overcome the
first hurdle in order to place himself within the purview of s 26, namely to establish
that clients entrusted specified sums of money to Costa Attorneys as cover for his
fees. In the light of this finding, it is not necessary for us to decide whether any of
the payments constituted entrustments as envisaged by s 26 or whether Mr Costa has
misappropriated the funds in the course of his practice. The appeal must therefore
fail.

[42] Regarding the issue of costs, the appellant contended that the principle
enunciated in Biowatch Trust v Registrar, Genetic Resources and Others 6  is
applicable since the matter required consideration of an important issue of public
interest, namely the legal nature of the relationship between attorneys, advocates and
clients. He submitted that the court should accordingly make no order as to costs if
the appeal fails. I disagree. The appellant launched the proceedings to compel
reimbursement of pecuniary loss that he allegedly suffered in respect of his unpaid
tax invoices. He was thus clearly pursuing a personal financial interest. The matter
accordingly does not raise any issues that are constitutional in nature; neither does it
have any impact on the public interest.7 Costs must therefore follow the result.

[43] In the result, I make the following order:
The appeal is dismissed with costs.

_____________________________
J E SMITH
ACTING JUDGE OF APPEAL

6 Biowatch Trust v Registrar Genetic Resources and Others [2009] ZACC 14; 2009 (6) SA 232 (CC); 2009 (10) BCLR
1014 (CC).
7 Mkhatshwa and Others v Mkhatshwa and Another [2021] ZACC 15.

APPEARANCES

For appellant:

L C Leysath
Instructed by:

Gishen-Gilchrist Inc, Benoni

Symington De Kok Attorneys, Bloemfontein

For respondent:

G Oliver
Instructed by:
Brendan Muller Inc, Cape Town

Van Der Merwe & Sorour Attorneys, Bloemfontein
THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:

28 July 2022
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does not
form part of the judgments of the Supreme Court of Appeal
Leysath v The Legal Practitioners’ Fidelity Fund Board of Control (770/2021) [2022] ZASCA 115 (28
July 2022)
Today the Supreme Court of Appeal (SCA) handed down judgment dismissing, with costs, an appeal
against the decision of the Gauteng Division of the High Court of South Africa, Pretoria (the high court).
The appellant, Mr L C Leysath , 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 s 26(a) of the Attorneys Act 53 of 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 s 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 s 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 this Court.
In his submissions, the appellant contended that the high court misconstrued the dispute between the
parties. In that regard, the appellant contended that the respondent had accepted that the monies paid
by clients to Costa Attorneys as cover for his fees constituted entrustments as envisaged by s 26 of the
Attorneys Act. The only issue, according to him, that was still alive before the high court was the
respondent’s contention that the appellant had failed to prove that clients had in fact paid the monies to
Costa Attorneys as cover for services rendered by him. He further contended that in pronouncing on
the issue of entrustment, the high court ignored the fact that there was a tripartite contractual
relationship between counsel, client and the attorney, and erroneously found that there existed a debtor
and creditor relationship between him and the instructing attorney. In doing so, the high court
impermissibly overturned binding precedent that established that a client was contractually liable for
counsel’s fees, and that there was no ‘hardened rule’ that an attorney ‘stands in’ for counsel’s fees. In
addition, the appellant submitted that the high court was wrong in refusing to follow the dictum in
Serrurier and Another v Korzia and Another, to the effect that in the event of a client paying an attorney
for counsel’s fees and the attorney failing to pay counsel, the fidelity fund would in all probability pay
the counsel. Regarding the adequacy of the proof of payments into Costa Attorneys’ trust account, the
appellant contended that the respondent had, in correspondence between the parties, set out the frame
of reference and parameters in which information in support of the claim was to be relayed to it. In terms

of that frame of reference, the respondent indicated that it required generic information and supporting
documents, and to the extent that they were insufficient, it would request further information. The
respondent did not challenge the supporting documents that he submitted to it nor did it request any
further information or documents. Therefore, the respondent was estopped from challenging the
adequacy of the evidence that the appellant had submitted in support of his claims. Consequently, the
respondent impermissibly raised that issue for the first time in its answering affidavit.
The SCA, made the following findings regarding this appeal. Firstly the Court highlighted that the
appellant was required, in terms of s 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. Secondly, the Court held that 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 in
support of his assertion that clients paid money to Costa Attorneys as cover for his fees by stating that
the relevant clients had informed him that they made payments to Costa Attorneys in respect of his
fees. However, he did not obtain confirmatory affidavits from them, but merely provided the respondent
with their contact details, expecting the latter to verify his claims. Thirdly the Court went on further and
found that the appellant's recourse to s 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. Fourthly, the SCA also held that the
purpose of s 26 of the Attorneys Act was to reimburse victims of theft by a practising attorney in respect
of specific amounts entrusted to the attorney. The first hurdle a claimant who relied on the section must
therefore overcome was to prove that the monies were in fact paid to an attorney on his or her behalf,
which was why the filing of the clients’ confirmatory affidavit setting out the relevant information that
would enable the respondent to determine whether the money had indeed been entrusted to the
attorney was so important to the case. However, the appellant had failed to produce any such evidence.
He had instead 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. Lastly, 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. As a result, the appeal must be dismissed with costs.

~~~~ends~~~~