The Attorneys’ Fidelity Fund Board v Prevance Capital (Pty) Ltd

Prevance Capital (Pty) Ltd advanced funds to persons represented as prospective sellers of immovable property, to assist with transfer-related costs. An attorney and conveyancer, Mr Robert Victor Weide, falsely represented that he was acting on behalf of such sellers, who in fact did not exist. Prevance deposited the advanced funds into Mr Weide’s trust account. Mr Weide misappropriated the funds, causing Prevance pecuniary loss. Prevance claimed reimbursement from the Attorneys’ Fidelity Fund Board under s 26(a) of the Attorneys’ Act 53 of 1979. The Board refused liability, contending that the funds were ‘investments’ falling within the exclusion in s 47(1)(g) of the Act. The Gauteng Division of the High Court held the Board liable, and the Board appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, and the judgment of the Gauteng Division of the High Court holding the Attorneys’ Fidelity Fund Board liable was upheld.

The case clarifies the scope of the Attorneys’ Fidelity Fund’s liability and the proper interpretation of ‘entrusted’ monies versus ‘investments’ under the Attorneys’ Act. It affirms that fraudulent conduct by an attorney, where funds are received solely for theft, cannot be recharacterised as an investment to avoid statutory liability, thereby strengthening protection for members of the public dealing with attorneys.