Wypkema v Lubbe

The respondent, a practising attorney, approached the appellant to provide bridging finance of R1 850 000 to a client, Rooihak Eiendomme (Edms) Bpk, pending registration of a mortgage bond. As security and repayment mechanism, the respondent delivered a cheque for R2 200 000 (capital plus fee) drawn on his firm’s trust account, accompanied by a letter stating that the cheque should only be presented on 29 September 2004. When presented, the cheque was dishonoured due to insufficient funds. The appellant sought provisional sentence based on the cheque. The High Court refused provisional sentence, holding that the attorney acted merely as agent for his client and was not personally liable.

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order granting provisional sentence for payment of R2 200 000, interest at 15.5% per annum from 1 October 2004 to date of payment, and costs. The Registrar was directed to refer the judgment to the Law Society of the Northern Provinces.

The case authoritatively clarifies that an attorney who draws a cheque on a trust account incurs personal liability unless representative capacity is clearly indicated. It reinforces principles governing trust accounts, negotiable instruments, and the professional responsibilities of attorneys, and is frequently cited in matters involving trust account misuse.