Legal Practitioners’ Fidelity Fund v Guilherme Carla Marshall

The respondent, Ms Guilherme, received proceeds of a R5 million life policy following the suicide of her husband. On the advice of Mr Spencer, an attorney and executor of her late husband’s insolvent estate, she paid R4.95 million into his attorney’s trust account to safeguard the funds pending finalisation of estate-related issues. Over time she withdrew portions of the money, but later discovered that approximately R799 967.24 was missing. Mr Spencer had misappropriated the funds and was subsequently suspended and struck from the roll. Ms Guilherme lodged a claim with the Legal Practitioners’ Fidelity Fund for reimbursement under s 26(a) of the Attorneys Act 53 of 1979. The Fund rejected the claim on the basis that the money was not ‘entrusted’ but merely deposited for safekeeping. The High Court upheld her claim, and the Fund appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs. The order of the High Court requiring the Legal Practitioners’ Fidelity Fund to reimburse Ms Guilherme in the amount of R799 967.24 plus interest was confirmed.

The case clarifies the meaning of ‘entrustment’ under s 26(a) of the Attorneys Act and affirms broad protection for members of the public who place money in attorneys’ trust accounts on professional advice. It confirms that entrustment is not confined to technical trusts and that the Fund’s liability depends on substance rather than form, reinforcing consumer protection in the legal profession.