Scholtz & Another v De Kock NO & Others

The deceased received a Road Accident Fund (RAF) award of R7 067 736.80 following a motor vehicle accident. On her instruction, the net amount of R5 600 000 was paid into the trust account of her identical twin sister, Ms Michelle Jacqueline Scholtz, a practising attorney. Four days later the funds were transferred to an investment account managed by Ms Scholtz. According to Ms Scholtz, a family agreement existed whereby R500 000 was paid to their father for professional services, and the balance was shared equally between the sisters, as Ms Scholtz had abandoned her own RAF claim due to an administrative error. Over the next four years, Ms Scholtz made payments from the investment account to the deceased and to third parties on the deceased’s instructions. After the deceased’s death, her husband, acting as guardian of their minor children and invoking the Beningfield exception, sought to compel Ms Scholtz to account for the R5 600 000, alleging a fiduciary duty.

The appeal was upheld with costs, including the costs of two counsel. The order of the full court was set aside and replaced with an order dismissing the appeal with costs.

The case clarifies that the payment of money into an attorney’s trust account does not automatically create a fiduciary duty to account, absent a mandate. It reinforces the application of the Plascon-Evans rule in motion proceedings and affirms that beneficiaries have no right to challenge a deceased’s lawful financial decisions made during her lifetime.