After eight years of relentless litigation, FDP Law has achieved a decisive victory for our client, a Trust, securing nearly R14 million (including interest) following the misappropriation of funds by a former attorney.
The Beginning: A Betrayal of Trust
In 2018, the Trust sold an immovable property and appointed their long-time attorney, Anton Coetzee of Thinane & du Toit Inc. as the conveyancer. Once the transfer was finalised, the Trust expected to receive the R8.5 million in proceeds. Instead, Coetzee claimed the funds had been “absorbed” into his firm’s business through a fictional agreement with one of the trustees.
On instruction from the Trust, Francois Pienaar of FDP Law immediately issued a Notice of Demand, which was met with evasions and denial. Legal action followed swiftly: proceedings for recovery of the funds, liquidation of Coetzee’s firm, sequestration of his estate, and ultimately a claim against the Legal Practitioner’s Fidelity Fund.
The First High Court Ruling
After nearly two years of litigation, the Gauteng South High Court ordered Coetzee and his firm to repay R8.5 million plus interest and costs in January 2020. Coetzee sought leave to appeal – first to the High Court, then to the Supreme Court of Appeal, and finally to the Constitutional Court. Each attempt was refused.
Despite these victories, the Trust could not yet recover from the Fidelity Fund. Under the Legal Practice Act, all possible avenues for execution had to first be exhausted.
A Vanishing Act
By this time, Coetzee had absconded to Mauritius, with no prospect of return. Every effort to execute on the judgment – liquidation, sequestration, and asset tracing – proved fruitless.
Even then, in July 2022, the Fidelity Fund rejected the Trust’s claim. The Fund argued that the proceeds of the property transfer were not “entrusted” to Coetzee within the meaning of section 55 of the Legal Practice Act.
Challenging the Fund
FDP Law, acting for the Trust, brought the matter before the Western Cape High Court to challenge the Fund’s decision. The Fund opposed, but the case turned on two core questions:
- Were the monies “entrusted” to the attorney when misappropriated?
- Could an undelivered instruction to invest in the attorney’s trust account fall under the statutory exclusion in section 47(1)(g) of the (then applicable) Attorneys Act?
The Decision
Williams AJ ruled emphatically in favour of the Trust:
- The funds were indeed entrusted to Coetzee – it had been deposited into his account for payment to the Trust, not for his own use.
- An instruction to hold funds in trust is distinct from an instruction to invest under section 78(2A). In this case, no such investment instruction was ever made. The Fund could not rely on that exclusion to deny liability.
The Court ordered the Fidelity Fund to pay the full R8.5 million, plus interest from September 2018 to date, as well as costs of the suit (including the costs of two counsel).
The Final Chapter
The Fund then attempted to appeal, but both the Full Bench and the Supreme Court of Appeal dismissed its applications, with costs.
At long last, after years of litigation, appeals, and administrative obstacles, the Fidelity Fund paid out to the Trust a total of nearly R14 million, with costs still to be taxed.
A Landmark Victory
This outcome underscores FDP Law’s commitment to pursuing justice, no matter how long or complex the fight may be.
A fantastic result for our client – and a resounding victory against the Fidelity Fund.