In terms of s 55 (1) of the Legal Practice Act 28 of 2014 (LPA), the LPFF (Fund) is liable to reimburse persons who suffer pecuniary loss as a result of theft of any money or other property given in trust to a trust account practice of the legal practitioner in the course of the practice of the legal practitioner.
In The Attorneys Fidelity Fund Board of Control v Love (Case No 170/2020)  ZASCA 44 (14 April 2021), the court held that one of the objectives of the Fund is to reimburse persons who may suffer pecuniary loss as a result of the theft of money which had been entrusted to the attorney. “The type of theft with which this case is concerned is that which has come to be known as misappropriation of trust funds (as to which see Law Society, Cape v Koch 1985(4) SA 379 (C) at 382); it seems to me that the material ingredients of a theft of this nature are the wrongful (in the sense of mens rea) dealing by an attorney with or appropriating to his own use of the moneys which have been “entrusted” to him – in the sense of having been required by the person making over the funds to be placed by the attorney in his trust account and that these remain there until the happening of some known future event.”
In Industrial and Commercial Factors (Pty) Ltd v Attorneys Fidelity Fund Board of Control  ZASCA 84; 1997 (1) SA 136 (AD), the court held that the word ‘entrusted’ was not meant by the legislature to imply that the handing over of the money or property concerned has to be subject to a trust in the technical sense of the word. It took into account the circumstances of that case, namely, that it was only the person who had there ‘entrusted the money’ who would suffer pecuniary loss.
In Attorneys Fidelity Fund Board of Control v Mettle Property Finance (Pty) Ltd 2012 (3) SA 611 (SCA) @ para , the court held that ‘…Where money is paid into the trust account of an attorney it does not follow that such money is in fact trust money…If money is simply handed over to an attorney by the debtor who thereby wishes to discharge a debt and the attorney has a mandate to receive it on behalf of the creditor, it may be difficult to establish an entrustment.’
In Attorneys Fidelity Fund Board of Control v Prevance Capital (Pty) Ltd (917/17) ZASCA  135 (28 September 2018) monies were deposited with the attorney (Weide) in terms of a finance scheme conducted by Prevance. The court held that:
“ … the finance agreements provided that all monies paid by Prevance to the Attorney’s Trust account have been paid by Prevance and entrusted specifically for the benefits of the seller.”
“… Considering that Mr Weide had presented fictitious documentation and referred to fictitious sellers and purchasers, Prevance were the only entity that would suffer pecuniary loss.”
In THE ATTORNEYS NOTARIES AND CONVEYANCERS FIDELITY GUARANTEE FUND v TONY ALLEM (PROPRIETARY) LIMITED and MARIE KATHLEEN ALLEM (SCA) case No; 274/87: Heard on 12-08-1989, Delivered on 18-08-1989), the court held that ” … The meaning of the word “entrust” was considered by Nicholas J in Provident Fund for the Clothing Industry v. Attorneys, Notaries and Conveyancers Fidelity Guarantee Fund 1981(3) SA 539(W), in which he held as follows at 543 E-F: “From these definitions, it is plain that ‘to entrust’ comprises two elements: (a) to place in the possession of something, (b) subject to a trust. As to the latter element, this connotes that the person entrusted is bound to deal with the property or money concerned for the benefit of others (cf Estate Kemp and Others v. McDonald’s Trustee 1915 AD 491 at 499). ‘(The trustee) is bound to hold and apply the property for the benefit of some person or persons or for the accomplishment of some special purpose’ (ibid at 508.)'”
 “… The facts of the present case, on the other hand, show that Stein received the money in connection with transactions which ordinarily fall within the scope of an attorney’s work in the course of his practice. I, therefore, agree with the finding of the Court a quo that the first respondent entrusted the monies to Stein in the course of his practice as an attorney. In my judgment, therefore, Mrs Allem has proved that she suffered pecuniary loss as a result of theft committed by Stein.”
The remaining Chapters of the Legal Practice Act, No. 28 of 2014 (LPA) were gazetted on the 31st of October 2018, and it is mandatory for Legal Practitioners to pay any unclaimed and unknown monies held in a trust account to the Legal Practitioners’ Fidelity Fund (LPFF) in accordance with section 87(4)(a) of this Act. Unknown/unclaimed funds received, held or paid on account of any person, are recorded in a suspense account in the books of account of the practice of the practitioner operating a trust account. The ownership of unknown or unclaimed funds passes to, and vests in the Fund. The owner of such money is not deprived of the right to claim such portion as he or she may prove entitlement to.
However, for a claim in respect of unknown/unclaimed funds to enjoy cover under the LPFF in the event of misappropriation of such funds by the trust account legal practitioner in the course of his/her practice, it must pass the test applied in the aforementioned decided cases, viz. (i) such funds are to be held, and the property applied for the benefit of some person or persons or for the accomplishment of some special purpose or until the happening of some known future event; (ii) were received in connection with transactions which ordinarily fall within the scope of an attorney’s work in the course of his practice and; (iii) that it was only the person who had there ‘entrusted the money’ who would suffer pecuniary loss.
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