Louw NO and Others v Coetzee and Others (342/02) [2002] ZASCA 156; [2003] 1 All SA 34 (SCA); 2003 (3) SA 329 (SCA) (29 November 2002)

Louw NO and Others v Coetzee and Others (342/02) [2002] ZASCA 156; [2003] 1 All SA 34 (SCA); 2003 (3) SA 329 (SCA) (29 November 2002)

The Supreme Court of Appeal held that the Financial Institutions (Protection of Funds) Act 28 of 2001 did not alter the common law or previous statutory regime regarding attorneys' trust moneys deposited with banks. The definition of 'trust property' in the 2001 FI Act, although broader, must be read in the context of the Act as a whole, which consolidates laws relating to the investment, safe custody, and administration of funds and trust property by financial institutions. There is no indication that the legislature intended to impose a trustee relationship between banks and attorneys' clients or to exclude attorneys' trust deposits from the assets of a bank in insolvency. The curator...

Citation
[2002] ZASCA 156
Parties
Appellant: T J Louw NO; Appellant: The Registrar of Banks; Appellant: The South African Reserve Bank; Respondent: S J Coetzee; Respondent: Microzone Trading 709 Limited; Respondent: E J Koen Inc; Respondent: Elizabeth Bender
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 November 2002
Case Number
342/02
Procedural Posture
Civil Appeal / Appeal From Pretoria High Court
Outcome
Appeal upheld; curator's decision to refuse payment reinstated.
Judges
Howie, Streicher, Mpati, Jones, Lewis
Legal Topics
Attorneys Trust Accounts, Financial Institutions Protection of Funds Act, Meaning of Trust Property, Bank Liquidation, Commixtio, Statutory Interpretation
Banking and Finance Civil Procedure Attorneys Trust Accounts Financial Institutions Protection of Funds Act Meaning of Trust Property Bank Liquidation Commixtio Statutory Interpretation

Case Brief

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Parties

T J Louw NO

Appellant

The Registrar of Banks

Appellant

The South African Reserve Bank

Appellant

S J Coetzee

Respondent

Microzone Trading 709 Limited

Respondent

E J Koen Inc

Respondent

Elizabeth Bender

Respondent

Procedural Posture

Civil Appeal / Appeal From Pretoria High Court

Legal Issues

  1. 1 Does money deposited by attorneys in trust accounts under s 78(2A) of the Attorneys Act constitute 'trust property' under the Financial Institutions (Protection of Funds) Act 28 of 2001?
  2. 2 Are such funds excluded from the assets of a bank in the event of insolvency or curatorship?
  3. 3 Did the 2001 FI Act change the common law or previous statutory regime regarding attorneys' trust moneys deposited with banks?

Ratio Decidendi

The Supreme Court of Appeal held that the Financial Institutions (Protection of Funds) Act 28 of 2001 did not alter the common law or previous statutory regime regarding attorneys' trust moneys deposited with banks. The definition of 'trust property' in the 2001 FI Act, although broader, must be read in the context of the Act as a whole, which consolidates laws relating to the investment, safe custody, and administration of funds and trust property by financial institutions. There is no indication that the legislature intended to impose a trustee relationship between banks and attorneys' clients or to exclude attorneys' trust deposits from the assets of a bank in insolvency. The curator...

Court Disposition

Appeal upheld; curator's decision to refuse payment reinstated.

Orders

  • The appeal is upheld.
  • The decision of the curator to refuse payment of the amounts claimed by the respondents is reinstated.