In another blow for disgraced fraud-accused advocate Zuko Nonxuba – tied to numerous cases of trust misappropriation – the Legal Practice Council (LPC) has taken control of the last remaining R100m in his trust account, although its investigations showed that the balance should have been substantially more.
Nonxuba is alleged to have misappropriated hundreds of millions of rands paid into his trust account that was due to his former clients after successfully litigating against the Department of Health in medical malpractice cases.
In all cases where minors were involved, the courts had ordered him to establish trusts on behalf of the children, and to ensure they received compensation, as beneficiaries.
However, reports the Cape Times, he failed to adhere to the court orders and is alleged to have retained and misappropriated these funds.
“Once it became clear to the LPC that … Mr Nonxuba had misappropriated trust funds, the LPC approached the High Court for an urgent interdict to prevent him from transacting further on his trust account,” said LPC spokesperson Kabelo Letebele.
“He has continuously tried to frustrate proceedings, with countless court applications against the LPC. Despite this, we succeeded in obtaining an interdict preventing him from operating his trust account on 18 April 2022.
“He then appealed this order and finally on 3 August 2023, the Constitutional Court dismissed his appeal. When we took control of the trust account it had a balance of just more than R100m. Our investigations have, however, shown that the trust balance should have been substantially more.”
The LPC is in the process of obtaining an order to strike him from the roll of attorneys. He is currently suspended from practice.
Meanwhile, the LPC has to identify all trust creditors who may have a claim against the money held in trust.
“We are not allowed, at this stage, to pay any trust creditors, since there appears to be a shortfall on the account, and due to Nonxuba’s refusal to co-operate with the LPC, it is difficult to finalise a reconciliation of the creditors. This means we cannot say for certain to which of his former clients the money currently belongs.”
The LPC added that it was impossible to say when it would be able to finalise the reconciliation of all transactions, given years of alleged transgressions.
It noted that while it investigates numerous complaints of misappropriation of trust funds, “very few instances are as extensive as the Nonxuba matter”.
Meanwhile, last week, the SIU said that in the Western Cape during 2018, about 33 fraudulent birth injury claims were identified in the contingency liability register to the value of about R409m, submitted by Nonxuba Incorporated Attorneys.
“Criminal cases have been registered in the Eastern Cape, Gauteng and Western Cape against Nonxuba Inc and Nonxuba. In the Western Cape, 33 matters were referred to the SAPS and are currently being investigated by the Directorate of Priority Crime Investigations (DPCI). The SIU is collaborating with the DPCI,” the SIU said.
In the Eastern Cape, the SIU said 158 medico-legal matters to the value of about R2.9bn for contingent liability were identified and handled by similar legal firms, where there were no hospital records of all of the claimants found at any of the hospitals.
“Through the SIU’s interventions, the matters were removed from the Contingent Liability Register and subsequently reduced the contingent liability of the department to R132.8m.”
Five medico-legal claims were identified, with judgments handed down in favour of the claimants. The department paid out R97.3m into the trust account of the claimant’s attorney. The attorney failed to register trusts as instructed in the court orders.
“The attorney also failed to communicate the outcome of High Court civil proceedings to the affected claimants and withheld payments to the them. The attorney was suspended by the LPC on unrelated matters, and the law firm’s trust account was placed under curatorship. The SIU is preparing a referral to the relevant prosecuting authority and LPC,” the SIU said.
It did not confirm whether Nonxuba was the attorney in question.
Cape Times PressReader article – Advocate’s legal woes pile up (Open access)
See more from MedicalBrief archives:
Lawyer who blew disabled children’s millions ‘should be struck off’
Slow process to hold medico-legal lawyers accountable for fraud
Eastern Cape Health interdicts attorney's R79m payout move