Edward Nathan Sonnenbergs is one of SA’s, and Africa’s, largest and leading law firms, with offices spread throughout the continent.
The facts of Hawarden v ENS are simple and chilling. In 2019, Judith Hawarden bought a house marketed by Pam Golding Properties. As is the custom, the seller appointed the conveyancing attorney, in this case ENS. Hawarden subsequently received an email from ENS’s conveyancing team with its trust bank account details, into which she was required to pay the balance of the purchase price of R5.5m.
Three years later and after a trial of 12 days, Hawarden prevailed, a David v Goliath victory. Justice Phanuel Mudau of the high court in Johannesburg ordered ENS to pay Hawarden’s R5.5m plus her costs on the scale between attorney and client. The punitive cost order was incurred because of ENS’s reprehensible conduct — in the view of the judge — during the trial, when the firm included in the trial bundles highly personal and sensitive, but irrelevant, information concerning Hawarden.
Several experts testified for both parties about the risks of cybercrime, how it is constantly evolving, and what steps businesses can take to mitigate the risks of business emails being compromised. They also demonstrated to the court how easy it is to change PDF files, the format most businesses use to send out unsecured invoices and bank details.
One colleague of mine described this decision as “frightening”, because notwithstanding all the warnings a creditor may send out about the danger of business email compromises, the effect of this court decision is that any business that sends its bank details in an unsecured manner to a debtor may be held liable for that debtor’s losses if the debtor falls victim to such fraud.