The delictual claim in the case of Edward Nathan Sonnenberg Inc v Hawarden shows the test that must be met to prove, economic loss, wrongfulness and the duty of care where there was a business email compromise (BEC) of the plaintiff, when buying property, and steps that could reasonably have taken to protect against the risk.




Ms Hawarden purchased a property and was supposed to pay the balance of the purchase price, R5.5m, to the conveyancing attorney, Edward Nathan Sonnenberg Inc (ENS). The estate agent’s email instructing her to make the initial deposit payment (R500 000) contained a warning about cybercrime and advised her to verify the banking details by telephone. She did this when paying the deposit but not when dealing with the guarantee requirements and the balance of the purchase price.


ENS emailed her their banking details, but unbeknown to both parties, Hawarden’s email account had been compromised by a cybercriminal. The criminal intercepted the emails, manipulated ENS’s banking details, and induced Hawarden to transfer the funds into their account instead of ENS’s account. Hawarden claimed pure economic loss from ENS, alleging they owed her a legal duty to warn her about BEC fraud and to advise her on precautions.




The question before the court was whether ENS’s alleged omission to warn and advise Ms. Hawarden about BEC fraud constituted wrongfulness for a delictual claim of pure economic loss. The judges stated that pure economic loss claims require a judicial determination of wrongfulness based on public policy considerations. Quoting Two Oceans Aquarium v Kantey (SCA 2006), Dawood, AJA, stated that: ‘…the criteria of vulnerability to risk will only ordinarily be satisfied “where the plaintiff could not reasonably have avoided the risk by other means”.’


The court found that ENS did not owe Hawarden a legal duty because: Hawarden was not ENS’s client, and there was no attorney-client relationship when the loss occurred.The loss resulted from Hawarden’s email account being compromised, not a failing in ENS’s system.Hawarden had been previously warned about BEC fraud by the estate agent but failed to take reasonable steps to verify ENS’s banking details. Imposing liability on ENS would create a risk of indeterminate liability for all creditors who send banking details via email. Hawarden was not vulnerable to the risk, as she could have reasonably taken steps to protect herself, such as verifying the banking details with ENS or her bank.




The SCA upheld ENS’s appeal, set aside the High Court’s order, and dismissed Hawarden’s claim with costs, including the costs of two counsel where employed. The court found that ENS did not owe Hawarden a legal duty, and she was obliged to take responsibility for her failure to protect herself against a known risk that she had been warned about.

For further guidance, individuals can contact an attorney at Schoemanlaw Inc.