About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2010
>>
[2010] ZASCA 90
|
|
Botha v Coetzee and Others (459/09) [2010] ZASCA 90 (31 May 2010)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 459/09
In the matter between:
ALFONSO OVERBEECK
BOTHA
Appellant
and
DANIEL JOHANNES COETZEE 1
ST
Respondent
URBAN OCEAN PROPERTY DEVELOPMENT
(PTY) LTD) 2
ND
Respondent
JAZZ SPIRIT 101 (PTY) LTD 3
RD
Respondent
SADDLE PATH PROPS 23 (PTY)
LTD 4
TH
Respondent
SHAKESPEARE PRECINCT (PTY) LTD
(formerly TANIN TRADING 138 (PTY)
LTD) 5
TH
Respondent
Neutral
citation
:
Botha
v Coetzee
(459/09)
[2010] ZASCA 90
(31 May 2010)
Coram:
HARMS
DP, CLOETE, HEHER, MHLANTLA AND TSHIQI JJA
Heard:
4
May 2010
Delivered:
31
May 2010
Updated:
Summary:
Civil
procedure – referral to trial – dispute about agreement –
applicant naming agreement partnership –
relief not available
if agreement partnership – true nature of agreement prima facie
joint venture
__________________________________________________________________________________
ORDER
On
appeal from:
Western Cape High Court (Cape Town) (Le Grange J sitting as court of
first instance):
1 The appeal is upheld
without a costs order.
2 The
order of the court a quo
is
set aside and substituted with the following:
‘(a) The
application is referred to trial.
(b) The Notice of Motion
is to serve as a simple summons and the applicant must file a
declaration within 20 days from the date
of this order, after which
the usual Uniform High Court rules will apply.
(c) Each
party is to pay his own costs.’
JUDGMENT
_____________________________________________________________________
TSHIQI JA (HARMS DP, CLOETE, HEHER
AND MHLANTLA JJA
concurring):
[1] The issue in this
appeal has its origin in an application by the appellant, Mr A O
Botha, for an order declaring him to be the
beneficial owner of 50
percent of the shares in the second respondent, Urban Ocean Property
Development (Pty) Ltd, for transfer
of the shares and ancillary
relief. All the shares in the company are registered in the name of
the first respondent, Mr D J Coetzee.
The relief was apparently based
on a contention that Botha was the beneficial owner of 50 percent of
the shares by virtue of a
partnership between him and Coetzee.
Coetzee opposed the application, disputing the existence of a
partnership between them and
contending in any event that the relief
sought was not competent because a partner is not entitled to claim
partnership assets
during the existence of the partnership.
[2] Because
of the factual dispute about the existence of the partnership, Botha
sought an order referring that issue (and some
related questions) to
oral evidence or trial. Counsel for Coetzee, in opposing the
referral, argued
in
limine
that
Botha’s application did not disclose a cause of action and that
the relief sought in the notice of motion was legally
unfounded.
[3]
The
Western Cape High Court upheld the point
in
limine
and
dismissed the application on the basis that it disclosed no cause of
action and that a referral to evidence could not alter
the result.
The appellant now appeals to this Court with the leave of the court
below.
[4] The
procedural approach adopted by the court a quo cannot be faulted and
was described
Valentino
Globe BV v Phillips & another
1
as follows
:
‘
There
are a number of cases which recognise the right of a respondent, in
spite of having filed an answering affidavit, to argue
at the outset
that the founding affidavit does not make out a
prima
facie
case
for the relief claimed. They for two reasons suggest that the
procedure is akin to an exception based on the ground that a
summons
or similar initiating process does not disclose a cause of action.
The founding affidavit alone falls to be considered,
and the
averments contained therein must be accepted as true. An important
difference with an exception is, however, that the application
contains evidence and not only allegations of fact, and what might be
sufficient in a summons may be insufficient in a founding
affidavit.
. . . The usual object of the procedure is to enable a respondent to
meet an application for referral to evidence or
the like and relieve
the Court of considering the conflicting allegations of fact.’
[5] The
legal approach of the court below was also correct. Partnership
assets are held by partners as co-owners in undivided shares.
This is
so because a partnership does not have an existence apart from the
individuals constituting it. The relief sought by Botha
was not
competent during the subsistence of a partnership. At best he could
only be entitled to an order declaring him a partner
and no more. In
19
Lawsa
2 ed para 285 it is stated:
‘
Before
realisation and distribution of the partnership assets amongst the
partners, a partner is not entitled to treat any particular
partnership asset as being his own, nor is any partner entitled to
any specific portion of the partnership assets as a whole. Regardless
of the question who the owner of the partnership assets is, every
partner is contractually bound towards his co-partner not to
appropriate partnership assets for his own purposes or to regard them
as part of his private assets.’
2
[6] On appeal the
question arose whether Botha had correctly identified the agreement
relied on by him as a partnership and whether
it would not have been
more correct to call it a joint venture. If it was a joint venture,
the relief sought by Botha was competent
and a referral to trial or
evidence of the dispute about the existence of the agreement,
irrespective of its label, should have
been granted.
[7] On
a close analysis of the evidence it is evident that the description
of the relationship as a ‘partnership’ was
ill-founded
and that the court a quo was misled, not only by the nomenclature
used in the founding affidavit, but also by the questions
posed by
Botha for referral to evidence.
The
question is not whether the agreement was correctly called a
partnership, but what the terms of the agreement were and whether
those terms could provide a cause of action. In order to answer the
question one has to consider what the parties agreed to do.
For
present purposes, the test is the test that applies at the exception
stage. Regard is primarily had to the founding affidavit.
[8] Botha,
incidentally, on occasion referred to the partnership in his founding
affidavit in inverted commas. The terms of the
agreement between the
parties as set out in the founding affidavit were these.
Coetzee
and Botha would acquire properties; they would use a company as a
vehicle for that business; Coetzee would initially hold
all the
shares in the company as a matter of convenience; and Coetzee would
on request transfer to Botha his 50 percent. Botha’s
evidence
was supported by Hoffmann (the financial adviser) and Stanton (an
auditor) in confirmatory affidavits.
[9] It follows from this
summary of the terms of the agreement that it was not a partnership
in the legal sense but rather something
akin to one – probably
a joint venture if a label is necessary. In any event, the terms of
the agreement, if established
in due course, provide a cause of
action, albeit not one based on partnership. It cannot be doubted
that if the matter had been
argued along these lines the court below
would have referred the matter to trial. Such an order would have
enabled Botha to formulate
his case with precision. Whether that case
will be excipiable or capable of proof is another matter that does
not concern this
Court.
[10] The manner in which
the application was conducted in the high court is relevant to the
determination of an appropriate costs
order. The application was
brought on the basis that the cause of action was a partnership
agreement. The application for referral
of the matter to trial was
also premised on the basis that the factual dispute pertained to the
existence of a partnership agreement.
This approach was persisted in
even on appeal to this Court. It seems that both the appellant and
the respondent concentrated
on the form and not the substance of the
matter. Neither party therefore should get the benefit of costs in
this regard.
[1
1] The
following order is consequently made:
1 The appeal is upheld
without a costs order.
2 The
order of the court a quo
is
set aside and substituted with the following:
‘(a) The
application is referred to trial.
(b) The Notice of Motion
is to serve as a simple summons and the applicant must file a
declaration within 20 days from the date
of this order, after which
the usual Uniform High Court rules will apply.
(c) Each party is to pay
his own costs.
____________________
Z
L L Tshiqi
Judge
of Appeal
APPEARANCES:
APPELLANT: P Coetsee SC
and G Walters
Instructed by Saunders
Attorneys, Cape Town;
Webbers, Bloemfontein
RESPONDENTS: Z F Joubert
SC and J D de Vries
Instructed by Honey
Attorneys, Tyger Valley
Honey Attorneys,
Bloemfontein
1
[1998] ZASCA 43
;
1998 (3) SA 775
(SCA) at 779F-I. Citations omitted.
2
See also
Robson v Theron
1978 (1) SA 841
(A) at 850C-D;
Sacks
v Commissioner for Inland Revenue
1946 AD 31
at 40;
Van
Heerden v Pienaar
1987 (1) SA 96
(A).