IN THE HIGH COURT OF SOUTH AFRICA
KWAZULU -NATAL DIVISION, PIETERMARITZBURG
CASE NO: 8717/2024
In the matter between:
AMAANAT INVE STMENT HOLDINGS LIMIT ED PLAINTIFF
and
FHO TRUST DEFENDANT
(cited in the name of its trustee s, Fathima H ussun Omar
NO, Mahomed Hussun Omar NO and S oraya Cassim
Omar NO)
___________________________________________________________________
ORDER
___________________________________________________________________
The following order shall issue:
The exception is dismissed with costs on scale B .
___________________________________________________________________
JUDGMENT
________ ________________________________ ___________________________
Mathenjwa J
Background
[1] This is an exception in terms of Uniform r ule 23(1) in terms of which the
defendant except s to the plaintiff’s amended particulars of claim on the basis that
they are vague and embarrassing and do not disclose a cause of action.
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[2] The plaintiff had instituted an action against the defendant in which it s eeks
relief declaring that the Trust estate is deemed not to be a separate entity, instead to
be dealt with as the alter ego of Kreston and Omar , and payment of specific amount s
unlawfully taken by Kreston from the plaintiff for the benefit of the FHO Trust (the
defendant) . Omar is Soraya Omar's husband and the father of the defendant's
trustees, Fatima and Mahomed. Omar also held the positions of managing partner of
Kreston KZN (Kreston), a partnership or accounting firm, and director and chief
executive officer of the plaintiff.
[3] On 5 August 2024 the plaintiff filed a notice to amend its plea in terms of rule
28(7). The defendant did not oppose the amendment, however on 21 August 2024 it
filed an exception to the plaintiff’s amended particulars of claim.
Grounds for exception
[4] In its first ground of exception the defendant contends that in paragraph 7 of
the particulars of claim the plaintiff avers that:
‘In terms of the oral agreement, Kreston , and each of its partners including the defendant,
would prepare and maintain monthly book of account and render services in respect of the
plaintiff .’
The defendant contend s that the amended pleading is vague and embarrassing in
such a way that the defendant is unable to plead thereto.
[5] The second ground of exception is that in paragraph 11 of the particulars of
claim the plaintiff avers that:
‘The 3 500 000.00 paid by Omar from the Kreston ’s bank account to the third party, was for
the purpose of benefitting the trust in circumstances where Omar proc ured the purchase of
an immovable property from the third party by the trust, which took transfer of the property,
and the payments made to the third party were made to contribute to the f unding of the
purchase of the property .’
The defendant contends that the pleadings lack the averments which are necessary
to sustain the cause of action because i t fails to state which property was purchased
by the Trust ; when it was purchased , and how the Trust made payment to the third
party.
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[6] In its third ground of exception the defendant states that in paragraph 13 of
the particulars of claim the plaintiff avers that Omar:
13.1 ‘When making payment to the defendant ( out of the alleged bank account of
Kreston) acted intentionally and unlawfully, with full knowledge of the circumstances…’
13.2 ‘acted intentionally and unlawfully by fail ing to exercise his powers and perform his
duties vis-a-vis the plaintiff ’, and
13.3 acted unlawfully by failing to exercise his power and perform his duties vis -a-vis the
plaintiff’s bank accounts” .
The defendant contend s that the particulars of claim lack the averments which are
necessary to sustain the cause of action because the plaintiff fails to state on what
basis the payment of funds out of Kreston ’s bank account can constitute unlawful
and dishonest action by Omar in breach of his fiduciary duties towards the plaintiff.
[7] The fourth ground of exception is that in paragraph 14 of the particulars the
plaintiff avers that:
‘The Trust (the defendant) unlawfully received the benefit of the R3 500 000.00 .’
According to the defendant the amended pleadings lack the averments which are
necessary to sustain the cause of action because the plaintiff fails to plea on what
grounds the defendant received the benefits of the amount .
[8] The fifth ground of exception is that in paragraph 15 of the particulars the
plaintiff states that it suffered damages “which the defendant is liable to pay ”. The
defendant claims that the plaintiff has not indicated the basis for its claim against the
defendant in relation to Omar's claimed breach of fiduciary responsibilities to the
plaintiff and the case where money from Kreston's bank account was transferred to a
third party.
[9] The sixth ground of exception is that in paragraph 16 of the particulars the
plaintiff avers that the defendant :
16.1 “ Reasonably entrusted Omar in the operation of the plaintiff’s bank account” .
16.2 ”was unlawfully prevented by Omar from becoming aware of the existence of the
payments ”.
16.3 “Was only made aware of Omar’s action s and of the payments pleaded in paragraphs
7.1 and 8.2 in November 2021 and thereafter ”.
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The defendant contend s that the plaintiff fails to state how the payment out of the
Kreston ’s bank account can be a breach of the plaintiff's trust in Omar while dealing
with the plaintiff’s account .
[10] The seventh ground of exception is that in paragraph 17 of the particulars the
plaintiff avers that:
17.1 “Kreston and Omar ’s use of the Trust (defendant) constitutes an unconscionable
abuse of the Trust’s estate
17.2 the plaintiff will seek that the court declares that the Trust estate is:
17.3 deemed not to be a separate juristic entity; and
17.4 the trust and the Trust estate is to be dealt with and deemed to be the alter ego of
Kreston ”.
The defendant contends that the order sought is incompetent because in terms of
the
law a trust is not a juristic person.
Parties contention s
[11] Mr Newton for the defendant in his heads of argument and in oral argument
before this court submits that the defendant is a trust and therefore it could not have
delivered the services of preparing and maintaining monthly book s of account and it
was not a party to the alleged oral agreement between the plaintiff and Kreston . In
respect of the second ground of exception, the defendant argued that it is unable to
determine the legal or factual basis for the plaintiff's allegation that the money
purportedly paid to the selle r of the property in some way benefited the defendant's
own acquisition of it . The defendant, the argument went, is accordingly embarrassed
by this averment, and cannot plead thereto.
[12] In respect of the third and fo urth grounds of exception , it was submitted on
behalf of the defendant that the failure by the plaintiff to state on what basis the
payment of funds out of Kreston ’s bank account can constitute unlawful action ; be a
breach of Omar’s fiduciary d uties towards the plaintiff ; and how such breach could
find a claim for damages against the defendant thus rendering the amended
pleading excipiable. Furthermore, it was submitted that the plaintiff’s failure to
particularize the ground s upon which the defendant ’s alleged receipt of R3 .5 million
was unlawful makes the pleading lack averments which are necessary to sustain the
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cause of action. Regarding ground five, it was submitted that there is no discernable
legal nexus between the pla intiff and the defendant which justifies the contention by
the plaintiff that it suffered damages which the defendant is liable to pay. In respect
of the seventh ground, it was submitted that the order sought by the plaintiff for a
declaration that the defendant trust not to be recognized as juristic entity and for its
estate to be deemed to be the alter ego of both Omar and Kr eston is not a
competent order in law.
[13] Mr McIntosh SC for the plaintiff submit s that the defendant has confused the
facta pr obanda with the facta probantia . According to Mr McIntosh the watermark of
the defendant’s exception appears to be a complain t about evidence whereas it is
not necessary for the plaintiff to plead ever y piece of evidence that would be
necessary to prove the facts pleaded so long as every fact that is necessary is
pleaded.
[14] It was submitted on behalf of the plaintiff that the defendant isolate s portions
of
the amended particulars of claim without reading the document as a whole . In this
regard Mr McIntosh referred this court to para graph 10 of the amended particulars of
claim wherein, the plaintiff had stated the reasons for making an allegation that the
amount of R3 ,5 million was unlawfully paid by Omar from the plaintiff’s bank account
to Kres ton’s bank account. Additionally, the defendant disregarded paragraph 12 of
the amended particulars of claim, which states that Omar paid the third party from
Kreston's bank account without Kreston having any legal obligation to make such
payment for the benefit of the trust or in breach of his fiduciary duties Finally, the
plaintiff disputes that the relief sought is ex cipiable and conten ds that it is within the
defendant's right if it so wishes, to plead that the plainti ff is not entitled to the relief
sought .
Analysis
[15] Counsel for the defendant referred the court to authorities that govern
exception s at great length . It is trite that for an exception based on the ground of lack
of averments to sustain the cause of action to succeed, the excipient must show that
ex facie the allegations made by a plaintiff and any document up on which his or her
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cause of action may be based; the claim is bad in law .1 The excipient must establish
that the pleading is ex cipiable on every interpretation that can reasonable be
attached to it .2 It is trite law that :3
‘The plaintiff is required to furnish an o utline of his case …The outline may be asymmetrical
and possess rough edges not obvious until actually explored by evidence . Provided the
defendant is given a clear idea of the material facts which are necessary to make the cause
of action intelligible .’
In McKelvey v Cowan NO4 the court held that:
‘It is a first principle in dealing with matters of exception that, if evidence can be led which
can disclose a cause of action alleged in the pleading, that particular pleading is not
excipiable . A pleading is only excipiable on the basis that no possible evidence led on the
pleadings can disclose a cause of action ’.
[16] I agree with the plaintiff’s counsel that most of the complaints raised by the
defendant are issues to which the defendant can plead to and the exception raised is
dilatory . In respect of the first ground of exception the defendant did not quote the
complete amend ed paragraph of the particulars of claim . It omitted the phrase which
states that: “including the defendant, that may have involvement . Therefore , the
issue of whether or not the defendant , being a trust could deliver the services as
described could be pleaded to by the defendant and will be considered and decided
at the trial of the matter.
[17] When the second, third, fourth , fifth and sixth ground s of exception are
considered in the context of the entire pleadings , it becomes clear that i n paragraph
10 the plaintiff stated that the amount paid by Omar from the plaintiff’s account to
Kreston ’s bank account was not due to Kreston in that Kreston did not render
services in respect of the plaintiff and the plaintiff owed no lawful obligation to
Kreston to pay it . In paragraph 11 the plaintiff avers that the amount paid by Omar
from the Kreston bank account to the third party was for the purpose of benefiting the
defendant. In paragraph 11.1 the plaintiff state s that Omar procured the purchase of
the property by the defendant who subsequently took transfer of the property from
1 Vermeulen v Goose Valley Investments (Pty) Ltd 2001 (3) SA 986 (SCA) para 7.
2 Southern port Development s (Pty) Ltd (previously known as Tsogo Sun Ebhayi (Pty) Ltd ) v Transnet
Ltd 2003 (5) SA 665 ( W) para 6 .
3 Jowell v Bramwell -Jones and Others 1998 (1) SA 836 ( W) at 91 3E-F.
4 McKelvey v Cowan NO 1980 (4) SA 525 ( Z) at 526D -E.
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the third party . In paragraph 11.2 the plaintiff states that the payment Omar made to
the third party originated from the plaintiff’s account.
[18] It is apparent from the pleaded facts that the plaintiff had pleaded the material
facts that susta in the cause of action. In argument before court the defendant ’s
counsel submits that the defendant is a bona fide purchase r and there is no nexus
between the unlawful conduct of Kreston and the defendant taking possession of the
property. In my view the issue of whether the defendant w ho took possession of the
property purchased by Kreston by funds unlawful ly taken from the plaintiff should
not be held liable for the loss suffered by the plaintiff will be determined by the trial
court based on the evidence before it . For the purpose of assessing the exception ,
this court must assume that the factual averment made in the amended pleadings
are correct.
[19] Regarding the seventh ground the defendant’s counsel submits that a trust
cannot be regarded as a juristic person in terms of the common law and in terms of
the Companies Act5. Therefore, the order sought for declar ing the trust’s estate to be
deemed not a separate entity is incompetent and therefore excipiable. In my view the
information is clear and sufficient from the pleadings to enable the defendant to
plead thereto if it feels that the order sought might be incompetent. The trial court on
hearing the evidence may grant the whole order sought or only part thereof . The
fragmented approach employed by the defendant in raising the exception based on a
piecemeal reading of the pleadings are contrary to the principles applicable in
assessing an exception ; that is the pleading must be read as a whole and no
paragraph should be read in isolation.
[20] For these reasons the exception should be dismissed with costs on scale B ,
taking into consideration the seniority of the counsel involved in this matter.
Order
[21] In the premises the following order is made:
The exception is dismissed with costs on scale B.
5 Companies Act 61 of 1973.
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______________
MATHENJWA
Appearances
Plaintiff ’s counsel: Mr K. C. McIntosh SC
Instructed by: Shepstone & Wyl ie
Durban
Defendant ’s counsel: Mr. A.R. Newton
Instructed by: BDP Attorneys
Cape Town
Date of hearing: 20 January 2025
Date of judgment: 30 January 2025