SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
MPUMALANGA DIVISION, MBOMBELA
CASE NO: 5305/2024
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: YES/NO
SIGNATURE
DATE: 16/09/2025
In the matter between:
PBS CHARTERED ACCOUNTANTS
INCORPORATED APPLICANT
and
PSG WEALTH FINANCIAL PLANNING (PTY) LTD RESPONDENT
This judgment was handed down electronically by circulation to the parties and/or
parties’ representatives by email. The date and time for hand -down is deemed to be
16 September 2025 at 12:00.
JUDGMENT
Mangena AJ
[1] The applicant is a firm of accountants carrying on business at 1 [...] M[...]
Street in Mbombela. Its area of focus is the provision of accounting services to its
clients. The respondent is an accredited financial services provider rendering
intermediary services to its clients.
[2] The parties concluded written referral agreements in 2017 and 2022 in terms
of which the applicant would refer clients (the contract uses the word prospect) to the
respondent for advice on financial planning, risk and investments. For simplicity, I will
use the word “client” in this judgment.
[3] In return and as payment for the referral , the respondent would pay a referral
fee of 30% of the net commission earned by the financial adviser upon a policy being
issued to the client or an investment being made by the client following the referral
by the applicant.
[4] The agreement sets out the mechanism for the d etermination of the
commission received from the referrals and obligates the respondent to pay the
applicant the amount due within 30 days of the funds reflecting in its bank account.
[5] The respondent honoured its obligations towards the applicant , and I am
informed that there is no payment outstanding in respect of the period during which
the contract was in force.
[6] On 28 May 2024 , the respondent , relying on Clause 4 of the agreement ,
issued a termination notice advising the applicant that the refer ral agreement shall
terminate in 30 days from the date of the written notice. The applicant accepted the
termination. Indeed, there does not appear to be much it could have done about it
because Clause 4 , which deals with termination , tersely provides as follows: “Any
party may terminate this agreement by giving 30 (thirty) days written notice of such
termination to the other party”. (My emphasis.)
[7] Following the termination , the applicant approached t his court for a
declaratory order in the following terms:
7.1 Declaring an existing and future right in favour of the applicant and an
existing and future obligation on the respondent, in terms of section 21(1)(c)
of the Superior Courts Act 10 of 2013 that the respondent remains obliged to
pay any outstanding commission from and including August 2024 and future
commissions as per the referral agreement entered into by and between the
applicant and the respondent, to the applicant.
7.2 There are other order s sought in the notice of motion in the event of
prayer 7.1 (declaratory order) being granted.
[8] The respondent opposes the relief sought and predicates its defence on the
following: that the applicant has not made a case for a declaratory order, and that the
referral agreement has terminated and does not make provision for the payment of
commission post-termination.
[9] Section 21(1)(c) of the Superior Cour ts Act regulates the granting of
declaratory orders. Before granting the order , the court should conduct a two -stage
enquiry, namely, whether the applicant is a person interested in an existing, future, or
contingent right or obligation and if satisfied, decide whether the case is a proper one
for the exercise of the discretion conferred on it. See Cordiant Trading CC v Daimler
Chrysler Financial Services (Pty) Ltd.1
[10] The applicant is an interested party in relation to the referral agreement and
seeks to assert its right predicated upon an agreement concluded with the
respondent. As I understand Mr Fourie, counsel for the applicant, there is a dispute
between the parties regarding the applicant’s right to be paid the commission. The
applicant firmly believes that this right survives the termination of the agreement and
entitles it to approach this court for the relief it seeks.
1 See Cordiant Trading CC v Daimler Chrysler Financial Services (Pty) Ltd 2005 (6) SA 205 (SCA)
para 16.
[11] Mr Van der Berg, counsel for the respondent , advances an opposite position.
He says there is no right established by the applicant deserving of any protection by
way of a declaration. He says this is so because the contract has been terminated
and such termination has been accepted by the applicant. There are no primary
obligations existing between them , and on the authority of Twenty-Third Century
Systems (Pty) Ltd and Another v SAP Africa Region (Pty) Ltd ,2 I should find that the
applicant cannot rely on section 21(1)(c) to base its legal claim for payment of future
commission. According to him , payment of the commission was a primary obligation
the respondent owed to the applicant , and it ceased when the agreement was
terminated.
[12] It is true that the agreement was terminated. The fact that it is terminated
does not take away the legal inter est that the applicant has flowing out of the
termination of that agreement. It is beyond dispute that the applicant was the source
of business for the respondent and derived direct financial benefit from the
agreement. The termination of the agreement dir ectly affects its financial interest. It
therefore meets the first stage of the enquiry espoused in Cordiant Trading supra.
[13] However, that is not the end of the matter. There is a further enquiry to be
made, namely , whether this is a case upon which t he court should exercise its
discretion in favour of the applicant. Mr Van Der Berg urged me not to do so. He
says that there is no contractual or legal basis upon which I can do so , based on the
manner in which the applicant formulated its claim. He says that declaratory orders
are not granted to answer abstract, academic or hypothetical situations. There is no
evidence before the court that there is a commission payable in the future. It was
incumbent upon the applicant to place material and relevant fact s to substantiate the
relief. With this , I agree, the applicant is seeking to establish liability for its future
relief. With this , I agree, the applicant is seeking to establish liability for its future
action (if any) by obtaining a declaratory order through the back door and not the
usual means of instituting action for the payment of the com mission. This should not
2 Twenty-Third Century Systems (Pty) Ltd and Another v SAP Africa Region (Pty) Ltd 2025 JDR 1811
(SCA).
be allowed. See Tri-Cor Industries (Pty) Ltd v Chairman of the Mpumalanga Tender
Board and others.3
[14] Further to the above , the agreement concluded between the parties has
terminated and does not make provision for the payment of commission post -
termination. For the applicant to find protection under section 21(1)(c) , it would need
to base its right to claim commission on a cl ause in the contract itself. The applicant
could not direct me to any clause in the contract that entitles it to be paid the
commission post -termination. In the absence of any clause upon which to rely to
establish a right to claim commission, I decline the applicant’s invitation to exercise
my discretion in its favour.
[15] There is also another reason why the application should fail. The applicant
has accepted the termination of the agreement. By accepting the termination, the
applicant signalled its cle ar intention not to be bound by the contract and its
provisions. If the applicant wanted to keep the contract alive, it should not have
accepted the repudiation but rather opted to enforce it and continue to draw the
benefits flowing from it, such as the referral fee. In this regard, I align myself with the
views of the S upreme Court of Appeal in the Twenty-Third century judgment when it
says:4
“.... when a party repudiates a contract, he breaches that contract. The
repudiation of the contract does not terminate the contract. The innocent party
has a choice of keeping the contract alive and enforcing it, or of cancelling it
by accepting the reputation. If he accepts the repudiation, he manifests an
intention neither to accept further performance under the contract from the
party who repudiated the contract, nor to further perform his own obligations
under the contract, thereby resiling from it. By accepting the reputation, the
innocent party brings to an end the duty of the parties to perform their primary
obligations under the contract. The effect of bringing an end to the primary
obligations under the contract. The effect of bringing an end to the primary
obligations is the activation of certain secondary obligations.”
3 See Tri-Cor Industries (Pty) Ltd v Chairman of the Mpumalanga Tender Board and others [1997] 4
All SA 414 (T).
4 Twenty-Third century para 22.
[16] For the above reasons, the application stands to be dismissed with costs on a
party and party scale B of the High Court.
______________________________
MANGENA AJ
ACTING JUDGE OF THE HIGH COURT
MPUMALANGA DIVISION, MBOMBELA
Appearances
For the plaintiff: Adv. Herman Fourie
Instructed by : Schoeman Borman Attorneys
For the respondent: P van der Berg SC
Instructed by: Thyne Jacobs Inc.
Date Heard: 02 September 2025
Judgment Delivered: 16 September 2025