IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
CASE NO.: 2025-046206
In the matter between:
NEIL DAVID BUTTON N.O. Plaintiff
and
MOHAMED YUSUF MOHAMEDY Defendant
Coram: Adams AJ
Heard: 30 April 2026
Delivered: 12 May 2026
Summary: Exception – Particulars of claim — Cause of action — Plaintiff, acting as
receiver of dissolved partnerships, seeking accounting and recovery of allegedly
misappropriated funds from defendant director — Defendant contending that
accounting and debatement constituted condition precedent to liability — Court
holding that particulars of claim, read holistically, disclosed a sustainable cause of
action and sufficiently enabled defendant to plead — Exception dismissed with costs.
JUDGMENT
ADAMS AJ:
Introduction
[1] The receiver appointed upon the termination of two partnerships claims
repayment from the defendant of allegedly misappropriated funds , the defendant
having acted as the director of the controlling partner in the partnerships, by way of
two separate claims
[2] What serves before this Court at this juncture is an exception raised by the
defendant in terms of Rule 23(1) of the Uniform Rules of Court. The defendant
contends that the plaintiff’s particulars of claim lack averments necessary to sustain
a cause of action and are accordingly excipiable. The plaintiff opposes the exception,
maintaining that the pleading, properly construed, discloses a complete and
sustainable cause of action.
[3] The formulation of the grounds of exception can be summarised as follows:
a) that the plaintiff does not have a right to seek an accounting (and a
debatement following on such accounting) from the defendant; and
b) that the only parties entitled to seek such accounting (and debatement) are
the two juristic entities constituting each of the partnerships involved, namely
New Exchange Investments (Pty) Ltd (“New Exchange”) and Peppercorn
Trading (Pty) Ltd (“Peppercorn”).
[4] Despite having elected to deliver an exception instead of a plea to the
particulars of claim, the defendant took no steps to prosecute the exception and
initially did not deliver any heads of argument in support of his contentions . The
plaintiff was accordingly required to set the matter down in order to compel a hearing
and determination of the merits of the exception. Only once the matter had been
enrolled for hearing and after the plaintiff had been obliged to deliver heads in the
absence of same from the defendant, did the defendant deliver his heads.
[5] The determination of this exception requires the Court to consider whether, on
every reasonable interpretation of the particulars of claim, no cause of action is
disclosed.1 I turn briefly to consider the facts underpinning the relief sought by the
plaintiff.
The background facts
[6] Two en commandite partnerships were terminated in terms of a court order
which is annexed to the particulars of claim, and provision was made for the
appointment of a receiver to wind up their affairs. The plaintiff was duly appointed as
receiver. The partnerships respectively operated service stations situated at Kuils
River and Melkbos, with the general partners being Peppercorn (Kuils River) and
New Exchange (Melkbos). The defendant was, at all material times, a director of
both Peppercorn and New Exchange. Although the service stations were operated
under the names of these companies, they constituted assets of the respective
partnerships. Following the conclusion of the written partnership agreements, oral
1 McKelvey v Cowan NO 1980 (4) SA 525 (Z) at 526D-E.
agreements were concluded in terms of which the defendant assumed responsibility
for the day -to-day management of both service stations and undertook to provide
financial information to the partnerships’ accountant for the preparation of accounts ,
in return for an agreed monthly remuneration.
[7] The plaintiff alleges that the defendant breached these oral agreements and
his duties to the partnerships by unilaterally increasing his own remuneration without
authority, misappropriating partnership funds, and failing to provide proper financial
records. In respect of the Kuils River service station, the defendant allegedly
increased his salary from R30 000 ,00 to R70 000 ,00 per month and withdrew
approximately R2 185 000 ,00 under the guise of a loan. In respect of the Melkbos
service station, he allegedly increased his salary to R70 000 ,00 per month, caused
an additional R30 000 ,00 per month to be paid to his wife without justification, and
withdrew approximately R4 332 113 ,24 as the total a of series of purported loans.
The defendant further failed, from about 2012, to furnish adequate financial
information to the accountant.
[8] Relying on the powers conferred upon him in the court order in terms of which
he was appointed as receiver, the plaintiff seeks an accounting and debatement from
the defendant , together with repayment of all amounts found to have been
misappropriated. The relevant powers are set out as follows in the court order:
“5. ….. The receiver's powers would be as follows:
5.1 To take possession of all assets, whether moveable or immovable, of the
partnerships and to determine and discharge all the labilities of the said
partnerships.
5.2 Without derogating from the generality of the order in paragraph 5.1 to
take possession of the service station business operated by the 7th
Respondent (Peppercorn Trading (Pty) Ltd) and the 8th Respondent (New
Exchange Investments (Pty.) Ltd), and to operate those businesses in the
name of the two companies until such time as the receiver has discharged all
his/her obligations in terms of the order and has disposed of those business
as contemplated by this order.
5.3 To inspect all documents and vouchers, books of account and financial
statements in respect of the 7" Respondent, Peppercorn Trading (Pty)Ltd and
the 8th Respondent (New Exchange investments (Pty) Ltd.
5.4 To obtain information from any auditors or accountants that might
have been engaged to prepare the books of account or financial statements of
the partnerships as well as of the 7th Respondent and the 8th Respondent
5.6 To determine from first Applicant and first Respondent an account of all
assets belonging to the said partnerships wherever such assets may be held.
And to determine whether any assets were dealt with by first or second
Respondent which are assets of the partnerships or is still in their respective
possessions.
5.7 To demand from each of the aforesaid persons payments or delivery to
the receiver of any balance of moneys or assets of the partnerships still in the
possession of any of those persons.
5.15 To pursue any claims against any of the aforesaid persons or any other
persons who may be owing money to the partnerships.”
The defendant’s submissions
[9] As indicated, the defendant’s exception is premised on the contention that the
plaintiff, acting as the appointed receiver of terminated partnerships, has failed to
plead the necessary averments to sustain a cause of action. In particular, the
defendant argues that on the plaintiff’s own version any amounts allegedly owed only
become due once an accounting and debatement of the funds advanced by the
partnerships have taken place.
[10] The defendant contends that such accounting and debatement have not yet
occurred. On this basis, it is argued that the rendering of an account and the
debatement thereof constitute a condition precedent to any liability on the part of the
defendant. In the absence of such prior steps, the plaintiff’s claim is said to be
premature.
[11] In advancing this argument, the defendant relies on Rule 18(4) of the Uniform
Rules of Court, which requires a clear and concise statement of the material facts,
with sufficient particularity to enable the opposing party to plead. It is further
submitted that a pleading which omits material averments necessary to sustain a
cause of action is excipiable.
[12] The defendant also invokes the well -established test for exceptions , namely
whether on every reasonable interpretation of the pleading no cause of action is
disclosed and contends that the plaintiff’s particulars of claim fail this test.
[13] The defendant argues, in addition, that the particulars of claim are vague and
embarrassing in that they lack sufficient particularity to enable a meaningful
response. The defendant contends that he is unable to plead until such time as an
accounting and debatement have been undertaken. On this basis, the defendant
seeks an order upholding the exception, with costs.
The plaintiff’s submissions
[14] The plaintiff contends that the exception is misconceived , and that the
particulars of claim, when read as a whole and accepted as true, clearly disclose a
cause of action.
[15] The plaintiff further submits that he is expressly authorised, by virtue of the
partnership structure and the court order, to demand an accounting and to pursue
the recovery of misappropriated funds. He contends that the defendant’s role as
director of the controlling partner gives rise to fiduciary duties, which are alleged to
have been breached through, inter alia, the misappropriation of funds.
[16] The plaintiff argues that the exception is internally inconsistent, overly technical,
and fails to demonstrate that no cause of action arises on any reasonable
interpretation of the pleading.
The applicable legal principles
[17] The principles governing exceptions are trite. In Trope v South African
Reserve Bank and Another2 and Lewis v Oneanate (Pty) Ltd ,3 the Appellate Division
(as it then was) emphasised that a plaintiff must plead the material facts upon which
the claim is founded with sufficient particularity to enable the defendant reasonably
to appreciate the case it is required to meet and to plead thereto . Correspondingly,
the excipient bears the onus of demonstrating that, on any reasonable interpretation,
no cause of action is disclosed.
[18] It is well-established that an exception is directed at the legal sufficiency of a
pleading, rather than the veracity of the allegations contained therein. Thus, for the
purposes of an exception, the Court is required to accept the pleaded facts as
correct and to determine whether, on every reasonable interpretation, the pleading
fails to disclose a cause of action. The onus rests on the excipient to establish that,
even on such acceptance, the pleading does not sustain a cognisable cause of
action.
[19] The function of an exception is to eliminate pleadings that are bad in law,
thereby avoiding the leading of unnecessary evidence and the costs attendant upon
a trial where no sustainable claim or defence exists. It is trite that both the parties
and the Court are bound by the pleadings; the Court may not stray beyond the four
corners of the pleaded case or determine issues not raised, lest it engage in
2 1993 (3) SA 264 (A).
3 1992 (4) SA 811 (A).
speculation and adjudicate matters not properly placed in dispute. 4 An exception is
therefore not a mechanism to test probabilities, resolve factual disputes, or
reformulate a party’s case.
[20] In Barclays National Bank Ltd v Thompson 5 the function of an exception on
the ground that necessary averments are lacking and the circumstances under which
it may be taken, were restated. The Court held that a well -founded exception serves
to dispose of a case, in whole or in part, and cannot be taken to part of a pleading
unless that part is self -contained and amounts to a separate claim or defence. The
purpose of an exception that a declaration does not disclose a cause of action is to
avoid the leading of unnecessary evidence at trial.
[21] In Telematrix6 the Court emphasised that exceptions are a useful tool that
help weed out cases that have no legal merit. The Court warned against an overly
technical or formalistic approach because if courts treat exceptions too rigidly, they
lose their usefulness. Courts are urged instead to deal with them sensibly and
practically. An exception should act like a “sword” that cuts through the claim and
exposes whether it is legally defective. In other words, it should test the legal validity
of the claim clearly and not get bogged down in artificial arguments.
[22] In McKelvey v Cowan NO 7 it was stated that if evidence can be led which
discloses a cause of action alleged in the pleadings, the pleading is not excipiable. A
pleading is only excipiable where no possible evidence led on the pleading can
4 See Jowell v Bramwell-Jones and Others 1998 (1) SA 836 (W) at 898G–I.
5 1989 (1) SA 547 (A) at 553 F-H.
6 Telematrix (Pty) Ltd v The Advertising Standards Authority SA 2006 (1) SA 461 (SCA) para 3.
7 1980 (4) SA 525 (Z) at 526D.
disclose a cause of action. In order to disclose a cause of action, a plaintiff’s
pleading must set out every material fact necessary to support the right to judgment,
if traversed. It need not include every piece of evidence but must contain each fact
that must be proved.8 The distinction is between the essential facta probanda, which
must be pleaded, and the facta probantia, which are matters for evidential proof at
trial. A failure to plead the former leaves the claim without a legal foundation,
whereas the inclusion of the latter tends to obscure rather than clarify the real issues.
Application of the law to the facts
[23] I have mentioned at the outset that t he defendant’s exception is framed on
two ostensibly distinct bases: first, that the plaintiff lacks the right and authority to
seek an accounting and debatement from the defendant; and second, that such relief
may be pursued only by the two juristic entities. On closer scrutiny, however, the
latter contention undermines the former, and the exception in substance rests on a
single proposition, namely, that the plaintiff is not vested with the requisite
entitlement to demand an accounting.
[24] During oral argument before this Court, it became apparent that the
defendant’s exception is, in essence, predicated upon the further contention that an
accounting and debatement constitute a condition precedent to the plaintiff’s claim.
On that footing it is argued that, in the absence of such prior accounting, no cause of
action has accrued to the plaintiff.
8 McKenzie v Farmers’ Co-operative Meat Industries Ltd 1922 AD 16 at 23.
[25] This contention is fallacious. The exception reflects a failure to appreciate the
juridical structure of the en commandite partnerships in question. The plaintiff pleads
that each service station is an asset of the respective partnerships, notwithstanding
that they were operated under the names of New Exchange and Peppercorn. The
written partnership agreements expressly record that the partners entered into
partnerships in respect of the service stations, and that the business of each
partnership would be conducted in the name of the juristic entities.
[26] This arrangement makes clear that the service stations are partnership
assets, and that the juristic entities merely serve as vehicles through which the
businesses are operated. The entities themselves have no ownership claim over the
businesses. In these circumstances, paragraph 5.6 of the court order (quoted earlier
in this judgment) empowers the plaintiff to obtain from the defendant an account of
all partnership assets, wherever situated, including any dealings relating to the
service station businesses. That authority is distinct from paragraph 5.3 of the same
order, which entitles the plaintiff to inspect documents and financial records of the
juristic entities.9
[27] The powers granted to the receiver must be interpreted holistically and
purposively. In any event, the plaintiff’s entitlement to an accounting also arises
directly from paragraph 5.6 of the court order, which expressly provides for such
relief and is binding on the defendant. Paragraph 5.6 expressly authorises the
9 Paragraph 5.3 reads as follows: “To inspect all documents and vouchers, books of
account and financial statements in respect of the 7" Respondent, Peppercorn Trading
(Pty)Ltd and the 8th Respondent (New Exchange investments (Pty) Ltd.”.
receiver to determine from the relevant persons an account of all assets belonging to
the partnerships, to trace their whereabouts, and to ascertain whether any such
assets were improperly dealt with or remain in the possession of the respondents.
Properly construed, this provision necessarily includes the power to require a
comprehensive accounting where such accounting is required to identify, locate, and
value partnership assets. Absent access to a full and transparent account, the
receiver would be unable to discharge the central mandate of determining the nett
assets and liabilities of the partnerships and to give effect to the order.
[28] Furthermore, on the plaintiff’s version as pleaded, which must be accepted as
correct for purposes of the exception, the defendant was effectively employed by the
service station businesses. This gives rise to a fiduciary duty to account. The oral
agreement in terms of which the defendant received a salary was concluded
between the partnerships and the defendant, with the juristic entities playing no role.
This is made plain in the particulars of claim.
[29] Additionally, paragraph 5.15 of court order10 empowers the plaintiff to pursue
claims against the defendant where monies are owed to the partnerships. The
plaintiff has alleged that the defendant misappropriated substantial sums from the
partnerships. These claims fall squarely within the scope of the authority granted by
that order.
10 This paragraph reads as follows: “5.15 To pursue any claims against any of the
aforesaid persons or any other persons who may be owing money to the partnerships.”.
[30] The defendant’s contention is, additionally, not sustainable for the following
reasons.
[31] First, w hen the particulars of claim are read holistically, they disclose a
coherent cause of action grounded in the alleged misappropriation of partnership
funds by a party occupying a fiduciary position. The plaintiff pleads its authority,
derived from both the partnership structure and a court order, to pursue recovery of
such funds and to demand an accounting.
[32] The plaintiff’s claim is not confined to a mere demand for payment of a
liquidated amount following a debatement. It encompasses the right to call for an
accounting, to interrogate the financial dealings in question, and to recover amounts
found to be due. In such circumstances, the accounting process forms part of the
relief sought, rather than a condition precedent to the institution of the claim.
[33] Second, the defendant’s characterisation of the accounting and debatement
as a condition precedent is not borne out by anything currently before this Court , at
least not in a manner that renders the particulars of claim excipiable. Whether an
accounting must precede liability, or whether it is integral to the relief claimed, is a
matter that may depend on the evidence and the precise legal relationship between
the parties. It is not a question that can be definitively resolved at the exception
stage. In Al Mayya International Limited (BVI) v DDP Valuers (Pty) Ltd11 it was said
that:
11 [2024] ZAGPPHC 757 (31 July 2024) paras 11 to 13.
"[11] A plaintiff is required to plead his/her case in terms that are lucid, logical and
intelligible. A plaintiff must only plead the facta probanda and not the facta probantia.
[12] A plaintiff should plead the outline of his case. That does not mean a defendant
is entitled to a framework like a crossword puzzle where every gap can be filled by
logical deduction. 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, the appellant will have satisfied the requirements.
[13] In an exception premised on the grounds of a failure to disclose a cause of
action, the onus is on the excipient to demonstrate that 'upon every interpretation
which the pleading in question, and in particular the document on which it is based,
can reasonably bear, no cause of action or defence (as the case may be) is
disclosed'."
[34] Third, the defendant has not discharged the onus of demonstrating that, on
every reasonable interpretation of the particulars of claim, no cause of action is
disclosed. At best for the defendant, the exception raises an issue as to the timing
and sequencing of relief. That does not extinguish the cause of action.
[35] Fourth, the complaint that the particulars of claim are vague and
embarrassing is similarly unsustainable. The material facts underpinning the claim ,
namely the existence of the partnership, the plaintiff’s authority, the defendant’s
fiduciary position, the alleged misappropriation, and the resulting loss, are sufficiently
pleaded to enable the defendant sensibly to formulate a response. Any further detail
required can be sought by way of a request for trial particulars under Rule 21.
[36] Finally, the defendant’s approach reflects an impermissibly technical
dissection of the pleading. The law requires a sensible and holistic reading, not one
that isolates alleged deficiencies divorced from the overall structure and substance
of the claim.
Conclusion
[37] The defendant’s exception is misconceived. It fails to establish that the
plaintiff’s particulars of claim lack averments necessary to sustain a cause of action.
On the contrary, the pleading discloses a sustainable claim which ought properly to
proceed to trial.
[38] The exception appears to be an attempt to forestall the adjudication of the
merits through technical objections, rather than a bona fide challenge to the legal
sufficiency of the claim . It constitutes an attempt to avoid engaging with the
particulars of claim. It is apparent that the exception is without merit , and the
defendant’s failure to prosecute the exception reinforces this conclusion.
Costs
[39] I see no reason why costs should not follow the result. Neither party argued
otherwise. In the exercise of my discretion under Rule 67A I am of the view that
counsel’s fees should be taxed on Scale B.
Order
[40] I accordingly order as follows:
1. The defendant’s exception is dismissed.
2. The defendant shall pay the costs of the exception , including counsel’s fees
taxed on scale B.
_________________________________
M. F. ADAMS
ACTING JUDGE OF THE HIGH COURT
Appearances
For the plaintiff: Adv. R, Randall, instructed by Stowell& C.O Attorneys.
For the defendant: Adv. M. Holland, instructed by Whelan Attorneys.