REPUBLIC OF SOUTH AFRICA

IN THE SOUTH GAUTENG HIGH COURT

(JOHANNESBURG)

(1)	REPORTABLE: YES/NO
(2)	OF INTEREST TO OTHER JUDGES: YES/NO
(3)	REVISED. 

07 November 2013          …………..……………………...

Date			Signature

	 

In the matter between:

                                                                                          CASE NO: A3012/2012

In the matter between:

VENTER: RUDOLPH	Appellant

and

BURGER: BAREND PETRUS	Respondent

	____

JUDGMENT

WEINER J:

[1]	In this appeal from the Magistrate’s Court (Brakpan), the appellant, who was the plaintiff in the court a quo, sued the respondent, the defendant in the court a quo, for a statement and debatement of account and on a second claim for an injuria. The magistrate dismissed both claims with costs. The appellant is appealing against this decision of the learned magistrate. 

[2]	For the appellant to be successful on the first claim, he needs to show that he is entitled to a statement and debatement of account from the respondent. In support of this, the appellant relies on Doyle v Fleet Motors PE (Pty) Ltd 1971 (3) SA 760 (A) (“Doyle”). In that case at 762A-B, the respondent was being sued for “(a) an account, (b) debate thereof, and (c) payment of an amount found to be due”. Holmes JA at 762D-E relied on the fact that the cause of action for the demand for a statement and debatement of an account is found as a “…cause of action [that] is statutorily recognized in the magistrates’ courts; see sec 46(1)(c)(i) of Act 32 of 1944 and Ruiters v Clarke, 1922 E.D.L 303”

[3]	Holmes JA continues at 762E-763D to set out the practice that should be followed in cases such as these:-
“What then should be the practice, for example, as to what either side must prove, what degree of accounting is required, and whether the debate of an ordered account must in the first instance take place between the parties? In the absence of Rules, the following general observations might be helpful:

1.   The plaintiff should aver –

(a)   his right to receive an account, and the basis of such right, whether by contract or by fiduciary relationship or otherwise;

(b)   any contractual terms or circumstances having a bearing on the account sought;

(c)   the defendant's failure to render an account.

2.   On proof of the foregoing, ordinarily the Court would in the first instance order only the rendering of an account within a specified time. The degree or amplitude of the account to be rendered would depend on the circumstances of each case. In some cases it might be appropriate that vouchers or explanations be included. As to books or records, it may well be sufficient, depending on the circumstances, that they be made available for inspection by the plaintiff. The Court may define the nature of the account.

3.   The Court might find it convenient to prescribe the time and procedure of the debate, with leave to the parties to approach if for further directions if need be. Ordinarily the parties should first debate the account between themselves. If they are unable to agree upon the outcome, they should, whether by pre-trial conference or otherwise, formulate a list of disputed items and issues. These could be set down for debate in Court. Judgment would be according to the Court's finding on the facts.

4.   The Court may, with the consent of both parties, refer the debate to a referee in terms of sec. 19 bis (1)(b) of the Supreme Court Act, 59 of 1959.

5.   If it appears from the pleadings that the plaintiff has already received an account which he avers is insufficient, the Court may enquire into and determine the issue of sufficiency, in order to decide whether to order the rendering of a proper account.

6.   Where the issue of sufficiency and the element of debate appear to be correlated, the Court might, in an appropriate case, find it convenient to undertake both enquiries at one hearing, and to order payment of the amount due (if any).

7.   In general the Court should not be bound to a rigid procedure, but should enjoy such measure of flexibility as practical justice may require.”

[4]	The record reflects that the respondent, under cross-examination, stated that the agreement between the parties, placed a duty on the parties to account to each other and to debate their accounts. He further testified that it remains a possibility to have the account debated and to provide supporting documentation for that purpose. The respondent further stated that he had never denied the appellant his right to have the account debated despite this being contrary to the pleadings. It was submitted by the respondent that whilst debatement was indeed possible, it would be unreasonable to have to conduct such an exercise. 

[5]	It is clear from the evidence of both parties, as well as the supporting documentary evidence, that the relationship between the parties is acrimonious.  However, this does not detract from the fact that there have been no supporting documents furnished to the appellant in order for the appellant to ascertain whether he did receive commission to which he was entitled in terms of the agreement between the parties. The evidence in chief of the appellant indicated that it was not possible for the appellant to determine exactly on  what basis his “commission” was paid. This Court is asked to decide whether the learned magistrate erred in not finding that the appellant has an existing right to demand a statement of account and a debatement of account supported by vouchers from the other party. 

[6]	It is common cause that there was some form of contractual relationship between the parties. The respondent uses the term commission to describe the amounts owing to the appellant and it would then indicate that the relationship is one of agency and would require the respondent to provide an account to the appellant. A fiduciary relationship will be a relationship where the one party would be entitled to demand of the other a statement of account. In this regard, the matter of Phillips v Fieldstone Africa (Pty) Ltd is of relevance. Heher JA held at [27]:-  

“The implied duties (ie duties which derive ex lege) are said to have arisen in the context of contract which defined the relationship between the parties. Compare Hodgkinson v Simms 3 SCR 377 (SCC): ‘the existence of a contract does not necessarily preclude the existence of fiduciary duties between the parties. On the contrary, the legal incidents of many contractual agreements are such as to give rise to a fiduciary duty. The paradigm example of this class of contract is the agency agreement, in which the allocation of rights and responsibilities in the contract give rise to the fiduciary expectations.’ ”

[7]	Heher JA continues at [27]:-
“while agency is not a necessary element of the existence of a fiduciary relationship (Robinson v Randfontein Estates Gold Mining Co Ltd 1921 AD 168 at 180), that agency exists will almost always provide an indication of such a relationship.”

[8]	Whilst there is no written agreement between the parties, it appears from the nature of their dealings that it was one in which both a fiduciary relationship and an agency relationship was present. Such tacit term appeared clearly from the evidence. It would then follow that the appellant is entitled to a statement and debatement of account. 

[9]	The respondent asserts that the appellant, at all material times, has been afforded the opportunity to attend at the home of the respondent and to look at the documents that he has kept pertaining to the agreement between the parties. This is not satisfactory for the appellant and has been argued by the appellant to be contrary to the contractual obligation that the appellant suggests is owed by the respondent. A party to an agreement who wishes to determine his or her entitlement from an agreement could not be expected to attend the home of their business partner and conduct a fishing expedition and an investigation to determine whether their entitlement has been properly accounted for. It must also be noted that the Respondent has testified, under cross-examination, that the drawing up of a statement is possible. Why when it is possible to draw up a proper account to show that the appellant has received all that he is due and dispense with this matter would the respondent persist with his objection to having to provide a proper account. 

[10]	The tacit term of their agreement was that the parties have a duty to provide a properly itemised and detailed account to one another. This court, therefore finds that the appellant is entitled to a statement of account and to a subsequent debatement if necessary. 

[11]	When deciding the procedure that should be followed after a statement of account and debatement have been ordered, the matter of Doyle is again of relevance. Holmes  JA sets out what procedure should then be followed. The court usually prescribes a time for the production of the account. The party seeking the account should have an opportunity to consider the account and raise any issues with the person from whom the account was sought. If the parties cannot agree, then a list of disputes can be drawn up and the parties could seek mediation, arbitration or adjudication for the finalization of the dispute. 

[12]	With respect to the second claim, the claim for injuria, the appellant asserts that it is indeed clear from the transcript of words used by the respondent that the respondent intended to insult the appellant and was therefore injurious. The respondent under cross-examination admitted that he used these words and that they had the effect of injuring the appellant and that he should have refrained from using same. 

[13]	The respondent has attempted to justify his actions by saying that such language was used in response to the appellant stealing certain drawings from him. This allegation was not corroborated by any other evidence. The appellant, however, could show that the drawings, for which he was accused of stealing, were faxed to him by the respondent. Whilst this court can accept that there is an informal relationship between the parties it is clear that referring to someone as a snake and a liar means that they are dishonest.  

[14]	As a consequence of the respondent’s words, the appellant is claiming R20 000 in non-patrimonial damages. This amount, however, should be reduced in light of the informal relationship between the appellant and the respondent. 

[15]	Turning to the question of costs, this appeal was originally set down for hearing on 31 July 2012 but was incorrectly enrolled and was removed from the roll. The issue of costs was reserved. The appellant has conceded that the matter was incorrectly set down on that prior occasion. It is inattention to the rules of court that result in the court rolls becoming congested and the appellant should be ordered to pay the wasted costs of 31 July 2012.

In the circumstances, I propose the following order: 
A: The Appeal is upheld.
B: Claim 1

1.	The Respondent must furnish the appellant with a proper and detailed statement of account regarding their dealings in the engineering business trading under the name and style of Gear Development. This account should be furnished within 21 days of this Court Order. Such account should be accompanied by supporting vouchers. 
2.	The parties are to debate such account and any payments due are to be made within 30 days after such debatement. 
3.	Any disputes remaining should be referred for mediation to an accountant agreed to by the parties or failing such agreement, an accountant appointed by the South African Institute of Chartered Accountants,  such referral to take place within 7 days from the date a dispute is declared. -

C: Claim 2

1.	The Respondent is to pay the appellant the sum of R2000 as damages for injuria. 

D: 

1.	The respondent is to pay the costs of this appeal save for the costs of 31 July 2012 with those costs to be borne by the appellant. 

I Agree,

Mdalana AJ
and it is so ordered. 
Weiner J
Date of hearing: 8 October 2013

Date of judgment: 07 November 2013

Counsel for Appellant:  HF Delport

Attorneys for Appellant: Ashton Smit en Esterhuizen 

Counsel for Respondent: HP WESt

Attorneys for Respondent: Malherbe Rigg and Ranwell Inc