Pezzutto v Dreyer and Others

• Jurisdiction: South Africa
• Citation: 1992 (3) SA 379 (A)

Pezzutto v Dreyer and Others
1992 (3) SA 379 (A)

1992 (3) SA p379

Citation	1992 (3) SA 379 (A)
Court	Appellate Division
Judge	Joubert JA, E M Grosskopf JA, Smallberger JA, Van Den Heever JA and Van Coller AJA
Heard	February 17, 1992
Judgment	March 27, 1992

Flynote : Sleutelwoorde D

Partnership — Creation of — Essentials for — Contribution by each E partner to partnership — Nature of contribution by each partner — Need not be of same quantity, character or value — Contribution must, however, be something 'appreciable', ie something of commercial value — Such contribution need not be capable of exact pecuniary assessment.

F Partnership — Nature of — Carrying on of business, to which each partner contributes, in common for joint benefit of parties with view to making profit — Business could be anything occupying time, attention and labour of man for purpose of making profit — Business need not be continuous — Joint venture in respect of single undertaking could amount to partnership.

G Evidence — Witness — Credibility of — Witness' evidence uncontradicted — Does not follow that evidence to be accepted for that reason alone — But where witness' evidence uncontradicted, plausible and unchallenged in any major respect, no justification for submitting it to unduly critical analysis. H

Headnote : Kopnota

The essentialia necessary for the creation of a partnership are (1) that each of the partners bring something into the partnership, whether it be money, labour or skill; (2) that the business should be carried on for the joint benefit of the parties; (3) that the object should be to make a profit; and (4) that the contract be a legitimate one (this latter requirement is one common to all contracts). Where these four requirements I are found to be present a Court would find that a partnership has been established, unless such a conclusion is negatived by a contrary intention disclosed on a correct construction of the agreement between the parties. In essence, therefore, a partnership is the carrying on of a business (to which each of the partners contributes) in common for the joint benefit of the parties with a view to making a profit. In this context, a business is anything which occupies the time, attention and labour of a man for the purpose of profit. The business need not be a continuous one - a joint J venture in respect of a single undertaking could amount to

1992 (3) SA p380

A a partnership provided the essentialia of a partnership are present. Finally, in this regard, it should be noted that the contribution made by each partner need not be of the same character, quantity or value. Nonetheless, each partner must contribute something 'appreciable', ie something of commercial value, although such contribution need not be capable of exact pecuniary assessment, as, for example, where a partner contributes his labour or skill.

While it does not follow merely from the fact that a witness' evidence is B uncontradicted that it must be accepted, since it may be so lacking in probability as to justify its rejection, where a witness' evidence is uncontradicted, plausible and unchallenged in any major respect there is no justification for submitting it to an unduly critical analysis.

In casu, the appellant had alleged that a 'handshake agreement' of partnership between himself, the first and second respondents and a fourth C party had come into existence. On his evidence, which the Court found to have been uncontradicted, unchallenged and plausible, he was held to have proved the essentialia necessary for the creation of a partnership agreement. The respondents' contention that lack of consensus on a number of matters arising from a partnership involving a project of the nature in issue was indicative of the agreement being incomplete was rejected, the Court holding that agreement on matters other than the essentialia of a partnership had not been essential for the formation of a partnership D agreement at the time of the handshake agreement; and that, to the extent that it may have been necessary to agree on other matters, they could have been agreed upon later within the partnership framework. The Court found, further, that there had been clarity among the parties in regard to the nature of each party's contribution, and the fact that the exact extent of such contribution and the precise role of each party had not been spelled out had not made the agreement void for vagueness.

The decision in the Witwatersrand Local Division in Pezzutto v Dreyer and E Others reversed.

Case Information

Appeal from a decision in the Witwatersrand Local Division (Flemming J). The facts appear from the judgment of Smalberger JA.

R Grbich for the appellant referred to the following authorities: Bester F v Van Niekerk 1960 (2) SA 779 (A) at 783H-784B, 784E-F; Purdon v Muller 1961 (2) SA 211 (A) at 217H, 218C-G, 220E-F and 221H; Wood v Walters 1921 AD 303; Law of Evidence Amendment Act 45 of 1988; Galante v Dickinson 1950 (2) SA 460 (A); Olifant v Shield Insurance Co 1980 (1) SA 903 (C) at 907H; Mapota v Santam Versekeringsmaatskappy Bpk 1977 (4) SA 515 (A) at 527G-528A; S v Holshausen 1984 (4) SA 852 (A); Joubert (ed) The Law of G South Africa sv Partnership vol 19 para 370 at 260-1, paras 383, 388, 398, 399, 400 and 419 et seq; Bamford The Law of Partnerships and Voluntary Associations in South Africa 3rd ed at 3-4; 105 note 70; Wille and Millin Mercantile Law of South Africa 18th ed at 22-3, 528; Hickton's Patent Syndicate v Patents and Machine Improvements Co Ltd [1909] 26 RPC H 339 at 347; Patents Act 57 of 1978, s 27; Sibex Construction (SA) (Pty) Ltd v Injectaseal CC 1988 (2) SA 54 (T) at 66D-E; Delyannis v Kapousousoglu 1942 (2) PH A40 (W); Kenilworth Palace Investments (Pty) Ltd and Another v Ingala and Another 1984 (2) SA 1 (C) at 11E-13A; Turrell v I D Argo NO 1976 (2) PH A35 (N); Collen v Rietfontein Engineering Works 1948 (1) SA 413 (A) at 430-1; Ford v Abercrombie 1904 TS 873 at 882; I Wessels Law of Contract in South Africa 2nd ed paras 331 and 3127; Burroughs Machines Ltd v Chenille Corporation of SA (Pty) Ltd 1964 (1) SA 669 (W); Soteriou v Retco Poyntons (Pty) Ltd 1985 (2) SA 922 (A) at 931F-I; Shell SA (Pty) Ltd v Corbitt and Another 1986 (4) SA 523 (C) at 528I-529E; Pothier (Tudor's translation) Butterworths 1854 para 10; Letraset Ltd v Helios Ltd 1972 (3) SA 245 (A) at 251A; The Concise Oxford J English Dictionary sv 'assist', 'help'

1992 (3) SA p381

A and 'profit'; Fortune v Versluis 1962 (1) SA 343 (A) at 348H; Woomack v Commercial Vehicle Spares (Pvt) Ltd 1968 (3) SA 419 (R) at 423D-E; Langermann v Carper 1905 TH 251; Fink v Fink 1945 WLD 226 at 228; Levin v Barclays Bank DCO 1968 (2) SA 45 (A); Small v Smith 1954 (3) SA 434 (SWA) at 438E et seq; Simon v Cramb 1926 TPD 37 at 39-41; Reidy v Dromey 1923 B (1) PH A40 (N); Amler's Precedents of Pleadings 2nd ed; Cole v Stuart 1940 AD 399 at 408; Eaton & Louw v Arcade Properties (Pty) Ltd 1961 (4) SA 233 (T) at 238H-239B; Olifants Tin 'B' Syndicate v De Jager 1912 TPD 305 at 315, 316; De Jager v Olifants Tin 'B' Syndicate 1912 AD 505 at 509; Dickinson & Brown v Fisher's Executors 1916 AD 374 at 394; Voet 17.2.8; Lindley and Banks on Partnership 16th ed para 2-05 note 11; Irvin & C Johnson Ltd v Gelcer & Co (Pty) Ltd 1958 (2) SA 59 (C) at 64H-65B; Greshham Life Assurance Society v Styles [1892] AC 309 at 322; Malan v Kommissaris van Binnelandse Inkomste 1983 (3) SA 1 (A) at 17A-B.

P J van R Henning SC (with him S J du Plessis) for the respondents referred to the following authorities: Pitout v North Cape Livestock D Co-operative Ltd 1977 (4) SA 842 (A) at 853B-C; Wege v Kemp 1912 TPD 135 at 139-40; Ferguson v Merensky 1903 TS 657 at 659; OK Bazaars v Bloch 1929 WLD 37 at 40; Robinson v Federal Supply and Cold Storage Co of South Africa Ltd 1908 EDL 357 at 366; King v Potgieter 1950 (3) SA 7 (T) at 10D-F; Hattingh v Van Rensburg 1964 (1) SA 578 (T) at 582-3; Pizani and E Another v First Consolidated Holdings (Pty) Ltd 1979 (1) SA 69 (A) at 81B-C; Johnston v Leal 1980 (3) SA 927 (A) at 939F-G; McWilliams v First Consolidated Holdings (Pty) Ltd 1982 (2) SA 1 (A) at 8H-9A; Levin v Barclays Bank DCO 1968 (2) SA 45 (A) at 47A; Efroiken v Simon 1921 CPD 367 at 370-1; Companies Act 61 of 1973 s 218(1)(d); Pothier A Treatise on the F Contract of Partnership (Tudor's translation, 1854 at 6-7 para 10); Morkels Transport (Pty) Ltd v Melrose Foods (Pty) Ltd and Another 1972 (2) SA 464 (W) at 470D-E; Malan v Nabygelegen Estates 1946 AD 562 at 573; Lindner and Another v Vogtmannsberger and Another 1965 (4) SA 108 (O) at 110E-G; Humphreys v Cassell 1923 TPD 280 at 282; G Scammel and Nephew Ltd G v HC and JG Ouston [1941] AC 251 at 267-9, 273; Wessels on Contract 2nd ed vol I at 22 para 77; De Wet and Yeats Kontraktereg en Handelsreg 4th ed at 83-4; Kenilworth Palace Investments (Pty) Ltd and Another v Ingala and Another 1984 (2) SA 1 (C) at 13B-C; Globe Electrical Transvaal (Pty) Ltd v Brunhuber and Others 1970 (3) SA 99 (E) at 105H-106C; Steyn NO v Lomlin (Edms) Bpk 1980 (1) SA 167 (O) at 170E; Davidowitz v Van Drimmelen 1913 H TPD 672 at 675; Scheepers v Vermeulen 1948 (4) SA 884 (O) at 892; Bilsden Properties (Pty) Ltd v Wilson 1946 NPD 736 at 744; Van der Linden Institutes (Juta's translation) 4.1.13 (403); Huber Jurisprudence of My Time (Gane's translation) vol 1 para 25 at 457; Inter Maritime Management SA v Companhia Portuguesa de Transportes Maritimos EP 1990 (4) SA 850 (A) I at 869G-H; Rowe v Assistant Magistrate, Pretoria, and Another 1925 TPD 361 at 369-70; Buys v Nancefield Trading Stores 1926 TPD 513 at 517; De Lange v Rudman 1928 EDL 439 at 442.

Cur adv vult.

Postea (March 27). J

1992 (3) SA p382

Judgment

A Smalberger JA:

The appellant and one De Polo instituted action against the three respondents in the...