Pretorius v Coopers Theron Du Toit

• Jurisdiction: South Africa
• Judge: Schutz J A
• Judgment Date: 14 March 1997
• Docket Number: 602/95
• Court: Appellate Division
• Hearing Date: 21 February 1997
• Citation: 1997 JDR 0249 (A)

Schutz JA:

I differ from my brother Streicher only in the respect that I consider that the judgment in favour of the respondent should not be reduced by the sum of R56 845,90, which is claimed by the appellant to represent legitimate deductions from the price determined under the dissolution agreement. It will be recalled that the respondent's case is that at the meeting of 3 June 1992 the indebtedness of NCK Hydraulics ("NCK") was established to be the only deduction in respect of both the

1997 JDR 0249 p3

Schutz JA

writing off of existing debtors and of the writing off of sums for work in progress that had not yet been charged to debtors. The appellant's case, on the other hand, is that further amounts could be written off in terms of cl. 8.1 of the dissolution agreement as in the normal and usual course of drawing up Coopers's statements.

The appellant has a finding against him, based both on the respective credibilities of the witnesses and the probabilities, as to what transpired at that meeting. Notwithstanding, in argument in this Court appellant's counsel, Mr Lacock, sought to confine this finding so that it does not extend to work in progress. The discussion involving NCK as described by Theron and Dreyer, so it is argued, was concerned only with debtors already debited and not with work in progress as well, so

1997 JDR 0249 p4

Schutz JA

that any entitlement to write off work in progress against pre-dissolution income depends entirely upon whether the same would have been written off in the normal run of business, ignoring the special circumstances of the dissolution. Alternatively, so I understood the argument, if the evidence of Theron and Dreyer should be construed to include work in progress among the excluded deductions, that part of their evidence should be rejected as being against the probabilities and false.

There is no room for reversing the credibility findings of the Court a quo. The record shows that the defences advanced by the appellant were advanced by means of unacceptable evidence. This applies also to his version that a limitation on deductions was not discussed on 3 June 1992. This is underlined by his failure to answer the respondent's letter

1997 JDR 0249 p5

Schutz JA

of 18 August 1992, in which the following comment was made on the appellant's proposed list of corrections:

"Ook het u persoonlik, so onlangs as 3 Junie 1992 aan die firma bevestig dat, met die uitsondering van NCK Hydraulics, die firma geen risikos op of debiteure of onvoltooide werk op kliënte waarvoor u verantwoordelik was het nie" (own emphasis).

Nor do I think that there is any substance in the argument that the discussion did not extend to work in progress. Theron said that it did, and the probabilities strongly support him. It is daar that the appellant was out of favour. Theron and Dreyer, on behalf of the remaining partners, were anxious to find out what losses arising in the appellant's section of the practice they might be called upon to share. If they had not been satisfied in that regard the negotiations would have taken

1997 JDR 0249 p6

Schutz JA

another course, probably involving a detailed investigation of the appellant's activities. Thus there was nothing casual about their enquiries. They wanted clear, precise answers. They say that is what they got. It would have been an exercise in futility to gain assurance on debtors while leaving a gaping hole in respect of work in progress. No experienced accountant could have done such a thing. Nor do the appellant's protestations that he did not know what the other partners' strategy was carry any weight. He, also as an experienced accountant, could not have been in doubt as to what was going on..

The argument that the discussion did not lead to an actual agreement in my opinion also lacks substance. Theron said several times that agreement was reached. He was cross-examined, not on the basis

1997 JDR 0249 p7

Schutz JA

that this was not so, but rather that the discussion took a different course. Mr Lacock, in answer to a question from a member of the Court, agreed that the issue was whether the version of Theron and Dreyer was to be accepted. Later, in response to a question from another member of the Court, he adopted the proposition that even if their version be accepted it did not establish a contract. To my mind, at least a tacit contract hash been established. Theron and Dreyer could not, understandably, remember exactly what had been said. But they were both men professionally and commercially experienced. They knew what they were out for. And they say they got it. There is no reason to doubt it.

My brother Streicher has reached two conclusions which, in my respectful view, are erroneous. The first is that even if an agreement was

1997 JDR 0249 p8

Schutz JA

reached it could extend only to "write-offs" that were needed on 3 June 1992 and that it did not affect any further ones subsequently found necessary, particularly on the day of ultimate reckoning, 30 June 1992. The second conclusion is that in any event the oral agreement which the respondent contends was reached on 3 June was in conflict with the later written agreement and thus inadmissible.

The respondent pleaded an agreement which was partly oral and partly written. What the evidence established was that the parties, after discussion of matters which would determine the price (in whole or in part) and having agreed thereon decided to have a written dissolution agreement prepared. The provisions of that agreement which related to the preparation of accounts which would reflect or determine the

1997 JDR 0249 p9

Schutz JA

financial consequences of the dissolution and, in particular, the phrase that accounts would be prepared "ingevolge die normale en gewone gebruik van Coopers" did not imply that any renegotiation of that which had been agreed upon should take place. Indeed I take it that this phrase is a standard formula which one can expect in many agreements of this nature. The usual practice was to debate and decide on what was to be written off at monthly partners' meetings. No doubt on such occasions certain well-established principles were taken into account. To my mind, the circumstances being unusual and the matter urgent, the meeting of 3 June 1992 served in lieu of the usual monthly meeting and, for whatever reason, agreement was reached. The work in progress component of the account which was to be a component of the price was thereby

1997 JDR 0249 p10

Schutz JA

established.

The further conclusion that an oral agreement with regard to the "write-offs" of amounts reflecting work in progress would be in conflict with the written agreement is also not justified. It overlooks the fact that the oral agreement contended for by the respondent preceded and indeed gave rise to the call for a written agreement. If, as the Court a quo found, the oral agreement was intended to be conclusive on the question of work in progress and thus to define the content of a part of the account that was to be mentioned in the written agreement, there is no contradiction or variation of the writing which was later signed - of Johnston v Leal 1980 (3) SA 927 (A) at 944 B - D. It was as if one of the pages of the account of 30 June 1992 had already been prepared and

1997 JDR 0249 p11

Schutz JA

approved.

A further point might be added. In his plea the appellant admitted that agreement was reached about NCK, but prior to 3 June 1992. It is therefore common cause that consensus was reached on this item although there is a difference as to the date. Thus it was established that NCK's debt would be written off against the price to be paid by the appellant. But the subject matter was the same as the item now disputed: what was and what was not to be written off. On the appellant's version the agreement as to NCK would therefore presumably have been reached at the same sort of discussion as occurred on 3 June. So we have the position that the appellant himself takes advantage of a discussion about a "write off', admits that the discussion led to agreement, and one

1997 JDR 0249 p12

Schutz JA

binding and not capable of being revisited on 30 June, but says that alike discussion led to no agreement on 3 June. An implausible story, when contrasted with the items claimed to be in dispute.

Accordingly the amount of R58 845,90 is not to be deducted from the respondent's claim.

The appeal is dismissed with costs.

SMALBERGER JA)

HOWIE JA) CONCUR

PLEWMAN JA)

Uitspraak

Streicher Wnd AR:

Die appellant is 'n rekenmeester wat te Kimberley

1997 JDR 0249 p13

Streicher Wnd AR

gepraktiseer het as 'n vennoot in die firma Coopers Theron Du Toit ("Coopers"). Op 3 Junie 1992 het die appellant, Theron, die beherende vennoot te die Kimberley kantoor van die vennootskap, Dreyer, die streeksvoorsitter van die vennootskap en Visagie, 'n mede-besturende vennoot, nasionaal, van die vennootskap, ooreengekom dat die appellant uit die vennootskap sou tree. Opdrag is aan 'n prokureur gegee om 'n ontbindingsooreenkoms op te stel. Die ontbindingsooreenkoms deur die prokureur opgestel is later deur die appellant en, namens die oorblywende vennote, deur Dreyer onderteken.

Ingevolge die skriftelike ontbindingsooreenkoms het die partye onder andere ooreengekom:

1. Die appellant sou op 30 Junie 1992 uit die vennootskap tree.

2. Vanaf die datum van uittrede sou al die bates van die

1997 JDR 0249 p14

Streicher Wnd AR

vennootskap die oorblywende vennote van Coopers toekom.

3. Die oorblywende vennote van Coopers sou geregtig wees om die besigheid van Coopers voort te sit en die appellant sou geregtig wees om as ouditeur en rekenmeester te praktiseer te Kimberley of elders.

4. Klousules 7 en 8 van die ontbindingsooreenkoms het soos volg bepaal:

"7.

Dit word geboekstaaf dat Pretorius oor 'n lys van die kliënte van Coopers beskik wat hy as rekenmeester en ouditeur bedien en waarvoor hy...