---

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

Case Number: 27798/06

DATE: 15 DECEMBER 2015

In the matter between:

C.S. DEETLEFS.................................................................................................................APPLICANT

And

A.D. FRIEDMAN N.O....................................................................................................RESPONDENT

(IN HIS CAPACITY AS EXECUTOR OF THE ESTATE OF WYLE C.A. DEETLEFS)

In Re:

C.A. DEETLEFS..................................................................................................................PLAINTIFF

And

C.S. DEETLEFS................................................................................................................DEFENDANT

Comm: HUGHES J

JUDGMENT

HUGHES J

[1] The applicant Cornelius Stephanus Deetlefs and his deceased father, Cornelius Albert Deetlefs, were in a partnership as far back as 1970. The parties were involved in a dispute (under the same case number) regarding the partnership initiated by the deceased since 2006.

[2] During the course of the aforesaid dispute, the parties agreed that a third party would be appointed to compile a report regarding the assets and liabilities of the partners and the partnership. To this end the partners concluded a document headed terms of reference for the third party. These terms of reference were selected by the applicant and the respondent, Andre Friedman, who was the attorney of the deceased at that time. The applicant and the deceased signed the terms of reference for the third party on 11 March 2010.

[3] The terms of reference to the third party identified the third party to be appointed, set out the mandate of the third party and the duties of both partners to co-operate with the third party. It listed the assets of the partnership and gave the third party the right to realise these assets. The third party was assigned to list the assets of each of the partners (in relation to the partnership), investigate where these where, correlate them and give value to those assets were no value had been given, table the liabilities incurred by each partner in the course of the partnership. The third party was instructed to compile a report and also set out how the division would take place in order to dissolve the partnership. The final report agreed upon by the partners would then be made an order of court.

[4] On 8 July 2010, shortly after the signing of the terms of reference the deceased died on 8 July 2010. On 25 August 2010, the respondent, Andre Friedman, was appointed an executor to the deceased's estate.

[5] The initial terms of reference to the third party signed by the deceased and the applicant, appointed Johan Enslin, as the third party.

[6] After the death of the deceased the first addendum to the terms of reference were commissioned and signed off on 15 February 2011. This addendum, signed by both the applicant and the respondent placed the executor in the place of the deceased, “ten aansien van die hangende litigasie onder bovermelde saaknommer”.

[7] Of importance is the fact that this first addendum made provision for the terms of reference signed on 11 March 2010 and this addendum to be made an order of court. If it were not made an order of court, it would be regarded as having the same status of an order of court. See paragraph 5 of the addendum set out below:

“Die partye bevestig dat die bepalings van hierdie addendum asook die "terme van ven/vysing na ‘n party” hierby aangeheg en gemerk “Aanhangsel CA1”. ‘n hofbevel gemaak sal word en sal dit, alvorens dit nog nie in ‘n hofbevel beliggaam is nie,dieselfde regskrag he asof dit reeds ‘n hofbevel is. ”

[8] On 9 May 2011 a second addendum was signed by the parties and this addendum removed Johan Enslin as third party and replaced him with Hein Immelman and Rudi Mulder.

[9] According to the second addendum the newly appointed third party had to compile individual reports and thereafter a joint report. The applicant and the respondent by way of the terms of reference and the addendums thereto, undertook to bind themselves to the directives as contained in the joint report by Immelman and Mulder. Provision was also made for the eventuality of Immelman and Mulder not reaching an agreement on the division of certain assets of the partnership. In this instance an independent Advocate was to be appointed to deal specifically with that aspect that the third parties could not agree upon.

[10] This application instituted by, Cornelius Stephanus Deetlefs, seeks to make the terms of reference to the third party and the two addendums, an order of court. He further seeks to compel the respondent to comply with the directives, for the dissolution and division of the partnership, as set out in the joint report of Immelman and Mulder.

[11] It was conceded by Adv. Strydom SC, for the respondent that prayer 1 of the notice of motion could be made an order of court. However, as regards prayer 2 together with its sub-paragraphs these could not be granted as the respondent raised a point in limine.

[12] The point in limine raised was that there was in fact no debt due or owed to the applicant by the deceased that arose from the partnership relationship. That section 13 (1) (d) of the Prescription Act 68 of 1969 that evokes a delay in prescription was not applicable in these circumstances. The result being that the time period for the applicant to institute a claim had prescribed. In addition, in terms of section 11, the terms of reference and the addend urns, these do not qualify to constitute being granted the status of an order or a judgment and as such the applicant’s claim had prescribed.

[13] It is trite that on the death of a partner, in a two man partnership and in the absence of provision of the continuation of the partnership, in the partnership agreement, the partnership is dissolved. In this matter there is no evidence that the partner’s intention were to continue the partnership even after death of either one of the partners.

[14] It is the respondent’s case that the claim of the applicant would have prescribed by the time he instituted these proceeding. He argues that firstly there was no debt established by the applicant due or owing to the deceased. Anything owed to the applicant would have arisen as the result of the death of his partner and the dissolution of the partnership relationship. Thus, the applicant does not enjoy the benefit of section 13 (1)(d) as there is no debt between the deceased and the applicant that arose during the partnership relationship.

[15] For easy reference section 13 in its entity is set out below:

“13 Completion of prescription delayed in certain circumstances

(a) the creditor is a minor or is insane or is a person under curatorship or is prevented by superior force including any law or any order of court from interrupting the running of prescription as contemplated in section 15 (1); or

(b) the debtor is outside the Republic; or

[Para, (b) substituted by s. 11 (a) of Act 139 of 1992.1

(c) the creditor and debtor are married to each other; or

(d) the creditor and debtor are partners and the debt is a debt which arose out of the partnership relationship; or

(e) the creditor is a juristic person and the debtor is a member of the governing body of such juristic person;

or

(f) the debt is the object of a dispute subjected to arbitration; or

(g) the debt is the object of a claim filed against the estate of a debtor who is deceased or against the insolvent estate of the debtor or against a company in liquidation or against an applicant under the Agricultural Credit Act, 1966; or

[Para, (g) substituted by s. 11 (b) of Act 139 of 1992.1

(h) the creditor or the debtor is deceased and an executor of the estate in question has not yet been appointed; and

(i) the relevant period of prescription would, but for the provisions of this subsection, be completed before

or on, or within one year after, the day on which the relevant impediment referred to in paragraph (a),

(b), (c), (d), (e), (f), (g) or (h) has ceased to exist, the period of prescription shall not be completed before a year has elapsed after the day referred to in paragraph (i).

(2) A debt which arises from a contract and which would, but for the provisions of this subsection, become prescribed before a reciprocal debt which arises from the same contract becomes prescribed, shall not become prescribed before the reciprocal debt becomes prescribed.”

[16] In Desai NO v Desai and Others 1996(1) SA 141 at 1461-J Grosskopf JA had the following to say of what constituted a debt, this was also followed in

Absa Bank v Andre' Keet ( 817/13) [2015] ZASCA 81(28 May 2015) :

“The term ‘debt’ is not defined in the Act, but in the context of section 10(1) it has a wide and general meaning, and includes an obligation to do something or refrain from doing something. (See Electricity Supply Commission v Stewarts and Lloyds of SA (Pty) Ltd 1981 (3) SA 340 (A) at 344F-G; Oertel en

Andere NNO v Direkteur van Plaaslike Bestuur en Andere 1983 (1) SA 354 (A) at 370S.)”

[17] It is well established that a debt is not that which is only sounding in money but may also encompass an obligation to do something or refrain from doing something (See Absa Bank para [12] supra).

[18] To my mind, the terms of reference for the third party does not amount to the deceased having undertaken to do something for the benefit of the applicant nor does it constitute that which is sounding in money. The terms of reference merely set out the third parties mandate, the assets of the partnership and the manner in which a directive with regards to the distribution to the partners after dissolution. The findings of the third party would only become an order of court if both partners agreed to make it an order of court. In my view, no obligation on the part of the deceased partner is evident from the terms of reference for the third party.

[19] I find that one cannot placed any reliance on the terms of reference in establishing a debt having existed between the parties as envisaged by section 13(1)(d), “if the creditor and the debtor are partners and the debt is a debt which arose out of the partnership relationships the applicant cannot rely on the extension of the prescriptive period provided for in section 13(1)(d). See Van Staden v Venter 1990 (4) SA 452 at 453H-I.

453H-I

“However, s 13 of Act 68 of 1969 provides that in certain circumstances the completion of prescription is delayed. One of these circumstances is that ’if the creditor and the debtor are partners and (the debt is a debt which arose out of the partnership relationship' (s 13(1 )(d) ), then the period of prescription shall not be completed until a year has elapsed after the day upon which the relevant impediment has ceased to exist.”.

[20] Turning to deal with whether the terms of reference and the addendums thereto constitute a judgment or order and should be seen as such, as agreed upon in the addendum by the parties. That being said, a judgment debt would have come to the fore and in terms of section 11 (a)(ii) the prescriptive period would be thirty years, so the argument of the applicant goes.

[21] It is trite that in respect of a judgment debt, a judgment creditor must be able to execute on that judgment debt or exact performance of the debt, for such to be a judgment. See Kilroe-Daley v Barclays National Bank Ltd [1984] ZASCA 90; 1984 (4) SA 609 AD at 624D-F:

“That means that judgment debt in s 11 (a) (il) refers, in the case of money, to the amount in respect of which execution can |be levied by the judgment creditor; that in the case of any other debt steps can be taken by the judgment creditor to exact performance of the debt, ie delivery of the property or performance of the obligation. A further feature of a judgment debt is that the judgment is appealable.”

[22] In the prevailing circumstances, the terms of reference together with the addendums cannot be regarded as a judgment debt. One is not able to execute on the documents and one is not able to seek exact performance either. In the result it stands to reason that any effort to invoke section 11 (a)(ii) in these circumstances must fait.

[23] It is conclusive that the prescriptive period would have commenced after the death of the partner, thus the applicant had three years from the date of death of his partner, to claim his share of the partnership. The death of the partner resulted in the dissolution of the partnership. The prescriptive period would have ended as at June 2013.

[24] In the circumstances the applicants claim became prescribed in terms of section 11 (d), being three years after July 2010 which would then seize June 2013. These application papers were only filed into court on 25 July 2014, being out of time.

[25] Consequently the following order is made:

[25.1] The application is dismissed with costs the claim of the applicant having become prescribed.

W. Hughes

Judge of the Court

---