SWAZILAND
HIGH COURT
SHONGWE
MOSES T.
Plaintiff
Vs
BHEKI
G. SIMELANE & CO
1st
Respondent
SIMELANE
BHEKI GOODWILL
2nd
Respondent
SIMELANE
THEMBELA ANDREW
3rd
Respondent
Civ.
Case No. 1802/2002
Coram Sapire,
CJ
For
Plaintiff Mr. P.R. Dunseith
For
Respondent Mr. L. Mamba
JUDGMENT
(28/06/2002)
2
The
applicant was a client of the 1st respondent which is a firm of
attorneys which until recently has been practising in Mbabane. The
2nd and 3rd respondents are alleged to be the constituent partners of
the first respondent.
The
applicant sought judgment on motion against all three respondents,
requiring the respondents jointly and severally the one paying and
the others to be pro tanto absolved. What the applicant required was
the accounting for and the payment of the proceeds of a settlement of
a third party accident damages claim. The 1st respondent had acted as
applicant's attorney in the matter, and had received an amount of
E400.603.00 in settlement of applicant's claim.
On
2nd March 2002 the 1st Respondent, under cover of a letter furnished
the applicant with a draft account for services rendered. The account
is a three-page recitation of what the respondent claimed to have
done without specifying any charge for any particular item.
The
last line reads.
"All
our fees included as per Power of Attorney dated 11 July 2000 and the
amount claimed was E120 180.00.
A
copy of the Power of Attorney was enclosed to justify the charging of
the fee which on the face of it appears to be an exorbitant amount,
considering that no summons had been issued.
In
the mandate there are clauses touching on the remuneration of the 1st
respondent, which are of doubtful validity in law. The amount claimed
is 30% of the amount recovered and is so provided for in the Power of
Attorney. There is no relationship to the work actually done. It is
not necessary for the present purposes however to comment on
propriety of procuring the client's signature on the document of this
nature.
3
When
the application came before me, judgment had already been granted
against the first 2 respondents that is, against the company Bheki G.
Simelane & Company and the 2nd respondent who was the individual
Bheki Goodwill Simelane. The applicant now sought judgment against
the third respondent. When I pointed out to Mr. Dunseith who appeared
for the applicant, the impropriety of his claim, he abandoned it, but
urged that in terms of Rule 14, I should declare third respondent to
have been a partner of the first respondent at the time of the
accrual of the cause of action so that it would not be necessary to
again come to court when the first respondent had been unproductively
excused.
The
provisions of Rule 14 are wide enough for me to entertain the
application and it is not necessary at this stage to quote the
provisions to which I refer.
While
the main application should have properly been directed only against
the partnership in the firm's name, the second and third respondents
were in fact joined and cited and they are alleged in the papers to
be the constituent partners of the first respondent. The application
was served on them. They were given the opportunity to contest the
allegation that they were the partners constituting the first
respondent. Not withstanding that notices in terms of (c) and (d) of
Rule 14 were not served, there has been substantial compliance with
the rule. In the case of the third respondent, he has addressed the
issue of his being a partner in the affidavit filed by him, and
placed material before the court to support his denial that he was a
partner. Indeed as far as he is concerned it is the only issue. It
would be wasteful and pointless not to decide the issue if possible
on the papers now.
The
applicant has alleged in the founding affidavit that the third
respondent was, and presently still is a constituent partner of the
first respondent (see paragraph 4). As this Was not to his knowledge
in issue he made no further allegations to support the assertion.
Having regard to the provisions of Rule 14 this was in fact
sufficient.
4
The
third respondent apart from raising points in limine which were not
persisted in or indeed of any substance in the first instance replied
to the allegation that he was a partner in the first respondent in
this manner.
"AD
PARAGRAPH 4.
I
state that although my name appeared as a partner in the first
respondent's letterheads, I was in fact not such partner. It was
agreed between the second respondent and myself that I would only
become a partner on payment of the purchase price of E300 000.00 in
respect of my intended shareholding in the first respondent which sum
I never paid. Although I was a co-signatory to the first respondent's
accounts this was only for purpose of convenience and I was never in
fact a partner. "
One
immediately asks the question if he is not a partner why does his
name appear on the letterheads?
The
third respondent thereafter attempted in succeeding paragraphs of his
affidavit to justify the fee provisions of the Power of Attorney,
which the applicant had been required to sign. His submissions in
this regard are neither impressively convincing nor indeed relevant
to the present case. More importantly, there is no evidence to
support his denial of being a partner and nothing apart from his say
so to corroborate his self-contradictory version of his status in the
first respondent. His conduct is self-contradictory in that he has
for an unspecified but substantial period preceding the present
difficulties facing the firm had his name appear as a partner on the
firm's stationery, and in its entry in the Hortor's Diary list of
Swaziland legal practices, whereas he now to avoid personal liability
for the debts and obligations of the first respondent seeks to reveal
that he was never a partner. Such a belated revelation cannot affect
his liability to third parties such as clients who dealt with the
firm on the basis of 3rd Respondent being one of its constituent
partners. Third
5
Respondent's
conduct recalls to mind the idiomatic description of the conduct
rodent passengers of a floundering vessel.
Why
has no balance sheet or supporting accounts been placed before the
court? Why has the firm's accountant not corroborated the third
respondent? To what accounts is he, the third respondent the
co-signatory? If it is the third respondent's bank accounts to which
reference is made, why has he not produced testimony from the bank
that he operates on the firm's accounts otherwise than as a partner.
There is on the papers nothing to substantiate, what appears to be a
fabrication of recent vintage, conceived by third respondent to
excuse him from liability for defalcations of clients' monies. I do
not believe the third respondent, and find on the overwhelming
preponderance of probabilities amounting to a certainty that the
partnership stationery and the entry in the Hortor's Diary correctly
reflect third respondents position and status in the firm, namely,
that he is and at all material times was a partner in the first
respondent.
If
it were necessary to do so I would find that third respondent is
estopped from denying that he was a partner in the respondent firm.
It cannot be denied that he held himself out so to be. The applicant
and other clients entrusted their affairs to the firm, which to all
intents and purposes comprised two qualified and practicing
attorneys. It was on the professional integrity of both of them,
which the clients were entitled to rely. Now that there are fears
that one of them has possibly absconded, it is not open to the other
to be heard to say I was not really a partner and although we gave
out that I was a partner, we had a private arrangement that I was in
fact not a partner and would not be jointly and severally liable for
the obligations of the firm. Mr. Mamba, who appeared on third
respondent's behalf has argued that the applicant has not alleged
that but for the representation that third respondent was a partner
he would not have put his case in the hands of the firm. In other
words there is no allegation that the applicant has acted on the
representation of third respondent being a partner to his prejudice.
The applicant however does not have to go so far to show prejudice.
The prejudice is that he would have had two debtors, one of whom
would
6
fall
away if the third respondent were permitted to advance the case he
now seeks to raise.
The
doctrine of holding out in these circumstances has been stated in the
following terms:
"A
man, who is not a partner, who by his words or conduct represents
himself to be a partner, or knowingly allows himself to be
represented as a partner, is liable to anyone who on the faith of
that representation dealt with or given credit to the firm. " 2
Estoppels
operate in favour only of those who were induced by the
representation to consider him a partner. This does not mean however
that it has to be shown that but for the representation he would not
have dealt with the firm.
For
the purposes of the present application and the applicant's claim
against the partnership, the third respondent is declared to be a
constituent partner of the partnership that is the first respondent
and in the event of an unsuccessful excursion of the partnership
assets execution may be levied on his private assets.
Third
respondent is to pay applicant's costs of these proceedings.
SAPIRE,
C.J
2
Jelliman v SA Manufacturing Co. 1923 CPD 215 at 218
