THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Case no:   498/10
In the matter between:

ROSHAN MORAR NO

Appellant
and
MAHOMED ASLAM OSMAN AKOO                        First Respondent
THE TRUSTEES OF THE MAHOMED
ASLAM AKOO FAMILY TRUST

Second Respondent

Neutral citation: Morar NO v Akoo (498/10) [2011] ZASCA 130 (15
September 2011)
Coram:
BRAND, MHLANTLA, MAJIEDT and WALLIS JJA and
MEER AJA.
Heard:
26 August 2011
Delivered: 15 September 2011
Summary: Partnership – liquidator appointed by the court – powers
to be conferred on liquidator – whether court may amplify powers
originally given to liquidator.

ORDER

On appeal from: KwaZulu-Natal High Court, Pietermaritzburg
(K Pillay J, sitting as court of first instance):
The appeal is dismissed with costs.

JUDGMENT

WALLIS JA (BRAND, MHLANTLA and MAJIEDT JJA and
MEER AJA concurring)
[1] Ordinarily when a partnership is dissolved the partners themselves
liquidate it, or cause it to be liquidated by one of their number or by a
third party chosen by them. The basis upon which the liquidation is
undertaken is agreed upon, whether in advance in a formal partnership
agreement or at the time of dissolution. Sometimes it is not possible for
the partners to reach such an agreement and one or more of the partners
seek the intervention of a court to procure the appointment of a
liquidator.1 That happened in the present case and it resulted in
Mr Morar’s appointment as the liquidator of the partnership operating a
business called Rollco. The order appointing him gave him detailed
powers. Mr Morar’s task has not been straightforward and accordingly he
approached the high court asking for further powers to be given to him.
The application was heard by K Pillay J and was dismissed. Mr Morar
appeals with her leave to this court. The issues raised by the appeal are

1 Invoking for that purpose the actio pro socio the nature of which was described by Joubert JA in
Robson v Theron 1978 (1) SA 841 (A) at 855H-856G.

whether it is competent for the initial order to be varied and whether the
relief Mr Morar now seeks should be granted to him.

[2] In about 1986 the Osman family established the business known as
Rollco, as manufacturers of roof sheeting and processors and suppliers of
steel products. Mr Mohamed Aslam Osman Akoo, the first respondent,
was actively engaged in the management of the business, ownership of
which lay with a family trust. During 1987 the Moosa family became
equal partners with the Osman family in the business, holding their
50 percent share through ten family trusts. There is a dispute whether the
Moosa family’s involvement was purely as financiers of the business or
whether they were also to play an active role in managing the business.
Be that as it may the business operated reasonably successfully and
generated profits, which were shared equally between the Osman family
trust and the Moosa family trusts.

[3] Problems started to emerge in 2002 or 2003 when Mr Akoo’s
brothers and father withdrew from the business. There is a dispute
whether their interests in the business were taken over by Mr Akoo, either
personally or through the medium of the second respondent, the
Mohamed Aslam Osman Akoo Family Trust (the Akoo family trust), or
whether a significant portion of their shares accrued to the various Moosa
family trusts.2 This appears to have marked the beginning of a breakdown
in relations between Mr Akoo, on the one hand, and the representatives of

2 This dispute may be affected by a further judgment by Msimang JP handed down on 22 June 2010 in
which he held that the Akoo family trust could not legally have entered into the partnership agreement
as on the relevant date its trustees (Mr Akoo and his wife) had not been issued with letters of authority
to act as trustees of the trust in terms of s 6 of the Trust Property Control Act 57 of 1988. There is other
litigation pending that may also have a material impact upon whether any such partnership ever
existed, the identity of the partners and the effect of the order referred to in para 4. The present
proceedings were brought and decided prior to the second order by Msimang JP and prior to the
commencement of the other litigation and will be decided without reference to them.

the Moosa family on the other. It culminated on 24 February 2006 with
Mr Akoo addressing a letter to each of the Moosa family trusts giving
them notice of the dissolution of the partnership with effect from
28 February 2006. In a case beset by disagreement the one point on which
all the parties agree is that this notice was effective to terminate the
Rollco
partnership,
however
constituted,
with
effect
from
28 February 2006.

[4] On 15 October 2007, on the application of certain of the Moosa
family trusts, Msimang J made an order declaring that the partnership
relationship subsisting between ten Moosa family trusts and either
Mr Akoo personally, or the Akoo family trust, under the name and style
of Rollco Roofing Systems, to have been lawfully dissolved with effect
from 28 February 2006. He ordered the appointment of Mr Morar as
liquidator and that from the date of the order:
‘… all partnership property and assets, of whatsoever form or nature, and regardless
of the date of acquisition of such property or asset by the partnership or any of its
partners, shall vest in the liquidator.’

[5] Mr Akoo was directed to furnish the liquidator and all the partners
with a full and proper account of the partnership business and its assets
and liabilities as at 28 February 2006 with supporting documents and
vouchers. He and a company, Rollco Roofing Systems (Pty) Ltd, through
which
Mr Akoo
had
been
conducting
the
business
since
28 February 2006, were ordered to furnish the liquidator with an account
of the income and expenditure arising from the operation of that business
‘alternatively arising from the use of the assets of the partnership from
1 March 2006 to the date of account’ including all supporting documents
and vouchers, as well as an accounting of the assets and liabilities of the

company. The liquidator was directed to effect a final liquidation of the
partnership and make any distribution to the partners according to the
extent of their determined interests in the partnership.

[6] Mr Morar has endeavoured to carry out his task but has met with
little success. Neither Mr Akoo nor Rollco Roofing Systems (Pty) Ltd
have rendered a proper account as required by the order. There remains
no clarity as to the whereabouts of the assets of the business or whether
the business is still in the hands of the company or has in effect been
transferred to another company. In those circumstances Mr Morar sought
and obtained an order for the liquidation of Rollco Roofing
Systems (Pty) Ltd. Thereafter an enquiry in terms of the provisions of
s 417 of the Companies Act 61 of 1973 (the old Companies Act)) was
convened before a retired judge. For reasons that are immaterial he raised
a query whether such an enquiry was competent. That resulted in
protracted litigation between the liquidator and the present respondents
that was only resolved after the appeal before us had been lodged. There
have been other legal proceedings involving the liquidator but with little
advantage in terms of achieving finality with the liquidation.

[7] In the result Mr Morar ran short of the sinews of war. He
accordingly wrote letters to the different potential partners of the Rollco
partnership asking for contributions. An amount of R500 000 was
forthcoming from the various Moosa family trusts but Mr Akoo and the
Akoo family trust, without expressly refusing to do so, provided nothing.
Their refusal is the subject of the first order sought by Mr Morar. In it he
asks that they be ordered to pay him an amount of R500 000 ‘for the
purposes of administering the estate of the partnership which conducted
trade under the name and style of Rollco Roofing Systems’. To fortify the

order in case of non-compliance he asks that if the money is not paid to
him within ten days of the order the sheriff should be authorised to attach
property sufficient, once sold, to realise R500 000 and to pay that amount
to him. Realising also that this may not prove to be sufficient if Mr Akoo
and the Akoo family trust continue to resist his attempts to pursue the
liquidation, he also asks for an order that he may in the future call upon
the partners to make contributions to him as required in order to fund his
work as liquidator and that they will be required to comply with those
calls for additional funds.

[8] Together with the claim for that financial relief Mr Morar sought
an order for a detailed account from Mr Akoo relating to the partnership’s
dealings with its major supplier. He also asked for more extensive powers
of interrogation in relation to Mr Akoo and certain other individuals. The
latter were said by his counsel to be the most important aspect of the
order that he sought. What he seeks is the power to appoint a senior
advocate to conduct an enquiry as if in terms of s 417 of the old
Companies Act. Lastly he asked for authority to take out professional
indemnity insurance as an expense of the liquidation.

[9] Counsel for Mr Morar did not point to any authority specifically
supporting this relief. Instead he submitted that it is relief that can be
granted by virtue of the general principles of the actio pro socio ‘and “the
wide equitable discretion” given to a liquidator of a partnership’.
Reliance was placed upon the exposition of the actio pro socio by Joubert
JA in Robson v Theron3 and upon the judgment in Brighton v Clift (2)4. It
is helpful to consider what was decided in these cases.

3 At 855H-856G
4 Brighton v Clift (2) 1971 (2) SA 191 (R) at 193B-D.

[10] Joubert JA surveyed the development of the law from Roman times
in regard to the actio pro socio and summarised his conclusions in the
following terms:
‘The principles of the common law underlying the actio pro socio may be
conveniently summarised as follows:
1. This action may be instituted by a partner against a co-partner during the existence
of the partnership for specific performance in terms of the partnership agreement
and/or fulfilment of personal obligations (praestationes personales) arising out of the
partnership agreement and business.
2. Where the partnership agreement provides for (or the parties subsequently agree
upon) the dissolution of the partnership and the manner in which the partnership is to
be liquidated and wound-up specific performance thereof may be claimed by means
of this action.
3. Where neither the partnership agreement nor a subsequent agreement between the
partners provides for the dissolution of the partnership and the manner in which the
partnership is to be liquidated and wound-up this action may in general (subject to any
stipulation for the duration of the partnership or any other relevant stipulations) be
brought by a partner to have the partnership liquidated and wound-up. The Court in
the exercise of its wide equitable discretion may appoint a liquidator to realise the
partnership assets for the purpose of liquidating partnership debts and to distribute the
balance of the partnership assets or their proceeds among the partners. Pothier,
op. cit., sec. 136.
4. Where a partnership has been dissolved a partner may avail himself of this action
against his co-partners to claim distribution of any undistributed partnership asset or
assets. Pothier, op. cit., sec. 162:
"Each of the former partners can alone demand a distribution of the effects which
remain in common after the dissolution of the partnership."
This obviously covers the situation where, after dissolution of a partnership, a
continuing partner retains possession of a partnership asset which has not been
included in a distribution of the partnership assets. Hence a retiring partner may
institute this action against the continuing partner to claim a distribution of the
partnership asset in question.

5. A court has a wide equitable discretion in respect of the mode of distribution of
partnership assets, having regard, inter alia, to the particular circumstances, what is
most to the advantage of the partners and what they prefer.
6 The various modes of distribution of partnership assets are fully dealt with by
Pothier, op. cit., secs. 161 - 178.’

[11] Two points are noteworthy about this exposition of the general
principles of the actio pro socio. The first is that according to the
authorities the action is one that lies at the instance of one of the partners
for relief against another partner, either during the subsistence of the
partnership or after its dissolution. A detailed discussion is to be found in
Voet 17.2.9 and 17.2.105 where it is said that the action is one in terms of
which one partner may claim against another:
(a) an account and a debatement thereof, either during the subsistence of
the partnership or after it has been terminated;
(b) delivery of a partnership asset to the partnership;
(c) the appointment of a liquidator to the partnership.
Other writers describe the actio in similar terms.6 Pothier7 says that:
‘From the obligations which arise out of the contract of partnership arises the action
pro socio, which each of the partners can maintain against his copartners, in order to
compel their fulfilment.
This is a personal action: it passes to the heirs and other universal successors of each
of the partners, who can maintain that action; and it may be brought against the heirs
and other universal successors of the partners, who are bound by it.’
None of the writers suggest that the actio is available to a liquidator once
appointed to liquidate a partnership. It is always available to the erstwhile

5 The Selective Voet being the Commentary on the Pandects of Johannes Voet (Gane’s translation),
Vol 3.
6 Van der Linden, Institutes of Holland (Juta’s translation) 2.4.1.11; Van der Keesel, Select Theses on
the Laws of Holland and Zeeland (Lorenz’s translation), 700 and 701; Van Oven’s Leerboek van
Romeinsch Privaatrecht (3rd ed)(1948) at 280 et seq.
7 Pothier, A Treatise on the Law of Partnership (translated by Owen Davies Tudor, 1854) section 134.

partners, but that does not mean that the liquidator can invoke it. This
undermines the attempt by Mr Morar to rely on it for the relief he seeks.

[12] The second point is that the references by Joubert JA to ‘a wide
discretion’ are not references to a discretion vested in the liquidator nor
are they references to a discretion enjoyed by the court to invest the
liquidator with broad-ranging powers. They refer to the discretion
enjoyed by a court either to appoint a liquidator or to order a distribution
of the partnership property among the partners in some other fashion. The
discussion in the passage that follows of the actio communi dividundo
refers to a similar discretion. The learned judge said only that, when
former partners approach the court for relief under either of these
actiones, the court has a wide discretion to determine whether to appoint
a liquidator, or to order a division of the partnership property, or to order
one partner to take over that property at a valuation with payment of the
appropriate share to the other or others. That is something very different
from saying that the liquidator appointed by the court has a wide
discretion in regard to the manner in which the liquidation is carried out
or from saying that the court has a wide discretion to afford extensive
powers to the liquidator of a partnership.

[13] The other authority on which reliance is placed in support of the
proposition that a liquidator has a ‘wide equitable discretion’ is the
decision in Brighton v Clift (2), supra. That concerned the dissolution and
winding-up of a firm of attorneys and the issue before the court was
whether a liquidator should be appointed in the face of opposition from
the one partner. The judgment was accordingly not concerned with the
powers to be granted to the liquidator, if appointed, save in a passing

fashion. Having decided that a liquidator should be appointed Macauley J
dealt with his powers in these terms:
‘With regard to the powers to be conferred on the liquidator, it seems to me that it is
not this Court's function to act as a liquidator and to anticipate problems which may
present themselves to the liquidator at a later stage. Doubtless, these will arise in any
liquidation, but they are matters for the liquidator to decide and, in doing so, he may
seek the parties' concurrence in any course he takes. Failing their agreement, his
decisions are open to objection by either party with recourse to the Courts. I decline,
therefore, to direct the liquidator in the manner sought in paras. 2-6 inclusive of the
amended draft order.’ 8 (Emphasis added.)
In the result the order the court made was confined to one appointing the
liquidator to wind up the partnership, realise its assets, collect the debts
due to it, prepare a final account and divide the assets between the
partners after paying the debts and the costs of liquidation.

[14] That judgment does not assist Mr Morar. The judge was asked to
make an order in very detailed terms, the particulars of which do not
emerge from his judgment. He refused to grant that order and instead
granted an order appointing the liquidator and leaving it to the liquidator
to determine how to go about his task. He did so on the basis that it would
be sensible for the liquidator to seek the concurrence of the parties to any
particular course of action in the knowledge that if they did not agree
with any particular decision they might have recourse to the court to
challenge it. He did not suggest that a liquidator could come back to the
court to seek additional powers of the type claimed in these proceedings.

[15] In Robson v Theron Joubert JA did not address in detail the
situation of a liquidator, no doubt because he decided that such an
appointment would not be appropriate. His concern was whether the actio

8 At 193B-D.

pro socio or the actio communi dividundo is the appropriate remedy to
resolve issues around the liquidation of a partnership, or whether either
one could be used.9 The only passage in his judgment dealing with
liquidators reads:
‘Van der Linden, 2.4.1.14, deals in some detail with the liquidation or winding-up of a
partnership. In doing so he relies heavily on the authority of the great French jurist,
Pothier, whose treatise on the law of partnership was regarded towards the end of the
eighteenth century as an authority of great weight in the Netherlands. This is not
surprising since the French and Roman-Dutch law of partnership are both founded on
Roman law. See Wessels, History of the Roman-Dutch Law, p. 652. His treatise was
translated by Van der Linden into Dutch: Verhandeling van het Recht omtrent
Sociëteiten of Compagnieschappen and has been regarded by our Courts as an
important authority in this branch of the law. In order to obviate repetition I intend to
follow up what Pothier has to say on the subject.
Pothier in his Treatise on the Contract of Partnership (translated by Owen Davies
Tudor) affirms the twofold purpose of the actio pro socio, viz. to implement the terms
of the partnership agreement and to dissolve it.’10
This only deals in passing with the process of liquidation and provides no
support for the contentions on behalf of Mr Morar. The learned judge was
simply not concerned with the powers to be afforded a liquidator
appointed to liquidate the partnership.

[16] I have found nothing in the old authorities to justify the notion that
the court has a discretion to grant wide-ranging powers of administration
to the liquidator of a partnership to be exercised in the course of
liquidating the partnership. The leading writers on the topic of partnership
among the old authorities barely mention the topic of the appointment of
liquidators and their powers. The reason appears to be that in many places
local ordinances provided that disputes about liquidation should be

9 See the discussion at 850C-854D. His conclusion following Pothier, was that both remedies are
available to be invoked in appropriate circumstances.
10 At 852D-G.

referred to arbitrators. By way of example, in the passage cited by
Joubert JA in support of paragraph 3 of his summary of the elements of
the actio pro socio, Pothier refers to the applicable French ordinance
when he says;
‘For this end, the Ordonnance of 1673, tit 4. art 9., provides that all contracts of
partnership should contain the clause of submission to arbitration upon all disputes
which may arise amongst partners on account of the partnership, and that where that
clause has been omitted, it should be supplied.’

[17] It would be unwise, in the absence of full argument on the source
of the court’s power to appoint a liquidator to a partnership, to make a
definitive finding as to the full extent of the powers that a court may vest
in the liquidator of a partnership. It is sufficient to deal with certain basic
principles and in the light of those to assess the specific powers that the
liquidator seeks in this case and determine whether they can or should be
granted.

[18] When the court appoints a liquidator for a partnership it is
remedying the failure of the partners to attend to the liquidation of the
partnership by agreement. Such failure may arise from disagreement over
the need to appoint a liquidator, or over the identity of the liquidator or
the powers that the liquidator should enjoy. That being so it is logical to
take as one’s starting point the powers that the partners could themselves
confer by agreement, if they were not in a state of hostilities. The court is
then asked to do no more than resolve a dispute between the partners over
the appointment of the liquidator or over the liquidator’s powers. It does
so in a way that the parties themselves could have done. The
disagreement arises in consequence of the one partner refusing to agree to
the liquidator being appointed or the liquidator having a particular power

and that can be characterised as a breach of the obligations of co-
operation and good faith that are central to all partnerships. The court is
then merely enforcing the contractual obligations of the partners
themselves.

[19] Once the court is asked to go beyond this it is necessary to identify
a source of its power to do so. That is central to the rule of law that
underpins our constitutional order. Courts are not free to do whatever
they wish to resolve the cases that come before them. The boundary
between judicial exposition and interpretation of legal sources, which is
the judicial function, and legislation, which is not, must be observed and
respected. In this case no such source was identified.

[20] In argument it was submitted that the appointment and functions of
the liquidator of a partnership are largely equivalent to those of the
liquidator of a company under the old Companies Act. However the
analogy is false. Unlike partnerships, companies only exist under the
legislation under which they are constituted, which governs their creation,
operation and liquidation. Although in some jurisdictions partnerships are
regulated by statute11 that is not the case in South Africa. In our law the
general approach to partnerships is that their creation, operation and
dissolution depends upon the terms of the agreement concluded by the
partners. If there are disputes at any stage of the relationship those are
resolved by the courts under the general rules governing contracts and in
terms of the actio pro socio. Whatever policy reasons might exist for
bringing about some degree of equivalence between partnerships and
companies, the legislature has not done so.

11 As in the United Kingdom.

[21] Turning specifically to the relief claimed by Mr Morar, in para 7.19
of the original order granted by Msimang J, he had been authorised to
direct any of the partners to attend on him at his offices in order to answer
such questions as he might raise in relation to any of the affairs and assets
of the partnership.12 In these proceedings he seeks an order authorising
him to employ attorneys and counsel for the purpose of examining any of
the partners, their servants or representatives suspected of being in
possession of property of the partnership or of being indebted to the
partnership or who is deemed capable of giving information concerning
the trade, dealings, affairs or property of the partnership. To that end he
also sought an order authorising him to engage the services of a senior
advocate to preside over ‘such examination or interrogation’ with the
same powers mutatis mutandis as a person appointed to conduct an
enquiry in terms of s 417 of the old Companies Act. Some of those
powers were spelled out in the draft order and they included the power to
summon witnesses, compel discovery, administer an oath and both
question and allow such person to be interrogated. There are legal
difficulties in regard to the power of the court to grant such orders and, if
granted, there would be practical difficulties in enforcing them.

[22]  The legal difficulties arise because it is debatable whether and to
what extent it is competent contractually to invest an individual with
certain of the powers conferred upon a functionary by statute.13 The
practice of conferring upon receivers under offers of compromise in terms
of s 311 of the Companies Act 61 of 1973 the powers of a liquidator

12 I leave aside any consideration of whether this order was itself competent or how it would operate if
all the partners were trusts, as might have been the case on one of the factual scenarios before the
learned judge.
13 South African Fabrics Limited v Millman NO & another 1972 (4) SA 592 (A) at 600E-G, citing
South African Board of Executors & Trust Co. (In Liquidation) v Gluckman 1967 (1) SA 534 (A) at
541F-H.

mutatis mutandis was described by Milne JA as ‘indiscriminate
borrowing mutatis mutandis of a liquidator’s general armoury’ which led
to “unforeseen problems and disputes’.14 In Gunn & another NNO v
Victory Upholsters (Pty) Ltd15 Didcott J dealt with a similar clause and
said that it could not mean that literally all the powers of a liquidator were
included. Among those he specifically said were excluded16 was the
power to interrogate the directors of the company about their
management of it prior to liquidation.

[23] The practical difficulties reinforce the legal ones. They are
illustrated by certain questions posed to counsel in the course of
argument. What if a person does not attend in response to a summons to
appear at such an interrogation? What happens if they decline to take an
oath or make an affirmation? Can they refuse to answer questions? What
are the consequences if they do so? If they lie in the course of such an
interrogation does that make them liable for the penalties attaching to the
crime of statutory perjury? No satisfactory answer was forthcoming. In
the case of companies the answers are reasonably clear and flow from the
terms of the statute. The questions are important because the successful
conduct of an interrogation depends upon there being answers that govern
these situations. It is also necessary that there be answers to them because
the conduct of such an interrogation raises constitutional issues in view of
its potential to infringe constitutionally protected rights such as the right
to dignity and the right to privacy.17 In my view there is no satisfactory

14 Morris NO v Airomatic (Pty) Ltd t/a Barlows Airconditioning Co. 1990 (4) SA 376 (A) at 401F-G.
This was a slight alteration of what Didcott J had said in Ex parte Trakman NO: In re Dumbe Motel
(Pty) Ltd 1978 (1) SA 1082 (N) at 1084 C-D.
15 Gunn & another NNO v Victory Upholsters (Pty) Ltd 1976 (1) SA 127 (D) at 135B-D
16 Approving counsel’s concession to this effect.
17 Ferreira v Levin NO & others; Vryenhoek & others v Powell NO & others 1996 (2) SA 621 (CC);
Bernstein & others v Bester & others NNO 1996 (2) SA 751 (CC).

answer to these questions and that poses insuperable practical problems to
the grant of these powers.

[24] If the court were to give these powers to the liquidator a curious
and untenable situation would result. It is illustrated by the following
example. Assume that a partnership business has closed because of
financial difficulties without any rift between the partners. They believe
that the source of their financial difficulties was the dishonesty or
negligence of a former employee. They wish to interrogate the employee
in order to confirm their suspicions. They cannot by agreement appoint a
liquidator with the power to conduct an interrogation and if they do the
employee can disregard such an appointment. Nor can they ask the court
to conduct an interrogation on their behalf. Courts in this country do not
have a general power to interrogate people. Yet, if the proposition on
behalf of Mr Morar is correct, the partners can overcome these difficulties
by applying to the court for the appointment of a liquidator and asking the
court to vest the liquidator with the power to conduct an interrogation.
That cannot be correct. It would mean that although neither the court nor
the partners are entitled to conduct an interrogation, they are able to bring
one about by the simple expedient of the court appointing the liquidator
and granting an order such as that sought in this case.

[25] For those reasons K Pillay J was correct to refuse to grant
Mr Morar the powers of interrogation that he seeks. The power to order
an interrogation is an exceptional power18 and I can find no basis upon
which it is one that courts can confer upon liquidators of partnerships. If
that is a shortcoming the remedy must lie in legislation.

18 In re North Australian Territory Company (1890) 45 Ch D 87 at 93 per Bowen LJ.

[26] The second aspect of the application is the prayer for a contribution
to the costs of administration of the liquidation of the partnership in an
amount of R500 000, together with the power to call upon the partners in
future to make further contributions if that is needed. The primary reason
for seeking these funds is that Mr Morar contemplates litigation that will
be both ‘complex and controversial’ and ‘time consuming and
expensive’. It is apparent from the founding affidavit that the primary
target of this litigation will be Mr Akoo or entities controlled by him,
such as the Akoo family trust.

[27] Once again no authority was proffered for this order beyond the
suggested wide equitable discretion, the existence of which I have already
rejected. Apart from the provisions in rule 43 for the court to order a
contribution towards costs in relation to pending matrimonial
proceedings, I am not aware of any circumstance in which our law
permits a party to proposed litigation to obtain from the intended other
party a contribution towards the costs of that litigation.19

[28] This case illustrates how inappropriate it would be for such an
order to be granted. The liquidator seeks a contribution on the basis that
Mr Akoo and the Akoo family trust are partners to the extent of
50 per cent in Rollco. However that is disputed by the Moosa trusts,
which claim that the Akoo family trust is not a partner at all and that
Mr Akoo’s share is limited to an approximately 20 per cent share, whilst
they hold the balance. Plainly some at least of the intended litigation will
be directed at this issue. If the assertion by the Moosa trusts is rejected
then Mr Akoo and the Akoo family trust will have had to pay half the

19 Cases where security for costs may be ordered are different because they are merely cases of
providing security against the possibility of the party furnishing such security having an adverse costs
order made against it.

costs of running litigation against themselves in which they have been
successful. What is more there is then little likelihood that they will be
able to recover their costs from Mr Morar. If it transpires that the Moosa
trusts are correct and Mr Akoo’s interest is only 20 per cent, on what
basis will he have had to provide half the costs of establishing that?

[29] At this point the analogy between the liquidator of a partnership
and the liquidator of a company is abandoned. In the case of a company
the liquidator must go to the creditors if financial assistance is needed in
order to pursue litigation and obtain contributions from them. Here the
beneficiaries of the proposed litigation would be the Moosa family trusts.
Why then should they not be required to provide the finances for
litigation if they wish to assert rights against their erstwhile partner?
Indeed one wonders why they do not institute the proceedings themselves
instead of leaving it to Mr Morar. The question of the identity of the
partners and the extent of their respective interests in the partnership is
pre-eminently an issue to be resolved among the partners by way of
proceedings under the actio pro socio.

[30] To multiply examples of the problems with this claim would be to
heap Pelion upon Ossa. The court does not have the power to make such
an order and it was rightly refused by K Pillay J.

[31] The next issue relates to the prayer for a detailed account in respect
of Rollco’s dealings with its principal supplier. It can be disposed of
simply. Firstly such an obligation already exists under the order granted
by Msimang J. Secondly a corresponding order was made against the
supplier without opposition and there is no reason to believe that it will
not be complied with. Such an order is accordingly unnecessary.

[32] That leaves only the prayer in relation to procuring professional
indemnity insurance. There is no need for such an order to be made. If
Mr Morar reasonably requires professional indemnity insurance in order
to carry out the liquidation of the Rollco partnership then he is entitled to
take out such insurance and in due course recover the premium as a cost
of administration. If he does not reasonably require such insurance for the
purposes of administration then the costs of his taking out such insurance
are a personal expense and cannot be debited to the partnership or its
members. The court cannot alter that situation. Mr Morar must make up
his own mind on this question and act accordingly. He does not need an
order of court to do so.

[33] For those reasons the high court was correct to dismiss the
application and the appeal must be dismissed. Although two counsel
appeared in the appeal the costs of two counsel were not sought in the
heads of argument and only one counsel appeared in the high court. The
matter was not so complicated as to warrant the employment of two
counsel. The appeal is dismissed with costs.

M J D WALLIS
JUDGE OF APPEAL

Appearances

For appellant:
A J Dickson SC
Instructed by
Schoerie & Sewgoolam Inc, Pietermaritzburg
McIntyre & Van der Post, Bloemfontein

For respondent:

N A Cassim SC (with him D Ramdhani)

Instructed by

Abbas Latib & Co, Durban

Honey Attorneys Inc, Bloemfontein.

Supreme Court of Appeal of South Africa

MEDIA SUMMARY– JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL

From:   The Registrar, Supreme Court of Appeal

Date:  15 September 2011

Status:  Immediate

Please note that the media summary is intended for the benefit of the media and does
not form part of the judgment of the Supreme Court of Appeal.

MORAR NO V AKOO

The Supreme Court of Appeal dismissed an appeal against an order by
the High Court refusing to grant the liquidator of a partnership the power
to conduct an interrogation as if in the liquidation of a company and the
right to demand that the partners provide him with funds, both for that
purpose and in order to engage in litigation to recover assets allegedly
belonging to the partners. The court held that powers of a liquidator in the
liquidation of a partnership should first be assessed in the light of the
powers that the partners themselves could confer on the liquidator. Where
the partners could not by their agreement confer such powers it would
generally be inappropriate for the court to do so.