THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 641/2019
In the matter between:

ZORAH BANOO KHAN

APPELLANT

and

SALIM MOHAMED SHAIK

RESPONDENT

Neutral citation: Khan
v
Shaik
(641/2019)
[2020] ZASCA
(21 September 2020)

Coram:
CACHALIA, SALDULKER and NICHOLLS JJA and MATOJANE
and SUTHERLAND AJJA

Heard:
4 September 2020

Delivered: This judgment was handed down electronically by circulation to the
parties’ representatives by email, publication on the Supreme Court of Appeal
website and release to SAFLII. The date and time for hand-down is deemed to be
10h00 on 21 September 2020.

Summary: Division of fruits of a universal partnership – claim to division is based
on a personal right and not a real right – claim in respect of a universal partnership
prescribes after three years from the termination of the universal partnership in terms
of s 11(d) of the Prescription Act 68 of 1969 – termination date of universal
partnership is a fact-specific issue; sometimes it may coincide with the termination
of the consortium but not necessarily – claim prescribed as it was instituted more
than three years after the universal partnership terminated.

ORDER

On appeal from: Gauteng Division of the High Court, Johannesburg (Weiner J
sitting as court of first instance):

The appeal is dismissed with costs.

JUDGMENT

Sutherland AJA (Cachalia, Saldulker and Nicholls JJA and Matojane AJA
concurring):

Introduction

[1] This case is about whether or not a claim to divide the fruits of a universal
partnership can prescribe in terms of the Prescription Act 68 of 1969.

[2] Ms Khan, the appellant, was the applicant a quo. She sought a declarator that
she and Mr Shaik, the respondent, were in a universal partnership and that, because
they had parted company, upon that premise, a liquidator be appointed to value the
fruits of the partnership and distribute the value in equal shares to the partners. The
application was dismissed. The basis for the dismissal was that her claim, if she had
one, had prescribed. No finding was made that a universal partnership had actually

come into being.1 The existence of the universal partnership was assumed purely for
the purpose of deciding the prescription issue.

[3] Three critical findings were made by the court a quo. First, that the claim had
been instituted six years after the consortium between the parties had terminated.2
Second, that concomitantly, the universal partnership had terminated at the moment
the consortium had ended. Third, that because such a claim fell within the provisions
of ss 10(1) and 11(d) of the Prescription Act, the claim had prescribed after an elapse
of three years from the date upon which the consortium ended.

[4] The counter proffered to these findings, as advanced on behalf of the appellant
is twofold: first, that her claim was based on a real right which would not have
prescribed within three years, and, second: in any event, even if a personal right,
prescription of a claim in respect of a universal partnership cannot begin to run until
a court pronounces a dissolution.

[5] Accordingly, the controversy requires these questions to be addressed:
(1)
What is the character of the rights in a universal partnership possessed
by a partner?

1 It was, in any event, not open to the court a quo to have made a firm decision on the existence of a universal
partnership because the facts averred to found such a claim were hotly disputed and therefore, had it been necessary
to make such a firm decision, the matter was inevitably bound for referral to oral evidence or to trial. The appellant
averred that they spent 20 years together as man and wife and that she was materially instrumental in building up a
business owned by the respondent. He denied these averments.
2 It was not part of the appellant’s case that she and the respondent were married, whether in terms of a Nikah or
otherwise. This was the case despite an allegation made by the respondent under oath that he and the appellant were
‘common law spouses’ and an admission by the respondent that he made that affidavit under pressure from the
appellant.

(2)
Is a claim to divide the fruits of a universal partnership based on a real
or a personal right?
(3)
Is the share claimed in a universal partnership a debt as contemplated
by the Prescription Act?
(4)
How is the date upon which prescription commences to run to be
determined in respect of a claim to share in a universal partnership?
(5)
Is a court order necessary to terminate a universal partnership?

The character of a partner’s rights in a universal partnership

[6] The label ‘universal partnership’ in our law, refers to the societas universorum
bonorum of the Roman-Dutch Law.3 The elements of a relationship between two
persons that evidences the existence of this species of partnership were most recently
affirmed by this Court in Butters v Mncora:4
‘I now turn to the relevant legal principles. As rightly pointed out by June Sinclair (assisted by
Jaqueline Heaton), The Law of Marriage vol 1 274, the general rule of our law is that cohabitation
does not give rise to special legal consequences. More particularly, the supportive and protective
measures established by family law are generally not available to those who remain unmarried,
despite their cohabitation, even for a lengthy period (see eg Volks NO v Robinson 2005 (5) BCLR
446 (CC)). Yet a cohabitee can invoke one or more of the remedies available in private law,
provided, of course, that he or she can establish the requirements for that remedy. What the plaintiff
sought to rely on in this case was a remedy derived from the law of partnership. Hence she had to
establish that she and the defendant were not only living together as husband and wife, but that
they were partners. As to the essential elements of a partnership, our courts have over the years
accepted the formulation by Pothier (RJ Pothier A Treatise on the Law of Partnership (Tudor's
Translation 1.3.8)) as a correct statement of our law (see eg Bester v Van Niekerk 1960 (2) SA 779

3 Lawsa vol 19 2 ed para 259ff.
4 Butters v Mncora [2012] ZASCA 29; 2012 (4) SA 1 (SCA); [2012] 2 All SA 485 (SCA) para 11; see too: Ponelat v
Schrepfer [2011] ZASCA 167; 2012 (1) SA 206 (SCA); [2012] 1 All SA 532 (SCA) paras 19-20.

(A) at 783H-784A; Mühlmann v Mühlmann 1981 (4) SA 632 (W) at 634C-F; Pezzutto v
Dreyer 1992 (3) SA 379 (A) at 390A-C). The three essentials are, firstly, that each of the parties
brings something into the partnership or binds themselves to bring something into it, whether it be
money or labour or skill. The second element is that the partnership business should be carried on
for the joint benefit of both parties. The third is that the object should be to make a profit. A fourth
element proposed by Pothier, namely, that the partnership contract should be legitimate, has been
discounted by our courts for being common to all contracts (see eg Bester v Van Niekerk supra at
784A).’5

[7] In practical terms, a controversy about the existence of a universal partnership
arises only when it ends, whether by death or by the parting of ways by the partners.
To prosecute a claim to share in the fruits of a disputed partnership, the claimant
must thus, for practical purposes, obtain a declarator that the partnership existed.

[8] Plainly, the essence of the concept of a universal partnership is an agreement
about joint effort and the pooling of risk and reward. Upon termination of the
universal partnership, what follows is an accounting to one another; the poorer
partner becomes the richer partner’s creditor. Accordingly, it is the contract that is
the foundation of the universal partnership, not the mere fact of the consortium and
the mere contributory efforts to building wealth.6 A tacit agreement suffices.7

5 The third element has been qualified in our law so that the objective may reach beyond profit making: Butters v
Mncora para 18.
6 Butters v Mncora paras 11 and 18; Mühlmann v Mühlmann 1984 (3) SA 102 (AD).
7 Butters v Mncora para 18.

Is a claim to share in a universal partnership a real or a personal right?

[9] In Absa Bank Limited v Keet, Zondi JA held:
‘. . . the solution to the problem of the prescription is to be found in the basic distinction in our law
between a real right (jus in re) and a personal right (jus in personam). Real rights are primarily
concerned with the relationship between a person and a thing and personal rights are concerned
with a relationship between two persons. The person who is entitled to a real right over a thing
can, by way of vindicatory action, claim that thing from any individual who interferes with his
right. Such a right is the right of ownership. If, however, the right is not absolute, but a relative
right to a thing, so that it can only be enforced against a determined individual or a class of
individuals, then it is a personal right.’8

[10] A claim based on a contract is, plainly, a personal not a real right. Because, as
indicated, a claim to one’s share in a universal partnership is, in truth, a demand that
the partners account to one another and that one pay the other a portion, such a claim
is inconsistent with asserting a real right.

[11] Accordingly, a partner in a universal partnership cannot have a direct claim to
an asset owned by the other partner. This attribute distinguishes joint ownership of
assets from a universal partnership. The clearest contrast is a marriage in community
of property. In such an example, the marriage is the juristic foundation for joint
ownership of everything the spouses jointly own. A universal partnership, unlike a
marriage in community of property does not cause the partners to be joint owners of
assets.

8 ABSA Bank Limited v Keet [2015] ZASCA 81; 2015 (4) SA 474 (SCA); [2015] 4 All SA 1 (SCA) para 20.

[12] The contention advanced on behalf the appellant that the concept of a
universal partnership and the concept of community of property are
indistinguishable is untenable. Reliance is place on a passage in Booysen v Stander9.
That Court was called upon to decide whether a universal partnership had come into
being. It cited the passage in Butters v Mncora at paras 11 and 18, part of which is
cited above in this judgment, as setting out the applicable legal principles. Thereupon
the Court stated that:
‘[75] As previously stated, a universal partnership is similar to a marriage in community
of property. It is trite that the nature of the relief which parties can claim when married in
community of property is either an order for division of the joint estate or an order for
forfeiture of the benefits of the marriage in community of property. It is furthermore trite
that each spouse automatically shares in the assets that are accumulated during the
subsistence of the marriage. The moment spouses enter into a marriage in community of
property they become co-owners of everything that either of them owned prior to the
marriage. Furthermore, a marriage in community of property not only results in community
of assets, but also in community of liabilities.
[76] These fundamental legal principles therefore reinforce my view that the plaintiff's
claim based on actio communi dividundo cannot be sustained as it is near impossible to
untangle the threads of interwoven narratives of life partners, which have layered
complexities akin thereto, in the advancement of a joint household.’ (Underlining supplied)
On the basis of the underlined sentence it is contended on behalf of the appellant that
this case is authority for the proposition that partners in a universal partnership are
co-owners of property. It is unlikely that this was the meaning which the Judge
sought to express in that passage because such a meaning would directly contradict
the passages cited from Butters v Mncora. A better reading of this passage is that a
comparison was drawn between a universal partnership and community of property

9 Booysen v Stander 2018(6) SA 528 (WCC) at paras 75-76.

in order to remark that in both instances there was a need to divide up the assets upon
a termination, rather than to state that a joint ownership of the assets existed.  If the
Judge did intend to state that partners in a universal partnership are joint owners of
assets that statement of the law would be incorrect.

[13] In addition, a number of cases were cited of behalf of the appellant to offer
purported further support for the contention that the appellant was asserting a real
right. However, all the cases cited are examples of joint ownership of assets.
Therefore, reliance on them avails the appellant not at all.10 In any event, in this case,
the appellant has not purported to formulate a vindicatory claim; rather, the relief
sought is a declaratory order that the universal partnership existed, an order
dissolving it, and the appointment of a liquidator to determine the assets in the ‘joint
estate of each party’11, liquidate them and distribute equal shares to the partners.12
Lastly, as held, in this Court, in Carmel Trading Co Ltd Commissioner, South
African Revenue Services & Others, ‘a former partner has no proprietary claim in
respect of the property of the dissolved partnership’.13

Is the share claimed by a partner in a universal partnership a debt as
contemplated by the Prescription Act?

[14] The provisions in the Prescription Act relevant to a contractual claim are
these:

10 Staegeman v Langenhoven [2011] ZAWCHC 302; 2011 (5) SA 648 (WCC); Mbalo v Makhosonke [2015]
ZAWCHC 91; Salaman v Salaman [2008] ZAKZHC 61.
11 The articulation of each partner having a ‘joint estate’ is of course a misnomer; it is however correct that the estate
of each partner would be a contributor to the universal partnership.
12 Notice of Motion: Record, page 1-2, prayers1-4. See Staegeman v Langenhoven where it was held that the rei
vindicatio (a claim based on a real right) was not a ‘debt’ contemplated by s 10 of the Prescription Act.
13 Carmel Trading Co Ltd v South African Revenue Services & Another 2008 (2) SA 433 (SCA) at para 15.

‘10. Extension of debts by prescription
(1) . . . a debt shall be extinguished by prescription after the lapse of the period which in terms of
the relevant law applies in respect of the prescription of such debt.
. . .
11. Periods of prescription of debts
The periods of prescription of debts shall be the following:
. . .
(d) save where an Act of Parliament provides otherwise, three years in respect of any other debt.’

[15] Thus, a claim by one partner against the other to account for a share in a
universal partnership, which claim is based on a contract, is therefore a claim to
enforce a personal right which is a debt as contemplated by the Prescription Act.

[16] The scope of the term ‘debt’ in the Prescription Act has been the subject of
clarification. Most recently, in Off Beat Holiday Club & another v Sanbonani
Holiday Spa Shareblock Ltd14, the Constitutional Court affirmed the dictum in
Makate v Vodacom Ltd15 that the scope of a ‘debt’ is that as formulated by Holmes
JA in Escom v Stewarts and Lloyds of South Africa16: ‘ …a debt is - that which is
owed or due; anything (as money, goods or services) which one person is under an
obligation to pay or render to another’ A claim founded on contract is such an
obligation, of which, a universal partnership is an example.17 It was argued that there
is a similarity between the claim to share in a universal partnership and the
circumstances in Makate v Vodacom Ltd. This idea is untenable. In Makate v
Vodacom Ltd, it was recognised that a contract had not yet come into being and thus

14 2017(5) SA 9 (CC) at para 44
15 2016 (4) SA 121 (CC) at para 93
16 1981(3) SA 340 at p344E- G
17 See too, eg: Robson v Theron 1978 (1) SA 841 (AD) at pp 848Hff and esp at p 849D: ‘The actio pro socio was a
personal action which arose from the partnership agreement (ex contractu societatis)’

a debt had not yet arisen. A claim to share in a universal partnership is squarely
founded on a contractual debt which has fallen due and payable.

How is the date upon which prescription starts to run to be determined in
respect of a claim to share in a universal partnership?

[17] Section 12 of the Prescription Act provides that: ‘prescription shall commence
to run as soon as the debt is due.’ Accordingly, a claim to share in a universal
partnership prescribes after three years from the moment the claim arises, ie, the
termination of the universal partnership.

[18] It is necessary to determine what significance to attach to the moment the
consortium ends as an appropriate date to signal the end of the universal partnership.

[19] Before the court a quo it was common cause that the claim had been instituted
six years after the termination of the consortium. The consortium ended when the
respondent left the common home never to return, whereupon he took up with
another woman whom he later married. The affidavits are quite explicit about this
event. The appellant alleged that the respondent left the common home in 2009 and
the respondent confirmed this, adding that: ‘…I took all my moveable assets with
me and the [appellant] kept all her moveable assets. When we separated in 2009, we
divided the assets and the relationship was finalised and terminated.’ The appellant
in a replying affidavit, agreed with that assertion adding the allegation that the
respondent ‘…intended to leave me with the immovable property to be my sole and
exclusive property’.

[20] Thereafter the partners had no dealings with one another either intimately or
in the business to which the appellant says she contributed. Save for the conflict that
flowed from the respondent’s endeavours to evict the appellant from the former
common home which had been, by then, registered in the name of his wife, they had
no further contact.

[21] The court a quo concluded that the claim arose upon the termination of the
consortium. On that premise, the prescriptive period of three years had elapsed
before summons was issued.

[22] In reaching this result, the Court a quo relied on the decision of the Western
Cape High Court in Schrepfer v Ponelat.18 In that case the conclusion was reached
that the consortium and the universal partnership ended simultaneously. This dictum
in Schrepfer v Ponelat is baldly stated and it is not entirely clear that it was intended
to equate the end of the consortium with the end of the universal partnership.19 The
matter went on appeal to this Court where the finding as to the date upon which the
universal partnership ended was neither disturbed nor commented upon. However,
what was noted was that after the termination of the consortium, the defendant made
payment to the plaintiff of a monthly sum of R1500 for the next 22 months.20 This
fact was not considered pertinent to the determination of the date of the termination
of the universal partnership in either judgment.

18 Schrepfer v Ponelat [2010] ZAWCHC 193 para 31.

19 Ibid.
20 Ponelat v Schrepfer para 15.

[23] The decision of the Western Cape High Court in Schrepfer v Ponelat was also
relied on in argument on behalf of the appellant to excuse the six-year delay because
the plaintiff in that case had instituted her claim four years after the claim arose.
However, this aspect of the case is unhelpful to the argument because in that case
the Court was not called upon to address a question of prescription. A court has no
competence to raise the issue of prescription mero motu.21

[24] The decision in Schrepfer v Ponelat can be contrasted with the decision in
Cloete v Maritz II,22 where the date the consortium ended was found not to be the
effective date for the end of the universal partnership. In this case the parties ended
a long-standing romantic relationship but continued for several months to
collaborate in several business ventures, in which they had both previously
participated, and they deliberated on how to extract value therefrom. This course of
conduct eventually ended. It was held that the latter date, when their commercial
dealings ended, was the date the universal partnership ended.23

[25] What follows from a consideration of these examples is that there is no magic
in the date the consortium ends for the purposes of determining the ending of the
universal partnership nor, axiomatically, the date for computing the beginning of the
running of prescription of a claim in respect of a universal partnership. On appeal in
Ponelat v Schrepfer, Meer AJA had this to say:

21 See: Section 17 (1) A court shall not of its own motion take notice of prescription.(2) A party to litigation who
invokes prescription, shall do so in the relevant document filed of record in the proceedings: Provided that a court
may allow prescription to be raised at any stage of the proceedings.
22 Cloete v Maritz (2014) ZAWCHC 108 (Cloete v Maritz II). A related dispute is the subject matter of a separate
judgment: Cloete v Maritz [2013] ZAWCHC 69; 2013 (5) SA 448 (WCC) (Cloete v Maritz I).
23 Cloete v Maritz II paras 11, 18 and 100.

‘A universal partnership exists if the necessary requirements for its existence are met, and this is
regardless of whether the parties are married, engaged or cohabiting.’24

[26] Therefore, the findings in Schepfer v Ponelat, in Cloete v Maritz II and in the
court a quo, must be understood to be findings of fact, not statements of principle.

[27] In the court a quo, the circumstances described by the appellant showed that
the joint enterprise between her and the respondent indeed ended at the same time
the consortium ended. In Cloete v Maritz the opposite was evidenced. In
Schrepfer v Ponelat, the payment of what was in effect a miserly maintenance
allowance did not give rise to an inference of a continuation of any joint enterprise;
their joint efforts had been extensive and related to successive enterprises, which
activity ceased simultaneously with the ending of the consortium.

[28] Accordingly, as alluded to earlier, because the substance of a universal
partnership is a pooling of risk and reward, although the commonplace rationale to
engage in such a joint effort may be rooted in a romantic relationship and indeed
sustained by it, the consortium is not the substratum of the legal relationship of a
universal partnership nor its alter ego. As ever, the date when prescription starts to
run is a fact-specific determination.

24 Ponelat v Schrepfer para 22; see too Butters v Mncora para 11: ‘cohabitation does not give rise to special legal
consequences.’

Is a Court order of dissolution required to terminate a universal partnership?

[29] A further contention was advanced on behalf the appellant that a partnership
is extinguished only at the time a court so orders. It was conceded that an agreement
between the partners could also dissolve a partnership. Moreover, the argument runs
on to posit that even an order of dissolution is not the actual moment of dissolution
because that can only occur when the assets are distributed – a proposition which
seems inconsistent with the earlier contention. The supposed force of this thesis is
that prescription cannot run until the liquidation of the partnership and because, as
in this case, a liquidation has not yet happened, albeit many years later, prescription
has yet to begin to run. Such a proposition is tantamount to saying that a claim to
share in a universal partnership is not susceptible to prescription at all. This
proposition is advanced on the premise that the claim is based on a personal right.

[30] The thesis is unsustainable even on its own terms. The executory acts required
to identify assets, determine value for the purposes of the partners accounting to one
another and effecting a physical distribution have no bearing on the date that the
partnership terminated. Such happenings are, by definition, possible only after the
date of dissolution of the partnership has been determined. The allusion to s 13(1)(d)
of the Prescription Act,25 which inhibits a debt owed by one partner to another during

25  “Section 13 (1) If-

(a)….(c)
(d)   the creditor and debtor are partners and the debt is a debt which arose out of the partnership
relationship;….
(e) ….(h)
(i)   and, 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).

the existence of the partnership, cannot have any bearing on the running of
prescription after the partnership has ended. The example proffered in support of the
argument on behalf of the appellant is that in Van der Merwe v Sekretaris van
Binnelandse Inkomste26 where the remark was made that for the purposes of the
liquidation the partnership continued to exist. The case is plainly unhelpful to the
argument. The circumstances there were that a partner in a commercial partnership
had died. Axiomatically, there had to an accounting of what was due to his estate at
the moment of death. Revenue from work–in–progress was calculated and paid to
the estate. That exercise took time. Plainly for the purposes of that calculation, the
corpus of the partnership remained in esse.

Conclusions

[31] Accordingly:
(1)  A claim to share in a universal partnership is based on a personal, not a real right.
(2)  Such a claim prescribes after three years from the termination of the universal
partnership in terms of s 11(d) of the Prescription Act.
(3)  The termination of the consortium is often simultaneous with the termination of
the universal partnership, but whether or not this is so, in each case, is a question
of fact.
(4)  In this case, the universal partnership did terminate at the same time as the
consortium and more than three years elapsed before a claim was instituted;
therefore, the appellant’s claim had prescribed.

26 1977 (1) SA 472(AD) esp at p 473F

The Order
The appeal is dismissed with costs.

_________________________
ROLAND SUTHERLAND
ACTING JUDGE OF APPEAL

APPEARANCES:

For the appellant:
Attorney Y Omar,
Instructed by

Zehir Omar Attorneys, Johannesburg,

Maree & Partners, Bloemfontein.

For the respondent:
Adv L van Gass,
Instructed by:

Stopforth Swanepoel & Brewis Attorneys, Johannesburg,
Phatshoane Henney Attorneys, 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:

21 September 2020
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.

Khan v Shaik (Case no. 641/2019) [2020] ZASCA 108 (21 September 2020)

Today the Supreme Court of Appeal (the SCA) dismissed the appeal of the appellant, Ms Zorah Banoo
Khan against the respondent, Mr Salim Mohamed Shaik, arising from the decision of the Gauteng
Division of the High Court, Johannesburg (the high court).
In the high court the appellant sought a declarator that she and the respondent were in a universal
partnership and that, because they had parted company, a liquidator be appointed to value the fruits of
the partnership and distribute the value in equal shares to the partners. The application was dismissed
on the basis that her claim, if she had one, had prescribed. No finding was made that a universal
partnership had actually come into being. The high court did, however, make three critical findings: (1)
the claim had been instituted six years after the consortium between the parties had terminated; (2) the
universal partnership had terminated when the consortium had ended; and (3) that because such a claim
fell within ss 10(1) and 11(d) of the Prescription Act 68 of 1969, the claim had prescribed after an elapse
of three years from the date upon which the consortium ended.
On appeal, the issue was whether or not a claim to divide the fruits of a universal partnership can
prescribe in terms of the Prescription Act. The SCA held that the essence of the concept of a universal
partnership is an agreement about joint effort and the pooling of risk and reward. Accordingly, the
contract is the foundation of the universal partnership. A claim based on a contract is a personal not a
real right, and a claim by one partner against the other to account for a share in a universal partnership,
was therefore a claim to enforce a personal right which is a debt as contemplated by the Prescription
Act.
The SCA held that the substance of a universal partnership is a pooling of risk and reward, although the
commonplace rationale to engage in such may be rooted in a romantic relationship, the consortium is
not the substratum of the legal relationship of a universal partnership. The date upon which prescription
starts to run is a fact-specific determination. On the facts of this case the SCA held that the universal
partnership terminated at the same time as the consortium and more than three years elapsed before a
claim was instituted; therefore, the appellant’s claim had prescribed. The appeal was accordingly
dismissed.