Wright v Wright

Two brothers, Alec Peter Wright (appellant) and William Robert Wright (first respondent), owned a metal business, Wright Metals CC (second respondent). The appellant ran the business and his wife maintained the books of account and performed administrative duties. A dispute arose between the brothers concerning profits from the business. The first respondent obtained a court order from Satchwell J in the South Gauteng High Court declaring that the brothers had conducted business in partnership, dissolving the partnership, and ordering the appellant to provide an accounting of the partnership business from March 1989 to the date of dissolution, with debatement of the account and payment of any amounts due. The parties consented to appointment of a referee, chartered accountant Mr Desmond Snyman, in terms of section 19bis of the Supreme Court Act, 59 of 1959, to investigate and report to the court. The referee found that the appellant owed R1,085,000 and interest to the first respondent as his share of partnership profits. The appellant challenged the referee's factual findings on several grounds including telephone expenditure, capital account adjustments, sales calculations, and exclusion of certain expenses. The high court (Kathree-Setiloane J) adopted the referee's report without modification and dismissed the appellant's counter-application.

• What is the proper approach to challenging factual findings of a referee appointed in terms of section 19bis of the Supreme Court Act 59 of 1959?
• On what grounds can a referee's report be impugned?
• What standard of evidence is required to raise genuine disputes of fact in challenging a referee's report?
• What is the evidentiary status of expert reports in motion proceedings challenging a referee's findings?

The appeal was dismissed with costs.

A referee's report appointed under section 19bis of the Supreme Court Act 59 of 1959 can only be impugned on narrow grounds, namely where the conclusions arrived at by the referee were unreasonable, irregular or wrong. A party challenging a referee's factual findings must persuade the court through admissible evidence that there are genuine disputes of fact on material aspects. Where a party seeks to raise genuine disputes of fact in challenging a referee's report, it must do so through: (1) admissible evidence, not hearsay, particularly where primary evidence is readily available; and (2) fully motivated answers and/or countervailing evidence, particularly where the facts are peculiarly within the party's knowledge. Once a referee's report is adopted by the court without modification, it stands as the court's factual findings unless properly impugned on the narrow grounds specified. The burden is on the party challenging the referee's report to demonstrate its unreasonableness, irregularity or wrongness, not on the other party to prove its correctness.

The court observed that there is a dearth of reported cases on section 19bis, which may suggest either a lack of use in practice or the uncontentious interpretation and application of the section whenever it was used. The court noted that the section provides a useful tool for a court to resolve factual disputes expeditiously where the court would otherwise be delayed, inconvenienced or disadvantaged. The court confirmed that the position of a referee under section 19bis is similar to that of an expert valuator who only makes factual findings but dissimilar to that of an arbitrator who fulfills a quasi-judicial function within the parameters of the Arbitration Act 42 of 1965, and therefore there are significant differences between the powers and functions of arbitrators and referees and between the bases on which an arbitrator's award and a referee's report can be impugned. The court noted that section 19bis is an almost verbatim promulgation of the Natal and Transvaal statutory provisions from the late 19th/early 20th century.

This case provides authoritative guidance on the proper approach to challenging a referee's report under section 19bis of the Supreme Court Act 59 of 1959 (replaced by section 38 of the Superior Courts Act 10 of 2013). It establishes that a referee's report, once adopted by the court, has the effect of factual findings by the court and can only be impugned on narrow grounds (where conclusions are unreasonable, irregular or wrong). The case clarifies the distinction between the functions of referees, expert valuators and arbitrators. It also reinforces important principles regarding the standard of evidence required in motion proceedings to raise genuine disputes of fact, particularly emphasizing that challenges must be supported by admissible evidence (not hearsay) and fully motivated countervailing evidence where facts are within a party's personal knowledge. The judgment addresses a dearth of reported cases on section 19bis and provides practical guidance on its interpretation and application.