Where there are mutually destructive versions of an oral agreement, a court will side with the version which is more probable considering the circumstances. The credibility of witnesses, including whether their evidence is coherent and consistent, will be taken into account.
The applicant in Meintjies v Annandale and another, an owner of an accounting business that she inherited from her deceased accountant husband, intended to continue with the business. Not being an accountant herself, she contracted the services of an outside accountant.
The applicant, with assistance from her administrative clerk, agreed with the respondent (an accountant) that the respondent would be contracted to attend to all the professional work and that she would be compensated one third of the net profits.
The respondent alleged that she had bought the business from the applicant and that she became responsible for payment of salaries, rent to the applicant, insurance for the furniture of the business and that she ultimately became the owner of the business.
The applicant was adamant that the executor of her late husband’s estate never gave her permission to sell the business to the purchaser.
On the contrary, the respondent denied that she was ever in the employ of the applicant.
In assessing the evidence, the court had to decide which one of the two mutually destructive versions was more probable. The court adopted the approach from National Employers’ General Insurance Co Ltd v Jagers that where there are two mutually destructive versions, a party can only succeed if it satisfies the court on a balance of probabilities that its version is true and accurate and thus acceptable, and that the other version advanced by the opposing party is therefore false or mistaken and falls to be rejected.
The court held that the evidence for the applicant was tendered in a coherent and honest manner.
The court found that not only was the version of the respondent improbable, but it was opportunistic and simply false. It was unlikely that the applicant would simply sign away her inheritance to a person that was unknown to her.
The respondent negotiated with the applicant’s administrative clerk without establishing whether the applicant had the authority to hand a viable business to her and it is unlikely that the respondent would have agreed to take over the business without knowing the extent of the work to be completed and not knowing whether the clients would have agreed to remain with her as their accountant.
The court held that the respondent was an astute businesswoman, having ensured that the letterheads and financials were drawn up in the name of her previous business; that all payments were made into her trust account; that the email addresses of the business be changed; that the employees be registered for unemployment benefits by her; that she pay for the insurance of the office equipment; and that she pay rent to the applicant for the use of her office space. These were seen by the court as efforts to cover the ‘ill-contrived plan’ of making it seem as though she had purchased the business.
In finding that the respondent’s version was improbable, the court found in favour of the applicant.
The case is Meintjies v Annandale and another.