Salim Moosa & Ors v Karim Issa Mawji

An adviser may owe fiduciary duties personally where, viewed in context, he undertakes responsibility for a client’s property investments and exercises discretionary power over the client’s interests. The use of companies to manage individual properties does not prevent an overarching personal agency relationship.

An account may be ordered where information supplied to the principal is fragmented or incomprehensible, even after substantial delay. Relevant considerations include limitation, proportionality, evidential difficulty, the identity of the accounting party, information already supplied, and the claimant’s motivation. Where the adviser has not given a satisfactory account, those considerations did not bar relief.

Three brothers brought a claim against their former real estate adviser for an account and other relief concerning property investments in England, Germany and South Africa. They alleged that the defendant had been appointed personally as their property adviser in July 2000 and had thereafter owed fiduciary duties.

The defendant contended that his company, rather than he personally, had been appointed; that the investments had been adequately accounted for; and that delay, limitation and the absence of other corporate entities prevented an account. The principal issues were the nature of the appointment, the existence and scope of fiduciary duties, the adequacy of the accounts, and the beneficial ownership of the South African property.

1. Appointment and fiduciary status. The defendant was personally appointed at the July 2000 meeting as the claimants’ property adviser and agent, although his company managed individual properties. The informal dealings, the contemporaneous note, the absence of corporate terms of business, and the defendant’s overarching investment role established a personal fiduciary relationship. He did not thereby become trustee of the properties.
2. Scope of the duties. The fiduciary relationship applied to each Schedule Project. The defendant had recommended and controlled complex offshore structures, while the claimants relied on his advice and were vulnerable to his exercise of power. His duties extended to the sums advanced under the structured loan arrangements.
3. Accounts. The 2004 and 2005 files, later meetings and financial statements did not provide sufficiently clear and comprehensible accounts of the investments. The claim was for breach of fiduciary obligations and was not confined to a contractual claim subject to the ordinary limitation period. The relevant entities’ absence did not prevent an account against the defendant personally.
4. The court considered delay, possible limitation of consequential claims, proportionality, evidential difficulty, the parties before the court, information already supplied and motivation. In the circumstances, delay and the information supplied did not bar an account.
5. Accounts in common form were ordered for Forest Hill, Bruntcliffe, Pescod Square and Würzburg. No account in common form was ordered for Roebuck House and Clarence Mill, although it was agreed that MGI owed £77,187 to Flemingo. The claimants were found to be the beneficial owners of the Ballito land at Mystic River. Further submissions were required on the form of the accounts and an injunction.

First-instance decision following trial in the High Court. No appellate history was stated in the judgment.