Commercial Law Index

The appellant was charged and found guilty of obtaining money under false pretenses; he then brought an appeal against the ruling of the High Court before the appellate court. 

The court was faced with two issues, the first being whether the High Court was justified in convicting the appellant on allegations of misrepresentation not covered in the charge. The second issue was whether the high court was correct to convict the appellant for misrepresentation and seize his property.

The court held that the High Court was justified in convicting the appellant and that the allegations of misrepresentation were covered in the charge. The court further held that the High Court made no error in seizing the appellant’s property following the conviction.

By evaluating witness testimonies and the evidence led in the High Court, the court stated that the appellant had indeed misrepresented himself to the witnesses so they could part with monies and invests with the appellant. The court was of the view that sufficient evidence was led in the High Court which justified the conviction of the appellant. Regarding the seizure of property, the court stated that the High Court exercised its inherent powers to make an order of forfeiture since the appellant bought and used the property to carry out his illegal operations for which he was convicted.

The appeal was unsuccessful and the judgement of the High Court (conviction and sentence) was upheld.

The issue was whether the state high court has jurisdiction over matters that are governed by the Investment and Security Act (the act). The case emanated from a dispute where the appellant was being sued in the court aqua for defrauding the respondents of units of shares. The appellant had raised a preliminary objection that the trial court lacked jurisdiction over the matter which was dismissed. The appellant thus was challenging the dismissal of the objection.

The appellant argued that the trial judge erred in dismissing its objection on the basis that jurisdiction of the high court is limited and excludes matters that are regulated by the act. The appellant pointed out that disputes around the act should be determined by the Investment and Security Tribunal (the tribunal).

The respondent opposed the appeal on the grounds that the trial judge was correct because the jurisdiction of the high court was unlimited. They argued that the dispute emanates from torts, conspiracy and fraud which fall within jurisdiction of the high court and that the act was unconstitutional. 

The court ruled that s 270 of the act establishes the tribunal to resolve disputes that fall under the act. It observed that s 284 of the act give the tribunal exclusive jurisdiction to determine matters regarding capital markets. It held that the dispute revolved around capital market operator (appellant) and its clients (respondents) hence it falls within the exclusive jurisdiction of the tribunal. It concluded that the trial judge erred and the appeal was upheld.

This was an appeal based on an action to set aside a consent judgment obtained before a court of competent jurisdiction on grounds of fraud.

The court determined whether such a consent judgment could be set aside despite its finality. The court observed that an appeal would not ordinarily lie against a consent judgment and that bringing a fresh action to challenge the validity of a consent judgment was a standard and accepted procedure. Thus, the court held that the court of appeal erred in treating the case as res judicata. The court also determined whether the Court of Appeal erred in striking the matter summarily when fraud was in issue. It was held that Court of Appeal erroneously denied the plaintiff a hearing leading to a violation of fundamental rule of natural justice.

Accordingly, the appeal was allowed, the judgments the High Court and the Court of Appeal were set aside and the court ordered a trial on the merits based on the pleadings as they stood at the High Court.

The applicant brought a complaint against the defendants for contravening the market allocation prohibition of the Competition Act (the act) by entering into an ongoing agreement allocating market territory for the sale of locking products in both the Free State and Northern Cape. They sought to have the defendant’s conduct declared in contravention and consequently interdicted and charged with a 10% turnover administrative charge in respect of the contravention.

The first issue was whether the commission could allege market allocation for all products. Looking at the legislative powers of the commission, the Competition Tribunal reasoned that since the agreement’s subject matter covered all products the commission had authority therein.

The tribunal then considered whether the agreement was still ongoing after the coming into effect of the act and s 4(1)(b)(ii). It assessed the evidence and established that the defendants had not competed with each other since the entry into agreement until the time in issue and thus the agreement remained ongoing. 

The final issue was whether the agreement’s rationale was in contravention of the section above. By looking at the ratio in American Soda Ash Corporation and Another vs. Competition Commission and Others [2005] 1 CPLR 1 (SCA) and The Competition-Commission and Pioneer Foods (Pty) Ltd, Case No: 15/CR/Feb07, the tribunal highlighted that s 4(1)(b)(ii)’s market allocation prohibition is a per se prohibition and thus there can be no justification for the conduct.

The agreement was held to be ongoing and in contravention of s 4(1)(b)(ii).

The respondent sold a car to a man who paid half price and took the vehicle
leaving the original registration book with the respondent. The new buyer on
the same day sold the car to the appellant. The respondent bought a suit
against the appellant and his predecessor in title for orders of specific
performance of the sale agreement, damages, interest and costs of the suit.
The trial court entered judgment for the respondent and the appellant’s
appeal to the court of appeal was dismissed hence this appeal.

This case considered whether the appellant had obtained the title of suit property by fraud. The court considered the grounds which would constitute fraud. It was found that fraud means actual fraud or some act of dishonesty. The court held that fraud must be proved strictly, the burden being heavier than on a balance of probabilities generally applied in civil matters. Accordingly, the fraud requires some act of dishonesty.

A dispute between the company and the bank arose in respect of a specimen signature card allegedly issued for Susan Margaret Howard Bristow (Susan) as a director of the company. The dispute arose because the signature of Dr. Alex Babitunga authenticating Susan's specimen signature card was apparently forged. Additional words written on the card, altering the previous arrangements with the bank requiring two signatures for authorisation of withdrawals, appeared without any initials, signatures, authentication or stamping by the person or persons who cancelled them. The bank permitted certain withdrawals from the company bank account in accordance with the instructions on the card; as opposed to the earlier instructions.

The respondent alleged that the appellant had acted in breach of its duty to the respondent as its customer and had been negligent in permitting the respondent’s accounts to be cleared of all the money in them without the respondent’s authority.

The issues were whether the lower court erred in law and in fact in not holding that the respondent was estopped from saying that Susan Bristow was not an authorized signatory to the respondent's account.

The court explained that the principles of estoppel provides that when one person has, by his or her declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon that belief, neither he or she nor his or her representative shall be allowed, in any suit or proceeding between himself or herself and that person or his or her representative, to deny the truth of that thing. One of the conditions for the doctrine to apply is, therefore that the act or omission by the person against whom estoppel is to be set up, as a defense, must have been intentionally caused, in the instant case the fraud which the two courts below found had caused the appellant to act to its detriment believing it to be true was unknown to the respondent until the police report. The court held that the defense of estoppel was not available to the bank against the company because the respondent was unaware of Susan's fraudulent signatures on the cheques until the police investigation and report.

The court held that all documents concerning the respondent's accounts were in the possession and custody of appellant bank. Only the appellant knew and was responsible for entries on the bank accounts, it bore responsibility as the banker to what entries were made on those accounts without respondent's authority. The appeal was therefore dismissed with costs.

This case considered the instance when the veil of incorporation can be lifted. The mind of a company where guilty intent or responsibility is being considered cannot be separated from the minds of the directors. The corporate veil ought to be lifted where there is proof of involvement of the directors in fraud. Once there has been an allegation of fraud against the company, the directors are ay virtue alleged to be involved. Accordingly, the veil of incorporation will be lifted where it is proved that the directors, acting as the mind and body of the company were involved in an act of dishonesty.

This case looked at the whether the veil of incorporation could be lifted and the defendants held liable for the debt of the company. The court looked at the instances when lifting of the corporate veil was applicable. There are three instances when the veil of incorporation can be lifted. 1) when a court in construing a statute, contract or other documents; 2) when the court is satisfied that the company is a mere façade concealing the true facts and 3) when it is established that the company is an authorized agent of its members/directors.

Further, the veil of incorporation can be lifted when the veil of incorporation is used as an instrument of fraud. The standard of proof required in cases of fraud is more onerous that the ordinary balance of probabilities. Section 20 of the Companies Act (‘the act’) empowers a court to lift the veil of incorporation against directors where there is any involvement in fraud by the directors. Fraud was defined to mean any act of dishonesty or actual fraud.

The court found in this case that the plaintiff was barred from instituting action against the defendants. Accordingly, the claim was dismissed with costs.

In this case the plaintiff claimed for special and general damages against the defendant for fraud and conversion of the plaintiff’s petroleum products. The case deals with fraud, where the party that benefited was not a bona fide purchaser of the products in this case. The court considered whether the defendant had good title for the products sold to him by the third party. Whether the defendant had a claim against the third party and whether there were remedies available to the parties.

In dealing with the first issue the court considered whether the defendant had acquired a better title than the mysterious seller had because the mysterious seller did not have any title to the good. The court applied the general rule in the latin maxim nemo dat quod non habet which was reflected in section 22 (1) of the Sale of Goods Act. The court found that the mysterious seller had no title to pass to the defendant and thus the defendant never acquired good title to the property. Therefore, the defendant was liable to make good any loss suffered by the plaintiff as a result of the conversion of the plaintiff’s goods.

In considering the second issue, the court found that the defendant had proved the transaction it had made with the third party and was therefore indemnified against the third party.

In considering the remedies available to the parties, the court held that general damages are compensatory to fulfil the principle of restitution in integrum which aims at restoring the plaintiff as nearly as possible to the position he or she would have been had the injury not occurred.

Therefore, the court upheld the plaintiff’s claim with costs.
The court also held that for the indemnity suit against the third party, the third party was to settle all liabilities ordered against the defendant less the amount against the defendant.
 

The base of the suit was defamation whereby the plaintiff averred that the defendants defamed him.

The first issue was whether there was defamation and who was defamed among the two defendants. The court states that it is crucial in the commercial arena to inquire whether the published statement concerns the business itself or someone affiliated with the business in his individual capacity. Generally, the defamation must refer to the person defamed. In this case it had to be specifically pleaded whether the alleged defamation referred to the company business or to plaintiff witness individually.

For the second issue of whether the court had jurisdiction to hear the matter, it relied the principle contained in section 13 of the Civil Procedure Code that every suit must be instituted in the court of the lowest grade competent to try it. The object and purpose of the said provision is to prevent overcrowding in the court of higher grade where a suit may be filed in a court of lower grade; to avoid multifariousness of litigation and to ensure that case involving huge amount must be heard by a more experienced court. The suit should have been properly instituted either in the District Court or in the Court of the Resident Magistrate which have competent jurisdiction to try the same.

The court concluded that a cause of action arises when facts on which liability is founded exist of which there were none in this instance. Thus the suit was rejected.