The Commercial Case Law Index is a collection of judgments from African countries on topics relating to commercial legal practice. The collection aims to provide a snapshot of commercial legal practice in a country, rather than present solely traditionally "reportable" cases. The index currently covers 400 judgments from Uganda, Tanzania, Nigeria, Ghana and South Africa.
Get started on finding judgments that are relevant to you by browsing the topic list on the left of the screen. Click the arrows next to the topic names to reveal a detailed list of sub-topics. Most judgments are accompanied by a short summary written by subject-matter expert postgraduate students from the University of Cape Town.
This was an action claiming monies allegedly siphoned from the plaintiff’s bank account with the participation and/or collusion of the defendant; and damages for the defendant’s breach of the fiduciary duty as branch manager. The defendant filed a counterclaim that his continued suspension and dismissal was unlawful.
The issues for consideration were whether the defendant caused financial loss to the plaintiff; whether the suspension and/or dismissal was lawful; and the available remedies.
Regarding the first issue, the court held that the suit rested on the allegation that the defendant kept 26 cheques. The court held that it was not proved that the defendant kept the cheques beyond the three days alleged by the plaintiff; however the court found that the defendant knew the cheques were kept beyond the three days. As a result, the defendant was jointly liable with a Mr Patrick Kigongo.
On the second issue, the court held that the plaintiff was entitled to suspend the defendant as he was charged with a criminal offence. Management may dismiss an employee who was facing criminal prosecution if their continued employment would prejudice the interests of the bank. However, the defendant was suspended without pay contrary to regulation 30 of the terms and conditions of service; and the termination was without notice of disciplinary action, without a right of defence, and was thus unlawful.
The plaintiff was awarded general damages. The defendant was awarded his full salary from the date of suspension until the date of termination.
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 1998 the appellant filed a suit against the respondent, to which the responded reacted with a counter-claim. The appellant’s claim was withdrawn in 2006 but the respondent’s counter-claim was not. The trial judge ruled in favour of the respondent. The appellants were dissatisfied with the decision and filed an appeal.
The Court of Appeal considered whether the burden of proof of fraud alleged in the counter-suit rested on the appellants. The court held that the burden of proof rests on the party who alleges that fraud was committed. In this case, the appellants had withdrawn their case against the respondent and only the respondent’s counter-claim remained. Consequently, the court upheld the appellant’s complaint and placed the burden to prove that fraud was committed on the respondent.
The court then considered whether the lease of the suit property to the first appellant was fraudulent and reviewed the lower court’s order in cancellation. The court held that fraud must be specifically pleaded and strictly proved and cannot be left to be inferred from the facts. Neither party attempted to prove fraud against the other. Therefore, the courts held that the lease of the suit property to the first appellant was not fraudulent and that the trial judge should not have cancelled the first appellant’s certificate of title.
The court also considered whether the respondent’s lease agreement was breached because the first appellant denied the respondent possession of the suit land and reviewed the lower court’s order to extend the respondents lease. The court found that the respondent was in breach of contract and, therefore, had no right of possession and overturned the trial judge’s order to extend the respondent’s lease because the respondent had failed to request it in due course.
All grounds of the appeal succeeded.
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.
In this case, the court made a determination on an application to set aside a consent judgment that made provision for share transfer, land transfer and a special resolution.
The court determined whether the fourth defendant had the authority to enter into the consent judgment. The court applied the indoor management rule to make a finding that the fourth defendant had such authority and that parties outside did not have to enquire about the fourth respondent’s authority.
The applicants raised an objection that the consent judgment contained unpleaded issues in the prior suit by including legal entities or companies which were not parties to the suit. This objection failed since the parties had elected to be bound by what they agreed.
On the issue of whether the fourth respondent had colluded with the other respondents to defraud the applicant, the court held that it lacked merit since the fourth respondent was duly authorised by the applicants to represent them. The applicants claimed that there was no special meeting to sanction the change of name and offering the first applicant interest in land but on the evidence tendered, the court was satisfied that the meeting took place.
The court dismissed the application to set aside the consent judgment thereby denying the consequential order sought to set aside transactions validated by the consent judgment. Accordingly, the application was dismissed with costs.