Commercial Law Index

The appellant had decided not to claim two previous accidents because he did not want to lose his no-claim bonus. This case highlights the effects of an “OUT bonus” clause within an insurance policy that positively discourages clients from submitting claims.

The court considered whether the appellant’s failure to disclose the two previous incidents in which the vehicle was damaged within 30 days, allowed the respondent to avoid liability in terms of the contract. The court had to decide whether the appellant’s inaction amounted to a breach of the insurance policy, which had stated in plain language that one is rewarded for not claiming.

The court held that the insurer’s policy created a self-absorption of any damage caused by the insured, whereby, the insured was to be paid 10% of their premiums after the first three years of the policy. The court held that this formed the basis of the appellant’s decision to not disclose his claims.

The court was not satisfied that the appellant’s failure to disclose the two previous incidents within 30 days amounted to a rejection of the claim. The court held that the obligation to report “incidents” created uncertainty, especially in situations whereby the insured had no intention of lodging a claim. In this case, it was evident that the appellant’s decision not to claim was a result of the attraction of the OUT bonus.

Thus, the court upheld the appellant’s claim and held that the defendant was liable to compensate the appellant.

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.

The applicant was a client of the first and second respondents, who represented the plaintiff (third respondent, a company) in a case against the applicant. The applicant claimed that during the legal representation, the first and second respondents became aware of facts prejudicial to him which were a violation of advocate and client relationship, thus applied for an injunction. 

The court considered whether the first and second respondents also handled matters which would arise in the suit against the applicant while representing the third respondent.

The court held that where there was a fiduciary relationship, the irrebuttable presumption is that there is a possibility of disclosure. Further, although some authorities state that the applicant should plead the confidential information that could be reviewed, recent authorities have held that such pleading would be contrary to the intended confidentiality. 

The court found that there was a fiduciary relationship between the first and second respondents. Moreso, the parties had a relationship of legal and litigation interaction. Therefore, information prejudicial to the applicant would likely emerge. 

The court accordingly granted the application and ordered the disqualification of the first and second respondents from the pending suit.
 

The issue was whether the Corporate Affairs Commission (appellant) has powers to inspect affairs of banks (respondents) without a court order.

The case emanated from decision of the trial judge declining to grant an order directing the respondents to comply with the appellant inspectors. 

The appellant argued that the Companies and Allied Matters Act (the act) empowers it to carry out an inspection without the need of a court order. It pointed out that the trial judge erred by holding that the appellant require a court order to investigate the respondents. 

The respondents opposed the appeal by pointing out that the appellant can only carry out an inspection on the respondents through a court order and that the appellant had no power to appoint inspectors. They further argued that allowing an inspection by the appellant amount to breach of bank/client confidentiality. 

The court ruled that the act allows the appellant to appoint investigators at the instances of company members or through a court order. It held that s 314(1) of the act empowers the appellant to investigate affairs of the banks without the need of a court order. The court ruled that the trial judge erred and the appeal was upheld.