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 High Court had jurisdiction to order the freezing of the bank accounts of the applicant.

The dispute emanated from an order to freeze the applicant’s three bank accounts after allegations of money laundering by the Financial Intelligence Centre (FIC). The applicant was accused of illegally receiving approximately US$ 43 000 and remittance of US$ 39 000 from a Canadian company. The applicant tried without success to apply to defreeze the bank accounts. 

The applicant further applied arguing that the Anti-Money Laundering Act (the act) only allowed the bank accounts to be frozen for one year.  It pointed out that the High Court exceeded its jurisdiction when it dismissed the application because the statutory period of 12 months had lapsed. They also challenged the decision to freeze all the accounts including money that was not part of the laundering investigation on the basis that it was an infringement of the right to natural justice.

The FIC argued that that investigation of allegation of fraud, which is criminal in nature, is not affected by time constraints.

The court held that one year was enough for FIC to investigate any alleged wrong-doing. It ruled that High Court lacked the jurisdiction to order the continuous freezing of the accounts of the applicant beyond the one year. It further ruled that moneys which stood in the accounts of the applicants before any alleged illegal transfers into the accounts should not form part of the freezing order.

This is a second appeal by the appellant, both
his original suit in the High Court and his
subsequent appeal to the Court of Appeal
having been dismissed. The background is
that the appellant thought to borrow money
from the respondent and gave security as his
land, the issued cheque bounced and the
respondent used the security to secure a
mortgage from the first respondent which he
failed to pay and the first respondent sold the
land. The appellant was evicted and the
business closed and the appellant alleged
fraud but was unsuccessful both at high court
and court of appeal hence this appeal on the
grounds of the sale of land using the power of
attorney, the validity of the mortgage on the
appellants land, holding on fraud, improper
consideration of the evidence on record and
complete disregard of the facts.

The court considered whether; the land occupied by the respondent was registered land, the grant of the lease was fraudulent, and estoppel is applicable.

The court held that s 31(1) of the Land Act gives security of tenure to a tenant on registered land. Moreso, the implications of the abolitions of statutory leases in terms of art 237 of the Constitution remains a grey area. The court also held that security of tenure protects a bona fide occupant 's interest. Also, under s 176 of the Registration of Titles Act, a registered proprietor is protected against ejectment except in certain cases including fraud. Further, to procure registration of title to defeat an unregistered interest amounts to fraud. The court also held that registration tainted with fraud does not give rise to the doctrine of estoppel.

The court found that respondent must continue occupation because they were in undisturbed possession and occupation before the 1995 Constitution. The abolition of statutory leases did not automatically extinguish such right. Also found that fraud was attributable to appellants because the grant and registration of suit land in the name of the second appellant was intended to defeat the unregistered interest of the respondent.

Accordingly, the court dismissed the appeal with costs. Further ordered the first appellant to give due consideration to the respondent's application for a lease over the suit land including giving it a priority in the granting of the lease.

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.