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.
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 defendant had rejected a claim of a certain amount as allowable tax deductions by the plaintiff. This case reconciles the different calculations for bad debts used according to the Financial Institution Act and the 2005 regulations on the other hand the Income Tax Act (ITA) International Financial Reporting Standards (IFRS).
The court considered whether the assessment followed by the defendant was unlawful.
The court held that it was not required to determine which methodology was more consistent with the ITA section 24. The rationale for accounting methods should not depart from what is provided under the ITA, which is the parent act. Therefore, the definition of a bad debt should be based on the ITA under. The court considered the practice note which had the interpretation of the Commissioner General and held that section 160 of the ITA must be followed because the practice note is only binding on the Commissioner General and her personnel. The court held that section 24 deals with deductions of bad debts and the conditions to be fulfilled for deduction must apply. Thus, the court held that a bad debt under section is allowable as a deduction under section 24.
The court held that the plaintiff was obliged to make provision for bad debts which meet the criteria under section 24 of the ITA and the practice note issued by the Commissioner, file accounts with the Bank of Uganda and be up to standard under the IFRS.
The court also considered whether the plaintiff had to comply with the Bank of Uganda Circular that regulated deductibility of bad debts for income tax. The court held that the circular was not binding because it does not deal with whether a bad debt is an allowable deduction or not.
The court was satisfied that the above sum was a bad debt that is supposed to be an allowable deduction under section 22 and 24 of the ITA.
The first appellant and the respondent are siblings whom were initially registered as tenants in common, on a land plot. In 2002, the proprietorship of this land was transferred from the names of the siblings to the 2nd to 8th appellants (who were at the time minor children of the first appellant).
The respondent was aggrieved by the transfer and registration of the appellant's descendants to the suit property. She contended that the first appellant had acted fraudulently in this transfer. She went to the High Court seeking reinstatement of her name on the suit title. The High Court granted the orders sought.
The appellants appeal the decision of the High Court. On the grounds that (1) the court erred in evaluating the evidence of the first appellant as a whole, nor recording of his evidence and (2) the respondent freely relinquished her interests in the property.
The respondent filed a cross appeal declaring that she is entitled to award of mesne profits and or general damages as well.
This court found that the transfer form did not amount to forgery or fraud. The appeal therefore succeeded in part. However, it was found that the respondent had not fulfilled the condition of transferring and subdividing part of lands into the names of the respondent - as they agreed.
The respondent was found to have carried out her part of the bargain and the first respondent must do his own as well.
Plaintiff instituted proceedings for breach of contract, special damages, and general damages. Defendant denied any breach took place, and contended that the dispute ought to have been referred to an arbitrator. Defendant also instituted a counterclaim for breach of contract.
The defendant approached the plaintiff for assistance in carrying out a contract with BCEG (Rwanda), and entered into a memorandum of understanding that the profits after expenses would be divided. The defendant failed to pay plaintiff an outstanding amount of monies, or for expenses incurred.
The issues for determination were whether the matter ought to have been referred to arbitration; whether the defendant breached the contract; and the remedies available to the parties.
Regarding issue one, the court stated that the matter could only be referred to arbitration in terms of the parties’ agreement if any of the parties applied to court for arbitration. Though an arbitration clause existed, no application was made to refer the matter to arbitration. The court could not invoke its inherent jurisdiction to refer the matter to arbitration without an application being made.
As regards issue two, the court found that the plaintiff proved that the defendant breached the contract. The defendant failed to deal specifically with the claims of the plaintiff, and instead provided blanket denials which the court held to be insufficient to disprove the plaintiff’s claims.
As regards the remedies available to the parties, the plaintiff failed to prove liability for special damages, but was entitled to general damages.
The defendants applied for credit facilities to obtain steel products from the plaintiff. The second and third defendants stood surety. The plaintiff contended that the defendants refused to pay for the steel products. The proceedings were for breach of contract, and special and general damages. The defendants denied concluding the contract, and argued the matter ought to be heard in South Africa.
The issues for determination were whether the court lacked jurisdiction; whether there was a contract between the parties; whether the defendants breached the contract; and whether second and third defendants were liable.
On the issue of jurisdiction, the court considered the agreement. It was clear that the parties consented to the jurisdiction of the High Court of South Africa, however the court held that the Constitution and Judicature Act provided it with unlimited original jurisdiction in all matters. Even when parties had an exclusive jurisdiction agreement, the High Court of Uganda still had jurisdiction to hear and determine the matter before it.
Regarding the existence of the contract, the law required the plaintiff to prove the documents were signed by the second and third defendants. The court found that the plaintiff proved it entered into a valid contract with the defendants.
Whether the defendants breached the contract, the court held that the first defendant breached the contract by failing to pay for the goods, and that the second and third defendants were liable as sureties.
Plaintiff was awarded special and general damages.
The applicant was directed to use other means to recover a judgment debt. The application was instituted to hold the second to sixth respondents liable for the first respondent’s debt as the controlling company of the first respondent.
The applicant argued that unless the corporate veil was lifted, and the second to sixth respondents were ordered to pay the debt, the applicant would not be able to recover the judgment debt.
The issues before the court were whether corporate veil could be lifted.
The court held that the first respondent company and second respondent company were one and the same. From the evidence, the third to sixth respondents were acting on behalf of the first and second respondents.
Grounds for lifting the veil were provided in section 20 of the Companies Act, and included where a company or its directors are involved in acts of fraud. The court held that the instruments of the first respondent were honestly executed. Failure to execute the court order was not reason for lifting the corporate veil as it was not evidence of fraud. However, a further ground for lifting the corporate veil was to prevent the deliberate evasion of contractual obligations. The court held that the third to sixth respondents’ resolve to sell the properties were attempts to prevent the realization of the judgment debt, and using the first respondent as a mask for fraud.
The application was granted.
This was an application for an order of specific performance compelling the defendants to sign transfers of an aircraft.
The court considered the indebtedness of both parties to each other and held that the plaintiff was indebted to the defendants in respect of leasing and purchasing. The court applied the rule that people who freely negotiate and conclude a contract should be held to their bargain and found that the plaintiff’s defence of duress was unviable, since the defendants were entitled to ground the aircraft on grounds of non-payment.
Secondly, the court determined whether the defendants/counterclaimants were entitled to the interest payments claimed in the counterclaim. The court held that the defendants were entitled to the interest as agreed upon in the reconciliation document.
Thirdly, the court considered whether the counter-claimants/ defendants have a cause of action against the second defendant. The court relied on the concept that only parties to a contract can sue for breach (privity of contract). It observed that there were exceptions to this rule where a third party can prove that he is a beneficiary of the contract between the two people. The court held that the defendants were third party beneficiaries since the loan agreement between the first defendant and the second defendant was for their benefit.
Accordingly the case was dismissed and the defendant was awarded special damages and general damages as prayed for, but denied aggravated damages.
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.
In this case the defendant raised a preliminary objection disputing the jurisdiction of the court to handle a dispute in a loan agreement.
The court determined the jurisdiction of the high court to handle the matter despite a clause in the agreement that ousted (excluded) its jurisdiction. The court applied article 139(4) of the Constitution and the rule that a simple clause in a contract does not oust the unlimited original jurisdiction of the High Court as conferred by the Constitution. The court observed that the defendant raised this objection to avoid liability since the defendant did not prove his case. The court was satisfied that it would be very expensive to conduct the trial in Belgium as provided in the contract. Consequently, the objection was not sustained and the court ordered that the matter should proceed to trial.
This was an application seeking orders for an interim stay of execution and/or enforcement of the decree and judgment of a civil suit pending the hearing and determination of the application; on grounds that there was a prima facie case on appeal and its essentiality for safeguarding the applicant’s right to appeal.
The respondents raised a preliminary objection to the application on grounds that it was not properly before the court. The court observed that it was more ideal for the High Court to first determine such applications on their own merits and for the Court of Appeal to do so only when the application is substantive in content and form and in special and rare circumstances: if the High Court refuses to accept its jurisdiction, or refuses jurisdiction on wrong reasons, or there is great delay.
The court was satisfied that the applicant failed to demonstrate special or rare circumstances for not making this application in the High Court first since there was no evidence of a formal application for stay or a follow up letter on the application. Accordingly, the court allowed the preliminary objection by counsel for the respondent and dismissed the application with an order to costs.
The court considered an appeal from a High Court decision that dismissed an application to set aside part of a previous judgment. The broad circumstances related to a series of judgments that related to who was entitled to vacant possession of land. However, the time within which to lodge the appeal had lapsed. The court restated the position on what the court must consider when dealing with an application for the extension of time. Such an enquiry is three-pronged involving three questions namely: (1) establishing sufficient reasons for the court to extend the time to lodge the appeal; (2) whether the applicant is guilty or not of dilatory conduct; and (3) whether any injustice will result from the application not being granted.
The court held that because the matter in this case raised serious questions of law that need to be addressed, it would be in the interests of justice to extend the time to file their appeal.
The court also dealt with affidavits as evidence and provided that just because they were not duly endorsed, does not mean the court will reject them. Further, where it is alleged that part of an affidavit is false, a court can sever that part and rely on remaining paragraphs.
The applicant sought a declaratory order stating that the first respondent was in contempt of a court order which restricted him from transferring, alienating and or disposing of the 60% shareholding in the third respondent company.
The court considered whether the first respondent was in contempt of court. It was held that the first respondent was indeed in contempt of an order issued by the same court in 2015.
When the first respondent argued that the transfer of shared occurred in 1997, the court examined the third respondent company’s annual returns from 2008 to 2015 which reflected share ownership to belong to two entities; Tanwood Ltd and Garwood Ltd. At the time neither Busa Ltd nor Queen Foreign Ltd appeared as shareholders. The court also examined a company search that was conducted in 2016 which reflected a change in shareholding; Queen Foreign Ltd was a majority shareholder. The court accepted the above as prima facie proof of contempt of court. The court relied on previous judgments that outlined the conditions that have to be met in order to legally prove that contempt of court occurred; it was held that all conditions were met.
As a result of contempt, the court disregarded the purported transfer of shares in the third respondent company and stated that the power of attorney had no effect whatsoever. The court awarded costs to the applicant. No fine was imposed.
The court considered whether the applicant had sufficient grounds for an interlocutory injunction to prevent the first respondent from entering into another contract.
The court held that there are three conditions that an applicant must show for a temporary interlocutory injunction. Firstly, must show that there is a prima facie case with a probability of success. Secondly, must show that he will suffer irreparable harm which will not be adequately compensated by an award for damages. Thirdly, the application is decided on a balance of convenience if the court is in doubt.
The court found that to establish a prima facie case the applicant must show that it is not a frivolous case, in that regard, the applicant did not show that there was a triable issue. Also found that irreparable harm must be substantial or material, in that light the applicant did not the likelihood of irreparable damages and any contemplated damages. The court also found that the balance of convenience was in favour of the respondent because if the injunction because the granting of the injunction would lead to indefinite termination.
Accordingly, the court dismissed the application with costs.
The appellant who undertook to invest and acquire shares in a telecom company brought an action
against the respondents for breach of contract, damages and interest. The appellant’s suit was dismissed
on a preliminary point of law as it disclosed no cause of action against the 2 nd and 3 rd respondents.
The applicant brought an application for interim order against the respondents disposing of the
suit property fraudulently mortgaged by her husband without spousal consent the same being
matrimonial property. The applicant’s suit was dismissed by the trial court hence the appeal from
which the application arose.
The applicants brought suits which were later consolidated against the respondents alleging that they were
acquired through fraud. The trial judge entered judgment against the applicant and declared her trespasser
without interest in the suit land. The applicant brought an application for stay of execution pending
disposal of appeal.
The court considered an application where the applicant argued that the Court of Appeal, in an earlier judgment in the same case, erroneously misconstrued s 272 of the Succession Act. The court held that an appeal could be re-heard if the matter is of great public importance. The court confirmed that great public importance and general importance depends on the facts and circumstances and may vary from case-to-case.
The guidelines for what would constitute public or general importance in certain cases are statements of law which affect
(1) a considerable number of people in their commercial practice;
(2) enjoyment of fundamental rights;
(3) the proper functioning of public institutions;
(4) the court’s scope to dispense redress; or (4) the discharge of duties of public officers.
If an appeal meets one of the criteria constituting public or general importance, the court will be permitted to re-hear an appeal on its merits. The court in this case held that this case raised a question of law of general importance and could be reheard.
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 applicant and respondent contested in a parliamentary election, the
respondent was aggrieved by the outcome of the election petitioned court
which dismissed the petition hence the appeal from which the application
arises. The applicant sought the notice of appeal struck out of court for being
filed out of time without leave of court.
This was a second appeal by the appellant
against the decision of the Court of Appeal
which ruled that terminal benefits paid to the
respondents were not taxable under Section 19
of the Income Tax Act. The background is that
the respondents were retrenched and awarded
terminal benefits for which they sought from
the appellant the tax due. The appellant
reviewed and presented a sum that was
contested by the respondents and the high court
ruled that the amount given to the former
employees was akin to gratuity which was tax
exempt. The court of appeal agreed with the
trial court hence this appeal.