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.
Second respondent was informed of a building for sale by the appellants with a 5% commission to whoever secured a buyer. Second respondent found a buyer but received no payment. He successfully claimed payment in the lower court, which the appellants appealed.
The issue was whether the second respondent was an agent of the appellants and entitled to the commission claimed.
Agency is created when the principal authorises the agent to act on their behalf, and the agent accepts to act on their authority. The appeal court agreed that the second respondent began acting as agent immediately after being given the sale price and rate of commission. The first appellant authorised several agents, including second respondent, to look for a buyer. The ultimate buyer was introduced to the first appellant by second respondent.
At issue was whether the second respondent could act as a commission agent or receive commission. He was not a qualified estate surveyor and valuer, or a member of the Nigerian Institute of Estate Surveyors, Agents and Valuers. Furthermore, a lawyer may not practice as a legal practitioner while engaging in the business of a commission agent. Though the second respondent contravened the latter rule, the court held that this contravention did not vitiate the agency agreement. A party who has benefitted from a contract cannot evade their obligations by relying on an allegation of illegality; illegality must be on the face of it. There was no illegality in the agency agreement.
The appeal was dismissed.
Appeal against the judgment in favour of the respondent for arrear rent with costs. The appeal was brought on two grounds: the lower court erred by ordering the rent payable in British Pounds (GBP); and the trial court erred in holding that the burden of proving non-payment of the rent in GBP rested on the appellant.
The first issue concerned the interpretation and applicability of the Decimal Currency Act (the act) on the mode of payment of the rent, which was fixed by the Deed of lease. Applying literal interpretation, the court concluded that section 1(2) of the Act related only to contracts entered into in Nigerian Pounds. It was not the legislature’s intention to constrict contractors from deciding the terms and manner of payment. Parties to a contract are bound by its terms and conditions, and a court will respect the contract.
Issue two as to who bore the onus of proving the currency of payment post-Decimal Currency Act, was decided in favour of the respondent. The burden of proof generally lies with the plaintiff to establish their case, however this burden is not static. The respondent adduced evidence of non-payment of rent, the burden shifted to the appellant to adduce evidence rebutting this, and in proof of the assertion that regular payments of rent were made. The appellant failed to produce evidence that payment was made, and that it was done in Naira and not GBP.
The appeal was dismissed.
First appellant applied for, and was allotted, a piece of state land under a temporary right of occupancy (TRO), which was non-transferable to third parties. First appellant built a restaurant on the land, which second appellant managed while first appellant lived in the USA. The second appellant was not granted any right of occupancy.
The issues for determination were: whether the trial court made a finding of fact that could only be made after leading evidence; whether the trial court was justified in discrediting or attacking evidence tendered by the appellant that was without objection by the respondent, who also led no evidence to contradict the same; and whether the trial court was justified in refusing to admit the pictures of the restaurant.
The appeal court found that the trial judge properly evaluated the documentary evidence before it and used its evaluation thereof to arrive at its decision. An appellate court may interfere where the trial court fails to evaluate the evidence properly. The court found that it was not in a position to interfere with the views of the trial court.
Issue two was resolved in favour of the respondents for the same considerations and conclusion as issue one. Issue three was decided in favour of the respondents as the evidence was held to be inadmissible because it was not in conformity with the pleadings.
The appeal was without merit and dismissed.
In this case, the respondent had filed an application for the enforcement of a judgment by means of garnishee proceedings. The court then granted an order of garnishee nisi, which the appellants then filed an affidavit to show cause. The matter was heard and the court made the garnishee order absolute. This case illustrates effect of a null judgment.
The court considered whether the High Court erred in granting the garnishee orders absolute. The court considered the direct effect of the judgment that had been made by the same court. The court had found that the judgment of the court below was incompetent and therefore a nullity.
The court held that the law was settled that, ‘out of nullity nothing worth anything or something can emerge or be predicated’. The court held that a null judgment though it existed as a fact, was devoid of any legal consequences. It was as if the judgment did not exist.
Therefore, the court concluded that the garnishee orders absolute made by the court below had automatically become nullity as well and were liable to be set aside ex debito justitiae (as of right).
The court upheld the appeal and wholly set aside the garnishee orders absolute.
The appellant brought his initial suit against a decision of the main committee of the first respondent suspending him from the Lagos Polo Club. The initial suit was dismissed in its entirety.
The appeal concerned three issues. Issues one and two were decided together, and concerned whether the lower court was correct in holding that the respondents complied with the provisions of the Lagos Polo Club Constitution in suspending the appellant; and whether the main committee of the Club could delegate any part of its disciplinary functions to its Disciplinary Sub-Committee.
Generally, courts will rarely interfere with the decisions of voluntary associations except where rules of natural justice were ignored. At issue was whether the appellant was given a fair hearing, which the court held that he was. The main committee was empowered to discipline its members for misconduct. Furthermore, the main committee was empowered to co-opt other persons to act under its authority. The power to constitute a sub-committee was incidental to the power to co-opt persons. Issues one and two were resolved against the appellant.
Issue three concerned whether the lower court considered all the processes filed by the appellant when arriving at its decision. In determining issues, a court is not bound to list all the material considered. Failure to expressly mention all the different processes does not mean the trial court failed to consider them. The court found against the appellant on this issue.
The appeal was dismissed.
The underlying dispute between the parties related to an entitlement of the appellants to a proper statement of account by the respondents. The question at issue was whether the order of the high court was appealable and if so, whether the appellants had made out a case for a two-state judicially controlled procedure, dealing first with the adequacy and second with the accuracy of the accounts.
In making a decision the court was guided by the principle that a judgment or order has three attributes, first, the decision made must be final in effect and not susceptible of alteration by the court of first instance; second, it must be definite of the rights of the parties; and third, it must have the effect of disposing of at least a substantial portion of the relief claimed in the main proceedings. The principles however are neither exhaustive nor cast in stone. An order may not possess all three attributes, but will nonetheless be appealable if it has final jurisdictional effect.
The court held that the order of the court a quo had effectively precluded the appellants from contesting the adequacy of the accounts, an issue that had been a bone of contention between the parties thus making the decision of the court a quo appealable. In the result, the appeal succeeded.
The respondent’s non-disclosure of the nature of a business conducted by a tenant on its insured premises was held to be material for the purposes of s 53(1) of the Short-Term Insurance Act. The court ruled that the failure to advise appellant of highly flammable materials being used to manufacture truck and trailer bodies on the property rendered the insurance contract void. The court found that a reasonable, prudent person would have viewed the disclosure of this information as relevant to the overall risk assessment, and that appellant had been induced into extending the cover.
The respondent unsuccessfully raised the defence of estoppel based on appellant’s failure to conduct a survey of the premises, at respondent’s request, to identify potential risks which could affect the policy. The court found that no misrepresentation could be shown on appellant’s part; estoppel was therefore not established.
Wallis JA concurred with the majority ruling but focused his reasoning on the practical and logical flaws in the respondent’s justification for its non-disclosure.
A claim by the appellant was repudiated by the respondent on the grounds that the deceased had misrepresented and failed to disclose to the respondent certain details of her pre-existing medical condition which materially affected the assessment of the risk under the policy by the respondent. The issue before the court was whether the deceased made a misrepresentation during the telephone conversation as well as materiality of any alleged misrepresentation or non-disclosure, does not arise in the absence of proof of the deceased’s pre-existing medical condition.
The court held that the respondent bore the onus to prove that the deceased had misrepresented herself to the respondent. The respondent also had to prove that the deceased had failed to disclose that she had received medical advice or treatment previously. There was however there was no clear understanding between the parties as to the evidential status of the contents of the hospital records. The court ruled that the respondent failed to discharge that onus to prove that the deceased did misrepresent herself as there was inadequacy and lack of clarity in the hospital records.
The court expressed that that the court a quo erred in concluding that it was not in dispute that the illnesses were noted correctly in the hospital records. The court also noted that the court a quo paid scant regard to the admissibility of the evidence as a result the parties had to file supplementary heads of argument.
Accordingly the court upheld the appeal.
This case dealt with a claim for wages of a ship’s crew members for having been kept hostage by Somali pirates. This case illustrated the similarities between Indian and South African maritime law.
The crisp issue before this court was whether at the time of the second appellant’s arrest at the respondent’s instance, there existed a maritime lien for crew’s wages entitling the respondent to arrest the second appellant by way of an in rem arrest in terms of s 3(4)(a) of the Admiralty Jurisdiction Regulation Act. The court held that a maritime lien is a maritime claim that constitutes one of the bases upon which a claimant may found an action in rem. It also confers a certain preference in ranking of claims.
The court considered the two-pronged enquiry into the existence of a maritime lien, Firstly, on a prima facie basis, whether the respondent had established the existence and nature of the claims sought to be enforced in rem against the second appellant. Secondly, the court had to determine whether the respondent prima facie established claims which, by reason of their nature and character, were protected by maritime lien in South African law.
The court was satisfied that there was no obligation on the second appellant to pay crew’s wages as these payments. The court reasoned that there had been a supervening event that caused the fulfillment of the crew’s employment contracts impossible. Therefore, there was no claim for unpaid wages giving rise to a maritime lien enforceable by an action in rem. Accordingly, the court upheld the appeal and ordered that the deemed arrest be set aside.
The court considered whether the South African Breweries (SAB), a dominant manufacturer and distributor of beer products, engaged in anti-competitive behaviour, by securing distribution agreements which constituted restrictive horizontal, alternatively, vertical practices in terms of s 4(1)(b)(ii) and s 5(1) of the Competition Act 89 of 1998 (‘the act’).
The commission challenged the distribution agreements and alleged that the SAB had contravened s 4(1)(b)(ii) of the act as a result of the exclusive territories awarded to appointed distributors (ADs) for distribution, amounting to a market division. The relationship between SAB and the AD’s were considered to determine whether they were competitors as contemplated in the act.
In applying the concept of ‘characterisation’ the pivotal question is a) whether the parties were in a horizontal relationship; and if so, b) whether the case involved the division of markets as contemplated in the act.
The court confirmed that, the ADs could not be seen to be autonomous economic actors, independent of the SAB, and were not in a competitive relationship with one another. Further, the true relationship was primarily a vertical one, encompassing a horizontal component, flowing from the vertical arrangement. The agreements did not amount to lessened intra-brand competition, preventing rival distributors from succeeding in the distribution within the market.
The court held that, there was not enough evidence to support the contention that the agreement had the effect of substantially preventing or lessening competition in the market, thus, there was no diminished consumer welfare supporting the prevention of competition in the market. The appeal was dismissed with costs.
The Competition Appeal Court considered whether the appellant’s pricing on polypropylene (PP) constituted excessive pricing and hence contravened section 8(a) of Competition Act 89 of 1998 (the act).
In establishing the proper interpretation of excessive pricing, the court looked at s 8(a) read with s1(1)(ix), placing more emphasis on the phrase ‘economic value.’ It considered domestic and foreign decisions and arrived at the determination that the pricing standard to be assessed should be the actual sale price and not a hypothetical price.
Regarding the economic value costing assessment, the court underscored the need to take into consideration costs that include depreciated insurance values related to capital costs; the tax effects, capital reward charges and common costs.
The court also looked at the reasonableness of the sale price when taken in relation to the economic value. It held that for s 8(a) to apply the price should be higher than economic value and should bear no reasonable relation thereto.
Acknowledging that the evaluation is a value judgement, the court rejected the Competition Tribunal’s assessment arguing that prices above economic value are not per se unreasonable. Instead, it held that conscious of the low nature of the price mark-up, there was no justification for judicial interference as this did not constitute a substantial increase.
The court thus concluded that the price did not constitute excessive pricing as required by the act. The appeal was therefore upheld.
The court considered whether a licensing agreement concluded between the parties, granting certain rights for a period of 5 years, amounted to a merger in terms of s 12(1) of the Competition Act 89 of 1998 (the act).
The focus was on whether the transaction would lead to structural changes in the market, thus, whether there is a reasonable chance that the transaction could impact on a competitive market outcome. It was argued that the transaction amounted to a transfer of the second respondent’s business, thus an acquisition of control. The court considered what is the appropriate test for acquiring or establishing direct or indirect control over the whole or part of the business for another was. Thus, in line with USA academic Professor Herbet Hovenkamp’s ‘Hovenkamp test’, the component of the business which was transferred must have constituted part of the business of the transferor, which has now been placed under direct or indirect control of the transferee.
The court held that, there had been no transfer of productive capacity which would amount to the transfer of market share, indicating that the transfer of the business could not have taken place within the realm of the license agreement. The court ordered that the commission was to give a report ascertaining whether there had been a change of control, and if it had, then the matter was referred back to the tribunal for determination.
The court held that, there was nothing in the agreement which amounted to a merger as defined in terms of the act. Appeal upheld.
The appellants are the only producers of andalusite in South Africa. The appellants notified the competition commission (the commission) of an intermediate merger in terms of s13A Competition Act 89 of 1998 (the act), which the commission prohibited. The competition tribunal (the tribunal) confirmed that prohibition. The appellants appealed to the competition appeal court (‘CAC’) contending that the merger should have been permitted subject to tendered conditions.
The CAC held that the tribunal ought to have relied on the s12A test where:
(i) it determined at first whether merger is likely to substantially prevent or lessen competition ;
(ii) whether the merger can or cannot be justified on substantial public interest grounds by assessing the factors set out in s12A(3) of the act; and
(iii) if the determination in (i) is ‘no’, the tribunal must determine whether the merger can or cannot be justified on substantial public interest grounds.
The CAC concluded that the merger was anti-competitive as it would give rise to a monopoly market. Additionally, the merging parties failed to portray any pro-competitive gains or public interest considerations which justified the merger. The appeal was therefore dismissed.
This application was in relation to a court order that the Competition Appeal Court (the CAC) granted in June 2016. This order held that the agreement between the first and second respondents did not give rise to a merger within the meaning of s 12(1) of the Competition Act 89 of 1998 (the act).
In the current application, the core issue to be resolved was the proper interpretation of the order granted by the CAC. Furthermore, evidence was sought to be led with regards to the parliamentary hearing that was conducted on 7 December 2016.
The CAC held that this order was clear and unambiguous. Accordingly it was not open to the CAC to give it a fresh interpretation or to supplement its meaning.
With regards to the parliamentary hearing, the CAC held that an order which would empower the commission to conduct interviews with both Mr Naidoo and Ms Makhobo fell outside the scope of the order it granted in June 2016. However, since the transcript of the parliamentary hearings was a public document, it found it not to be an obstacle to have the commission examine this transcript. The CAC held that whatever information contained in this transcript may be employed by the commission in order to make a recommendation as to whether the agreement falls within the definition of merger in terms of the act.
Competition – Unlawful Competition – Collusive Tendering – appropriate penalty
The case is an appeal by Media 24 Property Ltd which owns Forum and Vista community newspapers distributed in Welkom town against a decision of the Competition Commission Tribunal (the tribunal) which found that the selling of Forum newspaper in Welkom was predatory in contravention of s 8(c) of the Competition Act (the act). The tribunal ruled that the Forum newspaper was priced below the average cost to the detriment of other newspapers. In order to reach its decision, the tribunal employed the Average Total Cost concept (ATC).
On appeal, the appellant was challenging the use of the ATC concept as an appropriate benchmark for determining predatory pricing under the act. The court held that there are two tests for determining predatory pricing under s 8(d)(iv) being the benchmark of marginal cost and the Average Value Cost (AVC). It ruled that in order for the respondent (the commission) to show that the conduct of the appellant was predatory in nature, it needed to establish that the appellant is the dominant firm involved in selling goods below the marginal or (AVC). The court found that the ATC standard cannot be used to measure predatory pricing. It ruled that the Average Avoidable Cost (AAC) was the appropriate cost benchmark to determine predatory pricing. In light of evidence provided by the parties, the court found that the respondent failed to prove that Forum’s AAC exceeded its revenue hence the appeal was upheld.
Competition – Shareholders agreement – Non-compete clause – Whether a violation of horizontal restraints under the Competition Act
Contract – limitation of liability clause – suing in delict to escape application of limitation of liability clause
Delict – wrongfulness – duty of care
The applicants sought to interdict the respondents from applying the provisions of the Medicines and Related Substances Act (Medicines Act) and prevent them from seizing and detaining Playboy e-cigarettes and hookahs pending the outcome of part B of the application. A consignment of e-cigarettes belonging to the first applicant was seized by the first respondent. Part B of the application was a review of the decision by the respondents to amend Schedules 1, 2, and 3 of the Medicines Act.
The two issues in dispute were that the Medicines Act was being selectively enforced against the applicant as there had been no measures or steps taken in the past against other importers, distributors or retailers of e-cigarettes. Secondly, that the seizure of the consignment was not in accordance with the Medicines Act.
The respondents contended that selective enforcement took place due to capacity constraints. Whether or not the selective enforcement was constitutional depended upon whether there was a rational basis therefor. The court held that the selection was irrational and targeted the applicant for no objective reason. The means by which the respondent went about enforcing the Medicines Act against the applicant and no other retailer, distributor or importer was not connected to the governmental purpose of regulating e-cigarettes containing nicotine. The seizure of the consignment was set aside in terms of the Promotion of Administrative Justice Act. The court held that there was no need to make a determination on the interpretation of the Medicines Act.
The application was granted with costs.
South African Airways (SAA) received government funding on four occasions (since 2007). The applicant contended that SAA’s operation was non-commercial, anti-competitive and prejudicial to other air transport services. The decisions to issue a R5.6 billion guarantee to SAA on 26 September 2012, and to extend the guarantee’s period, were the subject of the review. Applicant argued that the decision was unlawful and ultra vires of the Public Finance Management Act; violated the separation of powers; violated sections 7(2), 9, and 22 of the Constitution; irrational; procedurally unfair; and in violation of Comair’s legitimate expectations.
The court held that pronouncing on the legality of the first decision was moot as there would be no utility in the order or in pronouncing on the issues related to it. It was separate from the extended guarantee. Furthermore, the court found that it did not have jurisdiction to decide issues based on Competition Law. The court also held that it was not in its jurisdiction to decide on matters of policy, to which the decision to issue the guarantee amounted.
Due to the dynamic nature of the market, need for flexibility, and to intervene in the dire circumstances of SAA as a strategic asset, the court held that there was no basis for forming a legitimate expectation by the applicant. The court also held that the decision was rational as it considered all relevant factors and involved multi-level input from different governmental departments.
The application was dismissed with no order as to costs.
This issue was whether the Minister of Finance (applicant) has powers to intervene where the respondent's (Oak Bay Investments) bank accounts were being closed. In deciding the case, the court employed the Superior Court Act 10 of 2013 (the act) which empowers the court to enquire into and determine any rights and obligation a person can claim.
The court held that the enquiry envisaged by s21(c) of the act encompasses a two-legged enquiry. The court must be satisfied that the applicant is a person interested in an existing, future or contingent right and whether the case is a proper one in which to exercise its jurisdiction.
The court ruled that there is no statute that empowers a minister to intervene in a private bank client dispute. Banks can terminate a relationship with a client at their own discretion. It observed that there was no uncertainty in regard to the relief sought by the applicant as there was a court precedent relating to relief being sought. The court held that the Minister of Finance through his counsel knew very well that he has no power to intervene. The court ruled that it is not obliged to grant the order sought by the minister because there was no uncertainty in regard to the legal question. It ruled further that to allow the relief sought would breach the principal of separation of powers as it will amount to judiciary to stray into domain of the executive.
The applicants sought an interim interdict against the respondent bank, with which they had a bank-client relationship, to restrain it from terminating the operations of the applicants’ banking facilities.
The court considered whether courts could direct the respondent to continue its operations in the country against its will. The court held that the respondent’s decision to exit the country’s banking sector is one that the courts cannot interfere with.
The court relied on the respondent’s constitutional right to trade, which also entails the election of not utilising such right. The court remarked that the respondent’s decision to cease operations in the country rested on commercial considerations which were highlighted in para 15 of the judgement.
The respondents right to or not trade supersedes any right the applicant may have, thus the application was dismissed with costs.
The applicants sought an order declaring that the respondent’s premature removal of an advertisement from a billboard under the latter’s control was unlawful and unconstitutional. The advertisement concerned Israel’s occupation of Palestine depicted by contrasting maps.
The applicants contested the removal on several grounds, including freedom of expression, which is entrenched by section 16 of the Constitution of the Republic of South Africa. Because respondent was not a state entity, this raised questions of when s 16 may be horizontally applied.
The respondent substantiated its conduct in terms of its agreement with the second applicant, arguing it was permissible due to the advertisement’s alleged contravention of the City’s advertising by-laws, the Practice Code of the Advertising Standards Authority, as well as its own internal policies.
The court found no legitimate basis in the parties’ agreement, on these facts, for the respondent’s removal of the advertisement prior to the stipulated flighting period. As a private body, the respondent was not positively burdened with respecting, promoting and upholding the applicants’ right to freedom of expression. However, it still faced a negative duty not to interfere with it.
The court granted the application and directed the respondent to reinstate the advertisement, subject to practical qualifications. A portion of 9(h) of the Outdoor Advertising By-Laws of the City of Johannesburg was held to be invalid for exceeding the constitutional limitations of free speech.
Competition - prohibited practices - quantifying a damages claim based on the finding of a tribunal