Commercial Law Index

The issue was whether a donation of an interest in a close corporation to the third respondent by the deceased could be declared unlawful and void for lack of consent in terms of s 15(2) and (3) of the Matrimonial Property Act (MPA). Further, if failure to set aside the donation timeously amounted to ratification in terms of s 15(4) of the MPA.

The court held in terms of s 15(4) that consent may be given by way of ratification within a reasonable time. If there was a lack of consent when entering into the transaction, the question is whether objectively, the benefiting party could have reasonably known that consent was required.

The court found that failure of the applicant to institute proceedings timeously does not support the conclusion that it was ratification in terms of s 15(4). The court also found that the conclusion of the transaction lacked the required consent. In that light, objectively, it was not incumbent for the third respondent to investigate the legal character of the deceased's first marriage before she accepted the donation. Therefore, deemed that there was consent in terms of s 15(3).

The court accordingly dismissed the application

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.

The applicant brought a complaint against the defendants for contravening the market allocation prohibition of the Competition Act (the act) by entering into an ongoing agreement allocating market territory for the sale of locking products in both the Free State and Northern Cape. They sought to have the defendant’s conduct declared in contravention and consequently interdicted and charged with a 10% turnover administrative charge in respect of the contravention.

The first issue was whether the commission could allege market allocation for all products. Looking at the legislative powers of the commission, the Competition Tribunal reasoned that since the agreement’s subject matter covered all products the commission had authority therein.

The tribunal then considered whether the agreement was still ongoing after the coming into effect of the act and s 4(1)(b)(ii). It assessed the evidence and established that the defendants had not competed with each other since the entry into agreement until the time in issue and thus the agreement remained ongoing. 

The final issue was whether the agreement’s rationale was in contravention of the section above. By looking at the ratio in American Soda Ash Corporation and Another vs. Competition Commission and Others [2005] 1 CPLR 1 (SCA) and The Competition-Commission and Pioneer Foods (Pty) Ltd, Case No: 15/CR/Feb07, the tribunal highlighted that s 4(1)(b)(ii)’s market allocation prohibition is a per se prohibition and thus there can be no justification for the conduct.

The agreement was held to be ongoing and in contravention of s 4(1)(b)(ii).

This case developed common law to hold an employer liable where one of its employees is sexually harassed by a senior employee.

The court considered the employer’s liability in tort for sexual harassment of its junior employee by a senior employee. The court held that the first and second respondent were jointly and severally liable for the damages suffered by the plaintiff as a result of sexual assault perpetrated against her.

The court applied the rule that an employer is vicariously liable for the actions of its employee when an unlawful act is connected to the conduct authorised by the employer. The court held that the first respondent placed the second respondent in a senior position of trust and thus had the responsibility of ensuring that the second respondent was capable of that trust. This trust created the causal link between the second respondent and the wrongful act and that the employment relationship facilitated the sexual harassment.

The court also found the first respondent liable for imposing a two-week suspension as opposed to dismissing the second respondent for sexual harassment of a younger subordinate.

Accordingly, the court granted the application for damages in the sum of R4 million jointly and severally from the first and second defendant.

This was an application to compel the Competition Commission of South Africa to produce a record of investigation.

The issue emanated from an investigation by the respondent on banks on allegation of collusive conduct in regard to trade in foreign currency.  The applicant was one of the banks investigated. The applicant requested without success on several times for the record of investigation from the respondent. It then made an application to compel the respondent to provide the record.

The respondent opposed the application arguing that the applicant should have proceeded by way of review under Promotion of Administrative Justice Act (PAJA) because its action amounted to an administrative act. The applicant on the other hand argued that the commission’s conduct did not constitute administrative action and the tribunal should consider the application.

In deciding the matter, the Competition Tribunal held that the respondent action did not qualify as administrative action because it does not meet the requirement of finality. However, it found that the Competition Commission cannot be compelled to provide the requested record because of the complex nature of the process. It ruled that the respondent should provide the requested record during discovery.

The respondent refused to accept the principle of simple interest. The appellant declined to pay compound interest. The dispute was taken to court for resolution. The liability whether to pay compound or simple interest can only commence from the date when the dispute whether to pay that interest is resolved.

The court held that when determining which interest to use a clear distinction needs to be made between the reasons for awarding a simple interest and those that justify an award of compound interest in legal proceedings. A simple interest arises invariably when a party which is liable or owes money fails to pay what is due before or on the date agreed, stipulated, implied. The court exercises its discretion as to the rate and date when interest shall be paid.

However, the award of compound interest depends on other different criteria beside the discretion of court. Compound interest is not founded simply on the mere fact of indebtedness nor on the date the principal debt becomes due nor on the duration it has taken to pay since accruing. It is based on one or more of a multiplicity of reasons such as the law applicable to the transaction, the nature of the business transacted or agreed between the parties, the construction of the agreement or contract made between the parties, the trade custom of the business out of which the indebtedness arose, intentions of the parties or the consequences of the commercial transaction that was concluded between them.

The court concluded that the arguments advanced on behalf of the respondent did not point to the award of a characteristically compound interest. There was no evidence presented or authorities cited to suggest that in this case compound interest was intended, implied or anticipated by the parties or implied by law. The authorities cited in this appeal did not assist court to decide that there was a compound interest implied or contemplated in this case. In the result, the appeal succeed.

The first issue was whether the appellate court erred in law and in fact to conclude that the respondent could not be sued. The court observed a difference in the extent of immunity accorded in the domestic act and that granted in the Eastern and Southern African Trade and Development Bank Charter of the Preferential Trade Area (PTA) for Eastern and Southern African States (the charter) and Eastern and Southern African Trade and Development Bank Act (the act), with the charter providing for absolute immunity whilst the act offered functional immunity. It reasoned that the intention of the act is to govern the relationship between Uganda and the respondent. Applying the ejusdem generis rule (that a general term describing a list of specific terms denotes other things that are like the specific elements) to interpret the objectives of the act, the court concluded that immunity was not intended to extend to third party relationships as these are not covered by the functionality principle underpinning the act. The court held the appellate court erred in its finding and instead concluded against immunity.

The second question was whether it was a procedural requirement to obtain a waiver before instituting suit against the respondent. Reiterating the functionality basis of the respondent’s immunity and the fact that it did not extent to suits from third parties for contractual breach, the court reasoned that the waiver requirement was inapplicable and unnecessary. It thus concluded that there was no need to obtain a waiver before commencing suit and allowed the appeal. 

The applicant in this application sought for an order staying the execution of the
judgment of the court of appeal until the determination of the appeal to this court, and
that costs of the application be provided for.

This is a second appeal from the Court of
Appeal which dismissed the appellant’s
appeal against the judgment and orders of the
High Court. The background is that the
second respondent obtained a loan from UCB
and they were given a tractor and a trailer
which was attached and the first respondent
sued to recover on the claim that it had been
wrongly attached. The trial court and the court
of appeal dismissed the suit hence this further
appeal on the grounds that the sale and

auction was unlawful, the mode of recovering
the property and the holding that the plaintiff
wasn’t a bonafide purchaser for value.

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.

The matter involved a dispute as to whether there was a contract and in effect breach of contract.

The main issue before the court was whether there was a contract for sale of goods and in consequence whether there was breach. Citing trite law that there is no contract if there is no agreement on the essential terms of contract, the court established that the alleged contract did not mention the amounts allegedly guaranteed whilst the demand for payment itself was not linked to the telephone transactions. The court considered the definition of a proforma invoice and concluded the alleged contract was part of negotiations and was therefore an offer to treat. As there was no indication of agreement on the essential terms, there was therefore no contract and consequently no breach of contract.

In obiter, the court also dealt with the question whether special damages were rightfully awarded by the court a quo. Acknowledging special damages as damage in fact caused by wrong and the claim requirements for specificity of pleading and proof, the court concluded that the award of special damages was inconsistent as liability could not be imported on a non-existent contract.

The court thus concluded in favor of the appellant and allowed the appeal.
 

The applicant approached the court to set aside the legal opinion and report of the first and second respondents’ respectively and in turn, the respondents challenged the validity of the application before the court.  

The court considered whether the applicant was properly incorporated and whether it had locus standi to bring a petition before the court. 

It was held that the applicant indeed did not have locus standi to petition the court to challenge the findings of the respondents due to not being properly incorporated. 
The court found that the merger between the entities that formed the applicant was in contravention of both the Constitution and legislation regulating companies. The court held that the Constitution was violated on two occasions. Firstly, when an agreement was entered into with an entity controlled by the government without the approval of the Attorney-General. Secondly, when the entity controlled by the government decided to hold a minority shareholding in the company that assisted in incorporating the applicant, which had the effect of parliament not having control of the funds as required. Legislation regulating companies was not complied with since the requirement for incorporating a private company was not observed. 

As a result, the preliminary objection raised by the respondents succeeded. The applicant did not exist in law thus it could not sue or be sued. No costs ordered as the applicant does not exist. 
 

The case was an application seeking to revive a consent judgment set aside by the registrar of the court. 

The dispute emanated from an application by the respondent seeking an order to nullify registration of property in the name of the defendants (who are now applicants). The order was granted under an ex parte application because the respondents failed to respond to the suit. The respondents tried without success to appeal the judgment.

The respondents then filed a notice of appeal to the Appeal Court seeking to appeal against the order of the High Court dismissing the application. They also requested an interim order for stay of execution. The applicant (who is now the respondent) objected to the appeal arguing that it was late which was confirmed by the registrar. The respondents referred the matter to a single judge and pending the determination by the judge, the parties entered into a consent judgment which was endorsed by the registrar. The registrar later set aside the consent judgment which the applicants are now seeking to revive.

In deciding the case, the court held that there was no appeal before the single judge because the applicants filed the appeal late. The court ruled that the registrar has no jurisdiction to hear and dispose an appeal. It found that the registrar erred when he entered a consent judgment on a matter which was on appeal before a court. It further ruled that the consent judgment was null and void thus it cannot be revived.

Two applications where lodged by both parties. The first application sought the rejection of a lodged case on the ground that the defendant in the suit, described as ‘the board,’ was a non-existing person, with no capacity to sue or be sued. Immediately thereafter, the applicant lodged the second application where he sought leave to amend the initial suit by adding a Pastor Kayanja as a party to the suit, in addition to the board.

In its judgement this court held that the board did not exist in law. The application to add Kayanja was held to be an attempt to substitute a non-existing defendant and thus in reality there was no valid plaint in the suit. The reason being that a suit in the names of a wrong plaintiff or defendant cannot be cured by amendment (as the applicant attempted to).

Hence, the first application succeeded, and the second application was dismissed.