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.
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.
Contract – limitation of liability clause – suing in delict to escape application of limitation of liability clause
Delict – wrongfulness – duty of care
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 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.
The court considered whether the second respondent was an agent of the appellants and entitled to a commission.
The court held that an agency is a fiduciary relationship created when a principal gives authority to an agent to act on his behalf which is accepted by the agent. The court also held that for a real estate agent to claim commission they must show that there was an introduction of a purchaser which was an efficient cause in bringing about the sale of a property. Professional Conduct for Legal Practitioners 2007 Rule 7(2)(b) does not forbid a legal practitioner from engaging in the business of a commission agent.
The court found that there was no illegality in the agency agreement between the second respondent and appellants.
The court accordingly dismissed the appeal and awarded costs to the respondent.
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.
In this case, the appellant claimed that the trial magistrate erred in holding that the appellant had a contractual duty to inform the respondent of the garnishee order. This case illustrates the duty to inform with regards to garnishee orders that also applies to banks.
The court considered whether the trial magistrate erred in holding that the appellant was legally bound to inform the respondent on the existence of the garnishee order. The court held that a bank has the duty to inform a customer in good time of a garnishee order so that the customer may take legal steps if he so wishes. Thus, the court held that though a notice from the appellant had been made in good time the fact that it reached the respondent late amounted to a breach of the fiduciary duty between them.
The court also held that it is a principle of law that an issue not raised at trial will not be entertained on appeal. Thus, the appellant was not allowed to raise questions as to whether the garnishee order was satisfied nor whether it was set aside.
In considering general damages, the court held that the trial court was correct in awarding general damages. The court dismissed the appeal in its entirety.