Commercial Law Index

The court considered whether a Financial Services Provider (FSP) as regulated according to the Financial Advisory and Intermediary Services Act (FAAIS) was negligent by advising the plaintiff which led to a loss of two million Rands.  Further, if the second defendant was liable to indemnify the first defendant for professional negligence considering the exclusion clause in the insurance contract.

The court held that s 16 of FAAIS requires that an FSP act honestly, fairly with due skill, care and diligence. Further that the FAAIS Code of Conduct requires professionalism, in the interest of the public.  In the case of an insurance contract, the court held that an exclusion clause might make proper commercial sense, be consistent with and not repugnant to the purpose of the contract.

The court concluded that the defendant did not act in accordance with expectations of an FSP, the defendant was negligent and dishonest. Further, the purpose of the insurance contract was to indemnify the insured for professional negligence; the exclusion interpreted restrictively cannot be applicable in the case.

The defendant was ordered to pay damages of two million Rands plus interest and second defendant to indemnify the first defendant.

The issue was whether the trial judge’s decision was affected by the lapse of time (19 months) between the adoption of written addresses and the delivery of judgment. The dispute emanated from the dismissal of the respondent as the principal assistant registrar of the appellant college. The respondent successfully challenged the dismissal and the lower court awarded him damages amounting to approximately 1.6 million Naira together with reinstatement. 

The appellant challenged the lower court’s ruling on the grounds that due to the time lapse between the hearing of evidence and delivery of judgement the trial judge was not able to make proper judgement. The appellants further argued that the s 294(1) Constitution requires that judgement must be delivered in 3 months.

The court pointed out that section 294(5) of the Constitution also provides that delay in the delivery of judgment does not lead to a judgment being vitiated. The delay must occasion a miscarriage of justice to result in such a conclusion. 

In deciding the matter, the court held that the errors made by the trial judge shows that he was no longer in position to properly appraise the evidence. This resulted in the miscarriage of justice 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.
 

The court was called upon to review a decision of the Court of Appeal that held that a lawyer without a valid licence to practice cannot practice law nor prepare any court process. The court below held that any process originated by a lawyer without a licence is null. The majority decision of the court held that where a lawyer endorses a writ and court process, but he did not have a licence at the time, he cannot be said to be functioning as a lawyer and not capable of endorsing the court process. A litigant who fails to verify the legal capacity of is lawyer cannot claim miscarriage of justice because the writ endorsed by an unlicensed practitioner is without legal effect.

The matter involve a ruling of contempt of court against the third and fourth respondents for their conduct in attacking the Chief Justice with an accusation of bias.

The court emphasised the importance of judicial independence as enshrined in the Constitution as a necessary element in maintaining judicial dignity and effectiveness, attributes that are crucial in upholding the democratic enterprise. Any attempt to disrespect the courts therefore amounts to an attack on the role of the courts and the community at large.

The court also emphasised the right to criticise the judiciary and its circumspection in exercising its power to charge citizens with contempt. However, should the conduct be of such gross a nature as to indicate a calculated attack, as in the present matter, the court would not refrain from the charge.

The court, however, acknowledged the harsh nature of the summary powers to charge for contempt, powers it accepted required circumspection. Nevertheless, the court considered the need to send a message to remind people to refrain from crossing the line between utilizing their freedom of expression and attacking the dignity of the court. It also invoked the principles of state policy which place duties to the citizenry to ensure the exercise of their freedoms upheld fundamental democratic principles. In the view of the court, the contemnors in question had dismally failed the above and therefore they were sentenced for contempt.

The main case was dismissed because a party did not appear in court when it came up for hearing. The case dealt with an application to set aside the dismissal order of the court. The court held that an application to set aside a dismissal order must be based on sufficient reasons and the court has absolute discretion where sufficient cause is shown. What amounts to reasonable or sufficient cause has not been defined because the court should have the discretion to decide based on the circumstances of each case.

In this case, the applicant claimed they were not aware of the dismissal order. The court held that sufficient reasons were not shown and the court dismissed the application to set aside the dismissal notice because the lawyers were simply negligent.