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WHERE FRAUD, COURT WOULD LIFT THE VEIL OF INCORPORATION

Dictum

FDB FINANCIAL SERVICES LTD. v. ADESOZA (2002) 8 NWLR (Pt. 668) 170 AT 173, the Court considering the power of a Court to lift the veil of incorporation held thus: “The consequences of recognizing the separate personality of a company is to draw a veil of incorporation over the Company. One is therefore generally not entitled to go behind or lift this veil. However, since a statute will not be allowed to be used as an excuse to justify illegality or fraud it is a quest to avoid the normal consequences of the statute which may result in grave injustice that the Court as occasion demands have to look behind or pierce the corporate veil.”

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FRAUD MUST BE SPECIFICALLY PLEADED

United African Company Ltd. v. Taylor (1934) 2 WACA 67 at 71, the Judicial Committee of the Privy Council said: “In the opinion of their Lordships there is no rule which is less subject to exception than the rule that charges of fraud and afortiori charges of criminal malversation or felony, against a defendant ought not to be made at the hearing of an action unless, in a case where there are pleadings, those charges have been definitely and clearly alleged so that the defendant comes into court prepared to meet them.”

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FRAUD LIFTS VEIL OF INCORPORATION

One of the occasions when the veil of incorporation will be lifted is when the Company is liable for fraud as in the instant case. – Galadima JSC. Alade v. Alic (2010) Was this dictum helpful? Yes 0 No 0...

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COMPANY WILL NOT BE USE AS AN INSTRUMENT OF FRAUD

It must be stated unequivocally that this court, as the last court of the land, will not allow a party to use its company as a cover to dupe, cheat and or defraud an innocent citizen who entered into lawful contract with the company, only to be confronted, with the defence of the company’s legal...

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THE STATUTE OF FRAUDS WILL NOT BE USED AS AN ENGINE OF FRAUD FOR WANT OF WRITING

He is bound by his bond, notwithstanding that the transaction is not evidenced in writing. Generally, section 4 of the Statute of Frauds requires that a transaction dealing with interest in land should be by a note or memorandum in writing. On the application of the Statute of Frauds, the Full Court of Divisional Court...

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FRAUD VITIATES; FRAUD MUST BE PLEADED AND PROVED STRICTLY

In the Duchess of Kingston’s Case (1775-1802) All E. R. Rep. 623 at 629 De Grey C. J., held that: “…Fraud is an extrinsic, collateral act, which vitiates the most solemn proceedings of Courts of Justice. LORD COKE says, it avoids all judicial acts, ecclesiastical or temporal.” Again in Fabunmi vs. Agbe (1985) 1 NWLR (Pt. 2) 299, Obaseki, JSC held at page 319 paragraph “C” that: “…Fraud is a serious crime and in civil matters, the particulars must be pleaded and proved strictly.”

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