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ALLEGATION OF FRAUD NOT PARTICULARISED IS USELESS AND CANNOT SUCCEED

Dictum

This is because in law, an allegation of fraud requires that the particulars of fraud be set out to confer any modicum of seriousness on such an allegation of fraud to warrant further enquiry into it at trial. In other words, unless and until an allegation of fraud is, expressly, made and supported by its particulars, it is a non-starter as it is well settled that a mere or bare or banal allegation of fraud, no matter how grave, is of no moment if it is not supported by the relevant particulars as required by law, Nammagi v. Akote [2021] 3 NWLR (pt. 1762) 170. An allegation of fraud that is merely generic, vague and lacking in the specific and particulars is in law a non-starter and useless, PDP v. INEC and Ors (2012) LPELR 9724 (SC) Nishizawa Ltd v. Jethwani (1984) 12 SC 234; UBA and Anor v. Alhaji Babangida Jargaba [2007] 11 NWLR (pt. 1045) 247.

— C.C. Nweze, JSC. APC v. Sheriff (2023) – SC/CV/1689/2022

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FROM THE FACTS AND CIRCUMSTANCES OF THIS CASE IT SHOWS THAT ARBITRATION MAY BE MORE OPEN TO FRAUD

582. Regardless of my decision, I hope the facts and circumstances of this case may provoke debate and reflection among the arbitration community, and also among state users of arbitration, and among other courts with responsibility to supervise or oversee arbitration. The facts and circumstances of this case, which are remarkable but very real, provide an opportunity to consider whether the arbitration process, which is of outstanding importance and value in the world, needs further attention where the value involved is so large and where a state is involved. 583. The risk is that arbitration as a process becomes less reliable, less able to find difficult but important new legal ground, and more vulnerable to fraud. The present case shows that having (as here) a tribunal of the greatest experience and expertise is not enough. Without reflection, then a case such as the present could happen again, and not reach the court.

— R. Knowles CBE. FRN v. Process & Industrial Developments Limited [2023] EWHC 2638 (Comm)

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WHAT IS FRAUD?

What then is fraud or what in law can amount to fraud? In law, fraud has simply been defined as an advantage gained by unfair means; a false representation of fact made knowingly, or without belief in its truth, or recklessly, not caring whether it is true or false. Fraud also means an intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right. It is also a false representation of a matter of fact whether by words or by concealment of that which should have been disclosed, which deceives another so he shall act upon it to his legal injury, Jowitt’s Dictionary of English Law, Vol. 1, 2nd Edition, p. 827; Black’s Law Dictionary, 8th Edition, p. 660.

— C.C. Nweze, JSC. APC v. Sheriff (2023) – SC/CV/1689/2022

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WHERE FRAUD, COURT WOULD LIFT THE VEIL OF INCORPORATION

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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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 entity as distinct from its directors. Most companies in this country are owned and managed solely by an individual, while registering the members of his family as the share holders. Such companies are nothing more than one-man-business; hence, the tendency is there to enter into contract in such company name and later turn around to claim that he was not a party to the agreement since the company is a legal entity.

– MUNTAKA-COMASSIE JSC. Alade v. Alic (2010)

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FRAUD IN CIVIL SUIT MUST BE SPECIFICALLY PLEADED

It is trite law that where fraud is alleged it must be specifically pleaded and the particulars of the fraud given in order to enable the party defending the allegation to understand the case he is facing and thereby prepare his defence.

– Amaizu, J.C.A. Adeniran v. Olagunju (2001)

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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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