Afik New 232 07.06.2017

Legislative Updates

May 8, 2017

A restaurant owner may be personally liable in case of employing of foreign employees without permit

A review by inspectors from the Population and Immigration Authority at a restaurant discovered a Ghanaian foreign employee working as a busboy and dishwasher. Both the company managing the restaurant and the shareholder thereof (who also served as the chef of the restaurant) were indicted...

May 23, 2017

‎‎‎‎‎‎‎‎‎‎Parties acting as shareholders in a company may be deemed such even if only one was registered as ‎such

A few friends formed a group of companies, but only one was registered as a shareholder in such. At some point the friends ceased working in the group and the registered shareholder claimed to be the only holder of rights while they argued that the relations were a partnership holding the shares of the companies and they have the right to be registered as shareholders and receive data on the ...

May 18, 2017

The period in which a person gave external services prior to becoming an employee may be deemed ‎part of the employment period

A person was engaged for a number of years as an external contractor and thereafter became an employee. The employer argued that the employment period commenced as of the registration as such and not at the period of external services...

May 7, 2017

Non-disclosure of material information in executing transaction constitutes deception, even if it was ‎done unintentionally

A car trading company sold a car, which was later discovered to have been with a replaced engine and defects in the chassis, all of which were not disclosed to the purchaser's attention prior to the transaction. The Seller argued that the non-disclosure was done in good faith as a result of a human error, because the salesperson who carried out the transaction was also unaware of them...

August 7, 2016

Revocation of a business permit requires due process including ‎reasonable time to prepare for a ‎hearing

A municipality revoked a business license granted to a factory on the grounds of violation of license terms...

June 1, 2017

‎‎‎‎‎‎‎‎ ‎‎‎‎‎‎‎A cautionary note will not create a secured debt if a mortgage is already recorded

To secure a loan, the debtor recorded a cautionary note in favor of the creditor on an apartment owned by the debtor and a mortgage, even though at the time the mortgage was recorded, the apartment was foreclosed by another creditor. The debtor also recorded a mortgage on another apartment, even though at the time it was already mortgaged to a bank with a note prohibiting other mortgages recordings. After bankruptcy of the debtor, the question arose as to whether the creditor is a secured creditor with priority over other creditors due to the fact that he registered a cautionary note and even a mortgage, even though both were recorded in a manner that contradicts existing records. The Court held that the recording of a cautionary note preventing the sale of an asset will create of a secured creditor status in the apartment but not when a previous mortgage exist because such previous mortgage creates the mortgaging bank the right to sell the apartment and then the cautionary note is canceled. The mortgage recorded contrary to the foreclosure of no power. However, the mortgage recorded contrary to the existing mortgage of the bank with a note preventing additional mortgages will be of no power vis-à-vis the mortgaging bank because the note is intended to protect only the rights of the existing mortgagor. Because of this, towards the other creditors the mortgage is valid and therefore the creditor will be a secured creditor having priority over other creditors.