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ANIN YEBOAH
This is a motion for
stay of execution brought by the 1st Co-Respondent/
Applicant (hereinafter called the Applicant) praying
this Honourable Court for stay of execution of the
judgment of Her Lordship Mrs. Justice Owusu-Arhin
delivered on 28/7/2003. The Applicant/Respondent
(hereinafter called the Respondent) by originating
motion on notice before the High Court, Accra prayed the
court to order the official Liquidator [the sole
respondent] to the action to declare the assets of Metal
Factory [Bibiani] Limited and a declaration that the
fully paid shareholders of Metal Factory (Bibiani)
Limited in value and Shereholding are as follows—
VALUE SHAREHOLDINGS
C.O. NYANOR
¢5,500,00 5,500,00
MENLEO ENT. LTM
600,000 600,000
STATE GOLD MINIG
COPRORATION
250,000 250,000
And that the liquidator
has to distribute the Net Assets of Metal Factory (Bibiani)
Limited in liquidation in proportion to the above
shareholdings:
ALTERNATIVELY
3. That the creditors
of Metal Factory (Bibiani) Limited who are entitled to
be paid dividends out Net Assets of Metal Factory
(Bibiani) Limited in Liquidation are as follows:
C. O.
NYANOR ¢5,500,000.00
MENLEO ENTERPRISE
LTD. 600,000.00
STATE GOLD MINING
CORPORATION 250,000.00
BIBIANI INDUSTRIAL
COMPLEX OR
OVERSEAS INVESTMENT CO.
LTD. 250,000.00
It appears from the
judgment that the action was brought by the Respondent
herein after the METAL FACTORY (BIBIANI) Limited
(hereinafter called the Company) had decided to wind up
and had indeed appointed an official liquidator in the
person of one J. K. FORSON who was the sole respondent
in this case at the court below as a liquidator under
the Bodies Corporate (Official Liquidation) Act, Act 180
of 1963. The Respondent's case was based on the fact
that the company had raised the shareholdings and
allotted shares to him for which he paid for at
¢5,250,000. He deposed that he was given share
Certificate and a receipt to evidence the transaction.
It appears that this contention of the Respondent that
he paid for the shares and that the official liquidator
should accept same as his shareholding in the company
was not accepted by the official liquidator. The
Respondent commenced this action at the High Court,
Accra for the reliefs referred to above. In course of
the hearing of the ac three shareholders, namely: MENLEO
ENTERPRISES LIMITED, STATE GOLD MINING CORPORATION and
BIBIANI INDUSTRIAL COMPLEX LIMITED were all joined as
Co-Respondents at the instance of the Respondent herein.
As said above, on 28th
August, 2003, the learned judge gave judgment in favour
Respondent and made several orders which have culminated
in the appeal and the star execution before this court.
The record shows that the first Co-Respondent, that is,
MENLEO ENTERPRISE LIMITED is the only party who has
lodged the appeal against the judgment of the High
Court. In arguing the motion, learned counsel for the
Applicant contended that the appeal raises arguable
points of law and that any refusal of the stay of
execution will render the appeal nugatory. He referred
to the governing principles on stay of execution and,
the case of DZOBO vrs. AGBEBLEWU (1991) 1 GLR 294 CA to
support his contention.
On the issue of
joinder, counsel for the Applicant has urged on this
court that the declaration by the trial judge that "the
Co-Respondents have been misjoined to the originating
summons" was erroneous. Even though at this stage an
appellate court does not make legal pronouncements on
the judgment as it does in substantive appeals, I think
when a legal point is raised this court is duty bound to
consider same. From the judgment sought to be stayed, it
is clear that it was the Respondent herein who prayed
for an order to join the three Co-Respondents, including
the Applicant in this application. They were joined
after the official liquidator had challenged the
Respondent herein on the shareholding structure of the
company and referred to the suit which the Respondent
herein claimed had not been settled. However, in the
judgment, the trial judge declared that the
Co-Respondent's' were misjoined.
I must confess that the
originating motion did not refer to any section of the
Companies Code, Act. 179 as the basis of the action. It
also did not refer to any section of the Bodies
Corporate (Official Liquidation) Act of 1963 Act 180 as
the basis of the action. Therefore it is difficult to
appreciate whether the Respondent herein as an applicant
at the court below was seeking a relief under section
217 or 218 or under any section of the said Act 179. The
Co-Respondents were joined by the Applicant himself,
presumably for the court to decide on the share
structure which affected the Co-Respondents and which
the official Liquidator was disputing.
In my respectful
opinion, I think the court below should not have
declared that they were misjoined as indeed any
declaration as to the shares of the Respondent would
affect the shareholders in the very company under
liquidation.
The learned trial judge
also made it clear that from the materials before her it
was clear from the history of the company that the
directors did not comply with the Regulations as well as
section 168 of Act, 179 which deals with resolutions.
She even proceeded to say that the shares of the company
were juggled by the directors as and when they wished
and indeed proceeded to cite as an example the
circumstances in which the Respondent herein managed to
buy the shares and paid ¢5,250,000.00 which share
purchase has been the basis of this proceedings.
As the Regulations and
the regulating statute, that is Act 179 of 1963 were all
flouted according to the trial judge, I am of the
respectful view that breach of statutory regulations
which are mandatory when apparent in any proceedings may
in appropriate cares invalidate the acts and omissions
of the company. In this case, it may even affect the
alleged issue and purchase of the shares. I consider
this as a vital legal point for consideration in the
substantive appeal and as a legal point based on
undisputed facts on record in could be raised before an
appellate court. See KWANTRENG vrs AMISSAH .s (1962) 1
GLR. 241 SC and STOOL OF ABINABINA vrs. ENYIMADU (1953)
12 WACA 171.
Another interesting
point raised before us relates to the pendency of the
suit which the trial judge was referred to. It was SUIT
No. NUSC 687/98 which was exhibited in this application
as EXHIBIT JKF 1. It is the suit between the 1st
Co-Respondent herein against the Applicant in this
application. It was commenced by Originating Motion on
Notice under sections 217 and 218 of Act 179. Both
sections deal with protection against illegal activities
of the company and oppression of rights. The action
sought to attack the very shares which as allegedly
alloted to Mr. C.O. Nyanor the Respondent to this
application. Even though terms of settlement was filed
on his behalf by his counsel on record, learned counsel
for Mr. C.O. Nyanor in course of his argument contended
that the terms of settlement was procured by fraud. Be
that as it may, the trial judge declared it to be of no
effect as it was not adopter by the court of trial.
However, the case is still pending to the extent that
there remains something to be done about it as a pending
suit.
It is still pending to
decide the share structure and the alleged allotment of
the ¢5,250.000 share to the Respondent to this
application. Its determination may have far-ranging
consequences on whatever the official liquidator will do
if it comes to apportioning of liabilities or assets of
the company.
For the trial judge to
ignore the pendency of the suit in the manner she did in
my respectful view raises serious legal argument to be
considered on appeal. In any case the suit was pending
when the Respondent herein fully aware of the
implications and the reliefs sought in the said suit
resorted to another action which substantially touches
on the same shareholding structure of the very company
whose liquidation is in issue.
I have considered the
affidavits filed on both sides and the exhibits of both
parties to this application as well as arguments from
both counsel. I am of the view that the appeal raises
serious questions of law bordering on procedure and the
legalities or illegalities governing the issue of shares
which indeed the trial judge herself acknowledges. I am
convinced that the application is deserving and I
proceed to grant some and stay execution of the judgment
delivered on 28/7/2003.
ANIN YEBOAH
JUSTICE OF APPEAL
OWUSU, J.A.
I have had the
opportunity to read before hand the decision of my
brother just read in Court and I am in entire agreement
with the conclusion arrived at, that the application for
stay be allowed. I would however add a few words in
support:
"It is the paramount
duty of a court to which an application for stay of
execution pending appeal is made to see that the appeal,
if successful, is not rendered nugatory."
See the case of JOSEPH
vrs. JEBELLE and Another (1963] 1 GLR. 387
On 29-1-2004, the
Liquidator was asked by this court to file a full
statement of Affairs of the financial position of Metal
Factory [Bibiani) Ltd.
In compliance with the
order, J. K. Forson the Liquidator did on 17/2/2004 file
what according to him is the true statement of Affairs
of the Company, as Ex" J. K. F. 1"
I have had a cursory
look of the Statement and from all indications the
amount involve a small amount.
From the Judgment the
following are the share holdings:
C.O. Nyanor
.. .. .. 5, 500,000 shares
Menleo Enterprise Ltd
.. .. 600,000 shares
State Gold Mining
Corporation .. 250,000 shares
Bibiani Industrial
Complex Ltd. .. 250,000 shares
From the above
holdings, the Respondent in this application is the
majority share holder out of the 6,600,000.00 paid up
shares, he holds over 83% of the shares.
If the application is
not granted and he is allowed to go into execution, the
bulk of the assets of the company would go to him and
the questions is will the applicant be able to recover
what might have been paid to the Respondent.?
Will the appeal not be
rendered nugatory.?
In the meantime,
according to the Liquidator, he has invested the assets
of the company so that in the event of the appeal not
succeeding, the Respondent would not suffer any
irreparable loss.
"Generally, where an
application for stay of Execution pending appeal is
considered in a case involving, inter alia, payment of
money, the main consideration should be not so much that
the victorious party is being deprived of the fruits of
his victory as what the position of a defeated party
would be who had had to pay or surrender some legal
right only to find himself successful on appeal.
Generally where large sums of money are involved the
policy of the law would not be against staying
execution; but when Execution is stayed and circumstance
permit, it should be on the condition that the
judgment-debtor pays into court the amount of money
involved, or, when refused, on the condition that the
judgment-creditor gives security which is approved by
the Judge."
The Respondent's claim
that he holds 5,500,000.00 is the subject matter of the
case MISC.687/98 titled MENLEO ENTERPRISE LTD. Vrs. C.
O. NYANOR and according to the trial judge, this suit is
still pending and therefore the legality of allotment of
the extra shares 5,250,000.00 is still in issue.
However, the
Applicant/Respondent used these shares as the basis of
his claim and this the trial court accepted even though
according to her the issue is till sub-judice. The main
issue in both cases is whether the Applicant/Respondent
herein is entitled to the 5,250,000.00 extra shares
which he claimed he purchased and paid for.
For this reason alone,
the dictates of Justice demand that execution of the
ruling be stayed pending the final determination of the
appeal.
Accordingly, I also
will grant the application as prayed.
R.C. OWUSU (MS.)
JUSTICE OF APPEAL
ANINAKWA, J.A.
I also agree.
R. T. ANINAKWA
JUSTICE OF APPEAL |
