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MARGARET
INSAIDOO J (MS).
R U L I N G
This is· an application to set
aside the writ of summons and
statement of claim filed by the
Plaintiff in this suit.
The arguments by the
Defendant/Applicant were that the
Plaintiff lacked capacity to
institute the action contrary to
sections 302, 103, 137 (1) and 137
(3) of the Companies Code.
That a search conducted by him at
the Department revealed that the
Company their records.
Registrar General's is not 'Known'
in
Additionally, the Power of
Attorney exhibited had not been
dated. Thus the above reasons were
fatal to the Plaintiff's case and
could not be cured under any
circumstances. Counsel cited the
cases of Wassa Mineral
Resources Ltd vs. Moydrow Ltd & 5
ors., decided on 11th
May 1995 by Justice D. K. Afreh
sitting as additional High Court
Judge. Akrong vs. Bulley [1965]
GLR 469.
The Plaintiff/Respondent in
response relied on the Rules of
court to demonstrate that the
application ought to fail. He was
emphatic that the application did
not comply with Order 9 rule 8 of
CI 47.
That the applicant could only set
aside the writ if it had entered
conditional appearance and even
so, he could only do so within 14
days. However the applicant's
instant application has been
brought 56 days clear working days
from the date of the entry of
appearance contrary to the rules;
and the applicant had neither
filed a conditional appearance nor
filed it within the 14 days as
required by the rules.
Thus the application is not in
compliance with the rules and same
is in breach and out of time with
the rules of court and cannot be
heard.
Applicant also relied on Order 81
rule 2 (2). However, the
respondent drew the court's
attention to the fact that the
rule could only be invoked if:
a) The application was made within
reasonable time. The party
applying had not taken a fresh
step after knowledge of the
irregularity.
The applicant had not met the
above criteria thus the applicant
having taken fresh step by filing
a statement of defence and
counterclaim the day after filing
the motion to dismiss the suit and
not within a reasonable time
should be forbidden from see king
shelter under that rule since the
provisions are mandatory and the
applicant is in blatant violation
of the rules of the court, the
matter was bereft of any legal
justification and should not be
heard.
THE COMPANIES CODE
Section 103, entitled "Power for
the company to keep branch
registers." is irrelevant to the
case
Section 302 also not relevant here
because is a foreign Company
under Section 315 of the code
is.
The Plaintiff is not required to
register within the jurisdiction
nor is it required to have an
established place of business
before it can access the
jurisdiction of the court.
Therefore the Plaintiff has
capacity to sue within the
jurisdiction. C. A. decision in
Adusei vs. Dinners Club [1982/83J
GLR page 809-816.
Additionally, Section 3 of the
code says that the Plaintiff can
access the courts even without a
Power of Attorney and the Power of
Attorney is given by the Managing
Director of the Plaintiff Company
and therefore the Managing
Director has the capacity to
donate the Power of Attorney and
the Defendant's are estopped from
denying this capacity after
accepting the agency agreement
from the same Managing Director.
The applicant referred us to the
case of Wassa Minerals
Resources limited v Moydrow
limited and 5 others. (supra)
In that case, In December, 1994
the Plaintiff Company brought an
action against the defendants
claiming 11 reliefs. For the
determination of the application
under consideration, it is
unnecessary to consider the claim
in detail. But it includes:
i)
A declaration that by reason of
the termination of Heads of
Agreement dated January 31, 1994
the Plaintiff and the Government
of Ghana are the only shareholders
of third Defendant Company.
ii) A declaration that the fourth
defendant is not competent to
remain a director of the plaintiff
company or of the third defendant
company.
iii)A declaration that the
competent to remain a defendant
company. fifth defendant is not
director of the third
iv) Damages against the fourth,
fifth and sixth defendants for
conspiring to injure and injuring
the plaintiff company.
In paragraph 22 of his Statement
of Defence filed on 6/1/95 the
fourth defendant has challenged
the propriety of the action on the
ground that at no time has the
plaintiff company decided to
institute the present action or
action of that nature and that
there is absolutely no authority
emanating from the plaintiff
company for the institution of
this action and consequently
contends that the action has been
instituted without proper
authority from the plaintiff
company, the name of which has
been unlawfully misused for this
purpose. He claims therefore that
this action ought ~o be dismissed.
Section 210 (2) significantly,
provides:
"Proceedings may be instituted by
the company on the authority of
the board of directors or of any
receiver and manager or liquidator
of the company, or of an ordinary
resolution of the company which
shall either have been agreed to
by all the members of the company
entitled to attend to and vote at
a general meeting or have been
passed at a general meeting".
Justice Afreh held at the High
Court that "This shows that a
single director, even the managing
director, cannot institute
proceedings in the name and on
behalf of the company without the
authority of the board of director
or of an· ordinary resolution
of the company to enforce the
duties of a director."
However, the court of appeal
decision in the case of : Edusei
v Diners Club Suisse SA [1982-83]
GLR P 810, 1n my view still holds
sway.
In that case, the plaintiff, a
Swiss limited liability company,
obtained a summary judgment
against the defendant in the High
Court, for the sum of 12, 000
pounds sterling, being the
outstanding cost of credit
facilities granted to the
defendant in Europe. The defendant
in the instant proceedings,
appealed against the judgment,
inter alia, on the grounds that:
(a) the transactions took place in
Zurich, Switzerland so that courts
in Ghana could not entertain such
an action; (b) the procedure for
summary judgment adopted by the
plaintiff did not allow its solici
tor in Ghana who had no personal
knowledge of the facts, to depose
to the supporting affidavit and
therefore the deposition was
incompetent in terms of the Court
of Appeal decision in Accra
Furniture and Rubber Foam Co. Ltd.
v. Indart S.P./A. of Rome [1973J 2
G.L.R. 289; and (c) which is
relevant to our case here, the
plaintiff being a foreign limited
liability company, lacked the
capacity to sue in Ghana as it was
neither registered nor carrying on
business in Ghana.
Held, dismissing the appeal:
(1) There was nothing on the
evidence
to show that Zurich was
intended as the exclusive forum
for the settlement of disputes
between the parties. Besides, by
appearing unconditionally to
the writ, the defendant
was deemed to have waved
any issue relating to the
appropriateness of the forum.
(2) The requirement of personal
knowledge of facts attested
to in an application for
summary judgment, had undergone
some modifications since the Court
of Appeal decision in the Indart
case decided in 1973. Under
the new Order 14, r.4 as
set out in the Schedule to
the High Court (Civil Procedure)
(Amendment) (No.2) Rules, 1977
(LI 1129), it was
provided that "Unless the Court
otherwise directs, an affidavit
given under rule 2 or 3
may contain statements of
information or belief with the
sources and grounds thereof. "
(Page 812)
(3) A court must be satisfied that
the parties appearing as suitors
before it, did exist as legal
.personae whether human in form or
artificially created. In the
latter class of cases, the court
must see whether the legal indices
that constituted the clothing
really adorned a legally
acceptable fictional character,
permitting it access
to our courts. In the instant
appeal, no challenge was made
to the fictional character of
the plaintiff as a limited
liability company. The challenge
was made to their
recognition as a foreign company
in the Ghanaian courts.
The attack was not against the
plaintiff's incorporation but
non-incorporation under the laws
of Ghana.
In the circumstances, the
defendant had the burden of
satisfying the court that
under Ghanaian
law,
a
company so
limited
in its liability but not
registered
or carrying on business
in Ghana was debarred from suing
in our courts. However, the
legal
position was that where the
identity of
a
limited
liability
company was known as in
the instant case, a necessary
assumption was that a
fictional entity
created by
law existed and that
body
could pursue legal actions. The
only limitation
was that the
court in their discretion,
would impose security for costs.
That was only fair
so that the party sued, if
victorious,
would not be damnified in seeking
relief from the plaintiff who was
chasing
a
mirage in foreign
climes.
Per Francois J. A. Apart from ci
ting the Levandowsky and Vincenta
cases, learned counsel for the
appellant made no effort
to bring to our
attention, any authority (statute
law or case law) where a foreign
limited liability company
has been denied access to
our courts. In the Merabello case
it was held that a foreign
limited liability company
need not have carried on business
or have had a place of business in
England to be amenable
to English jurisdiction on
winding-up proceedings provided it
had assets to be dealt with
within the jurisdiction. The
Levandowsky and Vincenta cases
involved partnership or firms, not
limited liability
companies. The decisions derive
their viability from the
interpretation of Order 48A of the
High Court (Civil Procedure)
Rules, 1954 (LN 140).
That Order permits partnership
actions to be prosecuted in
our courts, where it is disclosed
the partnerships are either
registered or doing business here
and the suit is by an
identifiable human persona suing
for the partnership. But with a
limited liability company; the
identity of the company is known
at law.
CONCLUSIONS
Upon considering all the
submissions and authorities cited
by both counsel, it is my
respectful view that this
application must fail. The writ of
summons as filed is competent and
the plaintiff has capacity to
pursue his claim. The application
is thus dismissed.
Costs of three million cedis
(¢3,OOO,OOO.OO)
(SGD)
MARGARET INSAIDOO
J
(MRS)
PARTIES:
PLAINTIFF ABSENT
DEFENDANT PRESENT
COUNSEL:
Nil OMAN BADOO FOR THE PLAINTIFF
T. N. WARD BREW FOR THE DEFENDANT
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