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J U D G M E N T
ATUGUBA, J.S.C:
On the 1st day of
April 2008 the Defendants /
Respondents herein filed an
Addendum to their Statement of
Case in the following terms, as
far as relevant; “We seek to
raise a fundamental point of law
concerning the locus standi of
the Plaintiff / Appellant. We
submit that this legal question
is substantial and could be
disposed off without the need
for any evidence. In raising
this point for the first time,
we are mindful of this Court’s
holding in A – G v. FAROE
ATLANTIC CO. LTD. [2005 – 2006]
SCGLR 271 at 279 (see holding
8).
“(8) Generally, where a point of
law had not been raised in the
trial court and in the
intermediate Court of Appeal it
might not be raised in the
Supreme Court as the final
Appellate Court. However, there
are exceptions to the general
rule, namely: …(iii) where
the legal question sought to be
raised for the first time was
substantial and could be
disposed off without the need
for further evidence …”
It is our respectful submission
that at all times material to
the commencement of the action
in the trial court, the
Plaintiff / Appellant was
defunct. It had ceased to exist
by operation of law, pursuant to
the provisions of the Transfer
of Shares and merger (Kowus
Motors, Kaasbohrer Ghana Limited
and Ghana Assembly Plant)
Decree, 1979 (AFRCD 60). The
Plaintiff / Appellant,
therefore, had no locus standi
and the whole action was a
nullity.
Section 4 of AFRCD 60 provided:
“Notwithstanding anything to the
contrary all the three companies
specified in Part 1 of the
schedule to this decree and the
company known as R. T. Briscoe
(Ghana) Limited are hereby
merged into one company to be
known as the “Automotive and
Technical Services Limited”
The three companies specified in
part 1 of the schedule to the
decree included the Plaintiff
/Appellant-company. It is not
in dispute that by AFRCD 60,
Kowus Motors, Kaasbohrer Ghana
Limited and Ghana Assembly Plant
were merged into one company
known as Automotive and
Technical Services Limited
(ATS). The three companies
aforesaid lost their separate
legal identities and ceased to
exist, their place having been
taken by ATS, the new company
created by law.”
It is settled law that the test
for the validity of the
institution of an action as far
as capacity of a party is
concerned is whether the party
is non existent. Thus in
Edusei v. Diners Club
Suisse S. A. (1982 – 83) GLR
809C.A at 814 – 815 Francois
J.A. (as he then was) delivering
the judgment of the court of
Appeal said: “It is obvious that
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 constitute the
clothing really adorn a legally
acceptable fictional character,
permitting it access to our
courts.
The English decisions follow a
similar train of thought. One
perceives for instance, serious
attempts made at preliminary
stages of the trial of English
cases, to obtain the fullest
disclosures of the identity of
the foreign artificial persona
before trial: see Re Compania
Merabello San Nicholas S.A.
[1972] 3 All E.R. 448 at p. 450
where the opening words of
Megarry J.’s judgment reads,
“The company was incorporated in
Panama . . . and all the details
about the company have been
obtained from the Panama public
registry.”
In the present appeal, no
challenge was made to the
fictional character of the
respondents as a limited
liability company.”
Again in Republic v. High Court,
Accra; Ex parte Attorney-General
(Delta Foods Case) (1998 – 99)
SCGLR at 614 I said: “it is also
well established that an action
by or against a party is not
nullified unless the true legal
identity of the part in question
cannot be ascertained: see
Ghana Industrial Holding
Corporation v Vincenta
Publications [1971] 2 GLR
24, CA, which was followed and
explained in the terms I have
just set out in Mussey v
Darko [1977] 1 GLR 147, CA;
Ghana Ports & Harbours
Authority v Issoufou [1991]
1 GLR 500, CA and Kimon
Compania Naviera SARP v Volta
Lines Ltd [1973] 1 GLR 140.
In contrast is Wadad Haddad
Fisheries v State Insurance
Corporation [1973] 1 GLR
501”
Similarly, in International Bulk
Shipping and Services Ltd. V
Minerals and Metals Trading Corp
of India and others, [1996] 1
ALLE R1017C.A, the facts of the
case as stated in the headnote
are as follows:
“In 1984 the plaintiffs, two
ship-owning companies, obtained
six arbitration awards in their
names against one or other of
the two defendants. The awards
required payment by the
defendants ‘forthwith’. At the
time, the assets of both
plaintiffs were vested in a
trustee in bankruptcy appointed
under United States bankruptcy
laws, but the umpire ruled that
the trustee had correctly
brought the suits in the
companies’ names and not his
own. The companies were
dissolved in 1985 and 1986
respectively, but proceedings to
enforce the awards were
nevertheless commenced by
originating summonses issued in
their names in 1988, even though
by then they were beyond
statutory recall. The
proceedings were adjourned to
enable the implications of the
dissolutions to be considered.
In 1993 the trustee in
bankruptcy obtained leave (i) to
be substituted as plaintiff
pursuant to RSC Ord 15, r 61a
and, after issuing fresh
proceedings against the same
defendants, (ii) to serve those
proceedings on the defendants
outside the jurisdiction. In
February 1994, on the
defendants’ application to set
aside the two orders, the judge
held that when the applications
for leave were made in 1993 the
cause of action were already
time-barred, the six-year
limitation period having
expired, and set aside both
orders on the ground inter alia
that the 1988 proceedings were a
nullity since the original
plaintiffs had ceased to exist
by reason of their dissolution
before those proceedings were
issued in their names. In March
1994 the trustee applied by
further summonses for leave to
amend the 1988 summonses so as
to correct the names of the
plaintiffs from those of the
companies to his own name,
pursuant to RSC Ord 20, r 5(3)b.
That application was dismissed,
and the trustee appealed against
both the February and March 1994
judgments, contending that in
1993 the relevant limitation
period had not expired because
the defendants had not
unequivocally breached their
contractual obligation to pay
the awards, and that in any
event, he should be allowed to
be substituted for the companies
as plaintiff in the actions.”
Evans L.J delivering the
judgment of the court stated at
1023 said:
“The general rule is that an
action commenced in the name of
a non-existent person, or
company, is a nullity: see
The Supreme Court Practice 1995
vol 1, para 15/6/1, p 201,
citing Lazard Bros &
Co Midland Bank Ltd [1933]
AC 289 at 296, [1932] All ER Rep
571 at 571 at 576 per Lord
Wright, Dubai Bank Ltd. V
Galadari (No. 4) (1990)
Times, 23 February (Morritt J)
and Fielding v Rigby
[1993] 4 All ER 294 at 297 –
298, [1993] 1 WLR 1355 at 1359.”
He continued at 1024 – 1025 as
follows:
“order 15, r 6:
misjoinder and non-joinder of
parties
The court’s power to add or
substitute a new party cannot be
exercised ‘after the expiry of
any relevant limitation period’
unless-
‘The relevant period was
current at the date when
proceedings were commenced and
it is necessary for the
determination of the action that
the new party should be added,
or substituted’ (ser r 6(5)(a),
and this is ‘necessary’ only if-
‘the court is satisfied that-(a)
the new party is a necessary
party to the action in that
property is vested in him at law
or in equity and the plaintiff’s
claim in respect of an equitable
interest in that property is
liable to be defeated unless the
new party is joined’ (see r
6(6)(a).
The following sub-paragraphs are
not relevant) Rule 6(6)(a)
deals with the commonplace
situation where the equitable
assignee of a cause of action
needs to have the assignor in
whom the legal interest is still
vested as a party to the action
if he is to obtain judgment
against the debtor. But that is
the converse of the present
case, where the named plaintiffs
are the companies in whom it is
asserted, the legal estate was
vested and the trustee seeks to
be added or substituted, either
as the transferee of that legal
estate or as the person in whom
the beneficial interest is
vested. There is no suggestion
that the trustee needs to be
added so as to avoid the
companies’ claims being
defeated.
But there is a more fundamental
objection to the application
made under this rule. It is
established by authority that
the rule does not apply when the
proceedings are a nullity,
either because the person named
as plaintiff died before the
writ was issued (see Tetlow v
Orela ltd. [1920] 2 Ch 24) or a
company plaintiff had been
dissolved and ceased to exist as
a legal person (see the
authorities cited above). The
rule clearly contemplates that
there is an existing action in
which the addition or
substitution may be made, and if
there is no existing action then
it follows that the rule cannot
apply.
This may seem over technical,
and it was submitted to Waller
J. that the objection disappears
if it is recognised that an
order made under the rule would
‘relate back’ to the date of the
writ, so that the action would
continue as if the substituted
party was the plaintiff named
from the outset. But Waller J.
rejected this argument and in my
judgment he was correct to do
so. Before s 35 of the
Limitation Act 1980 took effect,
although as a general
proposition an amendment of a
writ or pleading ‘relates back’
to the original date of the
document amended, this did not
apply where the amendment
involved either adding a new
party or raising a new cause of
action: see Liff v Peasley
[1980] 1 All ER 623 at 642-643,
[1980]1 WLR 781 at 803-804 per
Brandon LJ and Ketteman v
Hansel Properties Ltd.
[1988] 1 All ER 38, [1987]AC
189. It must also be remembered
that substitution in an existing
action only becomes necessary
when a ‘relevant limitation
period’ has expired at the date
of the application, and a fresh
writ would be out of time- jus
as has happened here. To permit
substitution in such a case is
effectively to deprive the
defendant of a limitation
defence against the applicant
who seeks to be joined as
plaintiff. Now, s 35 of the
1980 Act, together with the
revised terms of RSC Ord 15, r
6, restates the general rule
that such amendments are not
allowed, but with limited
exceptions, none of which
applies here. If the need for
the application arises because,
mistakenly, the wrong person was
named as plaintiff in the writ,
or the right person was wrongly
named, then the court has power
to correct the mistake under Ord
20, r 5, which is the separate
application made here. When
that is the appropriate order to
make then the fact that the
action may be a nullity is not
relevant and the fact that the
limitation period has expired
does not prevent the order being
made.
For these reasons, I agree with
Waller J’s conclusion that the
trustee’s application under Ord
15, r 7 (Change of parties by
reason of death etc) cannot
apply in the present case
because there has been no change
in the status of the companies
since the writs were issued in
their names (cf Yorkshir
Regional Health Authority v
Fairclough Building Ltd.
[1996] 1 WLR 210). We were not
invited to consider the
trustee’s application under this
rule.”
It is true that before the
institution of the action in
this case AFRCD60 had been
repeated by the Statute Law
Revision Act, 1997 (Act 543).
But the trite statutory and
common law position of that
repeal has been stated crisply
by the defendants / respondents’
counsel in the said addendum to
their statement of case as
follows:
“The repeal of AFRCD 60 by the
Statute Law Revision Act, 1997
(Act 543), without more, did not
automatically resuscitate the
moribund legal status of the
Plaintiff / Appellant.
Against the backdrop of the
aforesaid submissions, the
Plaintiff / Appellant’s action
was clearly a nullity and should
not have been entertained at
all. This Court is respectfully
invited to so hold.”
We so hold.
We need hardly say that the
courts do not like the perdition
of cases through technicalities
and this is adverted to by Evans
L. J. in his judgment. But he
has indicated the circumstances
in which the courts can relieve
actions from vitiation for lack
of corporate existence. They do
not cover this case.
We have adverted, in a search
for tabula nufragio in this
case, our minds to Mercer Alloys
Corporation v Rolls Royce ltd.
(1972) ALL ER 211, C.A. but
this, though not expressly
referred to by Evans L.J. supra,
is covered by his delivery as to
change of parties, to a legally
subsisting action, by reason of
death, etc. Were the appellant
to have commenced its action
before its merger to ATS, Ltd,
the position might have been
different. Here however at the
date of the appellant’s action,
it was by reason of the said
merger non est. The legal
effect of a merger of corporate
bodies in amply set out in the
Respondent’s submissions which
we adopt as follows:
“Barron’s Law Dictionary (3rd
Edition) defines ‘merger’ as
regards companies / corporations
as follows:
“In the law of corporations,
a merger is effected when one
(or more corporation(s)
becomes(s) a part of or merge(s)
with another corporation; the
former corporation(s) cease(s)
to exist but the latter
corporation continues to exist.
In a merger, the company that
continues to exist retains its
name and identity and acquires
the assets, liabilities,
franchises, and powers of the
corporations(s) that cease(s) to
exist.”
Mitra’s Legal and Commercial
Dictionary (6th
Edition)
also defines ‘merger’ in the
corporate field as:
“The absorption of one company
that ceases to exist into
another that retains its own
name and identity and acquires
the assets and liabilities of
the former”.
We therefore dismiss the appeal.
W. A. ATUGUBA
(JUSTICE OF THE SUPREME COURT)
DR. S. K. DATE-BAH
(JUSTICE OF THE SUPREME COURT)
J. ANSAH
(JUSTICE OF THE SUPREME COURT)
S. O. A. ADINYIRA (MRS)
(JUSTICE OF THE SUPREME COURT)
J. V. M. DOTSE
(JUSTICE OF THE SUPREME COURT)
COUNSEL:
NENE AMEGATCHER (WITH HIM ERIC
MENSAH, NAA AFARLEY DADSON AND
LESTA OHEMENG) FOR THE
PLAINTIFF/APPELLANT
KEN BROOKMAN-AMISSAH(WITH HIM MS
SOPHIA AIKINS) FOR
DEFENDANTS/RESPONDENTS
YAA GYAKOBO FOR THE
CO-DEFENDANT/RESPONDENT
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