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RULING
LARTEY J. A.:
This is an application
for stay of execution of the ruling and orders contained
in the decision of the High Court, Tema, made on 13th
June, 2002. By the orders, a Receiver/Manager was
appointed for the first defendant/company, and all the
four directors in this suit were also restrained from
holding themselves out as directors.
The main argument which
was canvassed in support of this application was that
the ruling and orders emanating therefrom are so
manifestly wrong and unlawful that they ought not be
allowed to be acted upon or enforced in law until the
final determination of the appeal. The point was made
that having regard to the endorsement on the writ of
summons and the statement of claim it was obvious that
the plaintiffs claim was for a collection of certain
rights. Indeed there was no claim for Receiver/Manager;
neither was there any claim for injunction against the
directors. It was thus submitted that where a party to
an action fails to make a final claim in his endorsement
he cannot claim what is not on his writ. That being the
case the learned judge was wrong in granting the reliefs
by an interlocutory application.
Reacting to this
particular point and finding support in COLEBOURNE VRS.
COLEBOURNE 1876 1 ch. D. 690 it was contended on behalf
of the plaintiff that it is not at all necessary that
the appointment of a receiver should have been indorsed
on the writ or even claimed by the statement of claim,
unless the appointment forms substantive part of the
relief sought. But it should be pointed out that the
case cited involved the administration of an estate
under a will brought by a sister as plaintiff against
her brother. The application of this authority to cover
the present case, where not even an injunction was
claimed is of doubtful application.
The submission was made
on behalf of the defendants that granted for purposes of
argument that there is absence of claim for receiver on
the writ to warrant the omission to be treated as not
necessary, the company being dealt with in this case is
one regulated by the Companies Code, (Act 279) and the
regulations made thereunder as well as the regulations
of the company itself. Therefore any act done, such as
the appointment of a receiver, should be seen to be in
conformity with the provisions of the Code.
For the plaintiff it
was argued that the trial judge exercised his discretion
pursuant to Order 50 r.7 of the High Court (Civil
Procedure) Rules 1954 (LN 140A) which prescribes the
power of a court to grant injunctions where it appears
to be just and convenient so to do. The contention in
this regard was that the trial judge had before him
material which revealed serious wrong doings in the
conduct of the affairs of the first defendant. One such
wrong doing was that the second and fourth defendants
had been introduced into the company by one Kofi
Dolphyne without reference to the plaintiff. Another
shortcoming related to the status of the third defendant
as well as the validity surrounding the appointment of
the fifth defendant. There was also the allegation that
no proper record-keeping was being kept, and thus
breached section 122 of the Code (Act 179) relating to
annual returns. And finally it was alleged that the
revelation included lack of proper meetings of the Board
in accordance with the Companies Code. Our simple answer
is whether it would not have been more convenient to
preserve the status quo and treat the alleged wrong
doings as matters to be gone into and treated thoroughly
in the course of hearing the substantive case?
We concede that order
50 r. 7 of LN 140A gives wide powers to a court to grant
an injunction and appoint a receiver/manager in
appropriate cases. Indeed the case of BUNZU & ANOR VRS.
ABBEYMAN FAMILY STOOL [1992 - 93] GBR was called in aid
of the proposition that in matters of this nature a
court should refrain from doing anything that might be
interpreted as interfering with exercise of a trial
judge's discretion. But in the case before us the
judge's exercise of his discretion was impugned because
the appointment of the receiver/manager and the
restraining orders against all the defendants were not
made in accordance with the Code.
We find the defendants'
line of argument more attractive because since the
subject matter in this suit is a company regulated by
the Companies Code (Act 179), it is desirable that
disputes involving it should be settled within the
strict parameters of the Code itself. In BOYEFIO VRS
NTHC PROPERTIES LTD [1996 - 97] SC GLR 531 to which our
attention was drawn, the law was stated that when an
enactment prescribes a procedure by which something was
to be done, it was that procedure alone that ought to be
resorted to. See also ASCHKAR VRS KARAM [1972] 1 GLR 1.
It would appear from
the Code that the only provision which empowers the
issuance of orders of injunction is section 217. By that
rule a member, such as the plaintiff herein, may apply
to the court for an injunction to restrain the company
from doing certain acts. As may be perceived from the
wording of the said section, the rule is restrictive: it
does not allow the injunction to cover the directors as
was done in the present case. The plaintiff's
appropriate remedy for his claim, as indorsed on his
writ of summons, is to be found in section 217 of the
Code, and that remedy is against the company and not its
directors.
Furthermore section 237
of Act 179 empowers the court, upon application to
appoint a receiver or manager on behalf of secured
creditors or debenture holders of a company which is in
the process of being wound up. The circumstances
surrounding the appointment of receiver/manager in the
case before us do not suggest that the company was in
fact being wound up. It seems to us therefore that the
appointment of a receiver/manager was not warranted. And
even if the company was beset with irregularities,
wrong-doings and illegalities as perceived by the
plaintiff, the Code makes adequate provision for his
remedy as stated above.
Now reference was made
in argument to section 7 of the Code which is the saving
provision of rules of equity and of common law
applicable to companies. We were urged to accept the
judge's injunction as an equitable order. It seems to us
that the order is inconsistent with section 180 of the
Code which prescribes a minimum of two directors to
operate the business of a company. In the instant case,
inasmuch as the order suspended all four directors of
the company, is it not arguable that the equitable order
purported to have been given conflicts with section 180
of Act 179? And although the order directed the second
defendant and he plaintiff to offer assistance to the
registrar of the High Court, Tema in the conduct of the
business of the company, we do not see the roles of
those assistants as contributing effectively to the
efficient management of the company.
It is on account of the
foregoing reasons that we feel the application for stay
of execution should be granted.
There will be costs of
¢2,500,000.00 in favour of the defendant.
F. M LARTEY
JUSTICE OF APPEAL
AKAMBA J.A.
I have had the
privilege of a preview of the lead judgment read by my
brother Lartey J.A.. I agree with his reasons and
conclusions but I wish to add a few points for emphasis.
The first relates to the appointment of the Registrar of
the court below as receiver and manager of the 1st
Defendant company, a stevedoring company. By this
appointment as both receiver and manager of a
stevedoring company which is in a specialized trade, the
Registrar as such receiver/manager would be required to
carry on the trade of stevedoring and to manage the
company's assets accordingly— see Truman & Co. vrs. Red
grave (1881) 18 Ch. D. 547. It is not far fetched to
wonder whether by the training of a Registrar, qua
Registrar, he is equipped to undertake to manage a
stevedoring company. It is in recognition of the
specialized nature in the operation of companies and to
facilitate their smooth and competent operations that
the legislature adopted the code to govern the operation
of companies. The companies Code, Act 179, applies to
all companies in Ghana. Section 88 of the code spells
out the powers of the court and provides for appointment
of a receiver whenever a fixed and floating charge has
become enforceable. In the case of a floating charge, a
receiver and manager of the assets is appointed subject
to the charge. Section 89 of Act 179 goes on to spell
out the mode of payment to be made by a receiver out of
the assets upon his appointment. Another relevant
provision of the code dealing with the appointment of
receivers and managers is S. 238 (of Act 179).
Significantly this section can be invoked when the
company in issue is being wound up. This is however not
the case in the instant application. Suffice it to refer
to S.238 (2) which states that a person appointed a
manager of a company shall manage the same with a view
to the beneficial realization of the security of those
on whose behalf he is appointed. Given this requirement
or objective could it be said that the Registrar, qua
Registrar, could competently carry out such function
under the circumstance? It is equally important to bear
in mind the fact that the drafters of the companies code
did not gloss over the issue as to the need to appoint
receivers and managers in the life of a company. In
limiting the instances when such appointments may be
resorted to, the drafts-man was fulfilling the objective
of fashioning out a code suitable to the needs of this
country. It is therefore wrong to import into the code
what others would have desired to be in the code. The
code is clear and devoid of any complications as to its
provisions.
In the instant
application, there are sufficient legal reasons why the
court below should not have looked beyond the code to
invoke its general powers under the High Court rules to
appoint the Registrar as receiver and manager. Equally,
this is not a case in which the code has left a gap
calling for the application of s. 7 of Act 179 to fill
in the gap.
The next point of
emphasis is the question whether the order appointing
the Registrar as a receiver and manager is executory so
as to warrant a stay of execution. The case of Mensah
vrs Ghana Football Association & Ors. (1989-90) GLR 1,
was cited to us in the course of arguments. In that case
the Supreme Court held that a judgment is executory when
any breach of the orders makes the person liable to
attachment for contempt. This being a Supreme Court
decision, the same is binding upon this Court and as
such, all we need to satisfy ourselves is whether a
breach of the order appointing the Registrar as
receiver/manager will render those persons so breaching
it liable for contempt. The answer is in the
affirmative. This is clearly a case in which the issue
as to whether or not the order is executory should be
put to rest in view of the case of Mensah vrs. Ghana
Football Association (supra). For the above reasons and
those given in the lead judgment, I agree that the
application for stay of execution of the ruling and
order of the High Court per Ofoe J. on 13th June 2002
ought to be and is hereby granted.
J. B. AKAMBA
JUSTICE OF APPEAL
OSEI J.A.:
I agree.
J. A. OSEI
JUSTICE OF APPEAL
COUNSEL
Stanley Amarteifio with
him Solomon Quandzie for Kudjawu for Applicants.
Kuntunkunuku Ampofo for
the Respondent.
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