GEORGE COHEN (W.A.) LTD. vs. COMET CONSTRUCTION CO., LTD.; GHANA COMMERCIAL BANK (CLAIMANTS) [1966]DLHC1696

GEORGE COHEN (W.A.) LTD. vs. COMET CONSTRUCTION CO., LTD.; GHANA COMMERCIAL BA... [1966]DLHC1696

Date	1966-12-05
Suit No.
Citation No.	[1966]DLHC1696

EDUSEI J.

MRS. E. M. ARTHUR FOR THE CLAIMANTS.

T. K. AGADZI FOR THE PLAINTIFFS.

[1966]DLHC1696
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													<main id="main" class="content" style="min-height: 60rem" >GEORGE COHEN (W.A.) LTD.<o:p></o:p>&nbsp;vs. <o:p></o:p>COMET CONSTRUCTION CO., LTD.; GHANA COMMERCIAL BANK (CLAIMANTS) <o:p></o:p>[HIGH COURT, ACCRA]<o:p></o:p>[1966] GLR 777<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 1.0pt 0in">

DATE:
5 DECEMBER 1966.<o:p></o:p>

</div>COUNSEL:&nbsp;&nbsp; <o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 0in 0in">

MRS. E. M. ARTHUR FOR THE CLAIMANTS.<o:p></o:p>

T. K. AGADZI FOR THE PLAINTIFFS.<o:p></o:p>

</div>CORAM:
<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0in 0in 0in 0in">

EDUSEI J.<o:p></o:p>

</div><o:p>&nbsp;</o:p>JUDGMENT OF EDUSEI J.<o:p></o:p>The facts
of this interpleader suit are briefly these. In June 1964 George Cohen (W.A.)
Ltd. recovered judgment in the High Court against the Comet Construction Co.,
Ltd. for a certain sum of money. In January 1965, not having received payment,
the judgment creditors issued a writ of fi. fa. against the chattels of the
judgment debtors as disclosed in exhibit C. The chattels referred to in exhibit
C are (a) one only Morris pick-up No. SG 3554 and (b) one only Morris tipper
truck No. SG 1059, and the sale was to take place on 6 July 1966. When this
fact of seizure came to the knowledge of the Ghana Commercial Bank, the
claimants herein, they interpleaded asserting that by virtue of exhibit A, a
debenture, dated 1 February 1963, the said chattels disclosed in exhibit C
among other property of the execution debtors were secured to them.<o:p></o:p><o:p>&nbsp;</o:p>Both
counsel agreed that the facts in this interpleader suit were indisputable and
the only question of law to be decided by this court is whether the execution
creditors or the claimants have prior claim to the chattels stated in exhibit
C.<o:p></o:p><o:p>&nbsp;</o:p>This
question compels me to examine the exact nature of the rights of the holders of
such a debenture. That the debenture, if valid, undoubtedly creates a charge on
the assets of the company is now well established ever since: see Re Standard
Manufacturing Co.1 and Re Opera Ltd.2 These cases decide that such charges
prevail as against an execution creditor if the debenture is valid.<o:p></o:p>It will
be observed that the chattels mentioned in exhibit C come under category 4 of
paragraph (4) of exhibit A and are a floating charge. And, what is a floating
charge? A floating charge which is quite distinct from a specific charge does
not fasten on any definite property but is an equitable charge on property
which is constantly changing, for example, stock-in-trade: see Charlesworth’s
Company Law (7th ed.), p. 242. Also in Gower’s Company Law (2nd ed.) at p. 390
it is stated that a floating charge imposes a charge on property present and
future and it allows the company to continue to deal with that property in the
ordinary course of business. However, if the debenture holder, on the happening
of some event stated in the debenture takes steps to have the floating charge
crystallised the charge then becomes a specific or fixed charge.
Crystallisation takes place, among other things, when a receiver is appointed,
and in such circumstances the company, and in this case, the judgment debtors,
cannot deal with the property comprised in the security without the consent of
the debenture holders. In the instant case a receiver and manager was appointed
on 12 August 1963 by the claimants in accordance with paragraph 10 (a) of
exhibit A and it was at a time when the execution creditors had not issued
their writ of fi. fa. which was on 14 January 1965. The notice of appointment
of a receiver and manager appeared in the Commercial and Industrial Bulletin
No. 2 of 10 January 1964 and this Bulletin forms part of the Ghana Gazette
which constitutes notice. But counsel for the execution creditors has raised
the all-important point that at the time of the seizure of chattels mentioned
in exhibit C there was no registration of exhibit A with the registrar of
companies in accordance with the provisions of the Companies Code, 1963,3 and
therefore there was no notice to third parties like the execution creditors who
must take in preference to the claimants. In fact the registration of exhibit A
took place on 4 October 1965; see exhibit B. This, no doubt, was subsequent to
the seizure of the chattels by the execution creditors. But the matter does not
rest there. Section 6 of the Companies Code, 1963, states thus, “Nothing in
this Code shall abrogate or affect any special legislation relating to
companies carrying on the business of banking, insurance or any other business
from time to time subject to special regulation.” (The emphasis is mine.) The
claimants who are bankers, the Ghana Commercial Bank, have special legislation
governing their activities. I here refer to the Bank of the Gold Coast
Ordinance, 1952,4 and later amended by the Ghana Commercial Bank (Amendment)
Ordinance, 1957,5 to read “Ghana Commercial Bank.” There is no legal obligation
in this special legislation on the claimants to register their debentures as is
required in the case of ordinary trading companies. The claimants, however, did
perhaps ex abundanti cautella publish the appointment of a manager and receiver
in respect of the property of the execution debtors in the Commercial and
Industrial Bulletin of 10 January 1964. The appointment of the said manager and
receiver took effect from 12 August 1963 and there was another appointment
revoking that of 12 August 1963 and this appeared in the Commercial and
Industrial Bulletin No. 47 of 30 September 1966 but the new appointment had its
effective date from 15 March 1965. For the purposes of this suit the first
appointment on 12 August 1963 is the only material factor to be considered.
This appointment should have put the execution creditors on their guard as to
their rights to go against the chattels in exhibit C. The decided cases,
however, tend to support the contention of the claimants, for in Davey &amp;
Co. v. Williamson &amp</main>