KUNI vs. STATE GOLD MINING CORPORATION AND ANOTHER [1977]DLHC11442

Date	1977-12-15
Suit No.	[1978] GLR 205-211
Citation No.	[1977]DLHC11442

SARKODEE J.

DAKWA-DWENENA (WITH HIM BROBBEY) FOR THE PLAINTIFF.

KOCUVIE TAY FOR THE DEFENDANTS AND CO-DEFENDANTS.

[1977]DLHC11442
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													<main id="main" class="content" style="min-height: 60rem" >KUNI<o:p></o:p>vs.<o:p></o:p>STATE GOLD MINING CORPORATION AND ANOTHER<o:p></o:p>[HIGH
COURT, SEKONDI]<o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 4pt;">

[1978]
GLR 205-211&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DATE:
15 DECEMBER 1977<o:p></o:p>

</div>COUNSEL:<o:p></o:p>DAKWA-DWENENA
(WITH HIM BROBBEY) FOR THE PLAINTIFF.<o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

KOCUVIE
TAY FOR THE DEFENDANTS AND CO-DEFENDANTS.<o:p></o:p>

</div>CORAM:<o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

</div>JUDGMENT
OF SARKODEE J.<o:p></o:p>The
plaintiff who is employed by the co-defendants, the Prestea Goldfields Ltd., as
a machine driver was on 11 July 1974 injured whilst working underground at the
said mines.&nbsp; He suffered a compressed
fracture of the twelfth thoraxic vertebrae resulting in the paralysis of the
lower limbs.&nbsp; The accident occurred when
the plaintiff acting upon instructions was working as a shovel boy; a job which
was not part of his normal duties.&nbsp; In
the course of drilling and shovelling loose rocks a mass of loose graphite fell
on him causing him those injuries as a result of which he has been in hospital
since the date of the accident.<o:p></o:p>Originally
the action was brought against the defendants only in their capacity as a gold
mining corporation carrying on business at Prestea.&nbsp; After the evidence of the plaintiff upon
application made on his behalf the Prestea Goldfields Ltd. were joined as
co-defendants.&nbsp; In his amended statement
of claim which followed the joinder the plaintiff stated that the co-defendants
were agents and (or servants) of the defendants.&nbsp; The defendants denied that they were the
employers of the plaintiff at the time of accident.&nbsp; The co-defendants on their part admitted that
the defendants were a gold mining corporation but said that they the
co-defendants were a subsidiary company of the defendants and that it was wrong
for the plaintiff to sue the shareholders for the wrongs of a company.&nbsp; Mr. Kocuvie Tay, learned counsel for both the
defendants and co-defendants, submitted that the Prestea Goldfields Ltd. were
the owners of the mines and that the defendants as shareholders had been
wrongly sued.<o:p></o:p>The
State Gold Mining Corporation was established under the Statutory Corporations
Act, 1964 (Act 232).&nbsp; By Part II of the
Instrument of Incorporation of the State Gold Mining Corporation, 1965 (L.I.
400), the objects of the State Gold Mining Corporation are:<o:p></o:p>"(a)
the mining of gold and the marketing of gold in Ghana and outside Ghana;<o:p></o:p>(b)
the carrying on of such other activities as may appear to the Corporation to be
incidental or conducive to the attainment of the objects set out in
sub-paragraph (a) of this paragraph or any .of them."<o:p></o:p>The
governing body of the State Gold Mining Corporation is a board which has power
to delegate to the managing director of a mining company the power to appoint
persons as employees of the corporation.&nbsp;
This power to appoint is reserved for the owner of the mines.&nbsp; It is not denied that the state Gold Mining
Corporation appoints the general manager, the chief engineer and the general
mines Manager of Prestea Goldfields Ltd. as is required by the Mining
Regulations, 1970 (L.I. 665).&nbsp; The daily-rated
employees and other junior staff of Prestea Goldfields Ltd. are appointed by
the Prestea Goldfields but this does not detract from the fact that the Prestea
Goldfields itself derives its authority to run the mines generally from the
State Gold Mining Corporation.&nbsp; In order
to control and effectively monitor the system of work at Prestea Goldfields
Ltd. the State Gold Mining Corporation has introduced a method by which Prestea
Goldfields Ltd. sends monthly returns for payment and [p.208] other activities
to the State Gold Mining Corporation.&nbsp; In
my view therefore the State Gold Mining Corporation effectively controls the
Prestea Goldfields Ltd., who is the agent of the State Gold Mining Corporation.<o:p></o:p>The
next question to consider is whether the State Gold Mining Corporation works
the mines through their agent Prestea Goldfields Ltd.&nbsp; A company is said to be the subsidiary of
another if that other (the holding company) is a member of it and controls the
composition of its board of directors, or if the holding company holds more
than half its "equity share capital": see the Companies Code, 1963
(Act 179), Sched. I, s. 2. Under the ordinary rules of law a parent company and
a subsidiary company, even a hundred per cent subsidiary, are distinct legal
entities.&nbsp; However it seems there is no
rule of law which says that a company cannot and should not act as the agent of
its holders.&nbsp; No problem arises where
there is an express agreement as in Southern (Inspector of Taxes) v. Watson
[1940] 3 All E.R. 439, C.A. where after the business had been converted into a
private company the agreement provided that the company should fulfil existing
contracts as agents of the seller.&nbsp; Where
there is no such agreement it is a question of fact in each case whether the
subsidiary company is carrying on the parent company's business or its own.<o:p></o:p>In
this regard I think all the circumstances must be taken into account the
following being particularly relevant:<o:p></o:p>(1)
Are the profits treated as those of the parent company?<o:p></o:p>(2)
Are the persons conducting the business appointed by the parent company?<o:p></o:p>(3)
Is the parent company the head and brain of the enterprise?<o:p></o:p>(4)
Does the parent company govern the business and decide what should be done and
what capital should be employed?<o:p></o:p>(5)
Are the profits made by its skill and direction ?<o:p></o:p>(6)
Is the parent company in effectual control?<o:p></o:p></main>