DOLPHYNE vs. SPEEDLINE STEVEDORING & CO LTD AND ANOTHER [1993]DLCA4232

Date	1993-01-14
Suit No.
Citation No.	[1993]DLCA4232

AMPIAH JA

KPEGAH JA

ADJABENG JA

E D KOM (WITH HIM CHARLES HAYIBOR AND MRS SYLVIA CUDJOE) FOR THE APPELLANT.

AFARI YEBOAH FOR THE RESPONDENTS.

[1993]DLCA4232
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													<main id="main" class="content" style="min-height: 60rem" >DOLPHYNE<o:p></o:p>vs.<o:p></o:p>SPEEDLINE STEVEDORING
&amp; CO LTD AND ANOTHER<o:p></o:p>[COURT
OF APPEAL, SEKONDI]<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">

[1993 - 4] 1 GBR 322 - 335 CA&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:
14 JANUARY 1993<o:p></o:p>

</div>COUNSEL:<o:p></o:p>E
D KOM (WITH HIM CHARLES HAYIBOR AND MRS SYLVIA CUDJOE) FOR THE APPELLANT.<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">

AFARI
YEBOAH FOR THE RESPONDENTS.<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 1.0pt 0in">

AMPIAH
JA, KPEGAH JA, &nbsp;ADJABENG JA<o:p></o:p>

</div>KPEGAH
JA. This is an appeal against the judgment of his Honour Antwi, sitting at the
circuit court, Sekondi.<o:p></o:p>According
to the plaintiff he and one R S Oduro, PW1, conceived an idea to form a
stevedoring company. This was when they were both working with Atlantic Port
Services, another stevedoring company. Those who were to join them in the
promotion of the company were Dr De-graft Dickson, Mr F N Arthur and a Madam
Dade, the wife of the 2nd defendant and Mr Brenya. The said Madam Dade could
not attend the preliminary meeting called for the purpose because she was sick
and had to be represented by the 2nd defendant, her husband.<o:p></o:p>The
plaintiff said he objected to the 2nd defendant being a member of the proposed
company but he was persuaded by Mr Oduro to accept him as the secretary of the
proposed company. To this, he agreed. Being the only promoter with any
stevedoring qualification, the plaintiff said he was authorised to enter into
certain pre-incorporation contracts and acquire certain equipment needed for a
stevedoring company. He employed and paid labourers. He also applied for and
obtained a stevedoring license for the company at a cost of ¢15,000.<o:p></o:p>The
2nd defendant was entrusted with the registration of the company with the
Registrar-General’s Department under the Companies Code. When he asked to sign
the relevant documents before registration, the plaintiff said, he was informed
by the 2nd defendant that the documents were with Mr Oduro, PW1, who had then
gone to UK to procure forklifts for the company. That was the end of the
matter, as he became marginalised. He later heard there was a suit pending in
court between Oduro and Arthur on the one hand and the 2nd defendant on the
other, in respect of the company. The matter was settled; Oduro and Arthur were
paid off by the 2nd defendant and his wife, who became the only
director-shareholders of the company. The company so incorporated was Speedline
Stevedoring Company Ltd, the lst defendant.<o:p></o:p>According
to the plaintiff before the company was incorporated, there was an agreement
between him and the other promoters that he, the plaintiff, would be a
director-shareholder with 25 per cent shareholding; that the shares were to be
paid for, not in cash, but by his pre-incorporation services rendered to the
company. But, says the plaintiff, the 2nd defendant fraudulently failed to
include his name as a director-shareholder as agreed when he was registering
the company. A suit was filed against him by Arthur and Oduro, the 2nd
defendant and his wife. Thereafter they fraudulently passed a resolution to the
effect that they were the only director-shareholders of the company.<o:p></o:p>The
plaintiff therefore took out a writ in the circuit court claiming against the
defendants jointly and severally for:<o:p></o:p>“(a) ¢5,000 damages for fraud;<o:p></o:p>(b) a declaration that he is a
director of the lst defendant company; in the alternative, an order for
specific performance that he be made a director;<o:p></o:p>(c) a declaration that he is a member
of the said company and entitled to dividends, profits etc from the company’s
operations.”<o:p></o:p>The
learned trial judge dismissed the claim against the lst defendant company. And,
in an exercise he termed lifting the veil “in order to fix who is responsible
for the loss incurred by the plaintiff” as a result of the conduct of the 2nd
defendant who is an officer of the company, the trial judge awarded ¢3 million
damages against the 2nd defendant. He then proceeded to order the 2nd
defendant, one of the shareholders, to appoint the plaintiff as a director of
the lst defendant company. The court also ordered that the register of the
company be rectified to include plaintiff’s name as a member. The learned trial
judge declared the plaintiff to be entitled to dividends from the date of
incorporation of the company.<o:p></o:p>I
would, before delving into the details of the matter only like to subject the
orders made by the court to some scrutiny. I will therefore quote the relevant
portion in detail:<o:p></o:p><o:p>&nbsp;</o:p>&nbsp;“I hold that the plaintiff is entitled to a
specific performance of the said agreement to make him a director and so order
the 2nd defendant to carry it out.<o:p></o:p>I further order that the register of
the company be rectified to include the name of the plaintiff in accordance
with section 35 of Companies Code. Following from this order the plaintiff is
also entitled to all rights of a member from date of incorporation, (October
1976), and all benefits to him as such a member.”<o:p></o:p>The
implication of the first part of the order is that the 2nd defendant, one of
the members of the company, must make the plaintiff a director or to appoint
him to that position. This was made without reference to the Regulations of the
company which normally contain the mode for the appointment of a director of a
company. Indeed the Regulations were not tendered in evidence. One therefore is
not in a position to decide whether the 2nd defendant only has the legal
competence to appoint a director.<o:p></o:p>The
implications of the order are therefore very grave as the 2nd defendant finds
himself being ordered to do what he has no legal capacity to do. I am not
prepared to speculate what the Regulations of the company say on the issue. I
do not want to expose m</main>