CENTRE PROPERTIES LTD & ANOR vs. OBUOM GOLDFIELDS LTD [2006]DLCA6681

Date	2006-06-02
Suit No.	H1/300/2005
Citation No.	[2006]DLCA6681

ASARE KORANG J.A [PRESIDING]

PIESARE J.A

TWENEBOA KODUA J.A.

MR. STANLEY AMARTEIFIO FOR THE DEFENDANT/APPELLANTS

MR. NENE AMEGATCHER FOR THE PLAINTIFFS/RESPONDENTS

[2006]DLCA6681
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													<main id="main" class="content" style="min-height: 60rem" >CENTRE PROPERTIES LTD
&amp; ANOR<o:p></o:p>vs.<o:p></o:p>OBUOM GOLDFIELDS LTD<o:p></o:p>[COURT
OF APPEAL, ACCRA]<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">

H1/300/2005&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: 2ND JUNE, 2006<o:p></o:p>

MR.
NENE AMEGATCHER FOR THE PLAINTIFFS/RESPONDENTS.<o:p></o:p>

<p class="MsoNormal" align="center" style="text-align:center;line-height:115%;
border:none;mso-border-top-alt:solid windowtext 1.5pt;mso-border-bottom-alt:
solid windowtext 1.5pt;padding:0in;mso-padding-alt:1.0pt 0in 1.0pt 0in">JUDGMENT<o:p></o:p>

</div>ASARE KORANG, J.A. <o:p></o:p>The
1st Plaintiff/Respondent [1st Plaintiff for short hereinafter] was granted, a
prospecting license by the Government of Ghana over a piece or parcel of land
known as the Obuom concession in the Amensie East District of the Ashanti
Region.&nbsp; The 2nd Plaintiff/Respondent
[2nd Plaintiff hereinafter] is the Chairman of the 1st Plaintiff. <o:p></o:p>The
1st Plaintiff on 26th October, 1991, entered into two agreements—an option
Agreement [OA] and a Joint Venture Agreement [JVA]—with Oro Sunkwa incorporated
[OSI] a mining company based in the USA, the purpose of the agreements being
the joint exploration and development of the Obuom Concession. <o:p></o:p>The
Defendant/Appellant [hereinafter called the Defendant-company] was incorporated
in December, 1991 under the JVA and OA and after incorporation, the 1st
Plaintiff transferred its mineral License in the Obuom Concession to the
Defendant-company after the payment of the sum of US $78,000. <o:p></o:p>It
was stipulated in section 2.3 of the OA that OSI would during the term of the
prospecting license expend a minimum of US $200,000 to perform exploration and
development work on the concession, leading to the possible discovery and
development of mineral deposits.&nbsp; The
sale structure of the Defendant-Company under sections 2.5, 2.6 and 2.7 of the
OA was as follows:— <o:p></o:p>[1
] O.S.I.&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;- 54% <o:p></o:p>[2]
1st Plaintiff&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; - 36% <o:p></o:p>[3]
Government of Ghana&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -
10% <o:p></o:p>Section
2.8 of the O.A also guaranteed the 2nd Plaintiffs as Chairman of the 1st
Plaintiff's Board the Chairmanship of the Defendant-Company, except where the
1st Plaintiff's holding in the Defendant-Company and the concession fell below
16%. Under section 5 of the OA, the terms of the JVA and the OA were
incorporated into each other. <o:p></o:p>The
JVA in Section 7 provided for the appointment of a Project Manager who was to
have sole control and management and operation of the Joint Venture Project and
by section 8.4 of the JVA, the Project Manager was to prepare a Feasibility
study and to submit it together with his preliminary recommendations as to
whether or not to proceed with commercial mining operations.&nbsp; Section 8.7.1 stated that it was only after a
positive recommendation by the Project Manager that the Defendant-Company would
apply for the grant of a mining lease or mineral Leases in respect of the
concession proposed to be commercially mined. <o:p></o:p>Subsequent
to these agreements, the Defendant-Company purported to make a call for the
payment of the 1st Plaintiff's shares even though no feasibility study had been
done by the Project Manager as stipulated in the JVA, to assess the viability
of the project.&nbsp; The Plaintiffs refused
to pay for the shares in a letter addressed to the Defendant-Company [Exhibit
J;] as the time for the calls for payment was premature.&nbsp; In the 1st paragraph of the said letter, the
1st Plaintiff threatened to withdraw from the project by securing the liquidation
of the Defendant-Company. <o:p></o:p>The
Defendant-Company then purported to remove the 2nd Plaintiff as a Director
under Section 2.8 of the OA as a result of a resolution taken at an
Extraordinary General Meeting. <o:p></o:p>Section
2.8 of the OA itself provided: <o:p></o:p>"The Chairman of Centre shall be
the chairman of the Board of Directors of OGL so long as Center's total equity
shares in OGL and the Concession does not fall below sixteen per cent
[16%]." <o:p></o:p>The
reason given for the removal of 2nd Plaintiff as Director was that by refusing
to pay for the shares, they had fallen below 16% and they were accordingly
forfeited. <o:p></o:p>The
Plaintiffs served notice that they would ignore the resolution for the removal
of the 2nd Plaintiff as a Director and filed an originating summons under
Section 217 of the Companies Code 1963 [Act. 179] for the determination of the
following questions. <o:p></o:p>“1. That the purported forfeiture of
Centre Properties’ [1st Plaintiffs] shares is illegal. <o:p></o:p>