AUGUSTINA DANKWAH & 19 ORS vs. EXPRESS LINK MICRO FINANCE LTD & 2 ORS [2017]DLHC4049

Date	2017-01-30
Suit No.	SUIT NO. BFS 261/2015
Citation No.	[2017]DLHC4049

DR. RICHMOND OSEI-HWERE JUSTICE OF THE HIGH COURT

NANA KWASI BOATEY FOR THE PLAINTIFFS

DANIEL SEKYERE FOR THE 2ND DEFENDANT/APPLICANT

[2017]DLHC4049
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													<main id="main" class="content" style="min-height: 60rem" >AUGUSTINA DANKWAH &amp;
19 ORS<o:p></o:p>vs.<o:p></o:p>EXPRESS LINK MICRO FINANCE LTD &amp; 2 ORS<o:p></o:p>&nbsp;[HIGH COURT
(COMMERCIAL DIVISION), KUMASI]<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;margin-left:0in;margin-right:.2in">

SUIT&nbsp;NO. BFS 261/2015&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: 30TH JANUARY, 2017<o:p></o:p>

</div>COUNSEL
<o:p></o:p>NANA KWASI BOATEY FOR THE
PLAINTIFFS <o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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</div>CORAM: <o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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</div><p class="MsoNormal" align="center" style="margin-top:1.45pt;margin-right:0in;
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mso-pagination:none;mso-layout-grid-align:none;text-autospace:none"><o:p>&nbsp;</o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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<p class="MsoNormal" align="center" style="margin-top:1.45pt;margin-right:0in;
margin-bottom:0in;margin-left:0in;margin-bottom:.0001pt;text-align:center;
mso-pagination:none;mso-layout-grid-align:none;text-autospace:none;border:none;
mso-border-bottom-alt:solid windowtext 1.5pt;padding:0in;mso-padding-alt:0in 0in 1.0pt 0in">RULING<o:p></o:p>

</div>Before the court is an
application filed on notice praying the Honourable Court to disjoin the 2nd
Defendant as a party to the suit.<o:p></o:p>The grounds of the
application are contained in the affidavit in support filed on 14/12/2016.<o:p></o:p>The Respondents are
opposed to the application and have demonstrated the grounds in the affidavit
in opposition filed on 22/12/2016.<o:p></o:p>At the hearing, counsel
for the applicant relied on the affidavit in support as well as the annexures
and prayed the court to disjoin the 2nd Defendant.&nbsp; Counsel submitted that the 2nd
Defendant as an officer of the 1st Defendant company cannot be sued
for the acts of the latter. That the subject matter in issue bothers on
contract between the plaintiffs and the 1st defendants and has
nothing to do with the personality of the 2nd Defendant. He
submitted that the statement of claim does not disclose any proper action
against the 2nd Defendant. Counsel cited the case of Appenteng v
Bank of West Africa &amp;Ors (1981) GLR 205 and Harlsbury Laws of England, 3rd
edition, vol 6, p 293 to buttress the fact that a company is a separate legal
entity distinct from its officers. He also cited section 139 of the Companies
Act, 1963 (Act 179) and emphasized that any act of the 2nd Defendant
is the act of the company unless proven otherwise. Counsel concluded that the 2nd
Defendant is not a proper party to be sued. He cited Order 11 rule 18(1) of the
High Court Civil Procedure Rules, 2004, CI 47 and prayed the court to strike
out the action against the 2nd Defendant.<o:p></o:p>Counsel for the
Plaintiffs/Respondents reiterated their opposition to motion. He first
challenged the competence of counsel for the 2nd Defendant/Applicant
to represent the latter since on the face of the motion paper no solicitors
license or chamber registration has been endorsed. He cited the Supreme Court
decisions in Henry NuerteyKorboe v
Francis Amosa, unreported, Suit No. J4/56/2014, Supreme Court, Accra
21/04/2016 and Republic v High Court,
Accra; Ex Parte Teriwajah and Henry NuerteyKorboe(REISS &amp; CO GHANA LIMITED)
(INTERESTED PARTY)invited the court to strike out the motion, as the
process is void. Secondly, counsel submitted that the application cannot be
brought under Order 11 r 18(1) of CI 47 in the manner presented by the
applicant. He argued that affidavit evidence cannot be used in such
application. He cited the case of Republic v High Court Accra exparte Aryeetey Ankrah[2003/2004]
SCGLR 398 in support of his submission. Finally, counsel invited the court to
dismiss the application since the 2nd Defendant/Applicant’s presence
is necessary for complete, effectual and effective determination of all the
issues in the case. He pointed out that there are serious allegations of fraud
against the Applicant and fraud is the basis upon which the court will lift the
corporate veil to deal with an officer of a company.<o:p></o:p>To ascertain whether the
2nd Defendant/Applicant was properly sued, we need to analyse the capacity of
companies and the individuals who control these companies within the context of
civil liability with particular reference to the pleadings in the instant case.<o:p></o:p>The 1st Defendant is a
limited liability company formed and registered under the Laws of Ghana.
Consequently, the 1st Defendant is a legal entity distinct from its members.
Hence it is capable of enjoying rights and of being subject to duties which are
not the same as those enjoyed or borne by its members i.e. the shareholders,
directors and officers of the company. This fundamental principle of corporate
personality and its distinctiveness from its members was first espoused in the
celebrated case of Salomon v Salomon [1897] AC 22 where Lord Macnaghten held:<o:p></o:p>"The
company is at law a different person altogether from the [shareholders]...;
and, though it may be that after incorporation the business is precisely the
same as it was before, and the same persons are managers, and the same hands
received the profits, the company is not in law the agent of the [shareholders]
or trustees for them.&nbsp; Nor are the
[shareholders], as members liable in any shape or form, except to the extent
and in the manner provided by the Act."<o:p></o:p>This
position of the law is captured in section 24 of the Companies Act, 1963 (Act
179) which provides as follows: <o:p></o:p>