NATIONAL INVESTMENT BANK LIMITED vs. NANKWATEX CONSTRUCTION LIMITED & 3 OTHERS [2017]DLHC4115

Date	2017-03-27
Suit No.	SUIT NO. BFS/63/2016
Citation No.	[2017]DLHC4115

DR. RICHMOND OSEI-HWERE JUSTICE OF THE HIGH COURT

PAUL ODURO FOR PLAINTIFF/RESPONDENT

NANA KWASI BOATEY FOR THE DEFENDANTS/APPLICANTS

[2017]DLHC4115
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													<main id="main" class="content" style="min-height: 60rem" >NATIONAL INVESTMENT BANK
LIMITED<o:p></o:p>vs.<o:p></o:p>NANKWATEX CONSTRUCTION LIMITED &amp; 3 OTHERS <o:p></o:p>[HIGH COURT (COMMERCIAL DIVISION), KUMASI]<o:p></o:p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
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SUIT&nbsp;NO. BFS/63/2016&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: 27TH MARCH, 2017<o:p></o:p>

</div>COUNSEL:
<o:p></o:p>PAUL ODURO FOR
PLAINTIFF/RESPONDENT <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;
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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>Order 4 rule 5(2) (a) of
the High Court Civil Procedure Rules, 2004 C1 47 provides:<o:p></o:p>“(2)
At any stage of proceedings the Court may on such terms as it thinks just
either of its own motion or on application<o:p></o:p>(a)&nbsp;&nbsp;
order any person who has been improperly or
unnecessarily made a party or who for any reason is no longer a party or a necessary
party to cease to be a party; …”<o:p></o:p>This application is made
pursuant to Order 4 rule 5(2) (a) of CI 47 for an order to strike out the names
of the 2nd and 3rd Defendants as not being proper parties
to the suit.<o:p></o:p>Counsel for the applicant relies
on paragraph 10 of the Plaintiff’s Statement of Claim and says that the basis
for suing the 2nd, 3rd and 4th defendants is that they are directors of the 1st
Defendant company. Counsel for the applicant also relies on paragraph 7 of the
affidavit in opposition where a loan application letter signed by the 2nd
Defendant in his capacity as the Managing Director of the 1st Defendant company
is attached to the affidavit in support of the motion. The said letter bears
the letterhead of the 1st defendant company. This, counsel submits show that
the 2nd Defendant was acting in his capacity as the Managing Defendant of the
Defendant company and not in his personal capacity. He further argues that
there is no personal guarantee of the loan by the 2nd Defendant and
therefore as a director he cannot be properly joined to the suit for the
default of the 1st Defendant.<o:p></o:p>Counsel cites the
following cases: Salomon v Salomon
[1897] AC 22 and Morkor v Kuma [1998
- 99] SCGLR 620 and argues that the 1st Defendant company is a
distinct legal entity and the officer of the company cannot be personally
liable for the acts of the company. He prays the court to grant the
application.<o:p></o:p>In opposing the
application, counsel for the Plaintiff/Applicant argues that the 2nd Defendant/
Applicant in his capacity as the Managing Director of the Company applied the
said overdraft facility. He argues that the inclusion of the 2nd
Defendant/Applicant as a party to the suit will help the court to finally
determine the matter in controversy. He argues that because the company is an
artificial person it acts through human beings and in this instance, it is the
applicant who was involved in the application for the overdraft facility. He
argues that if the name of the 2nd Defendant/Applicantis struck out
as a party to the suit, it will be difficult to recover the overdraft facility
advanced to the 1st Defendant company.&nbsp; He argues that since it is the 2nd
Defendant/Applicant who is running the defendant company it would be proper and
fair to make the defendant a party to the suit.<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>