MICHAEL AYUUNE AND 24 OTHERS vs. BOARD OF DIRECTORS, TEK COOPERATIVE CREDIT UNION LTD [2018]DLHC3985

MICHAEL AYUUNE AND 24 OTHERS vs. BOARD OF DIRECTORS, TEK COOPERATIVE CREDIT UNIO... [2018]DLHC3985

Date	2018-07-06
Suit No.	SUIT NO. OCC. 110/2018
Citation No.	[2018]DLHC3985

DR. RICHMOND OSEI-HWERE JUSTICE OF THE HIGH COURT

[2018]DLHC3985
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													<main id="main" class="content" style="min-height: 60rem" >MICHAEL AYUUNE AND 24
OTHERS<o:p></o:p>vs.<o:p></o:p>BOARD OF DIRECTORS, TEK COOPERATIVE CREDIT UNION LTD<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;
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SUIT&nbsp;NO. OCC. 110/2018&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &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:
6TH
JULY, 2018<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;
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</div><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-bottom:0in;margin-bottom:.0001pt;
text-align:center;line-height:115%;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>Background<o:p></o:p>On
20th June, 2018 the Plaintiffs/Respondents herein filed a writ of
summons claiming the following reliefs against the Defendants/Applicants
jointly and severally:<o:p></o:p>1.
Plaintiffs' claims against the Defendants is for an order allowing disqualified
candidates to contest the election of the Credit Union scheduled to take place
on 08/06/18.<o:p></o:p>2.
An Order compelling the out-going executives of the union to step aside.<o:p></o:p>3.
An order from the Honourable Court appointing interim executives for the Union.<o:p></o:p>4.
An Order from the Honourable Court directing the past executives from doing
business in the name of the Union.<o:p></o:p>5.
An Order of interlocutory injunction restraining the Defendants from
interfering with the election process of the Union.<o:p></o:p>6.
Any further relief(s) or order(s) as the Honorable Court might deem fit to
make.<o:p></o:p>7.
Cost. <o:p></o:p>In
this application the Defendants/Applicants herein are praying the honourable
court to strike out the writ of summons on grounds of want of jurisdiction and
abuse of the court’s process. <o:p></o:p>The
grounds of the application are contained in the affidavit in support filed on
26/6/2018.<o:p></o:p>The
Respondents are opposed to the application and have demonstrated the grounds in
an affidavit in opposition filed on 3/7/2018.<o:p></o:p>Legal Arguments <o:p></o:p>It
is the case of the applicants that as Board members of the Tek Cooperative
Credit Union Limited they acted on behalf of the company and as such they
cannot be sued for acts relating to their stewardship. Counsel for the
applicants cited various authorities including Salomon v Salomon and Co. Ltd
(1897) AC 22 and section 137 of the Companies Act, 1960 (Act 179) and argued
that the company as an artificial legal entity can sue and be sued and that
officers of a company cannot be liable for act done on behalf of the company.
Thus, it is the Tek Cooperative Credit Union Limited that ought to have been
sued since the acts complained of were done on behalf of the company by the
defendants/applicants. Counsel further submitted that the applicants as members
of the Board of Directors are agents of the company and that an agent cannot
sue or be sued in his own name whether the principal is named or unnamed. He
cited the Supreme Court case of Nasiru Abdulai Banda v Col. Ayisi, Civil Appeal
No. J4/1/2013 (delivered on 7th May, 2014) in support of this
principle. In sum, he urged on the court to dismiss the writ.<o:p></o:p>In
his response, counsel for the Plaintiffs/Respondents submitted that the action
before the court has to do with the rights of the plaintiffs as provided under
article 33(7) of the 1992 Constitution. He charged that the
Defendants/Applicants as directors of the company have acted contrary to the
bye laws of the company. Counsel’s beef is that the applicants have introduced
some measures in respect of election of officers and these measures do not
conform to the regulations of the Credit Union. He submitted that even though
the Tek Cooperative Credit Union is an artificial person, the acts complained
of were performed in the name of the Union by the Defendants in bad faith.
Consequently, the Defendants must be held liable for their acts. He invited the
court to not only dismiss the instant application but to order the Defendants
to step aside as their term of office has elapsed. He also prayed the court to
appoint an interim management committee to steer the affairs of the Credit
Union.<o:p></o:p>Before
I go into the merits of the application, it is important to deal with an issue
of law which relates to the Respondents counsel’s oral application to amend the
title of the writ to include the name of Tek Cooperative Credit Union Limited. <o:p></o:p>Order
16 rule 5 (1) of CI 47 provides that:<o:p></o:p>