AGRICARE COMPANY LIMITED vs . CHICKS & CHICKEN SERVICES LIMITED AND ANOR [2019]DLHC6848

Date	2019-01-18
Suit No.	SUIT NO. OCC 30/2019
Citation No.	[2019]DLHC6848

DR. RICHMOND OSEI-HWERE J

FRANCISCA ADJO AYIVOR FOR HENRY ASANTE FOR PLAINTIFF/RESPONDENT

LESLEY AMEDIOR FOR MICHAEL GYAN OWUSU FOR THE 2ND DEF/APPLICANT

[2019]DLHC6848
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													<main id="main" class="content" style="min-height: 60rem" >AGRICARE COMPANY LIMITED<o:p></o:p>vs .<o:p></o:p>CHICKS &amp; CHICKEN SERVICES LIMITED AND ANOR<o:p></o:p>[HIGH COURT, KUMASI]<o:p></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;
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padding:0in;mso-padding-alt:0in 0in 1.0pt 0in">SUIT NO. OCC 30/2019&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &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: 18TH JANUARY, 2019<o:p></o:p>

</div>COUNSEL:<o:p></o:p>FRANCISCA ADJO AYIVOR FOR HENRY ASANTE 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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LESLEY AMEDIOR FOR MICHAEL GYAN OWUSU
FOR THE 2ND DEF/APPLICANT <o:p></o:p>

</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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</div>The
incorporation of a company has many advantages, chiefly among them is the
separate legal entity status bestowed upon the company. This advantage is a
creation of law and has limited the liability of those who incorporate and
manage the company’s affairs. It is, therefore, axiomatic to state that a
company 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>‘‘Except to the extent that a
Company's Regulations otherwise provide, a company registered after the
commencement of this Act and an existing company which, pursuant to section 19,
adopts Regulations in lieu of its memorandum and articles of association shall
have, for the furtherance of its objects and of a business carried on by it and
authorised in its Regulations, all the powers of a natural person of full
capacity.’’<o:p></o:p>The
provisions of Section 24 of the Companies Act have been applied in numerous
cases including Morkor v Kuma [1998 - 99] SCGLR 620 where the Supreme Court
held at page 632 per Sophia Akuffo JSC (as she then was) as follows: <o:p></o:p>"Save as otherwise restricted by
its regulations, a company, after its registration, has all the powers of a
natural person of full capacity to pursue its authorised business. In this
capacity, a company is a corporate being, which, within the bounds of the
Companies Code, 1963 (Act 179) and the regulations of the Company, may do
everything that a natural person might do. In its own name, it can sue and be
sued and it can owe and be owed legal liabilities. A company is, thus, a legal
entity with a capacity separate, independent and distinct from the persons
constituting it or employed by it.&nbsp; From
the time the House of Lords clarified this cardinal principle more than a
century ago in the celebrated case of Salomon v Salomon &amp; Co. [1897] AC 22,
it has, subject to certain exceptions remained the same in all common law
countries and is the foundation on which our Companies Code, 1963 is grounded."<o:p></o:p>From
the foregoing, it is clear that the 1st defendant company herein
upon incorporation has become a separate and distinct entity from its
shareholders, directors and officers, and the Courts will seldom attach
personal liability to such shareholders, directors and officers whose acts are
the acts of the company except in very limited circumstances. <o:p></o:p>Sections
139 and 140 of Act 179 also espouse this fundamental principle of corporate
personality. In Bousiako Co., Ltd. V. Ghana Cocoa Marketing Board; Kwabo-Osekyere
Construction Works Ltd. V. Ghana Cocoa Marketing Board (Consolidated) [1982-83]
GLR 824, the Court explained the legal effect of these provisions. Osei-Hwere J
(as he then was) held at page 842:<o:p></o:p>‘‘Sections 139(a) and 140 of the
Companies Code, 1963 (Act 179) regulate the above proposition. By section 139
it is provided, among others, that any act of the board of directors or
managing director, for instance, while carrying on in the usual way the
business of the company should be treated as the act of the company itself; and
accordingly the company shall be civilly liable therefore to the same extent as
if it were a natural person …<o:p></o:p>Section 140 also provides for
situations when the acts of any officer or agent of a company shall be deemed
to be acts of the company. These are, for instance, when the company, acting
through its board of directors, or managing director, shall have expressly or
indirectly authorised such officer or agent to act in the matter or shall have
represented the officer or agent as having its authority to act in the matter.
In any of these events the company shall be civilly liable therefore to the
same extent as if it were a natural person.’’<o:p></o:p>In
the instant application before me, the 2nd defendant/applicant
(hereinafter referred to as the applicant) is praying the court for an order to
set aside the writ of summons and statement of claim filed by the
plaintiff/respondent (hereinafter referred to as the respondent) against him on
the ground that he is not </main>