[2019]DLHC9228 Login to Read Full Case <span style="font-size: 18px !important;"><p class="MsoNoSpacing" align="center" style="text-align:center;line-height:115%"><b><span style="font-size:12.0pt;line-height: 115%;font-family:"Book Antiqua",serif;color:#00B0F0">AGRICARE COMPANY LIMITED<o:p></o:p></span></b></p><p class="MsoNoSpacing" align="center" style="text-align:center;line-height:115%"><b><span style="font-size:12.0pt;line-height: 115%;font-family:"Book Antiqua",serif;mso-fareast-font-family:"Book Antiqua"; mso-bidi-font-family:"Book Antiqua";color:#00B0F0">vs.<o:p></o:p></span></b></p><p class="MsoNoSpacing" align="center" style="margin-bottom:6.0pt;text-align:center; line-height:115%"><b><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif; color:#00B0F0">CHICKS & CHICKEN SERVICES LIMITED AND ANOR<o:p></o:p></span></b></p><p class="MsoNoSpacing" align="center" style="text-align:center;line-height:115%"><span style="font-size:10.0pt;line-height:115%;font-family:"Book Antiqua",serif">[<span class="NoSpacingChar">HIGH COURT (COMMERCIAL DIVISION)</span>, KUMASI]<o:p></o:p></span></p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt; padding:0cm 0cm 1.0pt 0cm"> <p class="MsoNoSpacing" align="center" style="text-align:center;line-height:115%; border:none;mso-border-bottom-alt:solid windowtext 1.5pt;padding:0cm; mso-padding-alt:0cm 0cm 1.0pt 0cm"><b><span style="font-size:10.0pt;line-height:115%;font-family:"Book Antiqua",serif">SUIT NO. OCC 30/2019 </span></b><span style="font-size:10.0pt;line-height:115%;font-family:"Book Antiqua",serif"> DATE: 18<sup>TH</sup> JANUARY, 2019<b><o:p></o:p></b></span></p> </div><p class="MsoNoSpacing" style="line-height:115%"><b><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif">COUNSEL:<o:p></o:p></span></b></p><p class="MsoNoSpacing" style="line-height:115%"><span style="font-size:12.0pt; line-height:115%;font-family:"Book Antiqua",serif">A FRANCISCA ADJO AYIVOR FOR HENRY ASANTE FOR PLAINTIFF/RESPONDENT <o:p></o:p></span></p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt; padding:0cm 0cm 1.0pt 0cm"> <p class="MsoNoSpacing" style="line-height:115%;border:none;mso-border-bottom-alt: solid windowtext 1.5pt;padding:0cm;mso-padding-alt:0cm 0cm 1.0pt 0cm"><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif">LESLEY AMEDIOR FOR MICHAEL GYAN OWUSU FOR THE 2ND DEF/APPLICANT <o:p></o:p></span></p> </div><p class="MsoNoSpacing" style="line-height:115%"><b><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif; mso-fareast-font-family:"Book Antiqua";mso-bidi-font-family:"Book Antiqua"">CORAM:<o:p></o:p></span></b></p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt; padding:0cm 0cm 1.0pt 0cm"> <p class="MsoNoSpacing" style="line-height:115%;border:none;mso-border-bottom-alt: solid windowtext 1.5pt;padding:0cm;mso-padding-alt:0cm 0cm 1.0pt 0cm"><span class="NoSpacingChar"><span style="font-size:12.0pt;line-height:115%;font-family: "Book Antiqua",serif">HIS LORDSHIP JUSTICE DR. RICHMOND OSEI-HWERE, HIGH COURT JUDGE<o:p></o:p></span></span></p> </div><p class="MsoNoSpacing" style="line-height:115%"><b><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif"><o:p> </o:p></span></b></p><div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt; padding:0cm 0cm 1.0pt 0cm"> <p class="MsoNoSpacing" align="center" style="text-align:center;line-height:115%; border:none;mso-border-bottom-alt:solid windowtext 1.5pt;padding:0cm; mso-padding-alt:0cm 0cm 1.0pt 0cm"><b><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif">RULING<o:p></o:p></span></b></p> </div><p class="MsoNormal" style="text-align:justify;text-indent:36.0pt;line-height: 115%"><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif"><o:p> </o:p></span></p><p class="MsoNormal" style="text-align:justify;text-indent:36.0pt;line-height: 115%"><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif">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></span></p><p class="MsoNormal" style="margin-left:36.0pt;text-align:justify;line-height: 115%"><i><span style="font-size:12.0pt; line-height:115%;font-family:"Book Antiqua",serif">"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. 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></span></i></p><p class="MsoNormal" style="text-align:justify;text-indent:36.0pt;line-height: 115%"><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif">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></span></p><p class="MsoNormal" style="margin-left:36.0pt;text-align:justify;line-height: 115%"><i><span style="font-size:12.0pt; line-height:115%;font-family:"Book Antiqua",serif">‘‘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></span></i></p><p class="MsoNormal" style="text-align:justify;text-indent:36.0pt;line-height: 115%"><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif">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></span></p><p class="MsoNormal" style="margin-left:36.0pt;text-align:justify;line-height: 115%"><i><span style="font-size:12.0pt; line-height:115%;font-family:"Book Antiqua",serif">"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. From the time the House of Lords clarified this cardinal principle more than a century ago in the celebrated case of Salomon v Salomon & 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></span></i></p><p class="MsoNormal" style="text-align:justify;text-indent:36.0pt;line-height: 115%"><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif">From the foregoing, it is clear that the 1<sup>st</sup> 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></span></p><p class="MsoNormal" style="text-align:justify;text-indent:36.0pt;line-height: 115%"><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif">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></span></p><p class="MsoNormal" style="margin-left:36.0pt;text-align:justify;line-height: 115%"><i><span style="font-size:12.0pt; line-height:115%;font-family:"Book Antiqua",serif">‘‘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></span></i></p><p class="MsoNormal" style="margin-left:36.0pt;text-align:justify;line-height: 115%"><i><span style="font-size:12.0pt; line-height:115%;font-family:"Book Antiqua",serif">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></span></i></p><p class="MsoNormal" style="text-align:justify;text-indent:36.0pt;line-height: 115%"><span style="font-size:12.0pt;line-height:115%;font-family:"Book Antiqua",serif">In the instant application before me, the 2<sup>nd</sup> 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 (herein