ADIZA KUBURA ADAM vs. SADICO RAHAMA COMPANY LIMITED AND SALIFU MOHAMMED [2021]DLHC11619

Date	2021-10-21
Suit No.	SUIT NO: E12/33/21
Citation No.	[2021]DLHC11619

HIS LORDSHIP JUSTICE DR. RICHMOND OSEI-HWERE J

EMMANUEL ARTHUR ESQ FOR APPLICANT

[2021]DLHC11619
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													<main id="main" class="content" style="min-height: 60rem" >IN THE
MATTER OF SECTION 218 &amp; 219 OF THE COMPANIES ACT 2019 {ACT 992}<o:p></o:p>&nbsp;ADIZA
KUBURA ADAM<o:p></o:p>(APPLICANT)<o:p></o:p>vs.<o:p></o:p>SADICO RAHAMA COMPANY LIMITED AND SALIFU
MOHAMMED<o:p></o:p>(RESPONDENTS)<o:p></o:p>[HIGH COURT, SEKONDI]<o:p></o:p><div style="border-top: none; border-right: none; border-left: none; border-image: initial; border-bottom-width: 1.5pt; border-bottom-color: windowtext; padding: 0cm 0cm 1pt;">

<p class="MsoNormal" align="center" style="margin-bottom:0cm;margin-bottom:.0001pt;
text-align:center;line-height:normal;border:none;mso-border-bottom-alt:solid windowtext 1.5pt;
padding:0cm;mso-padding-alt:0cm 0cm 1.0pt 0cm">SUIT NO: E12/33/21&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:
21ST OCTOBER, 2021<o:p></o:p>

<p class="MsoNormalCxSpMiddle" style="margin-bottom:0cm;margin-bottom:.0001pt;
mso-add-space:auto;text-align:justify;line-height:normal;border:none;
mso-border-bottom-alt:solid windowtext 1.5pt;padding:0cm;mso-padding-alt:0cm 0cm 1.0pt 0cm">EMMANUEL ARTHUR ESQ
FOR APPLICANT<o:p></o:p>

</div>CORAM<o:p></o:p>HIS
LORDSHIP JUSTICE DR. RICHMOND OSEI-HWERE J<o:p></o:p><div style="border-top-width: 1.5pt; border-top-color: windowtext; border-left: none; border-bottom-width: 1.5pt; border-bottom-color: windowtext; border-right: none; padding: 1pt 0cm;">

<p class="MsoNormal" align="center" style="margin-bottom:0cm;margin-bottom:.0001pt;
text-align:center;border:none;mso-border-top-alt:solid windowtext 1.5pt;
mso-border-bottom-alt:solid windowtext 1.5pt;padding:0cm;mso-padding-alt:1.0pt 0cm 1.0pt 0cm">RULING<o:p></o:p>

</div>&nbsp;The
position of the common law relating to the right of the minority members or
individuals of a company to institute proceedings against the company is
espoused in the celebrated case of Foss v Harbottle (1843) 2 Hare 461. The rule
in Foss v Harbottle is to the effect that a court will generally refuse to
entertain action by minority shareholders or individual members of a company. <o:p></o:p>Where
a wrong is done to the company, the proper plaintiff is the company itself
except: a. illegal or ultra vires act and b. enforcement of personal rights.<o:p></o:p>A
member’s right to sue does not apply where the irregularity can be rectified.
Mellish L.J in Mac Dougall v Gardiner (1875-76) L.R. ICH.D13 p. 25<o:p></o:p>“In
my opinion, if the thing complained of is a thing which in substance the
majority of the company are entitled to do, if something has been done
irregularly which the majority of the company are entitled to do regularly, or
if something has been done illegally which the majority of the company are
entitled to do legally, there can be no use in having a litigation about it,
the ultimate end of which is only that a meeting has to be called, and then
ultimately the majority gets its wishes. Is it not better that the rule should
be adhered to that if it is a thing which the majority are the masters of, the
majority in substance shall be entitled to have their will followed? If it is a
matter of that nature, it only comes to this, that the majority are the only
persons who can complain that a thing which they are entitled to do has been
done irregularly; and that, as I understand it, is what has been decided by the
cases of Mozeley v. Alston and Foss v. Harbottle.”<o:p></o:p>The
Ghanaian law has modified the rule in Foss v Harbottle. Under sections 218 and
219 of the Companies Act 2019 (Act 992) individual members are vested with the
right to sue a company.<o:p></o:p>Section
218 provides that members of a company may apply to the court for injunction to
restrain the company from doing any act or entering into any transaction which
is illegal or ultra vires or which infringes any provision of its regulations,
or from acting on any resolution not properly passed in accordance with the Act
and the company’s Regulations. The courts reserve the right to declare such
acts void.<o:p></o:p>Furthermore,
section 219 gives members the right to sue for ‘remedy against oppression’. A
person can sue in the capacity of member, director, secretary, employee or
otherwise to protect his or her interest in the company. Section 219 of Act 992
provides:<o:p></o:p>“(1) A member or debenture
holder of a company or, in a case falling within section 234, the Registrar may
apply to the Court for an order under this section on the ground that:<o:p></o:p>(a) the affairs of the
company are being conducted or the powers of the directors are being exercised
in a manner oppressive to one or more of the members or debenture holders or in
disregard of the proper interests of those members, shareholders, officers, or
debenture holders of the company; or<o:p></o:p>(b) an act of the company
has been done or is threatened or that a resolution of the members, debenture
holders or a class of them has been passed or is proposed which unfairly
discriminates against, or is otherwise unfairly prejudicial to, one or more of
the members or debenture holders.<o:p></o:p>(2) Where on the
application, the Court is of the opinion that either of the grounds set out in
subsection (1) is established, the Court may, with a view to bringing to an end
or remedying the matters complained of, make an appropriate order; and, without
limiting the effect of this subsection, the Court may by order,<o:p></o:p>(a) direct or prohibit any
act or cancel or vary any transaction or resolution; or<o:p></o:p>(b) regulate the conduct of
the company's affairs in future; or<o:p></o:p>(c) provide for the purchase
of the shares or debentures of any members or debenture holders of the company
by other members or debenture holders of the company or by the company itself
and in the case of purchase of shares by the company without regard to the limitations
imposed by sections 61 to 65, other than subsections (4), (5) and (6) of
section 61.”<o:p><</main>