RULING

On 30^th April, 2019 leave was granted to Daniel Aidoo Mensah, the applicant herein (who described himself as the Administrator/Judicial Manager of Esich Life Assurance Company Ltd., the 1^st defendant therein) to substitute Esich Life Assurance Company Ltd. In the motion on notice for substitution, the applicant also prayed the court to set aside all court processes subsequent to the protection order that led to his appointment as the so called Administrator/Judicial Manager. The matter was adjourned for the court to hear legal arguments relating to the application to set aside all court processes particularly the garnishee order made subsequent to the appointment of Daniel Aidoo Mensah.

Counsel for the applicant argued that upon an application by the National Insurance Commission, the applicant was appointed as the Judicial Manager/Administrator of Esich Life Assurance by the High Court differently constituted under section 99 of the Insurance Act, 2006 (Act 724). That, an order of protection was made on 25^thJanuary, 2019 and the applicant was subsequently appointed by the court on 12^th February, 2019. Counsel submitted that per section 101 of Act 724 when a judicial management order is in force all proceedings, execution or other legal processes shall not be commenced or continued against the insurer or its assets. Thus, the garnishee order made on 22^nd February, 2019 is invalid, as the court had already appointed the applicant. He invited the court to set aside the garnishee nissi order and halt the execution process against Esich Life Assurance (now substituted by the applicant herein).

In a rebuttal to the submissions of counsel for the applicant, counsel for the plaintiff/respondent (hereinafter called the respondent) submitted that the applicant was appointed under section 180 of Act 724 and not section 99. He submitted that per the applicant’s own showing in Exhibit DAM2, he was appointed as an administrator and that the import of section 180 is that if you apply for a protection order you are appointed as an administrator and not a judicial manager. That, a judicial management order is governed by section 99 of Act 724. He submitted that section 92 of Act 724 also allows the National Insurance Commission to apply to the court for liquidation of an Insurance Company and that per section 6 of Bodies Corporate (Official Liquidations) Act, 1963 (Act 180) there is an automatic stay of proceedings when a liquidator is appointed for companies in general. However, section 92 of Act 724 has modified the general position relating to liquidation of companies such that stay of proceedings does not apply to liquidation of insurance companies. He also submitted that per section 180 of Act 724 appointment of an administrator does not automatically stay proceedings nor halt an execution process. He invited the court to dismiss the application to halt the garnishee proceeding.

The Insurance Act, 2006 (Act 724) was enacted to provide comprehensive provisions for the regulation of the insurance industry and for related matters.

Section 99(1) of Act 724 makes provision for an appointment of a judicial manager to manage the affairs of an insurance company (insurer) under distress upon an application made by the insurance company or the National Insurance Commission (NIC) under section 100 of the Act. The judicial manager shall operate under the conditions spelt out under section 101 of Act 724 as follows:

“During the period in which a judicial management order is in force in respect of an insurer except with the leave of the Court or with the consent of the judicial manager

(a) steps shall not be taken to enforce any security over the insurer's assets,

(b) steps shall not be taken to repossess assets that are being used or occupied by or are in the possession of the insurer

(c) proceedings. execution or other legal process shall not be commenced or continued or distress the against the insurer or its assets,

(d) a share shall not be transferred and an alteration shall not be made in the status of the members of the insurer, whether by an amendment of the memorandum or articles or any shareholders' or members' agreement or otherwise, and

(e) a resolution of the members of the insurer shall not be passed.”

Under section 180 of Act 724, the NIC can apply to the court for a protection order to among other reasons protect the interests of policyholders, creditors, customers and the public where the licence of an insurer is about to be revoked or suspended. Section 180 provides:

“180. (1) Where a license of either an insurer or insurance intermediary expires or is about to be revoked or suspended, the Commission may apply to the Court for a protection order. (2) On an application made under subsection (1), the Court may make such order as it considers necessary to protect or preserve the business or property of the insurer or insurance intermediary, or the interests of its policyholders, creditors, customers or the public including

(a) an order preventing the insurer or insurance intermediary or any other person from transferring, disposing of or otherwise dealing with property in the insurer's or insurance intermediary's custody or control,

(b) an order appointing an administrator to take over and manage the business then carried on by the insurer or insurance intermediary immediately before the revocation or suspension of the licence, as the case may be, [Emphasis mine]

(c) in the case of a company, an order that the insurer or insurance intermediary be wound up by the court subject to the supervision of the court under the Companies Code, or

(d) an order granting the Commission a search warrant.

(3) An order made under subsection (2) (b) may

(a) specify the powers of an administrator, which may include the powers of an insurer under this Act or of a liquidator under the Companies code,

(b) require the administrator to provide security to the satisfaction of the Court,

(c) determine the remuneration of the administrator, or

(d) require a person it considers necessary to appear before the court for the purposes of giving information or producing records concerning the insurer or insurance intermediary or the business carried on by the insurer or insurance intermediary …”

It is clear that section 180 (2) (b) empowers the court to appoint an administrator to take over and manage the business of an insurer immediately before the suspension or revocation of the licence. Thus, a protection order begets the appointment of an administrator. The legal effects of sections 99 and 180 are not the same. While section 99 falls under the broad heading: Liquidation and Judicial Management of Insurance Companies, section 180 also falls under the heading: Inspection and Enforcement. The orders that flow out of the two provisions are not the same.In fact, the positions appointed by the court under the provisions are not the same. The position of Judicial Manager cannot be used interchangeably with that of an Administrator. In effect, there is no such position as Judicial Manager/Administrator under the Insurance Act. Under the Act, the court either appoints a Judicial Manager or an Administrator to manage the affairs of a distressed insurer. The court can also appoint a liquidator under section 92 of the Act. Each appointment comes with its own conditions.

Now the profound question is: did the court appoint the applicant as a Judicial Manager or an Administrator of Esich Life Assurance?

From Exhibit DAM 1, there is no doubt that the court granted a protection order upon an application by the National Insurance Commission. The court order is entitled ORDER FOR PROTECTION and the content of the order speaks for itself.

Exhibit DAM 2 is the record of proceeding dated 12^th February, 2019. It is reproduced below:

“By Court

Mr. Aidoo Mensah, the person suggested by the applicant is in court.

By Court

Q: Do you consent to administer the Respondent? 

A: Yes, my lord.

Q: What are your Charges?

A: We are still in discussion with the NIC.

To:

Head of Care Supervision

Q: Is that the case?

A: Yes, my lord.

By Court

The Administration of the Respondent is entrusted to Mr. Daniel Aidoo Mensah, Executive Chairman and Chief Actuary of Aidoo Mensah and Associates Ltd. (Please refer to Profile and CV) which is attached to the Docket).

His fees and charges are still the subject of negotiation with the National Insurance Commission. He is to file quarterly report in regards to his Stewardship. These reports are to be verified by an affidavit.”

From a careful reading of the record of proceedings, it is clear that Mr. Daniel Aidoo Mensah was appointed as an administrator. In the words of Her Ladyship Justice Jennifer A. Dodoo (Mrs): “The Administration of the Respondent is entrusted to Mr. Daniel Aidoo Mensah, Executive Chairman and Chief Actuary of Aidoo Mensah and Associate Ltd …” The court also made orders relating to the filing of quarterly reports by the administrator. These orders were made in conformity with section 180 (3) of Act 724. The court was not mandated to make all the orders spelt out under section 180 (3), as the use of the word ‘may’ in the provision provides the court with a discretionary power relating to the orders.

Section 180 spells out the powers of the Administrator under a Protection Order and the conditions under which an administrator shall operate. The provision and other related provisions never required proceedings and execution processes relating to the insurer to cease on the appointment of the administrator. If the lawmaker wanted such a situation to prevail, it would have made an express provision for it. The linguistic canon of interpretation, expressio unius est exclusio alterius rule, informs this conclusion. Chitty on Contract at page 623 explains the rule as:

“The express mention of an instrument of a particular person, power or thing may show an intention to exclude any other person, power or thing; expressio unius est exclusio alterius.”

The result is that the garnishee nissi order made subsequent to the appointment of the administrator remains valid and the same cannot be set aside. Consequently, the garnishee proceedings cannot be halted.

For the foregoing reasons, the application is dismissed. There will be no order as to costs.

SGD 

DR. RICHMOND OSEI-HWERE 

JUSTICE OF THE HIGH COURT