IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL
ACCRA - A.D 2019
DANIEL GIBSON DANSO - (Plaintiff/Respondent)
INTECELL INVESTMENTS LTD & 3 ORS - (Defendant/Appellant)
DATE: 18TH JULY, 2019
CIVIL APPEAL NO: H1/57
JUDGES: P. K. GYAESAYOR JA (PRESIDING), A.LOVELACE-JOHNSON JA, CECILIA SOWAH JA
MR. CHARLES BENTUM FOR DEFENDANTS
APPELLANT NANA KOFI BOKOE FOR PLAINTIFF/RESPODENT
This is an appeal against the decision of the High Court, Accra dated 5th of March 2018.
In this judgment the plaintiff/respondent shall be called plaintiff whiles the appellants shall be called defendants.
The plaintiff is a retired police officer who invested an amount of Gh¢80,000 into an alleged financial institution belonging to 2nd to 4th defendants known as Intercell Financial Investment. He was to be paid a monthly interest of Gh¢2,400 from 5th June 2011 to February 2012.
After some initial payment of the interest agreed upon, they ceased paying. Plaintiff then applied for a return of half of his investment which amounted to Gh¢40,000 but they failed to pay. He then reported the matter to police CID who found during their investigation that the defendants were not licensed to operate as a financial institution. He therefore wrote to terminate the agreement.
As a result of police investigation the matter went to the Circuit Court who discharged the defendants on the grounds that this is a civil matter to be pursued in the civil courts and not in the Criminal Court.
Upon this decision of the Circuit Court, the plaintiff issued a writ in the High Court on 3rd November, 2017 claiming the following reliefs;
a. The amount of Eighty-eight Thousand Ghana Cedis (Gh¢88,000.00) being the sum of the plaintiff’s principal and accrued interest thereon.
b. Interest on the said sum from 5th July, 2012 to the day of final payment at the prevailing commercial bank rate.
d. Any other relief(s) that this honourable court may deem fit.
The defendants entered appearance to the summons on 20th November 2017. The 2nd to 4th defendants upon entering appearance proceeded to file a motion on notice to have their names struck out as defendant on the grounds that the contract has plaintiff as lender and the 1st defendant as borrower and that the defendants are not parties to the agreement.
They argued that they have been unnecessarily made parties to the suit and that the three defendants are distinct from the 1st defendant. Overruling this objection, the learned trial judge found that the presence of all the defendants is necessary for the complete and final determination of the suit. She relied on the exceptions laid down in the case of Morkor vrs Kumah [1999-2000] 1 GLR at 721.
The plaintiff applied for summary judgment against the defendants which was granted by the High Court on the grounds that the defendants have no defence to the suit. The essence of Order14 is stated in rule 1 as follows;
Where in an action a defendant has been served without statement of claim and has filed appearance, the plaintiff may on notice apply to the court for judgment against the defendant on the ground that the defendant has no defence to a claim- included in the writ, or to a particular part of such a claim, or the defendant has no defence to such a claim or part of a claim, except as to the amount of any damages claimed. See the case of Atlanta Timber Co. vrs Victoria Timber Company Ltd  1 GLR 221.
The purpose of the procedure under 14 is to enable a plaintiff who has specially endorsed his writ to obtain summary judgment without trial provided he can prove his claim clearly by affidavit.
Clearly then for a judgment to be obtained summarily, the plaintiff ought to show that the defendant has no defence to the claim or that the defence is a sham.
Now before us is sufficient evidence that plaintiff/appellant reported the conduct of the defendant to the police who upon investigation found that the 1st defendants is not licenced to operate as a financial institution. Also on record at page 76 is a letter from the bank of Ghana regarding the status of the 1st defendant as follows “we write to inform you that the company, INTECELL INVESTMENT LIMITED has not been granted licence to operate as a Non-Bank Financial institution or a micro finance company as required by the Non-Bank Financial Institution Act, 2008 (Act 774). Our records further reveal that INTECELL INVESTMENT LIMITED has not submitted any application for a licence from the Bank of Ghana”.
It is patently clear that the company listed as 1st defendant does not exist or has the mandate to do business as a financial institution. The defendants have signed cheques in favour of plaintiff as Acting Managing Director and accountant respectively. They have all the time presented themselves to plaintiff as directors/officers of a legitimate existing company. Now the bank of Ghana has disowned them. It is their duty to show that they are truly registered to operate as a financial institution which they have failed to do. They convinced the plaintiff to deposit his money with them. Under Section 26 of the Evidence Act, 1975 (Act 323).
It is stated that “Except as otherwise provided by law, including a rule of equity, when a party has, by that party’s own statement, act or omission, intentionally and deliberately caused or permitted another person to believe a thing to be true and to act upon that belief, the truth of the thing shall be conclusively presumed against that or the successors in interest of that party in proceedings between;
a. That party or the successors in interest of that party, and
b. The relying person or successors in interest of that person.”
The plaintiff/respondent dealt with the defendants upon their word and indeed proceeded to issue cheques in respect of accrued interest. The cheques were in the name of Intecell Investment but duly signed by Kudjo Anku as AG Managing Director and Jessie Maxwell Caleb as the Accountant.
In her judgment the trial judge applied the exceptions in Mokor vrs Kuma and entered judgment against the defendants for the undisputed amount claimed by the plaintiff. The attempts to detach themselves from the act of the 1st defendant cannot be supported. It is true that the company is a body corporate which can sue and be sued in its own name but in the case before us there is no evidence that the company was ever licenced to do business. The company was clearly set up by the defendant for illegal purposes. Any piercing of the veil to find out those really behind the company is permissible. In the Mokor’s case the Supreme Court ruled that the lifting of the veil may be justified depending on the nature of the case when it ruled that.
“The corporate barrier between a company and the person which constitute or run it may be breached only under certain circumstances. These circumstances may be generally characterised as those situations where, in the light of the evidence, the state of justice, public policy or Act 179 itself so required”.
It is impossible to formulate on exhaustive list of the circumstances that would justify the lifting of the corporate veil. However, the authorities indicate that such circumstances include where it is shown that the company was established to further fraudulent activities or to avoid contractual liability. In Halsbury’s Laws of England (4th ed.), Vol. 7 11 at paragraph 90, it is stated as follows:
“Notwithstanding the effect of a company’s incorporation. In some cases, the court will pierce the corporate veil in order to enable it to do justice by treating a particular company for the purpose of the litigation before it, as identical with the person or persons who control it. This will go done not only where there is fraud or improper conduct, but in all cases where the character of the company or the nature of the person who control it is a relevant feature. In such cases the court will go behind the mere status of the company as a separate legal entity directing and controlling the activities of the company”.
However, in this case the company does not exist or licensed to operates as a financial institution as claimed by the defendants. It is the defendants who collected the amount from the plaintiff. It is a fraudulent company designed to defraud unsuspecting customers and they must be personally liable for the alleged acts of the supposed company. The learned judge of the court below was right in finding that the defendants have no valid defence to the action since they do not deny receiving the money. After going through the evidence, we find that the plaintiff is justified in bringing this action against the defendants who have been receiving and making payment in the name of an unlicensed 1st defendant financial institution. Their presence is really necessary for a complete and effectual determination of the suit.
We shall accordingly uphold the summary judgment of the court below and dismiss the appeal.
The appeal accordingly dismissed and the judgment of the high court is hereby affirmed.