BLUE SKY PRODUCTS GH LTD vs ATTORNEY GENERAL & LANDS COMMISSION
  • IN THE SUPERIOR COURT OF JUDICATURE
    IN THE COURT OF APPEAL
    ACCRA - A.D 2018
BLUE SKY PRODUCTS GH. LTD. - (Appellant)
ATTORNEY GENERAL AND LANDS COMMISSION - (Respondents)

DATE:  3 RD MAY, 2018
CIVIL APPEAL NO:  H1/164/17
JUDGES:  MARFUL SAU (J.A) PRESIDING, LOVELACE-JOHNSON (J.A), HENRY A. KWOFIE (J.A)
LAWYERS:  MR. POKU-BOAH KWAME WITH ELREDA DANKYI (MRS.) FOR RESPONDENT
MR. K. AMOFA-AGYEMANG FOR APPLICANT/APPELLANT
JUDGMENT

AVRIL LOVELACE-JOHNSON JA:

On 29th June 2012, the Applicant/Appellant for what they described as ‘the recalcitrance of the officers of the Lands Commission among others’ filed an application for the following reliefs at the High Court.

 

A declaration that the Applicant is a person at law and entitled to and has the right to own landed property or interests in landed property as a Ghanaian legal person.

 

A declaration that the Applicant is a person at law and entitled to and has the right to own landed property or interests in the landed property as a PERSON as enshrined in ARTICLE 18 of the 1992 Constitution of the Republic of Ghana.

 

A declaration that pursuant to the said right the Applicant has the right or is entitled to purchase, obtain, enjoy, maintain, transfer, mortgage, assign, convey, etc interests in its land or interest in lands.

 

A declaration that the Applicant is by virtue of its registration and incorporation entitled to mortgage, convey, transfer, assign, lease, sublease, etc or all of its interests held by it in any landed property.

 

An order directed at all or relevant administrative bodies or public officials or Lands Commission to register or conclude the registration of all or any of the Applicant’s interests either for its benefits or for the benefit of its transferees, assignees, leases, etc

 

Any other orders as this court may deem fit

 

The said Lands Commission was joined as a second Respondent upon application. The High Court after hearing arguments from both sides refused to grant the said application and made further orders relating to the interest the Applicant/Appellant could have in any lands held by them and limited the powers to deal with the said land among others.

 

It is the dissatisfaction of the Applicant/Appellant with these orders that has culminated in the present appeal. Eight grounds of appeal were filed by the Appellant with the intimation that further grounds would later be filed upon receipt of the Record of Proceedings. No such further grounds were filed. These are;

 

That the whole judgment/ ruling is contrary to law.

 

That the judgment/ ruling is against the weight of evidence.

 

That the conclusion made by the judge that the appellant company does not have Ghanaian nationality is contrary to the evidence.

 

That the learned judge’s piercing of the corporate veil to determine the nationality of the appellant is unwarranted and wrong in law.

 

That the learned judge erred in law when he declared that the interest the appellant company shall have in any landed property shall not exceed a period of fifty years.

 

That the learned trial judge erred in law when he declared that the appellant shall not have a freehold interest in land and all such interest held by the appellant are declared void.

 

That the learned trial judge erred in law when he declared that the appellant shall have no power to sell land, but have power only to mortgage its landed property to raise capital.

 

That the Statement made in the 2nd paragraph of page 8 of the ruling to wit “I do not think we can afford to live in this country and pride ourselves as Ghanaian when our lands are in the hands of foreigner. This will certainly make our independence meaningless” is discriminatory and racist and same is illegal.

 

First, I will deal with a preliminary issue before considering the merits of this appeal. I agree with counsel for the Respondent/Respondent that the Applicant/Appellant first ground of appeal sins against Rule 8(4) of the rules of this court ie CI 19. The ground of appeal in question which alleges that the judgment under appeal is contrary to law does not give any particulars of the nature of this “contrary to law”. It is vague and therefore not permitted by sub rule 6 and is hereby struck out in the exercise of this Court’s power under Rule 8(7).

 

Counsel for the Applicant/Appellant argued grounds B and C together. I will discuss grounds B C and D together. Grounds E F and G will be determined by the findings on the three grounds earlier stated.

 

Counsel states that the trial judge formulated, the main issue for determination as “whether or not the Applicant/Appellant had a Ghanaian nationality” and rightly stated that the traditional rule was that upon its incorporation a company acquires the nationality of the country under whose laws it is incorporated and in whose territory it has its registered office. He submits that since the evidence adduced showed that the Applicant/Appellant was incorporated in Ghana, and so was a Ghanaian company and for that matter a Ghanaian citizen, it was contrary to the evidence for the learned trial High Court Judge to ‘rationalise’ the definition of citizenship in the Constitution.

 

By so doing, it is further submitted, the judge embarked on the illegal journey of differentiating between citizens entitled to acquire and own freehold interest in land and those who are not so entitled. This exercise according to counsel was beyond that Court’s jurisdiction.

 

In response Counsel for the Respondent contends that the Applicant/Appellant did not have the requisite Ghanaian nationality to qualify to hold freehold interest in land since it was solely owned by a foreign entity and so was not entitled to the reliefs sought and the Court properly so held. According to Counsel it was right for the trial Court to go beyond exhibit RSA2 upon which the Applicant/Appellant was basing its case. This was because even though the said exhibit emanating from the Registrar of Companies stated that the Applicant/Appellant was a Ghanaian Company it did not indicate where its headquarters was situate. The court was therefore right in taking into account other factors such as the ownership of all its shares by the parent company, the failure to state where the headquarters of the Applicant/Appellant is situate and rightly came to the conclusion that the Applicant/Appellant was not a Ghanaian company. In other words, the Court’s finding is supported by the evidence on record.

 

This Court’s statutory power of rehearing by virtue of Rule 8(1) of CI 19 has been defined by a host of authorities. All these cases make it clear that while one must be slow to disturb findings made by a trial court which directly heard witnesses, this court has the power to put itself in the shoes of the trial court and conduct a comprehensive examination of all evidence led to determine whether these findings are supported on the balance of probabilities by the evidence on record and if not, make its own findings after such an examination.

 

See the cases of

1. Djin v Musah Baako (2007-2008) SCGLR 68

2. Abbey v Antwi (2010) SCGLR 17

 

There appears to be some confusion in the Applicant/Appellant’s mind about the exercise engaged in by the learned trial Judge in coming to his conclusions in this appeal. In arguing ground B, counsel referred to arguments made relating to ground A so although the said ground was struck out I have read the arguments made in support of it regarding the submission that the Court acted beyond its jurisdiction. Nowhere in the judgment did the trial judge “veer off the course into the area of interpretation”. He was constantly aware that the Constitution was the supreme law of the land and its provisions had to be adhered to. His overriding concern was whether exhibit RSA2, that is the letter from the Registrar General stating that the Applicant/Appellant was a Ghanaian company was sufficient to make it so. In the light of the contrary position taken by the Respondent, the judge was duty bound to conduct the exercise that he did. The question then is whether in the light of the evidence adduced, the appellants qualify to be described as a Ghanaian company and so as a citizen to entitle them to hold a freehold interest in land in Ghana.

 

To counsel for the Applicant/Appellant, exhibits RSA, RSA1 and RSA2 are ‘conclusive pieces of evidence that the Applicant is a Ghanaian Company and for that matter a citizen’. See page 8 of his written submissions. These are the certificate of incorporation, certificate to commence business and a letter from the Registrar of Companies stating that they are a Ghanaian company. The Respondent’s position is that it is the constitutional provisions and the definition given by The Ghana Investment Promotion Centre, Act, 1994 Act 478 as to who a Ghanaian is in terms of business and Investment that are applicable here.

 

The current Act is The Ghana Investment Promotion Act 2013 Act 865. Section 40 remains the same as in the earlier Act. It defines a Ghanaian as

 

Any citizen or any company, partnership or association or body ( whether corporate or unincorporated) the majority capital or financial interest in which is owned by citizens of Ghana and includes the state and a statutory corporation

 

A study of the said Act shows that some businesses were solely reserved for Ghanaians by section 8 of the Act and the section above defined who a Ghanaian is for the purpose. The Respondents however contend that in terms of business and investment this definition should apply in this case. If this is so then the Applicant/Appellant is clearly not a Ghanaian company even if it was incorporated in Ghana. This is because the Applicant/Appellant’s own exhibit RSA2 states the only shareholder of the Applicant/Appellant to be Blue Sky Products (UK) Limited.

 

Counsel for the Applicant/Appellant takes issue with the trial judge’s assumption that the headquarters of the Applicant/Appellant is not in Ghana and states that this was not an issue at the trial so the court should not suo moto have made it one. The judgment shows it was one of the several factors the court considered in deciding if the Applicant/Appellant was a Ghanaian company.

 

It will be noticed from the judgment that the trial judge did not base his finding that the Applicant/Appellant was not a Ghanaian company on the provisions of the Ghana investment Act. He arrived at that conclusion by piercing the veil of incorporation, Counsel for the Applicant/Appellant underground D states that the piercing of the veil of incorporation by the judge was unwarranted since there was no proof on record that the Applicant/Appellants had engaged in any illegal conduct. In other words there had to be evidence of such conduct before that could be done. In the case of Akoto v Akoto [2011] 1 SCGLR 533 @ 543 Atuguba JSC quoted Robert Walker J in the case of Re Polly Peck International plc 2 All ER 433 2 447 where he stated, regarding the concept as follows

       That is a vivid but imprecise metaphor which has possible application in different contexts. The most relevant….is where corporate personality is used as ‘ a mere façade              concealing the true facts….’

 

Gower’s Principles of Modern Company Law 6th Edition page 173 lists the situation where a company is a mere façade concealing true facts as one of the circumstances where the court can pierce the veil of incorporation. The learned author states that from a study of cases decided by the courts, it appears that the fact that a company is found to be a façade does not necessarily mean it was necessarily incorporated with any deceptive intention.

 

Halsbury’s Laws of England, paragraph 90 Volume 7(1) states in part that lifting the corporate veil is justified in many cases

“…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 controls it is a relevant feature…”

 

 Certainly the character or nature of the Applicant/Appellant is in issue here since they seek a declaration that they are a Ghanaian legal entity. The Supreme Court in Morkor v Kuma [1998-99] SCGLR 620 @ 633 stated that

“..whether or not a circumstance is one in which the lifting of the veil of incorporation is merited is dependent on the peculiar factors driving each particular case’

 

Apart from the Respondent’s claim that the Applicant/Appellant was selling portions of the freehold interest in land it had acquired to other people in contravention of its stated purpose which was agro processing,(see exhibit LC1),more relevant for the purposes of determining the nationality of the Applicant/Appellants was the position of the court that piercing the veil of incorporation would enable it to determine if the Applicant/Appellant although incorporated in Ghana was a foreign company and so not entitled to a freehold interest in land exclusively reserved for Ghanaians by the Constitution. By performing this exercise, the court was enabled to go beyond the word of the Registrar of companies and find that Applicant/Appellant was wholly owned financially by a foreign company among other factors and in my considered opinion rightly found that Applicant/Appellant’s were a foreign company in spite of having been incorporated in Ghana. The judge listed six factors usually used to determine the true nationality of a company as

The state of incorporation

The principal seat of business

The nationality of shareholders

The nationality of overall investment

The nationality of management

The persons controlling the business of the company/corporation

 

The judge then stated as follows

Applying the criteria above, can it be said that the applicant company qualifies to have a Ghanaian nationality? By a search report exhibit (RSA2), filed by the Applicant, Blue Sky Products Ghana Limited is a Ghanaian company. It was incorporated on 26/02/1997 and commenced business on 27/02/1997. It has three directors namely; Anthony John Devereaux Pile, Bruce John Parson and Kwesi Seth Dei. . It is significant to note that none of the documents filed and relied upon by the Applicant show where the company is headquartered; and it is not known where its shareholders meetings are held……..Aside its incorporation in Ghana and the fact that it carries on its business in Ghana, there is really nothing Ghanaian about the company…’

 

The judge referred to the case of In Re a Company [1985] BCLC 333 which stated in part that

.....the court will use its power to pierce the corporate veil if it is necessary to achieve justice irrespective of the legal efficacy of the corporate structure under consideration’

 

 and concluded that the Applicant/Appellant did not hold Ghanaian nationality and could not therefore hold a freehold interest in land in Ghana.

 

I agree with that conclusion. I am also satisfied that the act of piercing the veil of incorporation by the learned Trial judge was justified in the peculiar circumstances of this case. Grounds B C and D fail as being without merit. They are dismissed.

 

In the light of my earlier conclusion that the Judge’s finding that the Applicant/Appellant is not a Ghanaian company is right and supported by law and the evidence on record, grounds E F and G which are all complaints against consequential orders made by the judge are without merit. The orders stated in grounds E and F were rightly made by virtue of Articles 266(1) (2) and (4) of the Constitution and that made in ground G rightly restrained the Applicant/Appellant from selling land as if it is registered to carry on with that business since that is not their registered purpose. The said grounds of appeal are also hereby dismissed.

 

The statement in ground H may not sit well with counsel for the Applicant/Appellant but his complaints about it have no bearing on the merit or otherwise of the judgment under appeal. For the avoidance of doubt, although it is a strongly worded opinion of the trial judge, it is certainly not racist, discriminatory or illegal as alleged by Counsel for the Applicant/Appellant.

 

In conclusion, there is no merit in this appeal. It fails in its entirety.