IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
KUMASI - A.D 2018
MR. SALAM - (Defendant/Appellant)
MR. C.K. ARHIN -(Plaintiff/Respondent)
DATE: 12 TH NOVEMBER, 2018
SUIT NO: H1/29/2018
JUDGES: ADUAMA OSEI JA (PRESIDING), SENYO DZAMEFE JA, WELBOURNE (MRS.) JA
JAMES MARSHALL BELIEB FOR DEFENDANT/ APPELLANT
KOBINA OBIRI YEBOAH FOR PLAINTIFF/RESPONDENT
ADUAMA OSEI JA:
By a writ of summons issued in the High Court, Kumasi, on the 26th of March, 2008, the Plaintiff/Respondent, hereinafter referred to as “the Plaintiff”, claimed the following reliefs against the Defendant/Appellant:
“1. A declaration that ownership to the farmland situate at Ampeyoo Krofofrom near Kumasi and which is registered as Okyeso Farms Limited is vested in the Plaintiff and his wife.
“2. Recovery of possession.
“3. An order of perpetual injunction restraining the defendant, his agents, servants, heirs and any person claiming title through him from interfering with the Plaintiff’s farmland in dispute.
“4. Damages for trespass.
“5. An order claiming one third (1/3) share of the animals reared on the plaintiff’s farmland by the defendant”.
The Plaintiff sought to justify the institution of his action in the statement of claim that accompanied the writ of summons. He stated in the statement of claim that in or around 1994, he acquired an 8.56 acre farmland situate at Ampeyoo Krofofrom on Agyeiwaa Stool land from Nana Kwabena Bonsu, Otumfour Apentenhene, and Opanin Kwabena Opong, the Odikro of Ampeyoo. He said he paid the drink money for the land and his grantors gave him allocation papers. The Plaintiff stated further that on the 20th of March, 1984, he registered his farms as “Okyeso Farms Limited”, under the Companies Act, 1963 (Act 179) and he built a 5-room living house and concrete structures on the land for the purpose of keeping farm animals. Having done these, the Plaintiff started rearing cattle, pigs, goats and sheep on the land. The Plaintiff alleged that in or around 1990, he employed the Defendant/Appellant, hereinafter referred to as “the Defendant”, on the land as farm keeper with the following terms of employment:
a) To keep and care for the farm animals;
b) To send the cattle out for pasture;
c) To be paid a monthly salary;
d) To be provided, together with wife and children, with free accommodation in the 5-room house built on the farm;
e) To be provided with free medical care, together with his family;
f) Permission to grow food crops on the farmland for their subsistence; and
g) A right to freely milk the cows for sale and or his own consumption.
According to the Plaintiff, his farming venture encountered a number of difficulties and in or around January, 1998, he told the Defendant that the farming enterprise had collapsed and he would therefore not be able to maintain him as an employee on a monthly salary.
He however gave the Defendant the option to remain in occupation of the 5-room house and to rent out some of the rooms to interested tenants. The Plaintiff alleged that following that offer, the Defendant rented out some of the rooms and also brought some members of his family into occupation of the premises. The Plaintiff alleged further that sometime around 1999 and 2000, his wife re-engaged the Defendant on terms similar to the previous terms of employment. According to the Plaintiff, it came to his attention that the Defendant was rearing animals on the farm and on or about 19th May, 2005, he caused his lawyer to write to the Defendant to demand from him a third share of the animals he was rearing. The Plaintiff alleged that in reaction to this demand, the Defendant introduced someone to him as a person who had 11 cattle on the farm and who had offered 3 of them to him (the Plaintiff). The Plaintiff alleged that the Defendant had however denied him the 3 cattle offered to him and had also refused to pay him the 1/3 share of the animals on the farm. The Plaintiff stated that he had demarcated the land into residential plots but the Defendant had falsely been claiming that he (Plaintiff) had sold him the farmstead and he had also been constructing buildings on some of the plots without his authority. The Defendant had also warned him and his wife and children not to set foot on the farm.
In his statement of defence, the Defendant denied that the Plaintiff was entitled to the reliefs claimed by him. The Defendant denied the grant alleged by the Plaintiff as having been obtained from the Ampeyoo Stool, and he also denied that the Plaintiff had registered the farm under the Companies Act. The Defendant further denied the Plaintiff’s allegation that his wife re-engaged him (Defendant) in or about 1999/2000, and also denied having introduced any person to the Plaintiff as having offered him 3 cattle. At the same time, however, the Defendant admitted the Plaintiff’s allegation that he (Defendant) had prevented him (Plaintiff) from taking the 3 cattle offered by that person and had refused to pay him the 1/3 share of the animals he was rearing on the farm. The Defendant alleged that sometime in 2005, he had acquired land known as Plot Nos. 33 and 39, Block E from the Ampeyoo Stool and he contended that if the Plaintiff had acquired 8.56 acres of farmland, the Plaintiff’s farmland was different from his (Defendant’s) Plot Nos.33 and 39. The Defendant alleged that he paid valuable consideration for his plots and he was given documents in respect of his acquisitions. In respect of the Plaintiff’s allegation regarding the terms of his (Defendant’s) employment, the Defendant alleged that the Plaintiff refused or failed to honour his side of the agreement. The Defendant alleged that in lieu of the terms which the Plaintiff failed to honour, the Plaintiff gave him (Defendant) the 5-room house. He said the offer of the house was to serve as compensation for his 14-year dedicated service. The Defendant also admitted having warned the Plaintiff and his family not to set foot on the farm. He however denied that his conduct in so doing was unlawful. The Defendant contended that he was rather entitled to reliefs against the Plaintiff and he accordingly counterclaimed against the Plaintiff as follows:
“i) Declaration of title to all that piece or parcel of Plot Nos. 33 Block E and 39 Block E situate and lying on the Ampeyoo Agyeiwaa Stool land;
“ii) Declaration of title to all that uncompleted five bedroom house given to the Defendant by the Plaintiff as compensation for rearing his cattle and in place of the agreed 1/3 of the newly born calves per year from the Plaintif’s farm;
“iii) An order of perpetual injunction restraining the Plaintiff herein, his agents, workmen, assigns and all persons acting in concert with him from interfering with and/or unduly harassing the Defendant and/or his workmen and agents on the said Plot No.33 Block E, and Plot No.39 Block E and the uncompleted five-bedroom house stated in (ii) supra.
“iv) Damages for trespass;
“v) Any other order(s) as the justice of the case would require in terms of rules of court and equity”
The issues set down as the issues for trial were:
“1. Whether or not the Plaintiff is the owner of the farmland situate at Ampeyoo Krofofrom near Kumasi which is registered as Okyeso Farm Limited;
“2. Whether or not Plot Nos.33 Block E and 39 Block E form part of the Plaintiff’s Okyeso Limited or are different from it;
“3. Whether or not Plot Nos.33 Block E and 39 Block E had been allocated to the Defendant by the occupant of the Ampeyoo Agyeiwaa Stool;
“4. Whether or not the Defendant was not paid any salary but by agreement made between the parties, the same was to be given one-third (1/3) of the newly born calves each year.
“5. Whether or not one Mr. Abia-Nkansah gave three of his cattle reared on the Plaintiff’s farmland to the Defendant to be given to the Plaintiff;
“6. Whether or not by any other agreement, the Defendant was to be given the Plaintiff’s five (5) bedroom house which the Defendant had been occupying as compensation for his services.
“7. Whether or not the Plaintiff is entitled to his claim;
“8. Whether or not the Defendant is entitled to the reliefs sought by him in his counterclaim.
“9. Any other issues raised by the pleadings”.
At the end of the trial, the trial Court rejected the case presented by the Defendant and declared the Plaintiff owner of Plot Nos.33, 39 and 40, Block E at Ampeyoo Krofofrom near Kumasi, registered as Okyeso Farm Limited. The trial Court also granted the Plaintiff reliefs 2, 3, 4 and 5 indorsed on his writ of summons.
Not satisfied with the decision of the trial Court, the Defendant has appealed against the same to this Court and this is our judgment in the appeal. The judgment appealed against is at page 110 to page 120 of the Appeal Record, and the Notice of Appeal is at pages 123 and 124 of the said Record. The grounds of appeal indorsed on the Notice of Appeal are that:
a) The trial Court erred in law when it held that the Plaintiff met the standard of proof required for declaration of title to the land in dispute.
b) The trial Court erred when it held that Defendant’s acquisition of the disputed land was fraudulent.
c) The trial Court erred in declaring the uncompleted house the property of Plaintiff.
d) The trial Court erred in granting the claim of 1/3 share of animals reared by Defendant when Plaintiff led no evidence to prove that he had any animals with Defendant.
e) The judgment is against the weight of evidence.
On the strength of the above-stated grounds, the Defendant is praying this Court to set aside the judgment of the trial Court and enter judgment in his favour on his counterclaim. The arguments advanced by Counsel for the Defendant in support of the appeal covered grounds (a), (b), (d) and (e). Ground (c) was abandoned because, as Counsel stated in his filed submissions, a critical examination of the judgment of the trial Court had shown that the trial Court did not make any order declaring the uncompleted house the property of the Plaintiff.
The last of the grounds to be argued by Counsel for the Defendant was ground (e), which contends that the judgment of the trial Court was against the weight of the evidence before it. Even though it was the last to be argued by Counsel, for reasons that will become evident by the end of this judgment, it is my intention to start my consideration of the appeal with it. As part of his arguments under that ground, Counsel for the defendant observed that when an appellant alleges that a judgment is against the weight of evidence, he has invoked the jurisdiction of the appellate court under rule 8(1) of its Rules, CI.19. This requires the Court of Appeal to re-hear the matter by examining the totality of the evidence on record and come to its own decision on the admitted facts. Counsel cited the cases of Akufo-Addo Vs. Catheline  1 GLR 377 and Tuakwa Vs. Bosom [2001-2002] SCGLR 61 in support of that submission. That principle is well-settled and it was indeed acknowledged by Counsel for the Plaintiff, who went on to submit that on the totality of the evidence on record, the Plaintiff was able to prove his case.
Now what was the Plaintiff’s case? The first indorsement on his writ of summons was for a declaration that ownership of “the farmland situate at Ampeyoo Krofofrom near Kumasi and which is registered as Okyeso Farms Limited” is vested in himself and his wife. A summary of the facts pleaded by him in support of this claim has been given above and what it says essentially is that the farmland in issue was acquired by him and registered under the Companies Act and that the Defendant whom he had employed to take care of his cattle and other animals on the farm, was making adverse claims in respect of it.
Among the documents he tendered at the trial to establish this claim are two allocation papers both dated 1st June, 1984, received in evidence as Exhibits A and A1 respectively, a certificate to commence business and a certificate of incorporation both issued under the Companies Act, and receipts for certain payments made by Okyeso Farms Limited. The certificates were received in evidence as Exhibits B and B1 respectively, and the receipts were received as Exhibits C, C1 and C2 respectively. Reading the exhibits mentioned above and putting the Plaintiff’s case in chronological perspective, I find that on the 20th of March, 1984, a company called Okyeso Farms Limited was incorporated under the Companies Act with the liability of its members limited. I also find that on the same day, that company was issued with a certificate to commence business and that on 1st June, 1984, two allocation papers were issued to the company in respect of the subject matter of the Plaintiff’s claim. Again I find that on 18th November, 1987, Okyeso Farms Limited made a payment of ground rent in respect of the subject matter of the Plaintiff’s claim.
It is clear from the above that prior to the allocation on the 1st of June, 1984, of the property claimed by the Plaintiff, Okyeso Farms Limited had been incorporated. It was subsequent to its incorporation on the 20th of March, 1984, that the allocation was made. Following the allocation, Okyeso Farms Limited made a payment of ground rent. If therefore the allocations and payments of ground rent are evidence of ownership, that ownership, in my view, was vested in Okyeso Farms Limited.
But in his statement of claim as well as his testimony before the trial Court, the Plaintiff stated that Okyeso Farms Limited was registered by him and that this registration was done under the Companies Act, 1963. Indeed, Exhibits B and B1 confirm the registration of Okyeso Farms Limited under the Companies Act, 1963. The question then is, what does it mean for a company to be registered under the Companies Act?
By section 14(5) of the Act, from the date of registration mentioned in the certificate of incorporation, the company is a body corporate and, subject to sections 27 and 28, is capable of exercising the functions of an incorporated company. Also by section 24, a company registered under the Act acquires all the powers of a natural person of full capacity. This concept of legal personality of companies, it will be recalled, was explained by Boison J in Owusu Vs. R.N. Thorne Limited  GLR 90 as meaning that the company “has a legal existence apart from the directors and members”. And this, in my view, is confirmation of the relevance and applicability of the rule in Foss Vs. Harbottle (1843) 2 Hare 461, in our jurisdiction. The rule is that a shareholder of an incorporated company, even when he is a controlling or sole shareholder, does not have a personal cause of action for a wrong done to the company.
Not to be forgotten on this subject is the case of Salomon Vs. Salomon & Company Ltd  AC 22, in which the House of Lords, among other things, underscored that a company formed in compliance with the regulation of the Companies Act is a separate person and not merely the agent of its controller. Among the implications of this principle are that properties of the company are distinguished from its members, and it has the right to sue and is liable to be sued. As a legal person, it has a legal right to enforce its own name and all legal proceedings must therefore be commenced and prosecuted in the name by which it was registered. On this stands the principle in Foss Vs. Harbottle (supra) that the company alone can institute an action in respect of an injury or wrong done to it.
Now, the ground of objection under consideration here is that the decision of the trial Court was against the weight of evidence, and where such an objection has been raised, Tuakwa Vs. Bosom (supra), expects the appellate court, after it has reviewed the record and considered all the evidence adduced, to satisfy itself as to whether on a preponderance of the probabilities the conclusions of the trial court are reasonably or amply supported by the evidence.
To guide the determination of the question whether the conclusions of the trial Court in the present case are reasonably or amply supported by the evidence, the following notes are made:
i) that by relief (1) indorsed on his writ of summons, the Plaintiff was asking the trial Court to declare ownership of the property in issue as vested in himself and his wife;
ii) that the evidence adduced in support of that relief rather pointed to ownership of the said property by Okyeso Farms Limited which had been incorporated under the Companies Act with limited liability, though the incorporation had been done by the Plaintiff who was probably the sole shareholder;
iii) that the legal consequence of the incorporation is that Okyeso Farms Limited has a separate legal existence from the Plaintiff;
iv) that the properties of Okyeso Farms Limited are distinguished from the Plaintiff and his properties;
v) that Okyeso Farms Limited has the right to sue and is liable to be sued;
vi) and that as a matter of law, Okyeso Farms Limited is the only person that can institute an action in respect of an injury or wrong done to it or in respect of its property.
Now, faced with the facts and the law as noted above, the trial Court’s decision was that the Plaintiff was entitled to his claims and it proceeded to declare him “owner of Plot Nos. 33, 39, and 40 Block E, Ampeyoo Krofofrom near Kumasi, registered as Okyeso Farms Limited, together with reliefs 2, 3, 4 and 5 as indorsed on the writ of summons”. But does this decision have reasonable or ample support from the record? It certainly does not. As the analyses done above have shown, this is a case in which the Plaintiff sued in respect of matters he had no capacity to litigate in Court and in which he sought to establish his case with evidence which only exposed his lack of capacity. It is also a case in which the Plaintiff found himself, under the Defendant’s counterclaim, defending claims which he had no capacity to defend and which could only properly be made against Okyeso Farms Limited. In an action brought in his personal capacity, the Plaintiff could not be declared owner of property which was established by the evidence to be owned by Okyeso Farms Limited. In spite of Bonney Vs. Bonney [1992-93] 2 GBR 779, in which Aikins JSC cautioned against interference by appellate courts with findings of fact made by trial courts, I think ground (e) of the Defendant’s appeal ought to succeed. In the present case, the decision of the trial Court is clearly wrong and it cannot be upheld by this Court.
Having sustained the Defendant’s contention that the decision of the trial Court was against the weight of evidence, I do not consider it necessary to discuss the remaining grounds of appeal.
I can only express regret that Counsel for the parties failed to raise the issue of capacity at the inception of the action. If they had done so, the true legal position would have been determined much earlier in the proceedings and the parties would have been spared the great expense they have incurred in terms of time and money up to this stage. The action was instituted on 26th March, 2008, that is over 10 years ago, and we cannot tell what further time and money will be expended by the parties before they are able to sort themselves out.
Before a person decides to institute an action in respect of a grievance he thinks he has, it is advisable that he considers whether by its nature, the grievance is one that entitles him to a hearing as a party by a court of law. Failure to do so may plunge him into an unwelcome situation such as we have in the present case. Most of the time, it is lawyers that prospective litigants rely upon to decide whether or not to go to court and, if they should, in what capacity. We as lawyers should therefore be mindful of the huge responsibility taking briefs thrusts upon us and endeavour to live up to it.
The Defendant prayed this Court in his notice of appeal to be awarded judgment on his counterclaim. As observed above, however, the issues raised under the counterclaim were issues that could only properly be raised against Okyeso Farms Limited.
With the claims under the counterclaim raised against the wrong person, no merit attaches to those claims and this Court does not consider it necessary to review the record with the counterclaim in view. Save that no merit attaches to the counterclaim, the Defendant’s appeal has succeeded and the judgment of the trial Court dated the 15th of March, 2017 is hereby set aside.