IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
KUMASI - A.D 2018
NANA ANIN AGYEKUM AND NANA WAWA ANIM II - (Plaintiffs/Respondent)
ADANSI ASAASI MINING CO. LTD AND PELANGIO MINES CO. LTD. -(1ST Defendant/Appellant & 2ND Defendant)
DATE: 26THFEBRUARY, 2018
SUIT NO: H1/83/2016
JUDGES: ADUAMA OSEI JA (PRESIDING), SENYO DZAMEFE JA, WELBOURNE (MRS.) JA
KOFI ADDO FOR 1ST DEFENDANT/APPELLANT OSCAR
KOFI JUMAH FOR PLAINTIFFS/RESPONDENTS
ADUAMA OSEI JA:
This is our judgment in an appeal against a decision of the Commercial Division of the High Court, Kumasi, dated the 30th of October, 2015, in which the High Court entered judgment against the 1st Defendant/Appellant in favour of the Plaintiffs/Respondents for all the reliefs claimed by them except two.
The Plaintiffs/Respondents instituted the action on their own behalf and on behalf of the Adansi Asaasi Asona Stool of Ashanti against the 1st Defendant/Appellant and the 2nd Defendant jointly and severally, and the reliefs claimed by them, as indorsed on their amended writ of summons, were as follows:
“(a) Recovery of the original copy of the card and the originals of all documents relative to the 1st defendant and mentioned in paragraphs 9 and 13 of the statement of claim.
“(b) A declaration that all directors of the 1st defendant are trustees of the Adansi Asaasi Stool and its allied communities and have been such trustees since 1974 when the 1st defendant was registered or alleged to have been registered under the laws of Ghana.
“(c) An order to remove all directors who were appointed to their positions long after the 1st Defendant was registered or allegedly registered in 1974, i.e. limiting the number of directors to only the original seven (7).
“(d) An order that the 1st Defendant be re-structured and that such re-structuring, i.e. admitting new members, appointing directors, substituting or replacing directors, etc. must be done only in consultation with the plaintiff Stool and allied communities.
“(e) An order directed at the 1st defendant to account for payments it has received from local/foreign companies over the years, especially in its dealings with:
(i) Pacific Cosmos Resources Limited of Vancouver, British Columbia, from August, 1993 to 2000.
(ii) Joint venture with SEMS Exploration Services Limited from August, 2003 to date.
(iii) Joint venture with Rangold Resources from April, 2004 to March 15, 2005.
(iv) Joint venture with 2nd defendant from June, 2006 to date.
“(f) An order directed at the 2nd defendant to stop allpayments to the 1st defendant forthwith.
“(g) An order of interim injunction to restrain the 2nd defendant from continuing with any further works onthe Adansi Asaasi Stool lands pending a final hearing and determination of the suit”.
In this judgment, the Plaintiffs/Respondents are referred to as “the Plaintiffs”, the 1st Defendant/Appellant is referred to as “the 1st Defendant” and the 2nd Defendant continues to be referred to as such.
In the statement of claim that accompanied the writ of summons, the Plaintiffs made allegations to the effect that certain German miners had gifted their mining concern called Adansi Asaasi Gold Mine Company Limited, established on the Stool’s land, to them and, to facilitate the tracing of all records relating to the said company and its operations, had handed to them a document in the form of a card. The Plaintiffs had held discussions with some natives of Adansi, including two persons who later turned out to be among the directors of the 1st Defendant, who were said to have vast experience in the mining industry, with a view to seeking their expert advice on the reactivation of the mining concern allegedly gifted to them.
Those two persons, after visiting and inspecting one of the shafts of the said mining concern, were alleged to have confirmed to the Plaintiffs that the area contained very rich gold deposits, and they were further alleged to have pledged their support for all efforts that the Plaintiffs would employ towards reactivating the mine. The Plaintiffs alleged again that in pursuance of their resolve to reactivate the mine, they handed the card to those two persons for the purpose of conducting official searches on the mining concern and gathering all other documents covering concessions relating to the mining concern. The two persons, as alleged, had after their searches, handed to the Plaintiffs only photocopies of documents on the concessions but had kept the card and the originals of the documents, and had ignored all demands by the Plaintiffs for the return of the card and originals of the documents.
Meanwhile, the 1st Defendant had been incorporated and it had turned out that the two persons, alleged to be wrongfully holding the card and other documents, were among its directors. Even though, as alleged, the 1st Defendant had at various times, both verbally and in writing, admitted having the card and other documents in its possession, the 1st Defendant had continued unlawfully, to hold on to the card.
The Plaintiffs contended in the statement of claim that the 1st Defendant (Adansi Asaasi Mining Company Limited) had been incorporated under the name of the mining concern gifted to them or under a name similar thereto, and they alleged that over the years, armed with the card and the original documents, the 1st Defendant had entered into agreements with and received cash payments from some local and foreign companies. The 1st Defendant was also alleged to be working on one of the concessions of the mining concern gifted to them and as consideration for granting the 2nd Defendant a right to acquire an interest in the concession, the 1st Defendant had demanded and obtained from the 2nd Defendant the sum of Twenty Thousand United States Dollars.
The Plaintiffs contended that the 1st Defendant is a fraudulent entity in view of the manner and apparent purpose of its incorporation, and has also been fraudulent towards them in the conduct of its affairs. The Plaintiffs contended in the alternative that the persons behind the operations of the 1st Defendant had placed themselves in the position of trustees for the Adansi Asaasi Asona Stool and had, through the conduct of the affairs of the 1st Defendant, acted in breach of trust.
In its statement of defence, the 1st Defendant denied the material allegations made by the Plaintiffs and described the allegations as a deliberate misrepresentation of facts. The 1st Defendant alleged that contrary to the allegations made by the Plaintiffs concerning concessions, the concession it works on covers an area of 225 square kilometres and that the portion passing through the Plaintiffs’ land is negligible. The 1st Defendant stated that the Plaintiffs erroneously considered that they were entitled to some of its shares and were aggrieved for not being offered shares. It contended that the Plaintiffs’ action was actuated by bad faith, ignorance, misinformation, greed and misapprehension of the principles of company law. The 1st Defendant contended further that there had never been any legal relationship between it and the Plaintiffs and it denied having perpetrated fraud or having breached any trust in respect of its operations or dealings with the Plaintiffs.
The 2nd Defendant also denied the material allegations made in the statement of claim concerning it and it contended that the Plaintiffs were not entitled to any of the claims or orders sought against it in the writ of summons and statement of claim.
The pre-trial settlement effort in the action failed and the pre-trial judge set down the following issues for determination:
“1. Whether or not the 1st Defendant Company is an off-shoot, successor and/or owes its existence to any previous company by name Adansi Asaasi Goldmine Co. Ltd.?
“2. Whether or not there is any record showing that a German company carried out exploratory activities prior to 1974?
“3. Whether or not the German company handed any document or card to the Plaintiffs in respect of Adansi Asaasi Goldmine Co. Ltd.?
“4. Whether or not the 1st Defendant is in possession of the original copy of the card?
“5. Whether or not the purported registration of the 1st Defendant company is lawful?
“6. Whether or not the 1st Defendant has committed fraud on the Plaintiffs?
“7. Whether or not the agreement(s) entered into between the 1st and 2nd Defendants is (are) valid?
“8. Whether or not the 1st Defendant is liable to the Plaintiffs for accounts?
“9. Whether or not the Plaintiffs claiming as owners of Adansi Asaasi stool land can seek interim injunction to prevent the 2nd Defendant from pursuing their lawful mineral exploration operations granted by the minister?”
At the end of the trial, the trial Court held in its judgment dated the 30th of October, 2015, that the 1st Defendant company owes its existence to the Adansi Asaasi Gold Mine Company Limited, and that there are records to show that a German company carried out exploratory activities on the land prior to 1974. The trial Court held further that the 1st Defendant was fraudulently concealed from the Plaintiffs, and that the 1st Defendant company is liable to render accounts to the Plaintiffs. The trial Court then proceeded, as stated above, to enter judgment for the Plaintiffs against the 1st Defendant for all the reliefs claimed by the Plaintiffs except reliefs (f) and (g). The 2nd Defendant was also ordered to stop all payments to the 1st Defendant forthwith, and it is obvious that the 1st Defendant has filed this appeal because it is dissatisfied with the decision of the trial Court.
The judgment appealed from is at page 471 to page 494 of the Appeal Record, and the Notice of Appeal is at pages 495 and 496 of the same Record. By the Notice of Appeal, the 1st Defendant is praying this Court to set aside the judgment of the trial Court and enter judgment in its favour. Four grounds of objection to the judgment of the trial Court were set out in the Notice of Appeal, and, pursuant to leave of the Court granted on 24th April, 2017, three additional grounds were filed. The seven grounds on which the 1st Defendant is now contesting the judgment of the trial Court are that:
“1. The judgment is against the weight of the evidence on record.
“2. The court erred when it rejected the credible evidence of the 1st Defendant but accepted the evidence of the Plaintiff.
“3. The Court erred when it decreed that the 1st Defendant perpetrated fraud on the Plaintiff.
“4. The Court erred when it shifted the onus of proof of a so-called existing card left by the Germans on to the 1st Defendant.
“5. The trial Court erred when it held that the 1st Defendant (Appellant) Company owes its existence to the Adansi Asaasi Gold Mine Company Limited.
“6. The Court erred when it held that 1st Defendant (Appellant) is liable to render account to the allied communities.
“7. The Court erred when it implied in its judgment that there was a trust relationship between the 1st Defendant/Appellant and such trust was breached”.
In his filed submissions, Counsel for the 1st Defendant argued grounds 1 and 2 together, and also argued grounds 4 and 5 together. Grounds 3, 6 and 7 were also argued together.
Under grounds 1 and 2, the 1st Defendant contends that the judgment of the trial Court is against the weight of evidence on record, and that the Court was wrong in rejecting the reliable evidence of the 1st Defendant while wholeheartedly accepting the weak and speculative evidence of the Plaintiffs.
In arguing these grounds, Counsel noted that an appeal is by way of re-hearing and, in that respect, urged this Court to make its own findings of fact if it is shown that the trial Court failed to do so. In the view of Counsel, the trial Court in the present case failed to make proper findings regarding the question as to whether an old German company existed. Counsel considered that there was no evidence of the existence of a German company whose assets were taken over by the 1st Defendant.
Counsel referred to sections 10 and 11 of the Evidence Act and also cited the cases of Abbey and Others VS. Antwi  SCGLR 27, and T.K. Serbeh & CO. LTD. VS. Mensah [2005-2006] SCGLR 341, and contended that in the present case, the evidence produced by the Plaintiffs was grievously insufficient. In his view, the trial Court should not have attached any weight to the evidence.
The contention of the 1st Defendant under grounds 4 and 5 is that the trial Court erred when it shifted the onus of proof of a so-called existing card left by German miners on to the 1st Defendant, and also held that the 1st Defendant owed its existence to Adansi Asaasi Gold Mine Company Limited.
In arguing the grounds, Counsel submitted that the trial Court did not carry out any serious examination and critique of the evidence. On the question of the card alleged by the Plaintiffs to have been handed to them by the Germans, Counsel contended that the trial Court was wrong in placing the burden of proving its non-existence on the 1st Defendant. In the view of Counsel, the trial Court misapplied the law when it shifted the onus of proof on that issue on to the 1st Defendant and decided that the 1st Defendant’s failure to call Justice Akuamoah Boateng was fatal to its case.
Under the combined grounds 3, 6 and 7, the 1st Defendant contends that the trial Court erred in holding that the 1st Defendant perpetrated fraud on the Plaintiffs, in holding that the 1st Defendant is liable to account to the allied communities, and in implying that the 1st Defendant owed a duty of trust which had been breached.
As part of his arguments in support of these combined grounds, Counsel contended that by statute, all minerals are the property of the state and the mere fact of a concession being on the Plaintiffs’ land did not vest ownership of the minerals thereunder in the Plaintiffs or the allied communities. Further, there was no documentary evidence, as the Conveyancing Act would require in respect of a transfer of an interest in land, of a gift of a concession by some Germans to the Plaintiffs. In these circumstances, there could be no bases for the trial
Court’s holding that the 1st Defendant was liable to account to the allied communities. Neither could there be any ground for the trial Court to imply the existence of a trust relationship between the 1st Defendant and the allied communities.
On the strength of the submissions made by him, Counsel for the 1st Defendant invited this Court to substitute its own findings for those of the trial Court and enter judgment for the 1st Defendant and set aside the judgment of the trial Court.
In his submissions in response to the arguments advanced in the appeal, Counsel for the Plaintiffs rejected the contention by the 1st Defendant that the judgment is against the weight of the evidence on record and that the trial Court erred when it rejected the credible evidence of the 1st Defendant and accepted the evidence of the Plaintiffs. Counsel for the Plaintiffs noted that appellate courts are loath to disturb findings of fact made by
trial courts and contended that in the present case, the 1st Defendant was unable to demonstrate consistently where the trial Court failed to make proper findings of fact regarding the vexed question of the existence of an old German company to warrant this Court disturbing the trial Court’s findings on that issue.
Counsel further contended that there is evidence on record that some Germans occupied portions of the Plaintiffs’ land at various times from 1900 until 1966 when they finally left for good and that the Germans gifted the concession they were working on and the documents relating thereto to the chiefs and people of the area. Counsel also mentioned the existence of evidence that there was a company called Asaasi-Ashanti Gold Mines Ltd. formed by one Charles Graham Cobb, and contended that some mining companies were working in the allied communities before independence. The existence of a previous mining company, Counsel contended, is therefore not in doubt and the 1st Defendant therefore failed to establish that the judgment of the trial Court is against the weight of evidence on record and also that the trial Court erred when it rejected the credible evidence of the 1st Defendant but accepted the evidence of the Plaintiffs. Counsel submitted that those grounds ought to be dismissed.
In further arguing against the appeal, Counsel for the Plaintiffs submitted that the 1st Defendant misunderstood the trial Court on the issue of the card. Counsel explained that the issue was not about the existence or otherwise of a card left by the Germans, but about whether or not the 1st Defendant was in possession of the original copy of the card. As far as that issue was concerned, in the view of Counsel for the Plaintiffs, the onus was clearly on the Plaintiffs to introduce sufficient evidence that indeed, the card was in the possession of the 1st Defendant. Counsel contended that the Plaintiffs led evidence to the effect that the card was given to the Chairman of the 1st Defendant and one John Benson Oduro, also a former director of the 1st Defendant and that such evidence having been led, the burden shifted on to the 1st Defendant to lead evidence in rebuttal of what the Plaintiffs had produced.
On the question whether or not the 1st Defendant perpetrated fraud on the Plaintiffs, Counsel noted that from the evidence, the 1st Defendant was initiated by the Chief of Adansi Asaasi, Mampamhwe and other persons, most of whom were citizens of the allied communities and contended that the Plaintiffs had proved their case and were therefore entitled to judgment on that issue.
On the contention by the 1st Defendant that the trial Court erred when it held that the 1st Defendant is liable to account to the allied communities, Counsel for the Plaintiffs submitted that on the evidence, there was a complete admission that the 1st Defendant was initiated by the Plaintiffs and that being the case, the trial Court’s conclusion that the 1st Defendant was liable to account to the Plaintiffs could not be questioned.
Regarding the contention by the 1st Defendant that the trial Court erred when it implied in its judgment that there was a trust relationship between it and the Plaintiffs and that such trust had been breached, Counsel submitted that in view of the evidence from the 1st Defendant itself that the Adansi Assasi Mining Company Limited was “initiated on 27th July, 1974 by the Chief of Mampamhwe and some prominent Ghanaian citizens mostly from the Adansi District”, the trial Court’s conclusion on the question of trust and its breach cannot be impeached.
In the view of Counsel for the Plaintiffs, the judgment of the trial Court is unassailable and that this appeal ought to be dismissed.
By including in its grounds of objection the contention that the judgment of the trial Court is against the weight of the evidence on record, the 1st Defendant is inviting this Court to review the entire record to find out whether the conclusion of the trial court is reasonably supported by the evidence. And as the authorities have repeatedly cautioned, in reviewing the evidence for the said purpose, this Court, as an appellate court, will need to hold back from disturbing findings of fact made by the trial Court, unless those findings are found to be wholly unsupportable by the evidence. This Court should not be driven to substitute its view of the facts for the findings made by the trial Court for the mere reason that it prefers some other version of the facts. Bonney Vs. Bonney [1992-93] GBR 779, Koglex Ltd. (No. 2) Vs. Field  SCGLR 175, Tuakwa Vs. Bosom [2001-2002] SCGLR 6, In Re Okine (Decd.); Dodoo Vs. Okine [2003-2004] SCGLR 582, may be mentioned among the authorities.
But what in the evidence must this Court look for in order to satisfactorily determine whether the judgment is reasonably supportable? Considering the issues that emerge from the pleadings and the arguments advanced by Counsel in this appeal, I think it is necessary to remind ourselves about aspects of the law regarding concessions and limited liability companies relevant to the issues. Doing so will bring into focus the facts that are pertinent in determining whether the reliefs granted by the trial Court have reasonable support from the record.
In respect of concessions, between the year 1939 and now, the applicable statutes have been the Concessions Act, 1939 (Cap 136), and the Concessions Act, 1962 (Act 124). The Concessions Act, 1962 came into force on 14th June, 1962 to bring the application of the Concessions Act, 1939 in respect of stool lands to an end but “to continue in force certain existing concessions subject to their terms and to provide for purposes connected therewith or incidental thereto”.
From section 1 (1) of the Concessions Act, 1939, a “concession” is understood as an “agreement by which a right, an interest or a property in, to or over land, in or to minerals, metals, precious stones, timber, rubber or any other products of the soil in or growing on land, or the option of acquiring that right, interest or property” is granted. Where such right, interest or property is purportedly granted by a citizen to a person who is not a citizen, it ought to be in writing; otherwise, it is void.
Even though as observed above, one of the purposes of the Concessions Act, 1962 was to bring the application of the Concessions Act, 1939 in respect of stool lands to an end, it is important to note that section 2 of the Concessions Act, 1962, continued in force concessions which were is in respect of stool lands and which were subsisting immediately before the date of the commencement of the said Act. The rights, or part thereof, granted by such concessions, according to section 13 of the Act, cannot be validly assigned, sub-leased, mortgaged or surrendered without the consent in writing of the Minister. A transaction made in respect of any such concession which did not have the consent in writing of the Minister was void.
The statute that governs the affairs of limited liability companies is the Companies Act, 1963 (Act 179), which has been in force since 1st July, 1963. Under section 13 of the said Act, it is possible for a contract or other transaction entered into on behalf of a limited liability company prior to its incorporation to be ratified by the company after its incorporation. Upon ratification, the company becomes bound by and entitled to the benefits of the contract or other transaction. But prior to ratification, the person or persons who purported to act in the name or on behalf of the company are normally bound by the contract or transaction.
As the Supreme explained per Acquah JSC , as he then was, in In Re Speedline Stevedoring Co. Ltd.; Republic Vs. High Court, Accra; Ex Parte Brenya [2001-2002] SCGLR 775 (783), “no legal person, natural or artificial, can contract before he or it exists”. For this reason, a contract made by a promoter on behalf of a company before its incorporation never binds the company. Even if the parties act on the contract, unless it is established that the company ratified it after its incorporation, the contract will not bind the company.
A limited liability company is formed by the registration of its proposed Regulations, and from the date of its registration as stated in the certificate of registration, the company becomes a body corporate by the name contained in the Regulations and is capable of exercising the functions of an incorporated company.
Section 18 of the Act requires that the Regulations of a company registered after the coming into force of the Act be signed by one or more subscribers and under section 19, a company which was in existence prior to the commencement of the Act could, by special resolution, adopt Regulations in lieu of its memorandum and articles of association. By section 24 of the Act, a company registered after the commencement of the Act or an existing company which adopts Regulations in lieu of its memorandum and articles of association has all the powers of a natural person of full capacity for the furtherance of its objects and of a business carried on by it.
By section 30 of the Act, the subscribers to the Regulations of a company are members of the company and on registration of the company, they shall be entered as members in the company’s register of members. Any other person who agrees with the company to become a member of the company and whose name is entered in the register of members is also a member of the company.
Under section 95 (1) of the Act, in the absence of a provision in the Regulations to the contrary, shares in a company are transferable without restriction but the transfer, which may be in common form, must be in writing. Also, by section 98 (3) of the Act, despite anything contained in the Regulations of a company or in a contract, the company is precluded from registering a transfer of shares where a proper instrument of transfer duly stamped, if chargeable to stamp duty, has not been delivered to the company.
The Act also has provisions on the transmission of shares where the holder of the shares is deceased. Under section 99, the survivor or survivors of a deceased shareholder, where the deceased was a joint holder, and the legal personal representative, where the deceased was the sole holder or last survivor of joint holders, are the only persons who may be recognised by the company as shareholders. A person on whom the ownership of a share devolves by reason of that person being the legal personal representative, receiver or trustee in bankruptcy of the holder or operation of law may, on the evidence properly required by the company being produced, be registered personally as the holder of the share.
Now, in the face of the law as highlighted above, can it be said that the evidence on record entitled the Plaintiffs to the reliefs the trial Court granted them?
The evidence by which the Plaintiffs sought to establish their claim was given by their Attorney, Matthew Kofi Turkson. He told the trial Court that between 1900 and the year of the coup that overthrew the Nkrumah government, a German company was, at intermittent periods, engaged in timber prospecting and gold and diamond mining activities in the country, specifically on the Plaintiffs’ stool land. Following the coup, the Germans abandoned their mining project and went back to their home country for good. According to the witness, before the Germans left, they gifted their concession to the Plaintiffs and gave them documents on the concession in the form of a card to enable them continue with the mining activities the Germans were undertaking on the land.
The witness testified that in the year 1973, the youth and elders of the community decided to reactivate the abandoned gold mine and that towards that end, they held a series of meetings to which they invited some experts from Obuasi, among whom were Rockson Amos Yeboah and Robert Degraft Sarfo. He mentioned the Chairperson of the 1st Defendant Company at the time of his testimony, Justice Akuamoah Boateng, as also being among the invitees to the 1973 meeting. The witness explained that they invited the experts to the meeting because they wanted them to help the community reactivate the abandoned mine. He said the experts were taken to the mining site to inspect the place and when they returned, they expressed satisfaction with what they saw and promised to help re-activate the mine.
Matthew Kofi Turkson testified further that on the 28th of July, 1974, Justice Akuamoah Boateng ordered the late John Benson Oduro to collect the card the Germans had given them from the Regent of the stool and that, with the card, Justice Akuamoah Boateng and the late John Benson Oduro went to Accra to conduct a search on the German company. He said at the Registrar-General’s Department, the existence of the German company was confirmed and they were given a certificate to continue with the mining activity without the imposition of any fee.
The witness stated further that Justice Akuamoah Boateng made copies of the documents they procured during the search and gave the copies to the late John Benson Oduro to be taken back home, while he (Justice Akuamoah Boateng), kept the originals and the card. He said, in spite of several demands and several interventions the Plaintiffs had resorted to, Justice Akuamoah Boateng had refused to give back to the stool the card the Regent gave him. The witness said the Plaintiffs subsequently discovered that Justice Akuamoah Boateng and John Benson Oduro had registered the 1st Defendant without making it clear in writing that they did so on behalf of the Plaintiffs.
In respect of the fraud alleged by the Plaintiffs against the 1st Defendant, the witness testified that, among other things, the allegation had been made because Justice Akuamoah Boateng and others had registered the 1st Defendant without disclosing in writing to the Registrar-General that they were registering the company for the stool. Also after registering the company they had, without the knowledge of the stool, given the concession to local and foreign companies and received payments therefor. The witness also contended in his testimony that the 1st Defendant was guilty of breach of trust because Justice Akuamoah Boateng and John Benson Oduro and others pledged to help the stool reactivate the mine but betrayed the stool on that score.
Among the significant facts that may be gathered from the cross-examination of Matthew Kofi Turkson by Counsel for the 1st Defendant are that the Plaintiffs inherited from the Germans their mining company and their concession, and that during the period between 1909 and 1976, the concession was lying idle and the company was also not operating.
Also when Matthew Kofi Turkson was asked whether the Plaintiffs ever changed directorships and shareholdings in the German company to reflect assumption of ownership by the Plaintiffs, his response was that he could not say much about the activities of the company between 1909 and 1939. When asked what the early Germans were doing between 1936 and 1960, the response of the witness was that during that period he noticed nothing. The witness disagreed when it was put to him that companies and concessions were registered by law and could not be gifted casually.
Robert Degraft Sarfo and Rockson Amos Yeboah and others are alleged by the Plaintiffs to be guilty of breach of trust in respect of their conduct in relation to the concession; and about these two persons, Matthew Kofi Turkson testified on cross-examination that they were not employees of the Plaintiffs and were neither paid consultants of the Plaintiffs. They were also not persons whom the Plaintiffs had otherwise contracted to undertake any venture on their behalf. And, again, there was no trusteeship agreement between them and the Plaintiffs. Regarding the Plaintiffs’ investment in the mining venture generally, the witness stated that they “never invested any money but rather the card”.
About the 1st Defendant, the witness had insisted several times earlier that it was a fictitious company. Later, in the course of his cross-examination however, the witness is heard conceding that the company had been regularly incorporated and that he had himself been nursing a desire to be given shares in it and had in fact made moves in that direction. Further, when it was suggested to the witness during cross-examination that the 1st Defendant had shown absolute respect, regard and concern for “the Chiefs of Adansi and by extension to their subjects”, the witness expressed agreement.
As observed above, Matthew Kofi Turkson asserted as the inheritance of the Plaintiffs from the Germans, the mining company of the Germans as well as the mining concession they operated. It is clear to me from this and from the record generally that at the base of the Plaintiffs’ action herein is what they perceive to be their interest in a company which some German miners had been running up to 1966, and a concession which the said miners had been operating. The Plaintiffs’ action appears to be for the protection of these interests, and the provision of redress for perceived violations of those interests.
The Plaintiffs consider the 1st Defendant as a continuation of the German company they allegedly inherited and so, the order sought by them under relief (a) for recovery of the original of a card relating to the German company, the declaration as to trusteeship sought under relief (b), the order for removal of directors sought under relief (c), the restructuring order sought under relief (d) and the order for account sought under relief (e), are all for the protection of the alleged inheritance.
Now, does the evidence on record support the Plaintiffs’ claim that they had inherited a German mining company and a mining concession? From the review of the evidence done above, it is clear that the Plaintiffs base their claim to ownership of the German company and their mining concession on a gift signified by the handing to them by the Germans of a card by which, as the Plaintiffs claimed, they could procure all the documents on the operations of the Germans to enable them continue with the mining activities the Germans had been undertaking on their stool land.
We however know, if we are talking about the mining company, that ownership of limited liability companies is not changed by mere transmission of documents. The gift Matthew Kofi Turkson testified about was allegedly made in the year of the overthrow of the Nkrumah government. This would be in 1966, and at that time the statute that regulated the formation and operations of companies was the Companies Act, 1963, (Act 179).
It is trite knowledge that the owners of a limited liability company with shares are its shareholders. A shareholder’s membership of a limited liability company continues until a valid transfer of all the shares held by him have been registered by the company, or until all of them are transmitted by operation of law to another person or forfeited for non-payment of calls, or until the shareholder dies. As we have noted above, even though under section 95 of the Companies Act, 1963, shares in a limited liability company may be transferred without restriction and may be in common form, the transfer must be in writing. Shares in a company are not transferred by the mere handing of documents to the intended transferee, if those documents are not instruments of transfer. This means that ownership or membership of a company does not change by the mere handing of “cards” or documents to the intended new owners or members by the existing owners or members. There ought to be a written transfer to the intended new owners or members by the existing owners or members.
Regarding concessions, we have noted above that section 2 of the Concessions Act, 1962 continued in force concessions which were in respect of stool lands and which were subsisting immediately before the date of commencement of the Act. We have noted that under section 13 of the said Act, the rights or part thereof granted by such concessions cannot be validly assigned, sub-leased, mortgaged or surrendered without the consent in writing of the Minister.
In the light of the provisions of the Companies Act and the Concessions Act referred to above therefore, granted that there were indeed some German miners who were carrying on mining activities in the country up to 1966,the testimony by Matthew Kofi Turkson that before the said miners left the country, they gifted their concession to the Plaintiffs and gave them documents on the concession in the form of a card to enable them continue with their mining activities, without more, cannot be considered as satisfactory evidence of due transfer of the interests or rights of the said German miners in their mining company and in their concession to the Plaintiffs.
Regarding the concession, in view of section 13 of the Concessions Act, this will be the position even though the concession is on the stool land of the Plaintiffs. As noted, the rights or part thereof granted by a concession on stool land cannot, among other things, be validly assigned or surrendered without the consent in writing of the Minister. And regarding the mining company, it is recalled that when Matthew Kofi Turkson was asked on cross-examination whether the Plaintiffs ever changed directorships and shareholdings in the German company to reflect the Plaintiffs’ assumption of ownership, his only response was that he could not say much about the activities of the company between 1909 and 1939. On the evidence on record therefore, the Plaintiffs did not acquire any interest or right in the German company or in the German concession and I hold accordingly.
Now, the argument underlying the Plaintiffs’ action herein is that the German company belonged to them by virtue of a gift, that the 1st Defendant company sprang out of the German company, and, therefore, that they have a stake in the affairs of the 1st Defendant, and they cannot be sidelined in matters relating to or affecting the 1st Defendant. However, with the decision that the Plaintiffs did not acquire any interest in or right to the
German company, the Plaintiffs’ claim to a stake in the affairs of the 1st Defendant is, in my view, defeated and it follows, as I hereby hold, that there is no legal basis for reliefs (b), (c), (d) and (e) sought by the Plaintiffs and granted by the trial Court. The claims under those reliefs erroneously assumed that the Plaintiffs had a stake in the affairs of the 1st Defendant.
The merits of the claim under relief (a) may however be considered differently. Under relief (a), the Plaintiffs are seeking recovery of the original copy of the card and the originals of all documents relative to the 1st defendant. The decision that the Plaintiffs do not have a stake in the affairs of the 1st Defendant means that the Plaintiffs have no locus to claim recovery of any “documents relative to the 1st Defendant”. We cannot however say so about the card which they say the German miners handed to them. I see the card as a chattel, and if the Germans handed the card to the Plaintiffs with the intention of making a gift of it to them, then in my view, whatever its value, property in the card passed to the Plaintiffs on its being handed to them. If therefore the Plaintiffs are able to establish by evidence that they own the card by virtue of a gift, that the card is in the possession of the 1st Defendant, and that the 1st Defendant is wrongfully detaining it, they should be entitled to relief in respect of the card.
The evidence on record that may be considered in respect of relief (a) is that of Matthew Kofi Turkson, which we are already familiar with. It is that following the overthrow of the Nkrumah government, certain German miners who had since 1900 been carrying on mining activities on the stool land of the Plaintiffs decided to leave the country for good and that before they left, they handed to the Plaintiffs as a gift, certain documents in the form of a card. It is further testified that on the 28th of July, 1974, Justice Akuamoah Boateng ordered the late John Benson Oduro to collect the card from the Regent of the stool and that having collected the card, Justice Akuamoah Boateng and the late John Benson Oduro went to Accra to conduct a search on the German company. After the search, Justice Akuamoah Boateng is alleged to have kept the originals of the documents they procured and the card and it is further alleged that, in spite of several demands and several interventions the Plaintiffs had resorted to, Justice Akuamoah Boateng had refused to give the card back to the stool.
There is a statement in the testimony of Robert Degraft Sarfo, 1st Defendant’s representative at the trial, that before the Adansi Traditional Council, the allegation that Justice Akuamoah Boateng was in possession of the card had once been made and that Justice Akuamoah Boateng had denied the said allegation. Indeed, in the course of his cross-examination, Matthew Kofi Turkson confirmed that Justice Akuamoah Boateng had once appeared before the Adansi Traditional Council and challenged the Plaintiffs on the issue of his being in possession of the card. Matthew Kofi Turkson however appeared evasive in his answer to a suggestion that during the said appearance the Plaintiffs could not substantiate their allegation concerning the card.
But another issue about the claim in respect of the card which needs to be addressed is that even though, according to the testimony of Matthew Kofi Turkson, the card is in the possession of Justice Akuamoah Boateng, the Plaintiffs’ claim is not being made against
Justice Akuamoah Boateng, but against the 1st Defendant. Is there any evidence on record or any legal principle that may translate possession of the card by Justice Akuamoah
Boateng into possession by the 1st Defendant?
It is provided under section 137 (1) of the Companies Act that a company “shall act through its members in general meeting or through its board of directors, or through officers or agents, appointed by, or under authority derived from the members in general meeting or the board of directors”. It has also been noted above that it is possible under section 13 of the Companies Act for a contract or other transaction entered into on behalf of a limited liability company prior to its incorporation to be ratified by the company after its incorporation, and that upon ratification, the company becomes bound by the contract or transaction and is also entitled to its benefits. Prior to ratification, the person or persons who purported to act in the name or on behalf of the company are normally bound by the contract or transaction.
The question to ask therefore, to my mind, is whether there is evidence on record that renders the possession alleged against Justice Akuamoah Boateng possession by the 1st Defendant in the terms of section 137 of the Companies Act or section 13 of the said Act. The terms of section 137 will be relevant if the 1st Defendant was in existence at the time Justice Akuamoah Boateng is alleged to have had dealings in respect of the card and there is also evidence which shows that, by the provisions of that section, those dealings of Justice Akuamoah Boateng constituted acts of the 1st Defendant. The terms of section 13 will be relevant if at the time of the dealings alleged against Justice Akuamoah Boateng, the 1st Defendant had not been incorporated but there is evidence that after its incorporation, the 1st Defendant ratified those dealings.
So, when was the 1st Defendant incorporated? The evidence on record does not make an answer to this question a straightforward one. According to Matthew Kofi Turkson, the 1st Defendant was “formed” on 29th July, 1974. Robert Degraft Sarfo however says it was “incorporated” on 11th July, 1974, while Nana Ama Akyaa Prempeh, Chief State Attorney, from the Registrar-General’s Department says in one breath that it was “incorporated” in
1976, and in another breath that “per the records it was registered on 29th July, 1974”.
When I go to the records, I find that the subscribers to the Regulations of the 1st Defendant, Exhibit 2, signed it on 11th July, 1974, that the certificate of incorporation, Exhibit 3, was signed on 24th February, 2004, and that the certificate to commence business, Exhibit 3A, was singed on 6th June, 1975.
The certification on the certificate of incorporation reads as follows:
“I hereby certify that the Adansi-Asaasi Mining Company (AAMCOL) Limited is this day incorporated under the Companies Code, 1963 (Act 179) and that the liability of its members is limited.
“Given under my hand and official seal at Victoriaborg, Accra, this 14th day of February, 2004”.
The obvious impression given by this certification is that the 1st Defendant was incorporated on 24th February, 2004, which is illogical having regard to the date of issuance of the certificate to commence business. There is however a statement on the top left corner of the certificate of incorporation which cannot be ignored, in view of the illogical relationship that certificate bears with the certificate to commence business as to their dates of issuance. On the top left corner of the certificate of incorporation, it is stated: “Registered on 29/7/1974”, and when I consider that the certificate to commence business must necessarily issue after the incorporation of the company, I feel inclined to hold, and indeed I hold, that the date of incorporation of the 1st Defendant was 29th July, 1974, and not 24th February, 2004.
So the 1st Defendant came into being on 29th July, 1974, and from the testimony of Matthew Kofi Turkson, Justice Akuamoah Boateng started his alleged dealings in respect of the card on the 28th of July, 1974. This was when Justice Akuamoah Boateng is alleged to have asked John Benson Oduro to collect the card from the Regent of the stool, and this was a day prior to the coming into being of the 1st Defendant.
In my view, even if Justice Akuamoah Boateng’s dealings respecting the card are proved, since they started prior to the incorporation of the 1st Defendant, those dealings would be pre-incorporation transactions which, by section 13 of the Companies Act, would require ratification by the 1st Defendant before they became binding on it. I do not however find any evidence of ratification on record. There is no evidence, for instance, that at the conclusion of those dealings, Justice Akuamoah Boateng placed the outcome of the dealings before the 1st Defendant for ratification and that the 1st Defendant did in fact ratify the dealings and their outcome. And I recall in this respect that under paragraph 17 of the statement of claim, the Plaintiffs stated that though the 1st Defendant had both verbally and in writing admitted having the card in its possession, it had continued to keep it unlawfully. Unfortunately, from my reading of the record, the Plaintiffs were unable to take this statement beyond a mere allegation. There is no evidence on record in proof of the “verbal and written admissions” alleged against the 1st Defendant.
In my view, therefore, the possession of the card alleged against Justice Akuamoah Boateng, even if it is proved, cannot be considered as possession by the 1st Defendant. It follows that the 1st Defendant was wrongly sued for recovery of the card and, further, that the trial Court erred in granting the Plaintiffs that relief. I am of the further view that, the holding by this Court that, not having been ratified, transactions purportedly undertaken or entered into on behalf of the 1st Defendant prior to its incorporation are not binding on it, provides another reason why this Court cannot affirm the trial Court’s decision granting against the 1st Defendant in favour of the Plaintiffs the reliefs contained in the judgment appealed against.
I am cautioned by the authorities, Bonney Vs. Bonney (supra) being among them, that an appellate court “should not under any circumstances, interfere with the findings of fact by a trial judge except where they are clearly shown to be wrong, or that he did not take all the circumstances and evidence into account, or has misapplied certain of the evidence, or has drawn wrong inferences without any evidence to support them”. It is clear from the discussion I have undertaken above that I consider the decision of the trial Court to be clearly wrong. In my view, considering the applicable law and the evidence on record, the reliefs granted by the trial Court were not warranted and the orders granting those reliefs ought to be reversed.
This appeal succeeds and the same is accordingly upheld. The judgment of the trial Court dated the 30th of October, 2015, is hereby set aside.
K. N. ADUAMA OSEI
[JUSTICE OF APPEAL]
I AGREE SENYO DZAMEFE
[JUSTICE OF APPEAL]
I ALSO AGREE MARGARET WELBOURNE (MRS.)
[JUSTICE OF APPEAL]