IN THE SUPERIOR COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ACCRA - A.D 2017
CLIPPER LEASING CORPORATION - (Plaintiff/Respondent/Respondent)
THE ATTORNEY GENERAL AND GHANA AIRWAYS LIMITED - (Defendants/Appellants/Applicants)
DATE: 19TH JANUARY, 2017
CIVIL APPEAL NO: H3/347/2016
JUDGES: OFOE JA (PRESIDING), KORBIEH JA , AGYEMANG (MRS.) JA
MR. KIZITO BEYUO FOR APPLICANTS
MS. ESINE OKUDZATO FOR RESPONDENT
In the instant application, the second defendant appellant/applicant makes the following prayers:
An order for the stay of execution of the judgment of the High Court, Commercial Division, Accra delivered on 5th February 2009;
An order setting aside the writ of summons and the proceedings thereon including judgment; and
That the plaintiff/respondent/respondent be made to refund all monies paid to it pursuant to the said judgment.
The matters antecedent to the application are the following:
The plaintiff/respondent/respondent (referred to hereafter as the respondent) brought suit at the High Court Commercial Division, on 13 July 2006 against the defendant/appellant/applicant (referred to as the applicant) for inter alia, the recovery of outstanding rent for the lease of an aircraft (MDDC10-30) and replacement engines. Judgment was entered against the applicant on 5th February 2009 for the payment of USD27, 000,000 as well as damages of GHC10, 000 for breach of contract and costs of GHC15, 000.
Although the applicant lodged an appeal against the said judgment before this court, some monies were apparently paid under the judgment to the respondent. The respondent also filed a cross-appeal. This was dismissed by this court differently constituted. The result is that the appeal lodged by the applicant is still pending.
The applicant in the meantime, caused a search to be conducted at the Registry of Financial Services Regulatory Commission of Antigua and Barbuda regarding the status of the respondent at the time it brought the action at the court below against the applicant which resulted in the judgment on appeal. The search revealed that the respondent which was incorporated on 31 May 1995 as an International Business Corporation, and whose name was thus registered in the books of the Registrar in accordance with the International Business Corporation Act Cap 222 of the Revised Laws of Antigua and Barbuda, did not have its name on the said Register at the time of suit. This was because same had been struck off by the Director on 6th June 2004,in accordance with S. 335 of Cap 222, for non-payment of the prescribed annual registration fee.
An application seeking the same prayers as the instant, was first placed before a single Justice of this court who dismissed it. In her ruling, the learned single Justice gave two reasons for the dismissal being: first, that the respondent whose name had been struck off the Register had not ceased to have legal status (by which it could sue and be sued), and second, that there was an appeal pending regarding which processes had been filed. Dissatisfied with the ruling of the single Justice of the court, the applicant brought the application before a full panel of this court for a reversal of same. The said panel declined to assume jurisdiction under Article 138(b) of the 1992 Constitution, to reverse the single judge in what she so clearly had no jurisdiction to deal with.
After this rigmarole, the instant application has found its way before us.
The application is supported by a thirty-paragraph affidavit sworn to by a legal practitioner at the Registrar-General’s Department in which she deposes to the aforesaid factual matters. She deposes further, that the respondent company having been struck off the register had no legal status or consequent right to maintain the action it brought against the applicant and one other at the court below and obtained judgment. According to the deponent, although the respondent company which was struck off the register at the time of suit subsequently got reinstated on 15th October 2014, the reinstatement did not relate back to give validity to acts that were done at the time the company had no legal status to do them.
The applicant therefore in the instant application, contends that the proceedings at the court below must in their entirety be voided, and has brought the instant application before this court seeking the aforesaid orders including a stay of execution. This last order is sought to prevent the respondent, a non-resident company from moving monies out while the application is pending, in order that a successful application be not rendered nugatory.
In an affidavit in opposition to the present application, a lawyer in the firm of solicitors for the respondent, deposed to the following matters: first of all, that the applicant did not have the capacity to bring the application as its appeal had been struck out by this court in earlier proceedings. On the merits of the application, she deposed that although the respondent’s name had been struck off the register, as long as it had not been dissolved, the evidence of which was the issuance of a certificate of dissolution made in accordance with S. 299(4) of Cap 222, it maintained its legal status which was the capacity to sue and be sued. She deposed that by S. 299 of Cap 222, a company ceased to exist only after it was dissolved, hence the power given to the Director after a notice of one hundred and twenty days, to issue a certificate of dissolution after due publication in the Gazette. She further deposed that the respondent although struck off at the material time, had been reinstated in the Register, a matter that would have been impossible if the company had, upon being struck off, lost its legal status such as would happen when a company was dissolved. The entire application she deposed, had been brought to frustrate execution and was without merit.
As aforesaid, the respondent indicated its intention to raise a preliminary objection to the hearing of this application on the ground that the appeal upon which the first prayer was predicated, was no longer in existence having allegedly been struck out. That point, raised in limine in respect of which many depositions were made in the supporting affidavit, is now moot as it has been ruled upon by this court. The appeal has been held to be subsisting, and so we go ahead to deal with the merits of the matter.
It is common cause that the respondent company was struck off the Register, and that at the time it instituted the suit at the court below (which resulted in judgment), its name had not been restored to the said Register. The question raised by this application and in respect of which a strong opposition has been mounted is this: what was the legal status of the respondent while its name was off the Register? The import of this question is whether or not the respondent had legal existence and the consequent capacity to bring the said suit at the court below. If not, the question is: what will be the status of the entire proceedings as well as the judgment obtained under it at the court below?
To these, the applicant responds that the respondent struck off the Register, had no legal status and therefore no capacity to sue. The respondent counters that although struck off the Register, it continued in existence as it was never dissolved. Learned counsel for the respondent postulated that a company whose name had been struck off the register under S. 335 of Cap 222continued to exist if a certificate of dissolution had to be issued to dissolve it under S.299 of the Act. We cannot agree with that contention.
S. 299 provides for the dissolution of companies where it has:
“(1) a. Not commenced business within three years after the date shown in its certificate of incorporation;
b. Has not carried on its business for three consecutive years; or
c. Has not had its name restored to the Register within two years after the date on which it was struck off under S. 335.”
Against the argument of continuity of legal existence until dissolution (predicated upon the interpretation of S.299) is this vexed question: what is the significance of S. 335 of Cap 222(referred to hereafter as the Act), in face of S. 336 thereof?
S. 335 (1) provides: “The Director may strike a company off the register if-
a. The corporation fails to send any return, notice, document or prescribed fee to the Director as required pursuant to the Act (Cap 222);
b. The corporation is dissolved;
c. The corporation is amalgamated with one or more other corporations or bodies;
d. The corporation does not carry out an undertaking given under subparagraph 1(a) of 339(to dissolve or change its name to a name dissimilar to the name or business name of any other person or of any association, partnership or firm …)
e. The registration of the Corporation is revoked pursuant to the Act (Cap 222)”
S.335(5) provides that a company struck off the register may not trade or conduct business (international banking, trust or insurance business).
s. 335(6) provides for the restoration of a company struck off the Register, to it.
S. 336 reads: “Where a corporation is struck off the register the liability of the corporation and of every director, officer, or shareholder of the corporation continues and may be enforced as it if had not been struck off the register”(my emphasis)
We are not persuaded by the arguments of the respondent, including those regarding the differences in the dictionary definition of the words “dissolution” and “striking off” (as applied to companies), nor do we hold the view that until a certificate of dissolution is issued under S. 299, the company although struck off under S. 335 continues in existence with its concomitant rights, including having the capacity to institute suits. The said interpretation, we intend to demonstrate, does not find support in the Act itself. It seems to us that the intendment of S. 335 is to remove from operation and existence, a company which is struck off the register.
In our view, the drafters of the legislation, intending, to remove from such company (as long as it was off the register), the legal status of a company with its accompanying rights and responsibilities, placed S. 336 thereat, to preserve the company’s liabilities, thereby preserving the rights of third parties. In our judgment, there would have been no need for S. 336 if the drafters did not intend a striking off from the register to affect the company’s legal status with the capacity to sue and be sued. Indeed, S. 336’s sub-paragraph: “…may be enforced as if it had not been struck off the register”, suggests that a striking off would, but for that provision have had an adverse consequence on such company’s liabilities to third parties.
We have arrived at this opinion, mindful of the cardinal rule of interpretation of statutes, that the statute must be read to find the intention of the lawmakers of the statute by considering it as a whole and in its context, see: Halsbury’s Laws of England (4th Ed.) Vol.44 p 856; also per Lord Davey, construing some clauses under the English Employers' Liability Act, 1880in Canada Sugar Refining Co. v. R.  A. C. 735 at p. 741, P. C.: "Every clause of a statute should be construed with reference to the context and the other clauses of the Act, so as, so far as possible, to make a consistent enactment of the whole statute or series of statutes relating to the subject-matter."
The Act, in providing under S. 371(1) thereof, that it should be construed fairly, largely and liberally, and in consonance with its purposes, sets out the said purposes to include: the encouragement of the development of Antigua and Barbuda as a responsible offshore financial, trade, and business centre.
It is doubtless in the pursuit of this that the Director is empowered to ensure that companies in its register stay viable, or be dissolved under S. 299, or operate responsibly in accordance with the law, or be struck off under S. 355.
Until its name was struck off, the respondent herein was registered in the books of the Registrar in accordance with the International Business Corporation Act Cap 222 of the Revised Laws of Antigua and Barbuda.S.235 of that statute operated to make the continuous incorporation and licensing of a company conditional, upon the payment of an annual renewal fee. Failure to do this attracted the sanction of the striking off the register as provided in S. 335 (1) (a).That is what happened to the respondent.
S.335 deals with circumstances under which a company may be removed from the register. The Director’s power to remove a company from the register exercisable under S. 335, may be a punitive measure such as where the company neglects to send any return, notice, document or prescribed fee to the Director S.335 (1)(a) (as in the instant case), or fails to honour an undertaking to change its name to one dissimilar to a registered company S.335 (4) (d).
S.335 (1), read together with S. 335(5)provides a clear picture of the import of the striking out of a company’s name by the Director: it ceases to have the capacity to conduct international trade or commerce: banking, trust, or insurance.
On the other hand, we find that S.299 which provides for the issuance of a certificate of dissolution as part of the provisions on winding up, empowers the Director to dissolve a company that appears for any reason to be dormant or non-operational, and this includes a company’s cessation of the conduct of its business, or one that does nothing to get its name restored to the Register two years of its being struck off.
S. 299(4) completes the process of winding up when a certificate of dissolution is issued, stating its effect and import to be the cessation of the existence of a company dissolved as part of the process of winding up.
The two circumstances in Ss. 299 and 335 are very different. The power of sanction given to the Director under S. 335(1) (a) and (d) does not obtain in S.299 which is concerned with the winding up of companies. In both circumstances (S.299 and S.335), the company would be stripped of its existence until the company thus struck off, was restored to the Register under S. 335(6), or the dissolved company was revived under S. 315.
We are not persuaded that a striking off the register, as opposed to a dissolution, is an interim state of affairs as canvassed by the respondent. Our view, which finds support in the Act, is that it ceases to have legal existence, it cannot conduct trade in international commerce, and only by an express provision in that statute are its liabilities against third parties, continued, see: per the South African Court of Appeal in Miller v Nafcoc Investment Holding 2010 (6) SA 390 (SCA) at 395 D-E: “Deregistration (striking off the register) puts an end to the company. Its corporate personality ends in the same way that a natural person ceases to exist.”
It seems to us incongruous with the purposes of the Act so stated in S.371(1) (supra), that a company, punished under S. 335(1)(a) by the removal of its name from the register, would be permitted to benefit from the exercise of rights such as the ability to sue third parties - as if the striking out had no effect. The contrary would give effect to the intendment of the drafters which is in line with the aforesaid purpose of the Act, that is: to deprive a company struck off the register its legal status. That is the raison d’etre of S. 336which operates to ensure that such a company, stripped of its legal status, would have its liabilities continue, to the benefit of third parties doing business with it “as if it had not been struck off the register”. Only the struck-off company’s liabilities are continued. In our view, the maxim expressio unius est exclusio ulterius, as an aid to interpretation must be resorted to in the instant matter. Calling in aid the said maxim, it seems to us that S. 336 of the Act which expressly mentions the continued existence of the company’s liabilities, read together with S. 335(5), would suggest a recognition that a company thus struck off would have no legal existence and would therefore have its rights, as well as its obligations against third parties, extinguished; hence the need to extend its life by a legal fiction (…as if it had not been struck off), for the sole purpose of preserving the right of third parties to enforce its obligations.
We find the case of Ghana Ports and Harbours Authority v. Issoufou  1 GLR 500 cited by the respondent for our persuasion, wholly inapplicable to the instant matter, for the issue raised by the instant application is distinguishable from that case. In that case, the plaintiff/respondent which was prosecuting its rights in a suit that had been pending for five years, was by statute, merged with another company into a new entity. The issue that was raised was concerned with accrued rights in face of a repealed statute and it was whether or not the appellant had become legally non-existent, and had in consequence, lost its right to pursue the claim against a third party, although the right to pursue the claim had before that statute been vested in the appellant which had commenced an action. As aforesaid, that issue is not the same as the issue raised by the instant application.
It has also been canvassed that the respondent company, struck off the register, was in any case restored to it in 2014.
Regarding the matter of restoration to the register, S. 335(6) of the Act provides:
“When a corporation is struck off the register and the cause of such striking has been cured, the Board may upon receipt of an application in the prescribed form and upon payment of any fees and penalties due, restore it to the register, and reinstate any licences previously issued to the corporationto engage in international banking, trust, or insurance business under such conditions as it determines appropriate”.
The said provision did not save or give retroactive validity upon reinstatement to any acts done or performed or carried out by the company while it was struck off the register. In the absence of a provision akin to the saving provision in many similar statutes within the Commonwealth, including S. 1032(1) of the English Companies Act 2006, which states that “the general effect of an order by a court for restoration to the Register is that the company is deemed to have continued in existence as if it had not been dissolved or struck off the register”, see: as applied in Davy v Pickering & Ors.  EWHC 380 (Ch), it would seem that while its name remained off the register at Antigua and Barbuda, from June 2006 until October 2014, the respondent had no legal status which would empower it to bring suit, and the subsequent restoration in October 2014, would have no effect to validate acts done (such as the institution of an action) while it was off the register.
It is for these reasons that we hold the view that the respondent company ceased to have legal existence once it was struck off the register, and it matters not that it was subsequently in 2014 restored to the register.
This then raises the capacity of the respondent to sue at the court below in July 2006, when its name had been struck off the register in June 2004, and it had consequently ceased to have legal existence. In Kowus Motors v. Checkpoint Ghana Ltd and Ors  SCGLR 230, the Supreme Court, approving the dictum of Francois JA (as he then was) in Edusei v Diners Club Suisse SA [1982-83] 2 GLR 809 at 814-815, CA,upheld a preliminary objection to an appeal, challenging the capacity of the appellant, a company that had ceased to exist by operation of law (AFRCD 60), and had become merged with two others into a new legal entity known as Automotive and Technical Services Ltd, to sue. This challenge was made the first time before the apex court. The court held that the test for the validity of the institution of an action, as far as capacity of a party was concerned, was whether the party existed; see also per Evans LJ in International Bulk Shipping and Services Ltd v. Minerals and Metals Trading Corp of India and Ors  1 All ER1017 at1023: “the general rule is that an action commenced in the name of a non-existent person or company, is a nullity…”
Having ruled that the respondent company which was struck off the register of companies of Antigua and Barbuda ceased to have legal existence, we further hold that it lacked the capacity to bring the suit it prosecuted at the court below, while it remained struck off the register. The subsequent restoration to the Register did not have the effect of validating acts such as the institution of the suit at the court below.
In the circumstance, we go ahead to grant the application to set aside the writ of summons, the proceedings thereon, including judgment entered thereon. We make a further order for the refund of monies paid under the judgment to be made by the respondent to the applicant.
We must however express our misgivings as well as displeasure regarding the manner in which this matter has been raised. Seeing that the applicant has lodged an appeal against the decision of the High Court, it seems to us that a challenge to jurisdiction (such as a challenge to capacity is), ought properly to have been raised as a ground in the appeal proper. The court then could have taken it as a preliminary matter following which consequential orders could have been made that would have had the same effect as what we have been called upon to do. The effect of this ruling is that the appeal before this court has been overtaken, and that is not the route we would have preferred or encouraged.
The application is granted as prayed.
Cost of GH¢1,000.00 in favour of applicants.