IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT
ACCRA - A.D 2019
NII AMANOR DODOO AND THE BEIGE BANK - (PLAINTIFFS/RESPONDENTS)
MICHAEL NYINAKU & 12 ORS - (Defendants/Applicants)
DATE: 30TH JULY, 2019
SUIT NO: CM/RPC/0962/2019
JUDGES: HER LADYSHIP JUSTICE JENNIFER ABENA DADZIE
ACE ANAN ANKOMAH ESQ., OF BENTSI-ENCHILL, LETSA AND ANKOMA, NO. 4 MOMOTSE AVENUE, ADABRAKA, ACCRA, COUNSEL FOR PLAINTIFFS.
YAW D. OPPONG ESQ., OF OPPONG & ASSOCIATES, 145 OTSOKRIKRI ST. ADJACENT GHANA REVENUE AUTHORITY, ADABRAKA, ACCRA, COUNSEL FOR 2ND, 3RD, 4TH, 5TH, 6TH AND 9TH DEFENDANTS.
THADDEUS SORY, ESQ., OF SORY @ LAW, NO. 4, 2ND CLOSE, BOUNDARY ROAD EXTENSION, NEAR UBA, EAST LEGON, ACCRA FOR 1ST, 7TH, 8TH, 10TH, 11TH, 12TH AND 13TH DEFENDANTS
This is an application by the 2nd to 6th and 9th Defendants/Applicants herein, hereafter referred to as "Applicants", invoking the original jurisdiction of this court for an order to strike out the instant suit on the basis that it was commenced by a person that is the 1st Plaintiff/Respondent, without the requisite capacity.
The facts of the case as can be gleaned from the records reveal that the 1st Plaintiff/Respondent, as Receiver of The Beige Bank, (hereinafter referred to as "the Bank/2nd Plaintiff/Respondent") identified a number of transactions executed by the Defendants to the suit that he alleges are unlawful. These include loans, advances and the acquisition of assets using the funds of the Bank made by the 1st Defendant for his and the benefit of the other Defendants. In this light, on June 14, 2019, the 1st Plaintiff/Respondent caused a Writ of Summons and a Statement of Claim to be issued against the Defendants. On June 20, 2019 upon application by the Bank and pursuant to an order of the court granting same, the Bank was joined to the suit as 2nd Plaintiff. The plaintiffs (herein referred to collectively as "Respondents") claimed the following reliefs per the amended Writ of Summons and Statement of Claim:
"a. A declaration that 1st Defendant has breached his duties as director of 2nd Plaintiff and is liable for all the losses to 2nd Plaintiff occasioned by the breaches;
b. A declaration that the various transactions described in the statement of claim between 2nd Plaintiff and Defendants are unlawful;
c. An order for 1st Defendant to account and refund to Plaintiffs for any profit resulting from property transactions with or through 12th Defendant, and for a further order rescinding all other transactions entered into between 2nd Plaintiff and Defendants;
d. Order of recovery jointly and severally against the respective Defendants of the following sum:
i. 1st and 2nd defendants, GH¢17,500,000
ii. 1st and 3rd Defendants, GH¢22,000,000
iii. 1st and 4th Defendants, GH¢18,500,000
iv. 1st and 5th Defendants, GH¢10,978,660.03
v. 1st and 6th Defendants, GH¢7,000,000
vi. 1st and 7th Defendants, GH¢29,000,000
vii. 1st and 8th Defendants, GH¢10,000,000
viii. 1st and 9th Defendants, GH¢575,321,154.99
ix. 1st and 10th Defendants, GH€46,040,347.51
x. 1st and 11th Defendants, GH€1,100,000
xi. 1st and 12th Defendants, GH€19,156,374.91 and
xii. 1st and 13th Defendants, GH¢597,255,052.91
e. An order for the recovery from 1st Defendant of GH¢17,865,243.03 being amounts unlawfully transferred and recorded in the 'shareholders general ledger' of 2nd plaintiff;
f. An order for the recovery from 1st Defendant of GH¢1,465,000 being amounts unlawfully transferred and recorded in the Directors general ledger' of 2nd Plaintiff
g. An order for the recovery from 1st Defendant of GH¢40,341,389.84 being amounts unlawfully transferred and recorded in the 'Prepayment project works general ledger' of 2nd Plaintiff;
h. An order for the payment of interest on each of the amounts enumerated at paragraphs (d), (e), (f) and (g) above at the prevailing bank rate from the respective dates of disbursement till date(s) of final payment;
i. An order directed at the 1st Defendant to produce to Plaintiffs, any documents covering all the transaction recorded in 2nd Plaintiff's general ledger known as Prepayment project works;
j. A declaration that all assets identified in this matter to have been acquired with funds taken from 2nd Plaintiff and traced to be within the possession or control of any of the Defendants or any other persons, are held in trust for 2nd Plaintiff: ..."
On July 2, 2019, the Applicants caused a conditional appearance to be entered on their behalf and on July 15, 2019, brought the present application invoking the original jurisdiction of this court for an order to strike out the suit on grounds of the writ being a nullity, it having been commenced by a person without the requisite capacity. On July 17, 2019, this court ordered counsel to file their written submissions on this point. I would note that in disposing of this matter, I have given great consideration to these addresses as well as the case law, authorities and rules of court procedure governing the grant or otherwise of an application such as the present one.
The case of the Applicants is pretty simple and straight forward. They argue that the 1st Plaintiff/Respondent does not have the capacity to initiate this action. Lack of capacity, they argue, makes the writ a nullity and in consequence, the entire proceedings emanating from it; the effect then being that no suit was commenced at all. Relying on the case of Akrong v Bulley  GLR 469-478 and Standard Bank Offshore Trust Company Ltd v National Investment Bank & 2 O rs (Civil Appeal No. J4/63/2016; delivered 21st June, 2017), and other writings, counsel submits that the question of capacity is not necessarily a substantive defence which should be argued on the merits. Rather, counsel contends that the issue of capacity could be raised as a question of law anytime at all by any of the parties. Thus, capacity must be found to be existent before the issuance of the writ else, the writ is a nullity.
Following therefrom, the Applicants contend that the joinder of the 2nd Plaintiff/Respondent to the suit is a nullity, citing the dictum of Lord Denning in the case of Macfoy v United Africa Co Ltd.  3 AER 1 1169, in which the learned judge posited that "you cannot put something on nothing and expect it to stay there, it will collapse". Counsel for Applicants further, on this point, refers to the recent decision of this Court in the case of Nii Amanor Dodoo v Kwabena Duffuor & 15 Ors (Civil Suit No. CM/RPC/0624/2018; delivered on 4th July, 2019] in which this court had dismissed the suit on grounds of capacity. On this basis, counsel argues that 1st Plaintiff/Respondent does not have the capacity to initiate these proceedings in his own name and therefore the writ is void.
Respondents are opposed to this application and submit, as a preliminary objection that by filing a conditional appearance, Applicants are bound to bring an application under Order 9 rule 8 of the High Court (Civil Procedure) Rules, 2004, CI 47 and even then for only the reliefs as specified in the rule. Since capacity is not one of those, this application is misplaced.
Again, it is was submitted by the Respondents that in so far as the application seeks to "strike out the suit" the said application is incompetent as "striking out suit" does not form part of the reliefs captured under rule 8 of Order 9 of C.1 47.
On the issue of raising capacity at this stage, the Respondents submit that capacity is not a matter of irregularity or jurisdiction but it is a substantive defence, which ought to have been pleaded by the Applicants in their defence so evidence could be led on it in trial. The Respondents argue that in any event, they both have capacity to bring the action and that in particular, the 1st Plaintiff/Respondent could sue in his own name having assumed the rights and powers of the members of the 2nd Plaintiff/Respondent by operation of law.
The 1st, 7th, 10th, 12th and 13th Defendants, in their respect, argue in support of striking out the suit. They contend that the 1st Plaintiff/Respondent instituted the instant proceedings in his personal capacity and not his official capacity or even in a representative capacity, as the writ is not endorsed with his official capacity as required by Order 2 rule 4(1)(a) of C.1 47.
It was argued further that 1st Plaintiff/Respondent did not have the capacity to bring this action in his own name. Counsel relied on the case of Dodoo v Duffuor & 15 Ors, supra, and concluded that the 1st Plaintiff/Respondent ought to have brought the proceedings in the name of the company under receivership and not in his own name. On this basis then, they argue the writ was defective. It was further submitted that 1st Plaintiff/Respondent failed to indorse on the writ itself that he sues in a representative capacity. This also, according to them renders the writ a nullity. Since the writ was defective then, the said defect could not inure to the benefit of the 2nd Plaintiff/Respondent to be joined to the suit as the writ could not be cured by the subsequent joinder. Counsel similarly, cited and relied on the case of Macfoy v United Africa Co Ltd., supra.
Before proceeding to dispose of the main task before me, I would like to comment first on the pertinent but preliminary objections raised by Respondents to the present application. They argue, firstly that upon filing a conditional appearance, a defendant is limited to filing only the applications set out under Order 9 rule 8 of C.1 47 and that "capacity" is not one of these "grounds". As such, this application must necessarily fail.
Order 9 rule 8 of C.I 47, which deals with applications to set aside a writ states as follows:
“A defendant may at any time before filing appearance, or, if the defendant has filed a conditional appearance, within fourteen days after filing appearance, apply to the Court for an order to
(a) set aside the writ or service of the writ;
(b) declare that the writ or notice of it has not been served on the defendant; or
(c) discharge any order that gives leave to serve the notice on the defendant outside the country."
Counsel described these applications as grounds and stated further that, no other "ground" can be canvassed by the defendant other than what counsel suggests is set out in the said rule. He cites in support of this proposition the case of Amissah-Abadoo v Abadoo  1 GLR 490 where Wiredu J (as he then was) gave three (3) "grounds” upon which those applications can be brought, namely, "irregularity of the writ, or irregularity in the service of the writ or to deny the jurisdiction of the court".
It is my view that this classification of the applications in Order 9 rule 8 of C.1 47 as "grounds" is what seems to have misled counsel. In my considered opinion, the applications as set out in the rule 8 of Order 9, C.I 47, are different from the grounds upon which those applications can be brought. These applications can be premised on any ground so far as that ground is sustainable in the eyes of the court. It is in recognition of this fact that the court in the case of Amissah-Abadoo v Abadoo, supra, made this observation at page 497 thus,
"a conditional, appearance or appearance under protest is a complete appearance to the action for all purposes, subject only to the right reserved by the defendant to apply to set aside the writ or the service thereof, on any ground which he can sustain". [Emphasis added]
What is set out in Order 9 rule 8 of C.I 47 then are not grounds as deemed by counsel but applications/reliefs. These applications as | have already stated can be grounded on any reason. The question of whether that reason is sustainable is then left to the court to decide. If it is, the result will be a grant of the application as laid out, otherwise, it fails and the case proceeds on its normal course.
It is my considered opinion that the three (3) grounds that the court in Amissah-Abadoo v Abadoo proceeded to state, that is, the "ground of irregularity of the writ or the service of it or to deny jurisdiction" are not the only grounds that could be canvassed when bringing an application to set aside a writ of summons. For where there is a defect apparent on the writ, such a writ can be set aside. Examples of where a writ may be deemed defective includes where the action is statute barred, where the plaintiff is not vested with a present cause of action, where the writ contains no address, or no sufficient endorsement of claim or even where the defendant is not the proper person to be sued or the court lacks jurisdiction (see Enoch D. Kom, Civil Procedure, 3rd Edn, 1990 p. 39; Order 12 rule 24, of the Supreme (High] Court (Civil Procedure) Rules, 1954 (L.N. 140A), which is impari materia with Order 9 rule 8 of C.I 47).
Poku v Bufie (deceased) and Adu-Poku Mensah (20091 SCGLR 310 at 338, per Ansah, JSC. In Standard Bank Offshore Trust Company Ltd v National Investment Bank Ltd., supra, their Lordships stated that
“A person's capacity to sue, whether under a statue or rule of practice, must be found to be present and valid before the issuance of the writ of summons, else the writ will be declared a nullity ... Capacity to sue is a very critical component of any civil litigation without which the plaintiff cannot maintain any claim."
A lack of capacity to initiate proceedings would therefore render the writ defective. This, the courts have held to have the effect of invalidating the writ and nullifying any proceedings ensuing therefrom. See also the cases of Republic v High Court, Accra; Ex parte Aryeetey, supra; NAOS Holding Inc. v Ghana Commercial Bank Ltd. (Civil Appeal No. J4/28/2009, delivered on 24th November, 2010)
On this basis, so far as the ground of capacity can be sustained by a defendant, he or she has the right to bring an application in court based on this ground for the writ to be set aside as invalid. Respondents therefore aptly quoted the case of Ex parte Aryeetey, supra, which held that:
The question of capacity in initiating proceedings, for instance, has been held to be very fundamental such that it can have catastrophic effects on the fortunes of a case. See Fosua and Adu Poku v Dufie (deceased) and Adu-Poku Mensah  SCGLR 310 at 338, per Ansah, JSC. In Standard Bank Offshore Trust Company Ltd v National Investment Bank Ltd., supra, their Lordships stated that
“A person's capacity to sue, whether under a statue or rule of practice, must be found to be present and valid before the issuance of the writ of summons, else the writ will be declared a nullity ... Capacity to sue is a very critical component of any civil litigation without which the plaintiff cannot maintain any claim."
A lack of capacity to initiate proceedings would therefore render the writ defective. This, the courts have held to have the effect of invalidating the writ and nullifying any proceedings ensuing therefrom. See also the cases of Republic v High Court, Accra; Ex parte Aryeetey, supra; NAOS Holding Inc. y Ghana Commercial Bank Ltd. (Civil Appeal No. J4/28/2009, delivered on 24th November, 2010).
On this basis, so far as the ground of capacity can be sustained by a defendant, he or she has the right to bring an application in court based on this ground for the writ to be set aside as invalid. Respondents therefore aptly quoted the case of Ex parte Aryeetey supra, which held that:
"...the requirement that a party indorses on the writ the capacity in which he sues is to ensure that a person sui ng in a representative capacity is actually invested with that capacity and therefore has the legal right to sue, this includes the submission that the requirements also enables the defendant, if he is minded to challenge the capacity the plaintiff claims he has and such a challenge may be taken as a preliminary issue. This is because if a part y brings an action in a capacity he does not have, the writ is a nullity and so are the proceedings and judgment founded on it. Any challenge to capacity therefore puts the validity of the writ in issue..." [Emphasis mine)
Looking at the nature of the application presently before the court, as can be gleaned from the affidavit in support of the motion and the submission of counsel for Applicants on their behalf, it is apparent that he Applicants do not intend to set up an application under Order 9 rule 8 of C.1 47 to set aside the writ. Rather, the Applicants invoked the original jurisdiction of this court to strike out the suit. This court finds that the proper jurisdiction that ought to have been invoked by the Applicants was the inherent jurisdiction and not the original jurisdiction of the court.
Nonetheless, the invocation of the original jurisdiction instead of the inherent jurisdiction is of no consequence. To hold otherwise and strike out this motion, in my respectful view, would be "pursuing technicalities to an absurdity" to borrow the words of the former West African Court of Appeal in the case of Chief Attua Kofie v. Kobina Attu, 17 June 1948, unreported, and quoted by Archer J.A. in Shardey . Adamptey  2 GLR 380. See also the case of Kuma v. Bart-Plange (1989-90] 1 GLR 119.
In the case of Shardey V. Adamptey, supra, the court per Justice Archer (as he then was) stated that:
"The citing of rules of court in applications before the court is desirable but I would not say that it is so indispensable that failure to do so should rock the very foundations of the administration of justice. Judges are not omniscient and, as one judge exclaimed a few centuries ago, "God forbid that any judge should know all the law." When an application is made and the relevant rule is cited, it enables the court to ascertain whether the application is properly before it and also what powers it has under the rule. There are cases where an application is not governed by any rule of court or by the inherent jurisdiction of the court. In such cases the court has no hesitation in dismissing or striking out the application. But it seems to me that where the substance of an application is clear but the wrong rule has been quoted, an applicant should be permitted to amend the rule in furtherance of justice. We live in a different judicial age but the maxim de minimis non curat lex goes marching on."
Consequently, I find that the application before the Court is competent.
Respondents also argue that capacity, being a question of fact is to be raised as a substantive defense which must specifically be pleaded and proven at trial by taking evidence. Counsel cites in support of this proposition the case of Faibille v Adei & Anor [Unreported; Suit No. AP 55/2007; dated 20th November 2007] where the High Court had made a finding that "lack of capacity is not one of the circumstances under which conditional appearance can be entered".
Whether or not a party has capacity, in my clear thinking, is not only a question of fact, as envisaged by counsel for Respondents, but it is also a question of law. Additionally, to a large extent, the stage of proceedings at which these questions are raised could determine whether it will be treated as a question of law or as a question of fact. Since the capacity of a plaintiff should be apparent on the face of the writ and the statement of claim, a defendant can raise, as a point of law, the issue that the plaintiff does not have capacity even at the time of filing an appearance under protest. When this is done, the court will only consider the writ in order to arrive at its decision. I find support on this point in the Court of Appeal case of Xin Bin Zhang v Nkrumah K. Jones (Civil Appeal No. H1/76/2016; delivered on 12th April, 2017) where the court noted thus,
"It is at this stage (the time of filing conditional appearance), that the defendant who genuinely sees that a writ is defective ought to speak up. Where such an application is presented to the court at that time, the court's decision will be premised on the narrow evidence of the process that lies before it."
If the issue is raised in the pleadings or after pleadings have closed and when all the rival contentions of the parties have been placed before the court, then the matter is taken outside the determination of a point of law and becomes for the court a determination of fact. In the case of Evelyn Asiedu Offei v Yaw Asamoah & Anor (Civil Appeal No. 34/64/2016, Unreported, delivered on 25th April, 2018, Unreported), the court stated that:
"whether or not a party has capacity to institute an action is a question of law that could be determined after a factual evaluation of the evidence on record. As a legal question, it can be raised at any time at all by any of the parties in litigation or even by the court suo motu when the circumstances call for its invocation".
See also ex parte Aryeetey, supra.
This implies that even before or after an appearance to the suit under protest has been filed, a defendant to an action can bring an application to have the writ struck out on grounds that the plaintiff, as could be gleaned from the writ of summons and the accompanying statement of claim, is not clothed with the requisite capacity to initiate the proceedings.
Having found and held that the issue of the capacity of 1st Plaintiff/Respondent can be dealt with at this stage of the proceedings, I will turn my attention to the crux of the argument of the Respondents in opposition to the application.
The first argument of the Respondents in support of their position is that it was the 2nd Plaintiff/Respondent who applied to be joined to the suit and by such joinder and subsequent amendment of the writ, the joinder relates back to the date of inception of the action. This, according to the Respondents, is to prevent the filing of a multiplicity of suits and that upon the joinder, the action is implanted with the character of the 2nd Plaintiff/Respondent so that the action survives and may even proceed without any of the other plaintiffs.
Secondly, the Respondents argue that they both have capacity to sue and that the provisions of sections 209 and 210 of the Companies Act, 1963 (Act 179) empower the 2nd Plaintiff/Respondent to commence legal proceedings in its own name while the 1st Plaintiff/Respondent, in his capacity as receiver and having succeeded to the rights and powers of the members of the 2nd Plaintiff/Respondent by operation of law, can also commence an action in his own name, both to enforce directors' liabilities against the 1st Defendant and then the rest of the Defendants as persons who knowingly participated in or benefited from the 1st Defendant's breach.
From all indications, it appears to me that the Respondents have brought this action, not as a receivership action to recover the property of the company in receivership, but in pursuance of the powers of a member of a company to enforce the civil liabilities of a director to restrain a threatened breach or upon breach of his duties or to recover from a director of the company a property of the company. [See Section 210 of Act 179, infra.] This is made more apparent upon reviewing the writ, which on its face does not show any indorsement of the official capacity of the 1st Plaintiff/Respondent and the reliefs endorsed thereon, the first of which states that the plaintiff's claim is for:
"A declaration that 1st Defendant has breached his duties as director of 2nd Plaintiff and is liable for all the losses to 2nd Plaintiff occasioned by the breaches",
in addition to the other reliefs that seek to recover cash and other assets from the Defendants, jointly and severally.
Furthermore, the submissions of counsel for Respondents sheds more light on and establishes the fact of the nature of the action being pursued by the Respondents.
I have had opportunity to examine into detail, the sections 209 and 210 of Act 179. They provide as follows:
"209. Civil liabilities for breach of duty
Where a director commits a breach of duty under sections 203 to 205,
(a) the director and any other person who knowingly participated in the breach is liable to compensate the company for the loss it suffers as a result of the breach;
(b) the director shall account to the company for a profit made by the director as a result of the breach; and
(c) a contract or any other transaction entered into between the director and the company in breach of that duty may be rescinded by the company.
Legal proceedings to enforce liabilities
(1) Proceedings to enforce the liabilities referred to in section 209 or to restrain a threatened breach of a duty under sections 203 to 205, or to recover from a director of the company a property of the company may be instituted by the company or by a member of the company.
(2)Proceedings may be instituted by the company on the authority of the board of directors or of a receiver and manager or liquidator of the company, or of an ordinary resolution of the company which has been agreed to by the members of the company entitled to attend and vote at a general meeting or has been passed at a general meeting.
(3) At a general meeting for the purposes of subsection (2), neither the proposed defendants nor the holders of the shares in which they or any of them are beneficially interested shall vote on the resolution and if they do vote their votes shall not be counted.
(4) After an investigation of the affairs of the company proceedings may, pursuant to section 225 be instituted in the name of the company by the Registrar.
(5) Where proceedings are instituted by a member, that member shall sue in a representative capacity on behalf of that member and all other members, except any that are defendants to the action, and shall join the company as a defendant; and to that representative action the provisions of section 324 shall apply."
The provisions of section 210 of Act 179 were provided to help safe guard the interests of a company especially against directors who breach their duties. Sections 210(1) and (2), Act 179 give both a member of a company and the company itself, through its directors on the authority of the board of directors or of a receiver and manager or liquidator of the company, the power to bring proceedings to enforce the liabilities referred to in section 209 or to restrain a threatened breach of any duty under sections 203 to 205 of the Act or to recover from any director of the company any property of the company.
Clearly, this is an innovation of the standards of the common law in the Foss v Harbottle rule. Foss v Harbottle (1843) 67 ER 189 provided that proceedings to enforce rights owed to the company including the enforcement of the duties of a director must be brought by the company and the company alone (the proper plaintiff rule). Prima facie, it was the board of directors alone that had the power to institute proceedings on behalf of the company, generally. Our legislature took into consideration the situation where the said director(s) are in control and cannot bring actions against themselves. It is for this reason that the members of the company were given this power within the contemplation of the law to make the directors accountable for breaches of their duties.
So in PS Investment Ltd v CEREDEC  1 SCGLR at 611, the court held per Dotse J.S.C. at pages 635 - 640 that statutory interventions contained in the Companies Act had significantly whittled away the scope of the "proper plaintiff" rule in Foss v. Harbottle and a member is allowed to bring an action in his name where it is alleged that the member's right has been violated. The court however stated that the "majority rule" would still be upheld where the court finds that power to bring an action as a member to enforce the liabilities of a director and in consequence, in his own name.
The question to be asked here is whether a receiver of a company can take action under section 210 of Act 179 as a member of the company as the respondents would want the court to hold?
A careful consideration of the relevant provisions of Act 930 and Act 179, in my considered opinion, suggests that although a receiver is said to "succeed the rights and powers of the shareholders" a receiver cannot bring the suit as a member within the context of section 210 of Act 179. The basic ground is that the legislator has already conferred on the receiver under section 127(3)(k) of Act 930 the power to institute and to defend an action because he is a receiver appointed to manage the affairs of the company. The fact that he assumes the powers of the members does not mean he is to limit himself by seeing himself as a member of the company for the purpose of bringing an action as a member/shareholder would under normal circumstances. A suit by a receiver then will reflect what is to be initiated by the company itself since having been made a receiver, the receiver now becomes the alter ego of the company until his appointment is terminated. The powers of the Receiver as within the intendment of Act 930 are far wider and more varied than what is conceived under section 210 of Act 179 in respect of a member of a company. By bringing the action as a shareholder then, the receiver will be limiting the rights of the company as an entity and would not be representing the interests of the company to its full extent.
n my considered opinion, the reason why Act 930 gives the power to succeed to the rights and powers of the shareholders, directors and the key personnel of the company to the receiver is so as to prevent undue interference in his work and the need to obtain shareholder consent to undertake certain required actions. The powers succeeded to are therefore not to be interpreted as giving authority to institute proceedings as a shareholder would. In this vein, the applicable section that the respondents fail to notice would be section 210(2) of Act 179, in recognition of the power of the receiver to institute the action on behalf of the company. I will repeat here the provisions of section 210 (2) of Act 179. That section states in part "Proceedings may be instituted by the company on the authority of the board of directors or f a receiver and manager or liquidator of the company" Such an action as per section 210(4) of Act 179 is to be instituted in the name of the company and not in the name of the receiver. Instituting proceedings as member then would, in my opinion, be derogating from the powers of the receiver.
This position becomes even more apparent when considered on the basis that section 210(2) of Act 179 takes specific mention of the word 'receiver' which title the 1st Plaintiff/Respondent ascribes to and his section grants the receiver the power to institute the action in the name of the company. Why then ill the 1st
Plaintiff/Respondent herein choose a route which is be laboured with such technicalities that he needs ow justify his powers when both Act 179 and Act 930 have clearly given him the power to bring the action as a receiver in the name of the company? Evidentially, this is why the 1st Plaintiff/Respondent did not identify himself as suing as a member but rather as a receiver and repeatedly described himself is a receiver in his statement of Claim. How then can he claim to be suing as a receiver in one breath, on behalf of the company and as a member in another breath?
Further, the provisions of Act 179 on which the Respondents ground their arguments, in particular, section 210(5) of Act 179 provides that where a member institutes legal proceedings in his name to enforce the liabilities of a director for breaching his duties, the member must initiate the proceedings in representative capacity on behalf of himself and all the other members excluding members who are defendants to the action and secondly, the company is to be joined as a defendant to the suit. Both of these conditions are mandatory as the word "shall" is used. Obviously in the case of a receiver, these requirements cannot be met as once a receiver is appointed it cannot be said he is taking action on behalf of other shareholders. In addition, making the company a defendant would not make sense because a receiver is supposed to be acting on behalf of the company. The Gowers Report also makes it clear that the reason a member is allowed to take such representative action is to afford such member and others with similar grievances to address violations of duties of the people in control of or managing the company. In this instance, by virtue of the fact that all the powers and rights of shareholders, directors and key personnel are vested in the receiver, he is the one at the helm of affairs.
or these reasons I am confident in my mind that section 210 of Act 179 should not be interpreted to mean a receiver is somehow also a member/shareholder within the context of that section and that an action by him is an action by a member/shareholder being brought under that section. It is not! It must be noted that a receiver is a different creature that is recognised under law and his appointment has specified implications for the insolvent company. The Act 179 itself under sections 236 to 245 has extensive special provisions dealing with Receivers and Managers. Why would the drafters of the law go the trouble of drafting such provisions if they intend that a receiver when appointed should be quated with a member/shareholder?
I find the argument of the Respondents to justify why a receiver can take action in his own name an ingenious one, which unfortunately, I do not agree with. I am further convinced in my position by reason of the holding of the Supreme Court in cases such as Boyefio v NTHC Properties Ltd [1997 - 98] GLR 768 where the court held, among others, that "[t]he law was clear that where an enactment had described a special procedure by which something was to be done, it was that procedure alone that was to be followed".
I therefore hold that the 1st Plaintiff/Respondent is mandated by both the Act 179 and Act 930 to initiate and defend any legal proceedings on behalf of the company in his capacity as receiver and not otherwise in any other capacity. will now turn my attention to the argument of the Respondents that the joinder of 2nd Plaintiff/Respondent in some way cures whatever defect as to the capacity the 1st Plaintiff/Respondent may have and therefore saves the writ. They cite in support of this argument the case of Sneade v Whearton (1904] 1 KB 295 where Collins MR stated at page 297 of the report that "the writ as amended becomes for this purpose the original commencement of the action, and the claim thereon indorsed is substituted for the claim originally indorsed".
find that even though this may be the position of the law, in so far as the 1st Plaintiff/Respondent ought to sidestep the procedure for bringing an action in his capacity as a receiver but rather brought he action as a derivative action, the original writ is defective and ought to be set aside as being void. In effect notwithstanding the fact that the 2nd Plaintiff/Respondent is clothed with the requisite capacity to initiate the suit by itself and in its own name, its joinder to the present suit cannot cure the defect in the writ, it having been set up on an already void writ. (See Macfoy v United Africa Co Ltd supra; Mosi Bagyina (1963] 1 GLR 337 SC. In the case of Alhaji Fatai Ayodela Alawiya v Mrs Elizabeth detokunbo Ogunsanya (2012) LPELR 1966 (SC) the supreme court of Nigeria delivered itself thus:
"An Amendment goes back to the original date of the process amended and since the original process is defective, the amendment cannot cure that defect as a valid process cannot replace a void process. The writ of summons is an initiating process and therefore must be valid to invoke the jurisdiction of the court".
n a proper interpretation of the provisions of Act 930, a receiver initiating or defending legal proceedings is required to do so in the name of the bank or specialised deposit-taking entity in receivership and not in his personal name. [See Dodoo v Duffuor & 15 Ors, supra.)
Having held that the 1st Plaintiff/Respondent cannot institute the action as a shareholder/member could and having held also that the original writ is void for which reason the joinder of the 2nd Plaintiff/Respondent to the suit is likewise a nullity, I accordingly strike out the writ of summons as being void as the 1st Plaintiff/Respondent had no capacity to initiate the writ in his name.
make no order as to costs.
CASES REFERRED TO:
1. Akrong v Bulley  GLR 469-478
2. Standard Bank Offshore Trust Company Ltd v National Investment Bank & 2 Ors Civil Appeal No. J4/63/2016; delivered 21st June, 2017
3. Macfoy v United Africa Co Itd  3 AER 1 1169,
4. Nii Amanor Dodoo v Kwabena Duffuor & 15 Ors (Civil Suit no. CM/RPC/0624/2018; delivered on 4th July, 2019)
5. Amissah-Ababoo v Abadoo  1 GLR 490
6. Republic v High Court, Accra; Ex parte Aryeetey (2003-2004] SCGLR 398
7. Fosua and Adu Poku v Dufie (deceased) and Adu-Poku Mensah  SCGLR 310 at 338
8. NAOS Holding Inc. v Ghana Commercial Bank Ltd. Civil Appeal No. J4/28/2009, delivered on 24th November, 2010
9. Chief Attua Kofie v. Kobina Attu, 17 June 1948, unreported,
10. Shardey v. Adamptey.  2 GLR 380
11. Kuma v. Bart-Plange [1989-90] 1 GLR 119
12. Faibille v Adei & Anor (unreported; Suit No: AP 55/2007; dated 20th November, 2007]
13. Xin Bin Zhang v Nkrumah K. Jones (Civil Appeal No. H1/76/2016) delivered on 12th April, 2017
14. Evelyn Asiedu Offei v Yaw Asamoah & Anor Unreported Civil Appeal No. J4/64/2016 delivered on 25th April, 2018
15. Foss v Harbottle (1843) 67 ER 189
16. PS Investment Ltd v. CEREDEC  1 SCGLR at 611
17. Boyefio v NTHC Properties Ltd [1997 – 98] 1 GLR 768
18. Sneade v Whearton (1904] 1 KB 295
19. Mosi v Bagyina (1963] 1 GLR 337 SC
20. Alhaji Fatai Ayodela Alawiya v Mrs Elizabeth Adetokunbg. Ogunsanya (2012) LPELR 1966 (SC)