On 15^th April 2019, Counsel for the Defendant/Applicant (hereinafter called the Applicant) filed a

Motion on Notice to set aside the Writ of Summons and Statement of Claim filed on 1^st March 2019 or to transfer the present matter to the High Court, Accra. Per the endorsement on the Plaintiff’s/Respondent’s (hereinafter called the Respondent) Writ of Summons and Statement of Claim the following reliefs were sought:

1)    An order for the payment of the sums of Six Hundred and Ten Thousand Ghana Cedis (GHC610,000.00) and Five Hundred Thousand Ghana Cedis (GHC500,000.00) which sums the Plaintiff invested with the Defendant company on 18^th August, 2017 and 19^th February, 2018 and which investments matured on the 18^th August, 2018 and 31^st October, 2018 respectively but which said sums the Defendant has failed to pay despite repeated demands by the Plaintiff.

2)    Interest on the said amounts at the prevailing commercial bank lending rate from 1^st November, 2018 till the date of final payment.

3)    Cost.

The Applicant herein has filed this Application pursuant to a Conditional Appearance filed by it on the 14th of March, 2019.

The Applicant’s Case

The grounds of the Applicant’s caseas gathered from the affidavit in support of the application and the applicant’s written submission filed on its behalf by counsel are:

a. That the present action falls within the scope of section 18 and 19 of the Securities Industry Act, 2016 (Act 929) hence the Respondent ought to have made a formal complaint to the Securities and Exchange Commission (“SEC”) before commencing the present action.

b. That the Securities Industries Act stays the Court’s Jurisdiction until all such complaints, disputes or violations have been submitted for resolution.

c. That the proper forum for commencing a suit against the Defendant is the High Court, Accra where it has its registered office and carries on business.

In his written submissions, Counsel for the applicant argued thatby virtue of the structure, organization and operation of its business, the breach of any contractual provision with a customer falls within the scope of section 19 of Act 929 and the need to resort to SEC is backed by strong public policy reasons. Counsel submitted that the present action constitutes a complaint, dispute or violation within the meaning of section 19 of Act 929 and that the respondent ought to follow the procedure set out under section 19. Counsel cited the case of Boyefio v NTHC Properties Ltd [1997-98] 1 GLR 768 which amplified the principle of law that where a statute prescribes a special procedure by which a relief is to be sought, a party cannot resort to any other procedure.

Counsel argued further that per section 19 of Act 929, SEC exercises jurisdiction to receive, hear and adjudicate complaints and disputes from customers in respect of non-payment of investments as alleged by the respondent. That section 19 of Act 929 does not oust the Court’s jurisdiction but only defers it until the complaint, dispute or violation complained of has first been submitted to the Hearings Committee of SEC. That the Act also gives a right of appeal to the High Court after the Hearing Committee has made a determination.

It is also the contention of the applicant that it carries on business in the Greater Accra Region and has its registered office in the said Region. In view of these, it is applicant’s case that the proper forum for commencing a suit against it is the High Court, Accra. Counsel submitted that even though it has an office in Kumasi, the office by its operational structure possesses no power of management whatsoever. Counsel submitted that the test laid by the Court to establish whether a company was carrying on business for purposes of being sued in a Regionwas to ascertain whether the company had a permanent establishment or whether that establishment had powers of management in the Region. Social Aid Guild of Ghana v Dassah and Another [1989-90] 2GLR 233, holding 3 cited.

Counsel further argued that since the Applicant herein resides and carries on business in the Greater Accra Region and its contracts with the Respondent were essentially performed in the Greater Accra Region, the case has been commenced in the wrong forum. He therefore invited the court to report to the Chief Justice for the case to be transferred to the High Court, Accra. Counsel cited Sections 104 and 105 of the Courts Act, 1993 (Act459) in support of his view.

Basis for Opposing the Application

The Respondent is opposed to the application and it has demonstrated the basis of the opposition in an affidavit in opposition filed on 23^rd April, 2019.

Before tackling the grounds of the opposition, counsel for the respondent attacked the propriety of the application. Counsel described the application as incompetent as the same was filed 31 days after entering conditional appearance. He argued that where conditional appearance has been filed but fourteen (14) days has expired after the filing of the same, the party loses his right to object to the jurisdiction of the court by motion and may do so in his defence.

On the substantive grounds, counsel for the applicant submitted that the court is the proper forum to hear disputes such as those set out in the Writ of Summons and Statement of Claim. He relied heavily on Boyefio v NTHC Properties Ltd supra on the construction to be given to the phrase “matters arising under the Act” and argued that the present dispute does not fall within the scope of complaints that must be submitted to SEC for resolution. That the substance of the suit is for a common law breach of investment contract which does not in any way arise under Act 929 and therefore ought not be submitted to the SEC for redress before filing a case in Court.

On the venue for the institution of the action, counsel for the Respondent submitted that per the Writ of Summons and Statement of Claim, the Respondent entered into an investment contract with the Applicant herein at its branch at the Kwame Nkrumah University of Science and Technology (KNUST) located in Kumasi. Counsel submitted further that the Applicant is in breach of the investment contract and that the Respondent seeks from this court an order among others in the nature of specific performance of the contract.The venue of Respondent’s case therefore falls squarely within the provisions of Order 3 Rule 1 (4) of C.I 47 which determines the appropriate venue for the institution of the action at:

1. The region in which the contract ought to have been performed; or

2. The region where the Respondent resides; or

3. The region where the Respondent carries on his business.

Counsel argued that the Respondent is at liberty to choose any of the three (3) venues stated supra for the commencement of his action.

Issues emanating from the Application

Three main issues emanate from the instant application. They are:

1. Whether or not the application is competent in law since the same was filed after fourteen days of the entry of conditional appearance?

2. Whether or not the Respondent ought to have submitted a formal complaint to the SEC before issuing the instant Writ?

3. Whether or not the present action ought to be transferred to the High Court, Accra?

I shall proceed to deal with the issuesseriatim:

Competence of the Application

It is not in doubt that an application to set aside a Writ of Summons can be filed by a defendant after entry of conditional appearance.Order 9 rule 7 (2) states:

“A conditional appearance, except by a person sued as a partner of a firm and served as a partner, is to be treated for all purposes as unconditional appearance unless the Defendant applies to the Court within the time limited for the purpose, for an order under rule 8 and the Court makes an order under that rule.”

In Amissah-Abadoo v Abadoo (1973) 1 GLR 490 it was held that:

“A defendant might enter a conditional appearance where he intended to have the writ or the service of the writ set aside on the ground of irregularity in the writ or the service of it or to deny jurisdiction. Irregularity here included the irregularity in the issue or service of the writ or in the form of the writ.

The defendant’s application did not attack the plaintiff’s writ on any of the above grounds…the conditional appearance would be treated as unconditional appearance.”

It is also not in doubt that the applicant herein entered conditional appearance on the 14th of March, 2019 upon service of the writ, and proceeded to file the application to set aside the writ of summons on 15th April, 2019, that is thirty-one (31) days after entering conditional appearance.By Order 9 rule 7 of CI 47 the conditional appearance is treated as unconditional appearance unless the defendant applies to the court within the fourteen-day period provided under rule 8 and the court makes an order under that rule. SeeAmissah-Abadoo v Abadoo, supra. In such an instance, the unconditional appearance would constitute a waiver of the objection and would amount to a fresh step in the action as envisaged under Order 81 of CI 47. Thus, when the instant application was filed on 15th April, 2019 the conditional appearance had crystallized into an unconditional appearance.

It is, however, the law that where the objection raised by the defendant is to the effect that the writ discloses no cause of action or raises a jurisdictional defect, the objection may be entertained after the expiration of the 14 days provided under Order 9 rule 8. An objection to jurisdiction can be entertained by the court under its inherent jurisdiction at any time during the trial or even on appeal. See Quist v Kwantreng (1961) GLR 605. Therefore, the failure to file an application to set aside the writ within 14 days will not prevent the court from hearing the application thereafter. Consequently, the respondent’s attack on the competence of the instant application is misconceived and the same fails. The result is that the application is proper and worthy of interrogation.

Has Issuance of the Writ Breached Act 929?

At the heart of the 2^nd issue for consideration (i.e. Whether or not the Respondent ought to have submitted a formal complaint to SEC before issuing the instant Writ?) is whether the action has breached the dispute settlement provision contained in the Securities Industry Act, 2016 (Act 929).

It is axiomatic to state that where a statute has set out a procedure for seeking a relief or enforcing a right, a party cannot resort to any other procedure especially when the required procedure is statutory. See Boyefio v NTHC Properties Ltd [1997-98] 1 GLR 768 and Ayikai v Okaidja III [2011] 1SCGLR 205, 208.

The Applicant’s case is grounded on the Securities Industry Act, 2016 (Act 929) particularly sections 18 and 19 thereof. Counsel contended that per his interpretation of section 19(1) of Act 929, the Respondent ought to have submitted a complaint to the SEC before seeking any redress in Court.

Section 19(1) of Act 929 provides as follows:

“A complaint, dispute or a violation arising under this Act shall before any redress is sought in the courts be submitted to the Commission for hearing and determination in accordance with this Act.”

From the plain meaning of section 19(1) of Act 929, the SEC is vested with the right as a matter of first instance to hear and determine various complaints. The provision is, however, not a carte blanche for every dispute, complaint or violation involving an entity licensed by the SEC to be submitted to it for determination. The scope of such complaints, disputes or violations is limited by the said section to only those arising under the Act.

Thus, in order to clothe the SEC with jurisdiction to hear and determine any complaint, dispute or violation submitted to it, the Applicant or Complainant as the case might be must show that such a dispute arises under Act 929.

A provision similar to section 19(1) of Act 929 was the subject of interpretation by the Supreme Court in the case of Boyefio v NTHC Properties Ltd [1997-98] 1 GLR 768. In that case, the Plaintiff commenced an action against the Defendant for damages for trespass, ejectment and perpetual injunction in respect of a piece of land at Baatsonaa within the Nungua Traditional Area which had been declared a registration district by the Land Title Registration – Declaration of Registration District (Accra District 02_ Instrument, 1992 (LI 1536) under the Land Title Registration Law, 1986 (PNDCL 152). The Defendantbrought an action to have the suit dismissed on the ground that since the area had been declared a registration district the Plaintiff should have first submitted the dispute to the adjudication committee created under the law before proceeding to Court as provided under section 12 of PNDCL 152.

In determining the issue, the Supreme Court set out to interpret the meaning of the phrase “disputes under this Law” appearing under section 12 of PNDCL 152. The Court in doing so referred to a number of provisions within the Act which creates a dispute requiring the party to seek redress under the Act before referring the matter to Court. The Supreme Court per Acquah JSC (as he then was) interpreted the phrase “disputes under this law” in the following words:

“The above exposition, in brief, outlines the main disputes under PNDCL 152 envisaged to arise in the course of registering title to land and interests therein at the Land Title Registry: disputes relating to conflicting claims under section 23(6) of PNDCL 152; disputes relating to conflicting Act 122 registered instruments under section 113(2) of PNDCL 152; disputes relating to the Land Registrar's rejection to register an applicant under section 21(2) of PNDCL 152; and finally disputes relating to the accuracy of boundaries and situations of land on the registry maps and plans under section 37(2) of PNDCL 152. Of course, each of the above four main disputes or a combination of them may give rise to further disputes in the course of registration. However, whatever be the complex disputes which may arise from those envisaged under the PNDCL 152, the important point is that the disputes set out above are the "disputes under this Law" in respect of which, in the language of section 12(1) of PNDCL 152, no action shall be commenced in any court until the procedures for settling them under PNDCL 152 have been exhausted”

The above dictum reinforces the view that not every dispute involving institutions regulated by SEC were envisaged as disputes arising from Act 929.

From the Writ of Summons and Statement of Claim, it is apparent that the instant dispute borders on common law breach of contract. The respondent is alleging that his investments with the applicant company have matured since 18^th August, 2018 and 31^st October, 2018 respectively and that the applicant has failed or refused to pay the principal sums despite repeated demands. The respondent has sued for recovery of money from the applicant.

To ascertain the true meaning of section 19 (1) of Act 929 and to determine whether disputes relating to breach of contract under common law falls within the category of disputes arising under Act 929, it is important to read the Act as a whole to effectuate the intention of the legislature.

Section 1 of Act 929 establishes the Securities and Exchange Commission. By section 2 of the Act, the object of the Commission is to regulate and promote the growth and development of an efficient and fair securities market in which investors and the integrity of the market are protected. Section 3 spells out the functions of the Act which are designed to achieve the object of the Commission. It provides as follows:

3. To achieve the object the Commission shall

a. advise the Minister on matters relating to the securities industry;

b. maintain surveillance over activities in securities to ensure orderly, fair and equitable dealings in securities;

c. register, license, authorise or regulate, in accordance with this Act or the Regulations,

i. securities exchanges,

ii. commodities and futures exchanges,

iii. securities depositories,

iv. clearing and settlement institutions,

v. credit rating agencies,

vi. fund managers,

vii. investment advisers,

viii. unit trusts,

ix. mutual funds,

x. hedge funds,

xi. private equity funds,

xii. venture capital funds,

xiii. nominees,

xiv. underwriters,

xv. issuing houses,

xvi. registrars,

xvii. custodians,

xviii. trustees,

xix. primary dealers,

xx. broker-dealers,

xxi. the representatives of the persons specified in subpara-graphs (i) to (xx); and

xxii. any other institution in the securities industry to control and supervise their activities with a view to maintaining proper standards or conduct and acceptable practices in the securities business;

d. formulate principles for the guidance of the industry;

e. monitor the solvency of licence holders and take measures to protect the interest of customers where the solvency of a licence holder is in doubt;

f. protect the integrity of the securities market against any abuses arising from dealing in securities including insider trading;

g. adopt measures to minimise and resolve any conflict of interest that may arise for market operators;

h. review, approve and regulate takeovers, mergers, acquisitions and all forms of business combinations in accordance with any law or code of practice requiring it to do so;

i. create the necessary atmosphere for the orderly growth and development of the capital market;

j. perform the functions referred to in the Companies Act 1963 (Act 179);

k. examine and approve invitations to the public made by issuers other than the government;

l. authorise and regulate the issuing of securities in Ghana by foreign issuers; and

m. undertake activities that are necessary or expedient for giving full effect to the provisions of this Act.

It is my considered opinion that complaints, disputes or violations arising from the Act are those flowing directly from the functions of the SECtogether with the other provisions of the Act. These are the provisions that create disputes involving the SEC regulated institutions. Such complaints, disputes or violations are meant to be submitted to the Administrative Hearings Committee of SEC for determination within the meaning of section 19 (1) of Act 929.

I have examined the afore-stated functions of the SEC together with the other provisions of the Actand it is my considered opinion that they do not cover contractual breach between a SEC regulated institution and its customers. Section 19 (1) only anticipates complaints, disputes or violations relating to registration, licensing, authorization or regulation of institutions operating under the regulatory purview of the SEC. By no stretch of imagination can it be construed to cover private contracts between these institutions on one hand and individuals including customers on the other. Indeed, a private contract can lead to a violation or dispute relating to the institution’s license, for instance, and it is such disputes that are anticipated under section 19 (1). The regulatory purview of SEC vis-à-vis its regulated institutions are applied based on the Act or Regulations, as provided in section 3 (c) of Act 929. The Act does not cover matters relating to breach of private contracts between the SEC regulated institutions and their customers. If the legislator wanted to include such a provision it would have done so. On this score, the linguistic canon of interpretation,expressiounusestexclusioalterius rule becomes very useful in the analysis. Chitty on Contracts explains the rule as “The express mention in an instrument of a particular person, power or thing may show an intention to exclude any other person, power or thing; expressiounusestexclusioalterius.”

I am not oblivious of the warning sent to the legal fraternity by our Supreme Court to adopt the above rule with caution. See Ghana Ports and Harbours Authority v Issoufou [1993-94] 1 GLR 24. I have heeded to the caution and I have adopted a cautious approach in the use of this rule of interpretation. In the face of the extensive provisions relating to the functions of the SEC and other related provisions in the Act, I can safely conclude that failure on the part of the legislature to include matters relating to breach of contract between SEC regulated institutions and their customers cannot be attributed to inadvertence or accident. The same was not mentioned because the object of the Act was not designed to cover such matters.

It is concluded from the foregoing that no provision of Act 929 imposes on any person a legal obligation to report matters of breach of contract of a fund manager to the SEC for settlement. I therefore decline counsel for the applicant’s bold invitation to conclude that the instant action is premature and same ought to be set aside until the SEC has heard it in pursuance of section 19 (1) of Act 929. Doing otherwise will encouragean absurd situation where all liquidated claims against investment companies and vice versa shall be submitted to SEC for determination. Section 19 (1) was meant to complement the effort of the court by focusing on technical matters that are best handled by the industry players. It is aimed at providing a dispute resolution mechanism that suits the securities industry and its commercial intuition. It is not meant to oust the jurisdiction of the court as a court of first instance in resolving common law breach of contract. On that score, the court is clothed with the jurisdiction to hear the instant suit.

Should the Case be referred to the Chief Justice for transfer to the High Court, Accra?

I now turn my attention to whether this court has the power to hear the present suit or the same should be referred to the Chief Justice for her to transfer the matter to the High Court, Accra.

Order 3 rule 1(4) of CI 47 provides:

“(4) Every cause or matter for specific performance of a contract or in respect of breach of contract, shall be commenced in the Region in which the contract ought to have been performed or in which the defendant resides or carries on business.”

It is not in doubt that the Respondent invested with the Applicant at its KNUST branch in Kumasi – he paid out various sums to the KNUST branch and was issued with investment certificates by the said KNUST branch.Since the Respondent dealt with the Applicant at the KNUST branch, the Applicant can therefore be said to have carried on business in Kumasi. The Respondent is not privy to the internal operations of the Applicant’s business and as such could not have been expected to know that the KNUST branch was only a “processing entity” as the Applicant seems to suggest to this court. It was only reasonable that upon the ordinary fulfilment of the Respondent’s obligations under the investment contract, his investment would be paid out at the KNUST branch in Kumasi. Thus, the place where the contract between the Applicant and the Respondent ought to have been performed was at the KNUST branch in Kumasi and not in Accra. Assuming without admitting that the Applicant resides or carries out its business in Accra, the Respondent was at liberty to institute the action in the region where the contract was to be performed which in this case is Kumasi.

The fact that the transaction took place at the KNUST Branch, Kumasi has not been debunked. It can, therefore, be concluded that the contract ought to have been performed in Kumasi. Thus, on the strength of Order 3 rule 1(4), the Respondent can elect to sue the Applicant in Kumasi. This court is, therefore, clothed with the jurisdiction to entertain the suit.

For the reasons above, the application fails in its entirety and the same is dismissed. Costs of GHC 5,000.00 awarded against the Defendant/Applicant.