EDEM AFFRAM & ANOR v. BERNARD YAW OWUSU-TWUMASI & ORS

MAJORITY DECISION

PROF. MENSA-BONSU (MRS.) JSC:-

This is an appeal from a case which began because two friends decided to go into commercial ventures together, relying merely on their friendship to order their affairs, with unhappy results. It proves again the truth of the adage:

The interests of Friendship are served but ill,

When pressed into competition with the Till.

In this judgment, the original designations of the parties are maintained to avoid confusion as their roles in the case changed in the course of its travel through the hierarchy of courts.

Facts and Background

The 1st plaintiff and 1st defendant were friends who, at some point in time, were both based in the United Kingdom. They decided to go into business together, and first established a company, Concord Security Ltd. in UK which they managed together till 1st Defendant returned to Ghana, whilst 1st Plaintiff remained in the UK.

While 1st plaintiff was in the UK and 1st defendant was in Ghana, they formed another Company, Oak House Company Ltd (the 2nd defendant in the instant case), sometime in 2004. They invited two other persons to join them in the business. The documentation leading to the incorporation were all signed with the consent of the 1st Plaintiff and on his behalf by the 1st defendant. The 1st Plaintiff held 43% of the shares; the 1st defendant had 25% shares; the 2nd plaintiff also had 25% shares; and another person who subsequently resigned, owned 7% shares. The 1st plaintiff says he paid for his share through various sums of money he transferred to 1st defendant to capitalize 2nd defendant Company, as well as funding the acquisition of equipment such as cars, needed for the running of the company. The parties operated on the basis of friendship, and all their communication was informal. Sometime later, 1st plaintiff began to notice that 1st defendant seemed to be no longer available to talk about the affairs of the Company. Eventually, he returned to Ghana only to discover that 1st defendant had removed his name as a Director and shareholder of 2nd defendant Company and changed the structure of the shareholding.

1st plaintiff further contends that 1st defendant had incorporated 3rd defendant company and transferred all of 2nd defendant’s shares to 3rd defendant.

The 1st plaintiff also claimed that he remitted money to 1st defendant to acquire land at East Legon for their joint benefit. 1st defendant bought ten (10) plots at East Legon and also other plots in th