KENNEDY SAFORO-BAAH vs NDK FINANCIAL SERVICES LTD

This case concerns a dispute over a loan facility of GH¢80,000.00 obtained by Kennag Limited from the Defendant. The Plaintiff, who is not the borrower but a mortgagor, instituted an action against the Defendant seeking various reliefs including determination of the actual amount owed, declaration of bad faith, ample time to repay the loan, and an injunction. The central issue in the case was whether the Plaintiff had the legal capacity to sue on behalf of Kennag Limited, a limited liability company. The Court, relying on the principle of separate legal personality of companies, determined that the Plaintiff lacked the capacity to seek the reliefs prayed for, as he was not the borrower of the loan facility. The Court emphasized that a limited liability company has a separate legal personality from its controllers and can sue or be sued in its own right. The Court also noted that where a person's capacity to initiate proceedings is challenged, the merits of the action cannot be heard until the question of capacity is determined. Consequently, the Court struck out the Plaintiff's action for lack of capacity and awarded costs of GH₵2,000.00 in favor of the Defendant.