MIRFIELD PROPERTIES LTD v. STARWIN PRODUCTS (SPL) & ANOTHER
November 24, 2016
COURT OF APPEAL
GHANA
CORAM
- S. E. KANYOKE, JA (Presiding)
- A. M. DORDZIE, JA
- I. O. TANKO AMADU, JA
Areas of Law
- Corporate Law
- Civil Procedure
- Evidence Law
JUDGMENT
AM.DORDZIE (MRS), J.A.:
FACTS:
The 1st Respondent/Respondent is a company that manufactures pharmaceuticals. The 2nd Respondent is a financial advisor and sponsoring broker of the 1st Respondent Company. I will refer to the parties as appellant and respondents.
The Appellant herein is a majority shareholder and member of the 1st Respondent Company. The 1st Respondent Company issued notice to its members (notice is dated 10/4/2013) inviting them to its 10th Annual General Meeting (AGM) on the 19th of June 2013.
The notice contained the agenda for the meeting; the contents of the agenda had among others the following:
(a) “To authorize the Directors to issue additional shares through a renounceable rights issued to raise up to GH¢10, 000,000 (Ten Million Ghana Cedis) in accordance with the regulations of the company, the Companies Code, 1963 (Act 179) and other relevant laws and regulations and subject to prior approval of the Ghana Stock Exchange.
(b) To authorize the Directors to offer any shares that are not taken up by the shareholders under the renounceable rights issue to prospective investors as the Directors may deem fit.”
The 10th AGM of the 1st Respondent Company was held as scheduled and resolutions were passed authorizing the directors to perform the acts quoted in (a) and (b) above.
On the14th of November, 2014 the appellant issued an Originating Notice of Motion in the High Court against the 1st & 2nd Respondents seeking a declaration that the 1st Respondent had acted ultra vires; in that, contrary to Sections 25, 152, 155, 149, 168, 153, 31, 160, 177, 178, 21, 203-206, 216 and 297 of the Companies Act, 1963 (Act 179) the 1st respondent
(i) Is purporting to implement a renounceable rights for Ten Million Ghana Cedis (GH¢10,000,000) without obtaining the proper approval for same from its shareholders.
(ii) Has deliberately refused to allow a shareholder, Enviro Solutions Ltd. to inspect the minutes of its 2012 AGM minutes and purported 2013 AGM minutes and to furnish the said shareholder with copies of same in spite of repeated request for same.
(iii) Has failed to grant a formal request made by the Applicant on 27th October 2014, to convene an extraordinary general meeting (EGM), to examine the intended renounceable rights issue.
The Applicant further prayed the High Court for the following orders:
1. An order declaring void and of no effect the special resolutions passed at the 2013 AGM which
a) Authorized the directors to issue