GH - MONTERO AND ANOTHER v. REDCO LTD. AND ANOTHER

JUDGMENT OF ABBAN J. A.

This is an interlocutory appeal from the ruling of the High Court, Accra dated 2 July 1985. In that ruling the learned High Court judge refused to grant the appellants (hereafter called the plaintiffs) an interim injunction restraining the respondents (hereafter called the defendants) from suspending the first plaintiff as the managing director pending the determination of the suit.

The plaintiffs had sued for the following reliefs:

(1) an order to restrain the defendants from taking decisions which are contrary to the regulations of Redco Ltd., a limited liability company registered under the Companies Code, 1963 (Act 179); and

(2) an order of the court to declare the decision contained in the first defendant's letters dated 8 and 22 May 1985 void and of no effect."

The two plaintiffs in the court below were Mr Montero and a Spanish group of companies with a long name. For the sake of brevity they will hereinafter be referred to as the Spanish group. The defendant's were also two, namely Redco Ltd and Mr Duncan, chairman of the board of directors of Redco Ltd. Redco Ltd is registered in Ghana as a limited liability company under the Companies Code, 1963 (Act 179) of Ghana. The shareholders of Redco Ltd are the Spanish group, holding 40 per cent of the shares and Bank for Housing and Construction which holds the remaining 60 per cent.

The first plaintiff, Mr Montero, was the managing director of Redco Ltd. and at the same time the executive chairman of the Spanish group . In May 1985 the board of directors of Redco Ltd. "in the supreme interest of, Redco Ltd. instructed the first plaintiff to hand over the management of Redco Ltd. to his deputy, one Mr. D. B. Pabi, and the latter was to be -the acting managing director of Redco Ltd. until [p.713] further notice. In other words, the first plaintiff was suspended as the managing director of Redco Ltd.

It may be observed that the decision to suspend the first plaintiff as the managing director of Redco Ltd. and to appoint Mr Pabi as the acting managing director was taken by the board of directors of Redco Ltd. at a meeting and the same was later communicated to the first plaintiff by letters referred to in the writ of summons.

The first plaintiff and the Spanish group, the second plaintiff herein, contended that the board of directors which took the said decision did not form a quorum, and therefore the decision was unlawful and the court should declare the same null and void

JUDGMENT OF ABBAN J. A.

The plaintiffs had sued for the following reliefs:

(1) an order to restrain the defendants from taking decisions which are contrary to the regulations of Redco Ltd., a limited liability company registered under the Companies Code, 1963 (Act 179); and

(2) an order of the court to declare the decision contained in the first defendant's letters dated 8 and 22 May 1985 void and of no effect."

MONTERO AND ANOTHER v. REDCO LTD. AND ANOTHER

Areas of Law

JUDGEMENT