N THE MATTER OF NORTHERN ENGINEERING CO., LTD AND IN THE MATTER OF THE COMPANIES CODE, 1963 (ACT 179), SECTION 217 AND LUGUTERAH v. NORTHERN ENGINEERING CO., LTD. AND OTHERS
1978
HIGH COURT
GHANA
Areas of Law
- Corporate Law
- Civil Procedure
1978
HIGH COURT
GHANA
AI Generated Summary
In a High Court originating motion, A. A. Luguterah, a shareholder and director of Northern Engineering Co., Ltd. (N.E.C.), sought declarations invalidating an extraordinary general meeting called by notice dated 7 June 1977 and held on 11 June 1977, denying shareholder status to eight named individuals, and confirming the lawful directors. He also pursued injunctive relief against managing director C. K. A. Djokotoe, alleging extensive mismanagement, dishonesty, and procedural violations. Taylor J. overruled a preliminary objection that section 217 authorizes relief only against the company, reasoning that restraining the company’s operation with an individual as managing director effectively restrains that individual. The court held the meeting invalid because it was convened by a non-authorized officer and gave only two days’ notice, far short of the 21 days required, without 95% consent. The purported increase of capital from 10,000 to 100,000 shares was void for lack of a duly noticed special resolution. The eight respondents were not shareholders due to non-compliance with pre-emption and registration. Appointments of seven directors were ultra vires regulation 57; only Ziblim Andan, Djokotoe, and Luguterah were lawful directors. A perpetual injunction was refused; Djokotoe was confirmed as acting managing director; interim restraints and cost orders were issued.
JUDGMENT OF TAYLOR J.
In this originating motion on notice, the applicant, A. A. Luguterah, as a shareholder of the Northern Engineering Co., Ltd. the first respondent in this action seeks a declaration: (1) That a notice dated 7 June 1977 of an extraordinary general meeting of the Northern Engineering Co., Ltd. and the proceedings of the said meeting held on 11 June 1977 are invalid; (2) that eight persons namely, Mr. L. K. O. Djokotoe, the third respondent, Mr. T. B. Frimpong, the fourth respondent, Mr. D. A. Mensah, the fifth respondent, Mr. Mahama Alhassan, [p.481] the seventh respondent, Major-General D. C. K. Amenu, the eighth respondent, Alhaji Lamusah, the ninth respondent, Mr. Martin Kumassey and the tenth respondent, Mr. E. N. K. Mensah, who are styling themselves shareholders of the Northern Engineering Co., Ltd. are not shareholders of the said company; (3) that the second respondent, Ziblim Andan, the sixth respondent, C. K. A. Djokotoe, and the applicant, A. A. Luguterah, are the only lawful directors of the Northern Engineering Co., Ltd.
The applicant further seeks a perpetual injunction restraining the second respondent from acting as chairman of the board of directors, the sixth respondent, C. K. A. Djokotoe and L. K. Djokotoe from acting as managing director and secretary respectively and the said L. K. Djokotoe and the third, fourth, fifth, sixth, seventh, eighth, ninth and tenth respondents from acting as members of the company. He also asks as is usual in these motions for such further or other orders as may seem fit.
On 19 June 1978 the applicant applied to this court for an interim order of injunction restraining the sixth respondent, C. K. A. Djokotoe, from acting as managing director of the Northern Engineering Co., Ltd., the first respondent, hereinafter referred to as the N.E.C. He also asked for an order for the appointment of a receiver and manager to act as managing director of the N.E.C. until the final determination of the action. The sixth respondent was served with the motion paper and supporting affidavit on 12 June 1978 and although in the original application he filed an affidavit in opposition and also filed a notice of appointment of solicitors, nevertheless, he filed no papers whatsoever in opposition to the application for the interim order of injunction. On the hearing of the application he was not represented and he did not appear nor did his solicitors inform the court as to the reasons why he did not appear