Pentagon Inn Ltd. v. OFS Micro Finance
2019
HIGH COURT
GHANA
CORAM
- HIS LORDSHIP JUSTICE NICHOLAS M.C. ABODAKPI J
Areas of Law
- Corporate Law
- Equity and Trusts
- Civil Procedure
2019
HIGH COURT
GHANA
CORAM
AI Generated Summary
Justice Nicholas M. C. Abodakpi of the Ghana High Court considered an application to lift the corporate veil of OFS ‑Micro Finance. After reviewing affidavit evidence and written submissions, the Court found improper conduct by the Respondent ’s controlling persons. They reneged on releasing a subject document despite a contempt conviction and had not sufficiently purged their contempt. The Court articulated circumstances in which the corporate veil may be pierced, including sufficient evidence, the dictates of justice, public policy, or requirements of the Companies Code/Act. Drawing on Russell J ’s reasoning in Jones v Lipman, the Court viewed the Respondent ’s corporate personality as a device or sham used to evade equitable obligations. It granted the application, ordered that the veil be lifted, treated directors/owners and the company as indistinct for the matter, and awarded GH ¢4,000 costs.
This Court has perused and evaluated the affidavit evidence in support andin opposition to this motion filed on 02/11/2017. The written submissions filed by both sides have also been examined.
The relief, applicant is seeking is an order to lift the corporate veil of theRespondent/Company.
The corporate barrier between the company and the person who constituteor run it may be breached only under certain circumstances namely: a) When there is sufficient evidence to support it.
b) When the dictates of justice c) Public policy or d) Companies code/act so requires.
I have found evidence of improper conduct shown by the owners of theRespondent/Company.
The character of the Respondent Company andthe nature of persons who are its controlling mind are called into question, as they reneged on releasing the subject matter document to applicant, even after conviction for contempt for the default.
And by that there isamble evidence that respondents have failed to sufficiently purgethemselves of their contemptuous conduct.
The corporate veil of OFS-MICRO FINANCE, shall be lifted.
The wordsof RUSSEL J. in the suit: JONES VS LIPMAN [1962] 1WLR 832properly describes and fits the circumstance of this case.
Those words of wisdom are descriptive of Respondent conduct.
He wrote: “…a device, a sham and a mask which the Defendant holdsbefore his face in an attempt to avoid recognition by the eyes ofequity. ”~ 2 ~ BY COURT: 1. The application is granted, there is no distinction now between the Directors and owners of Respondents and the Company as a legalperson.
2. Cost of GH¢4, 000. 00 is awarded against Respondents and in Applicant’s favour.
(sgd. )H/L NICHOLAS M. C. ABODAKPI JUSTICE OF THE HIGH COURT.