PETER OSEI ASSIBEY v. ADEHYEMAN GARDENS LTD. & KWAKU ASARE
2004
SUPREME COURT
GHANA
CORAM
- ATUGUBA, J.S.C. (PRESIDING)
- MISS AKUFFO, J.S.C.
- MRS. WOOD, J.S.C.
- DR. DATE-BAH, J.S.C.
- PROF. OCRAN, J.S.C
Areas of Law
- Corporate Law
- Civil Procedure
2004
SUPREME COURT
GHANA
CORAM
AI Generated Summary
The Supreme Court of Ghana, per Sophia A. B. Akuffo JSC, dismissed the 1st Appellant companys appeal from the Court of Appeals majority judgment. The dispute arose after the Companys solicitors labeled the Respondent a nominal shareholder and demanded 47,410,258.20 based on asset valuation, despite his status as an original subscriber to the Regulations. Applying sections 21 and 30 of the Companies Code (Act 179), the Court held that subscription to the Regulations makes a person a member (and shareholder) upon incorporation, irrespective of payment or issuance of share certificates, which are only prima facie evidence. The Court found no valid calls or forfeiture under the Companys Regulations (requiring Board resolutions, notice and minutes), rendering the demands unlawful. It affirmed that the Respondent remained both a shareholder and a director, and therefore dismissed the appeal.
J U D G M E N T
SOPHIA A. B. AKUFFO, J.S.C.
In this judgement the Plaintiff/Appellant/Respondent herein will be referred to as ‘the Respondent’, and the Defendants/Respondents/Appellants will be referred to as ‘the Appellants’. The 1st Appellant will also be referred to as ‘the Company’.
The brief facts underlying this appeal are that the Company was incorporated sometime in April 1991 as a limited liability company with 1,000,000 shares of no par value. Exhibit 1, the Regulations of the Company, shows that the subscribers to the Company were the 2nd Appellant, who subscribed to 600,000 shares for which the consideration payable in cash was ¢600,000.00, and Nana Osei Afriyie and the Respondent, each of whom subscribed to 200,000 shares for which the consideration payable in cash, in each case, was ¢200,000.00. According to Exhibit 1, the first Directors of the Company were the three subscribers and one D. Patrick Ewusi Sekyi.
Sometime after the Company commenced its operations, problems developed between the 2nd Appellant and the Respondent the nub of which was that, whilst the Respondent claimed that he was a fully paid-up member of the Company and entitled to participate in the day to day running of the Company, the 2nd Appellant insisted that the Respondent had not paid for any of his shares. Matters came to a head when, by a letter dated 1st November, 1995 (Exhibit Q), the solicitors for the Company informed the Respondent that he (the Respondent) was only a ‘nominal shareholder’ of the Company. The letter also purported to offer to the Respondent 20% shares in the Company, in consideration of which he must pay an unspecified sum of money that he was to ascertain by contacting the office of the Managing Director within 14 days, failing which the shares would be offered to someone else. This letter was immediately followed by another communication from the 2nd Appellant, dated 3rd November 1995 (Exhibit R), referring to the solicitors’ letter and informing the Respondent that, according to the Company’s auditor’s report, the net value of the Company’s assets was ¢237,051,291.00. The letter also informed the Respondent that, ‘as a nominal shareholder’, he had not paid for his shares and, in order to become a fully-fledged shareholder, he must pay an amount of ¢47,410,258.20, being 20% of the current net value of the company’s assets. The Respondent referred the matter to his solicitors.
The record shows further, per Exhibit 3, that on 31st October 1