2021
COURT OF APPEAL
GHANA
CORAM
AI Generated Summary
Justice Novisi Aryene JA, with Justices Henry Kwofie JA (Presiding) and Merley Wood JA concurring, affirmed a High Court decision against a former senior manager who claimed to have purchased his duty-post executive bungalow from his employer’s Managing Director. The appellant relied on payments, receipts, a CEO email stopping rent deductions, and Land Title forms to assert ownership. The Court of Appeal held that under sections 202, 139, and 140 of the Companies Act, 1963 (Act 179), the Managing Director lacked authority to sell company immovable assets without an ordinary resolution of the shareholders—Government of Ghana, Databank Private Equity, and Trans Africa Pharmaceuticals Company Ltd. As an insider who admitted knowledge of board-approval requirements, the appellant could not invoke Turquand’s in-door management rule and failed the due diligence expected of land purchasers. The sale was void, actions pursuant to it were ineffective, eviction and rent orders stood, and costs of GH¢10,000 were awarded to the plaintiff/respondent.
NOVISI ARYENE JA
Section 139 (a) of the Companies Act 1963 (Act 179) provides,
a) The Company shall not incur civil liability to any person if that person had actual knowledge at the time of the transaction in question that the general meeting, board of directors, as the case may be, had no power to act in the matter or had acted in an irregular manner or if having regard to his position with or relationship to, the company, he ought to have known of the absence of power or of the irregularity;
Section 140 (1) provides “Except as otherwise provided in section 139 of this Code, the acts of any officer or agent of a company shall not be deemed to be the acts of the company unless,
a) The company acting through its Members in General Meeting, board of directors or managing director shall have expressly or impliedly authorized such officer or agent to act in the matter, or
b) The company, acting as aforesaid shall have represented the officer or agent as having its authority to act in the matter, in which event the company shall be civilly liable to any person who has entered into any such transaction in reliance on such representation, unless such a person had actual knowledge that the officer or agent had no authority or unless having regard to his position with or relationship to the company, he ought to have known of such absence of authority”
Section 202 (1) of Act 179 also provides:
Notwithstanding subsection (3) of section 137 of this Code, any provision in the Company’s Regulation, the directors of a company with shares shall not, without the approval of an ordinary resolution of the company,
a) Sell, lease, or otherwise dispose of the whole or substantially the whole of the undertaking or of the assets of the company.
1st defendant is a former employee of plaintiff, and 2nd defendant is the Managing Director of Plaintiff Company. Plaintiff sued and obtained judgment against defendants for reliefs endorsed on the writ of summons. Dissatisfied with the judgment of the High Court delivered on 28th of June 2018, 1st defendant has lodged the instant appeal complaining about the entire judgment and praying for same to the set aside. In this judgment 1st defendant will be referred to as the appellant and the plaintiff as respondent. The Managing Director (who did not file written submissions) will be referred to simply as 2nd defendant.
The facts culminating in the instant suit are that while in the employ of respondent, appellant was allocated an