SIC FINANCIAL SERVICES LIMITED VS ALLTIME CAPITAL LIMITED & 2 ORS.
2019
HIGH COURT
GHANA
CORAM
- JUSTICE MRS. ANGELINA MENSAH-HOMIAH
Areas of Law
- Banking and Finance Law
- Corporate Law
- Civil Procedure
2019
HIGH COURT
GHANA
CORAM
AI Generated Summary
This case involves a dispute over an investment made with a company licensed by the Securities and Exchange Commission. The Plaintiff sued both the company and its Managing Director to recover the invested amount. The court struck out the entire suit, ruling that the Plaintiff had not exhausted the internal dispute resolution processes required by the Securities Industry Act 2016 before approaching the court. The case highlights the importance of following proper procedures in securities-related disputes and raises questions about the potential personal liability of company directors in such matters. The court's decision emphasizes the primacy of statutory requirements in determining the appropriate forum for resolving financial disputes.
Before me is an application for an order striking out the pleadings and the 2nd Defendant as a party
to the Plaintiff’s suit. By its Writ of Summons and Statement of Claim issued from the registry of
this Court on 2nd January, 2019, the Plaintiff sought to recover jointly and severally from the
defendants the sum of Four Million, Nine Hundred and Seventy-Two Thousand, Six Hundred and
Nine Cedis Forty-Nine pesewas (GH₵4,972,609.40), interest thereon and legal fees.
The 1st and 2nd Defendants entered conditional appearance on 16th January 2019 per their Lawyer.
After the conditional appearance had crystallized into an unconditional appearance, Counsel for
the 1st and 2nd Defendants filed the instant application on 5th February, 2019 for an order striking
out the 2nd Defendant & pleadings under Order 4 rule 4, Order 11 Rule 18 of C. I. 47 and under
inherent jurisdiction of the Court.
In arguing the application, Counsel for the 2nd Defendant/Applicant (Applicant) stated that the
Applicant is an unnecessary party to this suit because the Plaintiff has not demonstrated per its
Statement of Claim that there is any cause of action against the Applicant. Counsel submitted that
by the Plaintiff’s own showing in its pleadings, the Applicant is the Managing Director of the 1st
Defendant Company and it is the 1st Defendant who directly presided over the transaction in issue.
Since the 1st Defendant is a legal entity that can sue and be sued, he argued that there is no need to
join the applicant. He relied heavily on the case of Morkor v. Kumah (1998/99) SCGLR 620 at
635 paragraph 2. He invited the Court to reject the Respondent’s claim that it has a cause of
action against the Applicant.
In opposing the application, Counsel for the Plaintiff/Respondent (Respondent) submitted that the
1st Defendant is licensed and regulated by the Securities & Exchange Commission, and by virtue
of Regulations 4 & 5 of the Securities & Exchange Commission Regulations 2003 LI 1728, a
Managing Director of a Company subject to those regulations owes special duties to customers
and depositors different from the duties owed by limited liability companies. Referring to
Regulations 23, 24 and 25 of L.I. 1728, Counsel argued that the law required that a certain level
of liquidity be maintained at all times, details of the specific investment to be made with the sum
deposited must be disclosed to the client and the client’s approval obtained in writing. A
compliance off