S.M.A.E.S. WEST AFRICA LTD & ANOR VS FAUZIYA HAMIDU
October 17, 2019
HIGH COURT
GHANA
CORAM
- GEORGE K. KOOMSON ‘J’.
Areas of Law
- Civil Procedure
- Corporate Law
- Commercial Law
October 17, 2019
HIGH COURT
GHANA
CORAM
AI Generated Summary
In this Ghana High Court interlocutory matter, a limited liability company in the electrical materials trade sued to restrain a director from interfering with its management, while the director counterclaimed for an audit and refunds, alleging mismanagement by the de facto Managing Director and majority shareholder. The Court reviewed applicable standards from POUNTY v DOEGAH and American Cyanamid, emphasizing the need for a protectable right and the balance of convenience. Observing improper corporate governance and mutual suspicion, the Court declined to grant unilateral control to either side, finding such restraint would deepen the fragile relationship. Exercising discretion under Order 25 rule 1(1) of C.I. 47, the Court restrained both parties, appointed Mr. Eric Nana Nipah of PricewaterhouseCoopers as interim manager/receiver, ordered a comprehensive audit from incorporation to date, and directed quarterly reports, with each party bearing their own costs.
On the 15th May, 2019, the Plaintiffs issued a Writ of Summons against the Defendant asking for the following reliefs:-
1. An order of perpetual injunction against the Defendant restraining her, her assigns or privies from interfering in the management, day to day administration of the 1st Plaintiff’s business.
2. An order of accounts directed at the Defendant with respect to all sums withdrawn from 1st Plaintiff’s bank accounts and a further order directed at the Defendant to refund all sums determined to have been wrongfully withdrawn from 1st Plaintiff’s bank accounts.
3. An order directing an audit covering the period that the Defendant took control of the 1st Plaintiff’s business to date; and
4. General damages for trespass to the Plaintiff’s property, its premises at Okpoi-Gornu (opposite Casa Global Estates), Spintex Road, Accra and for any damages to the 1st Plaintiff arising from the break-in on the 2nd April, 2019.
On the 4th June, 2019, the Defendant filed a conditional appearance to the Writ of summons and further filed her Statement of Defence and Counterclaim on the 25th June, 2019, seeking the following reliefs:-
a. An order to audit the books of the Company from the date of commencement of business to date.
b. An order compelling the 2nd Plaintiff to refund all company resources used for his personal use without the authorization of the Board of Directors of the company.
c. Cost
The Plaintiffs have filed the present application seeking a restraining order from this Court to restrain and or prohibit the Defendant, her agents, assigns and privies from interfering in the management, day to day operation and administration of the company.
The case for the Plaintiff is that the 2nd Plaintiff is the Managing Director and the majority shareholder of the 1st Plaintiff, a limited liability company which retails electrical materials for industrial and civil use. The 2nd Plaintiff owns 484,500 out of the total 510,000 issues shares of the 1st Plaintiff whiles the Defendant, who is a director of the 1st Plaintiff and minority shareholders, owns 25,500 of the 1st Plaintiff’s issued shares. As the 1st Plaintiff’s Managing Director, 2nd Plaintiff has solely been in charge of the day-to-day management and operation of the 1st Plaintiff since its incorporation, and that although the Defendant is a Director, she does not play any role in the day-to-day management and operation of the company.
2nd Plaintiff further contended that on 27th March,