STEVE BRATHWAITE v. ATWIMA MPONUA RURAL BANK & SAMUEL DADZIE & 4 ORS
2018
HIGH COURT
GHANA
CORAM
- ANGELINA MENSAH-HOMIAH (MRS.) JUSTICE OF THE HIGH COURT
Areas of Law
- Corporate Law
- Civil Procedure
2018
HIGH COURT
GHANA
CORAM
AI Generated Summary
The application by the Applicants to be joined as Defendants was dismissed. The court ruled that the Defendant, as a legal entity, has the capacity to defend itself without involving individual shareholders. The court awarded costs against the Applicants and adjourned the substantive case.
RULING
On 09/04/2018, the Applicants herein who described themselves as majority shareholders of the Defendant Bank field the instant application to be joined to the suit as Defendants. Under order 4 rule 5 (a) and (b) of the High Court (Civil Procedure) Rules 2004, C.I. 47.
The gravamen of this application, as gathered from paragraphs 7 and 8 of the supporting affidavit is that the Applicants who are majority shareholders will be significantly affected by the outcome of this suit. In arguing the motion, counsel for the Applicants conceded that the Applicants’ shares put together does not make them majority shareholders. Counsel for the Plaintiff/Respondent vehemently opposed the application. He argued inter alia, that the application itself is premised on the wrong footing, since the Applicant admit, through their counsel there, they are not majority shareholders. Counsel also submitted that the Defendant Company is a legal entity which can sue and be sued, and if a work is done to a company, he Company can sue in its own capacity.
Relying on Bank of West Africa, Appenteng, (1972) 1 GLR 153, counsel submitted that shareholders lack the capacity to sue or defend an action against a company. He urged the court to dismiss the instant application as being an abuse of the processes of the court and an invitation to open the floodgates to the remaining 95% shareholders to be joined as Defendants, which will in the long run unnecessarily delay proceedings. Concluding, counsel argued that, the Applicants as shareholders are not necessary parties to this suit. In the Bank of West Africa v. Appenteng case, referred to supra, the Court of Appeal held (holding 1)
that:
“As a general rule, a shareholder cannot sue for a wrong done to a company or to recover money as damages to it, unless the action is taken by the Company itself…”
There are however exceptions to this general rule, for example, where the company purports to undertake an illegal or ultra varei activity, because section 217 (1) of the companies Act, 1963, Act 179, and where the individual members seek to protect their personal rights.
It is to be noted that the Applicants herein are not seeking to be joined as Plaintiffs, but as Defendants. The reliefs being sought by the Plaintiff, as a majority shareholder, are directed at the Defendant Company or bank itself.
These are the reliefs:A declaration of the court that it was wrongful for the Defendant not to include the business of un ordinary resol