COURT OF APPEAL
DATE: 3 MAY 1971
SIRIBOE JSC ANIN AND ARCHER JJA
CASES REFERRED TO
(1) Von Hellfeld v. Rechnitzer and Mayer Fréres & Co. [1914] 1 Ch. 748; 83 L.J.Ch. 521; 110 L.T. 877; 58 S.J. 414, C.A.
(2) O’Neil v. Clason (1 876) 46 L.J.Q.B. 191.
(3) Pollexfen & Co. v. Sibson & Co. (1886) 16 Q.B.D. 792; 55 L.J.Q.B. 294; 54 L.T. 297; 34 W.R. 534.
(4) Russell v. Cambefort (1889) 23 Q.B.D. 526, C.A.
(5) Shepherd v. Hirsch, Pritchard & Co. (1890) 45 Ch.D. 231; 59 L.J.Ch. 819; 63 L.T. 335; 38 W.R. 745; 6 T.L.R. 438.
(6) Davies & Co. v. Andre & Co. (1890) 24 Q.B.D. 598; 59 L.J.Q.B. 233; 63 L.T. 151; 38 W.R. 437, C.A.
(7) Western National Bank of City of New York v. Perez, Triana & Co. [1891] 1 Q.B. 304; 60 L.J.Q.B. 272; 64 L.T. 543; 39 W.R. 245; 7 T.L.R. 177, C.A.
(8) Mosi v. Bagyina [1963] 1 G.L.R. 337, S.C.
(9) Re Pritchard [1963] Ch. 502; [1963] 2 W.L.R. 685; 107 S.J. 154; [1963] 1 All E.R. 873, C.A.
NATURE OF PROCEEDINGS
APPEAL from a decision of the High Court, Accra (unreported) in which it was held that the respondents were entitled to enter judgment for the amount claimed in their specially endorsed writ. See also the respondents’ attempt to obtain leave to go into execution which has been reported in [1971] 1 G.L.R. 38 and 49.
COUNSEL
Dr. S. K. B. Asante, Solicitor-General, for the appellants.
B. Quashie-Idun for the respondents.
JUDGMENT OF ARCHER JA
Archer J.A. delivered the judgment of the court. On 17 June 1970, Levandowsky & B.A.S.E. Group filed a specially endorsed writ, for service on the Attorney-General for and on behalf of the Government of the Republic of Ghana, claiming against the Government the sum of; £462,432 1s. 4d. sterling or N¢1,132,958.55 being an amount due and owing in respect of professional fees for plans prepared for an international conference hall, a secretariat, a hotel and a theatre. For convenience, the parties will be referred to in this judgment as “the Group “ and “the Government.” The total amount claimed by the Group was itemised in a bill attached to the writ as follows:
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Original fee demanded in October 1964
(£412,031) less amount paid in March 1967
(£121,071 11s. 3d.) .. .. .. £290, 959 8s. 9d. Interest at one per cent. over British bank rate
between October 1964 and April 1970 .. 167,338 3 4
Expenses .. .. 2,881 10 10 Interest on expenses .. 1,252 18 5 _____________
Total £462,432 1s. 4d. _____________
On 26 June 1970, the Government entered an unconditional appearance and on 3 July 1970, the Group took out a summons under Order 14, r. 1 of the Supreme [High] Court (Civil Procedure) Rules, 1954 (L.N. 140A), for liberty to enter judgment for the total amount claimed. The affidavit in support of the application was sworn to by the managing clerk of the solicitors for the Group. In opposition to the application, the Government filed an affidavit in which the main objection stated was that the Group and the Government had agreed that any dispute or differences arising between them as to their rights, liabilities and duties should be referred to arbitration.
Upon hearing the parties, the learned High Court judge adjourned the proceedings to enable the Government to file a further affidavit specifying the nature of the dispute which should be referred to arbitration. As a result of this order, the Group filed a further affidavit and exhibited copies of correspondence between the Group and the Government that took place between 26 November 1968 and 2 January 1969 indicating that the parties had met to discuss the matter and proposals had been made by both sides (see exhibits, JEKA 1 – 4).
When the Government filed its further affidavit on 23 July 1970 (which was subsequent to that of the Group filed two days earlier and must have been served on the Attorney-General) no comment was made by the Government on the correspondence relied on by the Group. Instead, the Government took a new stand and averred that the architectural drawings and designs prepared by the Group were never approved nor used by the Government and that the whole project was abandoned and therefore the Government agreed to pay the Group on a quantum meruit basis. It was further stated that the Group was not entitled to any interest. After considering the matter further, the learned trial judge held that the affidavits filed by the Government did not disclose any triable issues and that the Group was entitled to enter judgment for the amount claimed in their specially endorsed writ.
It is against this summary judgment that the Government appealed to this court. The original grounds filed were supplemented by additional grounds but only the grounds argued will be dealt with in this judgment. The first ground argued was that the Group was not competent to institute legal proceedings in the courts of Ghana. The weapon used to attack the competency of the Group was Order 48A, r. 1 which reads:
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“Any two or more persons claiming or being liable as co-partners and carrying on business within the jurisdiction may sue or be sued in the name of the respective firms, if any, of which such persons were co-partners at the time of the accruing of the cause of action; and any party to an action may in such case apply by summons to a Judge for a statement of the names and addresses of the persons who were, at the time of the accruing of the cause of action, co-partners in any such firm, to be furnished in such manner, and verified on oath or otherwise as the Judge may direct.”
The Government’s argument was that as the Group was a firm carrying on business outside Ghana, a writ of summons could not be issued in the firm’s name as plaintiffs in the courts of Ghana because Order 48A, r. 1 referred specifically to two or more persons carrying on business within the jurisdiction. In one letter, exhibit JEKA 3, in which exemption from the payment of Ghana income tax was claimed, the Group was emphatic that all work had been done outside Ghana. If the services were rendered entirely outside Ghana, then the proviso to paragraph 6 (1) of the Income Tax Decree, 1966 (N.L.C.D. 78), would apply and the Group would be exempted from the payment of Ghana income tax. On the Group’s own admission, therefore, the Government is entitled to say that the Group is not a firm carrying on business within the jurisdiction and furthermore the provisions of Order 48A, r. 1 cannot inure for the benefit of the Group.
The English case of Von Hellfeld v. Rechnitzer and Mayer Fréres & Co. [1914] 1 Ch. 748, C.A. was cited by the learned Solicitor-General to indicate how Order 48A, r. 1 had been construed and applied in the past. It seems that without relying on any previously decided cases, the rule itself is couched in very simple, clear, unambiguous and intelligible language and no cementation with judicial precedent is necessary to reveal the forcefulness of the first ground of appeal. Nevertheless, Mr. Quashie-Idun, learned counsel for the Group, also cited the Von Hellfeld case and relied on passages in that judgment. The facts in that case were that a foreigner carrying on business in England sued another foreigner carrying on business in England together with another firm carrying on business in Paris as defendants. Although the second defendants were not carrying on business in England, the partners were sued in the firm’s name and leave was obtained to serve the writ outside the jurisdiction, which was done. A notice of motion was then given by the second defendants to set aside the order for service of the writ on them outside the jurisdiction. The application was granted and the order set aside. On appeal, it was held (affirming the decision of Astbury J.) that the proceedings must be set aside on the ground that there was no power to sue a foreign partnership, not carrying on business in England, under its firm name, in the absence of evidence that by French law a partnership was a different legal entity from the individual partners. Buckley L.J. in his judgment stated at pp. 752-754 that:
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“All these matters as regards the form and the service of the writ are matters of procedure governed by the rules and practice of this Court under the Judicature Act, and the whole question for investigation is whether or not it is right in these proceedings to sue these three gentlemen . . . under their firm name … and whether under that firm name there can be given leave to serve them, and whether they can be served. The language of the rule does not authorize it. The language of the rule is to the contrary. It can only be done if they are carrying on business within the jurisdiction, which these gentlemen are not. Prima facie therefore it is wrong…. I am not going to suggest the amendment which ought to be made, but it appears to me that as the writ stands it is not a writ which was properly issued according to our procedure. . .”
Phillimore L.J. concurred with Buckley L.J.’s opinion but added at p. 754:
“According to our modern practice there are three classes who can sue, or appear to writs, — persons, corporations, and firms. The introduction of partnerships is comparatively modern and since the Judicature Act, but the fact is merely for convenience of nomenclature and of service; the results are in the end the same as if the individuals composing them sued or were sued by their individual names.”
This dictum by Phillimore L.J. gave Mr. Quashie-Idun a fillip in submitting that Order 48A, r. 1 was a rule of convenience and nothing more. But that is not what Phillimore L.J. meant. Whatever he said in his judgment did not alter the legal position that a firm carrying on business outside the jurisdiction cannot sue or be sued in the firm’s name. Phillimore L.J. emphasized the legal position when he added at p. 754:
“[B]ut our law, being very careful how it interferes with the rights of foreigners, has not allowed service to be effected upon individuals who are engaged in a foreign partnership by serving the partnership as in England. The foreign partners cannot be sued by their firm name, and there is nothing to enable service upon some manager carrying on business for the partners or service on one as service on the rest.”
There is therefore no salvation for the Group in Phillimore L.J.’s judgment.
What was the origin of Order 48A? It is not necessary to apply Darwinian techniques in ascertaining the origin. The whole Order was first introduced in 1891 when a few judicial decisions (relating to service of writs on foreign firms and the individual partners, depending on whether the foreign firm was carrying on business in England or whether one partner on a visit to England could be served) revealed a hiatus in the court rules. The earliest case was that of O’Neil v. Clason (1876) 46 L.J.Q.B. 191 in which Coleridge C.J. held that a writ of summons could be served on a defendant resident in Germany but who had a place of business in London under the firm’s name and that service on the manager in London was good under Order 9, r. 6 (a).
The next development took place in 1886. In Pollexfen & Co. v. Sibson & Co. (1886) 16 Q.B.D. 792, the defendants, who were a foreign
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partnership carrying on business out of the jurisdiction, were sued in the name of their firm. One member of the firm happening to be within the jurisdiction was served with the writ. It was held that the service on that partner was good service under Order 9, r. 6 because at the time of the service the partner served was within the jurisdiction. Smith J. thought the rule must apply to foreign as well as English firms.
Then in 1889, there was a judicial explosion. In Russell v. Cambefort (1889) 23 Q.B.D. 526, the Court of Appeal held that a foreign partnership, the members of which were foreigners resident out of the jurisdiction but carrying on business in England, could not be served under Order 16, r. 6 by service on the manager of their principal place of business within the jurisdiction. This decision overruled the O’Neil case (supra) decided by a Divisional Court. In the Russell v. Cambefort case, Cotton L.J. said at p. 529:
“[W]e ought not to construe the rule so as to bring within the jurisdiction persons who neither by nationality nor by residence are capable of being made subject to the jurisdiction. It was said that the point in this case was decided by O’Neil v. Clason 46 L.J. (Q.B.) 191 as in my opinion, we ought not to follow a decision if we think it was wrong on such a question as jurisdiction…. With respect to Pollexfen v. Sibson 16 Q.B.D. 792, that case does not in any way interfere with our decision in the present case, for there one of the partners was served while in England; it did not decide that service can be effected on a foreign partnership under this rule.”
The following year, 1890, found ripples on previous judicial pronouncements. In the case of Shepherd v. Hirsch, Pritchard & Co. (1890) 45 Ch. D. 231 Chitty J. generated these ripples when he said at p. 233: “In interpreting Order IX., rule 6, regard must be had to the ordinary principles of international law. It occurred to me during the argument that it was a question worthy of consideration, whether where a State allows a foreigner to carry on business at a fixed place within its jurisdiction it was not competent for the State to enact, consistently with such principles, that the foreigner, in return for the protection thus afforded to him by the laws of the State, should be liable, as to writs or other process issuing out of its Courts, to be served at such place of business by his manager or agent there in respect of contracts or obligations entered into or arising in the course of such business. But I am precluded from entertaining any such question by the decision of the Court of Appeal in Russell v. Cambefort.”
Here was the great Chitty J. expressing his opinion as to what ought to be the law yet he was constrained from doing what was just and proper by the chains of higher judicial precedent.
Matters came to a head in Davies & Co. v. Andre & Co. (1890) 24 Q.B.D. 598, where the Court of Appeal held that there was no power under the Rules of the Supreme Court, in an action against a firm, to
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allow the entry of a conditional apperance, i.e. an appearance by a person which denies that such a person is a partner in the firm. This decision overruled a judgment of the Divisional Court in which Wills J. had expressed the view that there was a dilemma calling for the attention of the rules committee and then proceeded to make a rule to prevent injustice from being done. Lord Esher M.R. remonstrating with the court below said at p. 607: “There is no rule that fits the case. It seems to me that the learned judges below created one out of their own heads.” In the same year, 1890, there was clamour in the Court of Appeal for revision of the court rules so far as they concerned foreign firms. In Western National Bank of the City of New York v. Perez, Triana & Co. [1891] 1 Q.B. 304, it was held by Lindley and Bowen L.JJ., on the authority of Russell v. Cambefort (supra) that Order 9, r. 6 did not apply to the case of a foreign firm, and that the service in England upon a person who was temporarily there although expressly served as a partner was not good service. Lord Esher M.R. on the other hand thought it was good service, and ended his dissent with these words at p. 314: “I have the strongest opinion that the rules and orders as to the service of writs abroad should be at once revised.” Bowen L.J. concluded his judgment by referring to what Lord Esher M.R. had said and added at p. 318: “I desire to express an opinion, formed by some experience and observation, of the necessity of redrafting the rules under the Judicature Act, so far as they affect partnership.” The English courts were beset with problems not specifically provided for by the rules of court when foreign firms were sued and served either in England or abroad. Persons served but who were not partners had no opportunity of denying at the earliest opportunity that they were partners. The problems were summed up in the words of Lindley L.J. when he said at p. 314 in the Perez, Triana & Co. case:
“[I]f a member of a firm is resident abroad, the prudent way is to proceed against all the partners by name, or against all who are in this country, and not to attempt to proceed under Order IX. and sue them in the name of the firm, which will lead to trouble in getting judgment and future execution, and had better be avoided.”
It is obvious that these judicial observations led to the introduction of Order 48A which has the title, “Actions by and against firms and persons carrying on business in names other than their own.” The conflict in the previous decisions was resolved and buried. The operative words in rule 1 are: “carrying on business within the jurisdiction.” The whole Order deals with how partners can sue or be sued; how they should enter appearance; and how appearance under protest can be entered, thus taking care of the situation which arose in the case of Davies & Co. v. Andre & Co. (supra). The rule itself makes it possible for a party to demand to know who the partners of a firm are and who were so at a particular time. The earlier decisions indicate that the courts were reluctant to assume jurisdiction over foreign firms not carrying on business in England. Order 48A, r. 1 has consolidated this old reluctance. It follows that where the foreign firm is carrying on business in England under the firm’s name
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the partners can sue and be sued under the firm’s name. The Registration of Business Names Act, 1916 (6 & 7 Geo. 5, c. 58), in England makes registration of business names compulsory and a party can always search the registers to find out who are the partners in the firm. If the party is not satisfied, he can apply to a judge for a summons to compel disclosure of the identities of the partners. The practice in England as one can ascertain from the White Book is that a foreign firm not carrying on business within the jurisdiction cannot sue under the firm’s name. Such a writ in the firm’s name would be rejected at the registry. Order 48A, r. 1 confers a statutory privilege as regards the classes of persons mentioned in the rule. The statutory privilege does not apply in cases not classified in the rule. Order 74 provides: “Where no provision is made by these Rules the procedure, practice and forms in force for the time being in the High Court of Justice in England shall, so far as they can be conveniently applied, be in force in the Supreme Court of Ghana.” If the practice in England is that writs issued in the firm’s name by foreign firms not carrying on business in England are rejected outright at the registry, then it follows that the writ issued by the Group in the present appeal should have been rejected by the Accra High Court registry when it was brought for filing on the ground that it was no writ.
Mr. Quashie-Idun, learned counsel for the Group, argued strongly that the Group had failed to comply with a rule of court which was merely procedural and as the Government had entered an unconditional appearance to the writ and had also filed two affidavits in opposition to the application for leave to enter judgment summarily, the Government must be taken to have waived the irregularity. He also urged that the Government should have acted timeously and should not have waited until the matter came before an appellate court before making it a ground of appeal.
Dr. Asante for the Government explained that when the writ of summons was first issued and served, the Government’s impression was that the Group was carrying on business within the jurisdiction and therefore earlier legal arguments put forward by the Government were directed to prove that as the Group had not been registered and incorporated under the Incorporated Private Partnerships Act, 1962 (Act 152), the Group could not enforce any contract in the courts of Ghana. However, this erroneous impression was corrected when the Group, in an affidavit filed, revealed that it was not carrying on business within the jurisdiction. As a result the Government had to rely on Order 48A, r. 1. There is no doubt that the explanation given by the learned Solicitor-General is a reasonable answer to the Group’s contention that any irregularity had been waived and that the Government did not take immediate steps to object to the proceedings taken in the Group’s name.
Mr. Quashie-Idun relied on Order 70 and submitted that non-compliance with Order 48A, r. 1 was not fatal because the court had power under Order 70 to excuse irregularities. In Mosi v. Bagyina [1963] 1 G.L.R. 337 the then Supreme Court drew a distinction between a mere
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irregularity in procedure and what was a nullity and held at p. 347 that Order 70 applied only to mere irregularities. We must confess that we are not happy with the adjective “mere” used in qualifying procedural irregularities. What is irregular is irregular and provided the irregularity infringes any rule of court, then Order 70 can be invoked. After all Order 70 deals with non-compliance with the rules and if there is no rule to comply with, it follows that Order 70 cannot apply. In any case the distinction between a mere irregularity and a nullity appears to have vanished since the decision in Re Pritchard [1963] Ch. 502, C.A. in which all of the authorities on Order 70 were reviewed. Order 70 has now been reworded in England as Order 2. See The Annual Practice, 1967.
As already pointed out, Order 48A, r. 1 was passed as a result of confusion in judicial pronouncements with regard to actions taken against partnerships in the firm’s name. This confusion became more complex in the case of foreign firms within and without the jurisdiction. Order 48A, r. 1 was therefore introduced to clarify the position. There is nothing in Order 48, r. 1 which forbids suing partners in the individual names of the partners. Indeed it is the proper thing to do. But as an alternative, Order 48, r. 1 introduced a more convenient form so that instead of reciting, for example, the twelve names of individual partners as plaintiffs or defendants, it is only necessary to mention the firm or partnership name. This rule of convenience is available only when the firm carries on business within Ghana and the rule applies to both Ghanaian and foreign firms. If a foreign firm does not carry on business in Ghana, this rule of convenience is absolutely excluded, and the foreign firm cannot sue or be sued in its firm name. When one reads Order 48A, r. 1 carefully the operative verb is the word “may.” The rule is therefore permissive and it applies only to cases mentioned in the rule.
We think, therefore, that Dr. Asante was on sure ground and perfectly right when he submitted that in the present appeal Order 70 was inapplicable because there was no rule of court which provided that foreign firms which did not carry on business within the jurisdiction could come to court under the firm’s name. This brings the argument further to basic principles of law.
Who can sue or be sued in a court of law? On this point the law of Ghana is the same as English law. The general rule of law is that any person, natural or artificial, may sue and be sued in a court of law. See Halsbury’s Laws of England (3rd ed.), Vol. 1, p. 15 and the reference to Comyns’ Digest. Natural persons need not be defined because they can only mean human beings, who are living, as opposed to dead persons. Artificial persons are those created by law or recognised by law as persons. Natural persons and artificial persons have always been identified by names assumed by them, and they come to a court of law under those names.
Artificial persons are corporations created by law or states and governments. Order 1 of our rules of court defines a plaintiff and defendant respectively to include persons. “Person” is defined to include a body
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corporate or body politic. These are the persons who can sue or be sued in a court of law. But not all of these persons by themselves can be countenanced by the court. Thus infants and persons of unsound mind can only sue or be sued through their next friend, guardian or committee. Since Ghanaian families and stools are not corporate bodies, Order 16, r. 8 enables the head of the family or the occupant of the stool to sue or be sued for and on behalf of the family or the stool. There is also provision for a representative action where there are numerous persons. When a litigant dies, a living person has to be substituted to carry on with the litigation in certain cases.
What about partnerships? They occupy a curious position. Partnerships have never previously in Ghana been regarded as legal entities and have never sued or been sued as legal persons. It was only recently when the Incorporated Private Partnerships Act, 1962 (Act 152), was passed in Ghana that all partnerships carrying on business in Ghana became subject not only to compulsory registration but also to mandatory in corporation. Before Act 152 was passed, partnerships carrying on business within the jurisdiction sued under the firm’s name, not as legal entities but because they were permitted by Order 48A, r. 1 to sue or be sued in the firm’s name and style.
Now what is the position of the Group in this appeal. First of all the Group did not carry on business within Ghana as a firm. Therefore the Group is precluded from taking advantage of the privilege in Order 48A, r.1 by suing in Ghana under the name “Levandowsky & B.A.S.E. Group.” Secondly, there is no evidence that the Group is an artificial person, that is, a corporate body. If that is the case, then the Group could not have sued under the partnership name. The Group could only sue in Ghana by disclosing all the names of the partners in the Group as plaintiffs. That should have been the proper course because then the individual partners would have come to court as natural persons.
We think, and we have no doubt whatsoever in our minds, that if an unincorporated foreign firm, not carrying on business within the jurisdiction, had issued this writ in England, the writ would have been rejected as no writ. It seems to us therefore that the writ issued by the Group was not properly before the trial court, because there were no plaintiffs before the court. This ground of appeal alone, in our view, disposes of the appeal in favour of the Government and the judgment of the court below should be set aside because the writ of summons was null and void. The defect is too fundamental and cannot be excused by the court. It would therefore appear unnecessary to consider the other ground argued by the learned Solicitor-General at the request of the court, namely, that the learned trial judge erred in holding that the affidavits filed by the Government did not disclose any triable issues. It was argued under this ground that there were triable issues as to what was the amount due to the Group and that no interest had been agreed upon between the parties. It was also pointed out by the learned Solicitor-General that the affidavits filed in support of the summons for leave to enter summary
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judgment should have been sworn to by somebody “who can swear positively to the facts” verifying the cause of action and the amount claimed, but in the present case, the affidavits were sworn to by the managing clerk of the solicitors acting for the Group. It seems to us that since the Group may wish to reconsider their position and to re-advise themselves on what further steps to take in the matter, it would be imprudent to pronounce on these matters in this judgment.
However, there is one very important observation which we think ought to be made in fairness to both the Group and the Government to ensure that that observation will not be overlooked when they are re-advising themselves. It seems to us that if the specially endorsed writ had been accompanied with a full statement of claim giving an account of the history of the claim, the learned trial judge would have been given proper guidance as to whether summary judgment should have been entered for the amount specially endorsed or whether leave to defend the action should have been granted. We say this because during the hearing Mr. Quashie-Idun revealed that some time in the history of the claim, the Group and the Government compromised on an amount lesser than the original contract claim of £462,000. It appears the lesser amount was the subject-matter of exhibits JEKA 4 and JEKA 5. But because the Government was not paying the Group any further moneys, the Group decided to sue for the original contract price. The question is whether the compromise was binding on the Group? We refuse to answer the question.
The writ of summons and the statement of account attached to the writ were in respect of the original contract price, yet when the Group applied for entry of summary judgment the Group used exhibits JEKA 4 and JEKA 5, which related to the compromise for a lesser sum, as evidence in support of the original contract price specially endorsed on the writ. The question again is whether these exhibits verified or proved the greater original contract price due from the Government. Once again we refuse to give a categorical answer to this question in this judgment as the answer is not a difficult one and must now be too obvious to the Group. Nevertheless, Mr. Quashie-Idun deserves commendation for making this revelation with candour and without inhibition because it has enabled this court, unlike the trial court, to understand the vicissitudes of the Group’s claim. This is in the best tradition of the Bar.
In conclusion, we hold that the Group is not competent to sue under the firm’s name in the courts of Ghana as it is not carrying on business within the jurisdiction. The writ of summons should not have issued in the first place in the firm’s name. The writ was null and void and of no effect, and it follows that the judgment itself is of no legal consequence. For the above reasons, we allow the appeal and set aside the judgment of the court below.
DECISION
Appeal allowed.
T. G. K.
