MORKOR vs. KUMA (NO 1) [1999-2000] 1 GLR 721

CASES REFERRED TO

(1) Salomon v Salomon & Co [1897] AC 22; [1895-99] All ER Rep 9; 66 LJCH 35, HL.

(2) Darby, Re; Ex parte Brougham [1911] 1 KB 95, 80 LJKB 180; 18 Mans 10.

(3) Amartey v Social Security Bank; Social Security Bank v Robertson (Consolidated) [1987-88] 1 GLR 497, CA.

(4) Jones v Lipman [1962] 1 WLR 832; [1962] 1 All ER 442; 106 SJ 531.

[p.725] of [1999-2000] 1 GLR 721

(5) Dallas v Dallas (1960) DLR (2d) 746.

NATURE OF PROCEEDINGS

APPEAL by the appellant against the majority decision of the Court of Appeal affirming the ruling of the High Court dismissing the appellant’s application for stay of execution and setting aside of the summary judgment the respondent had obtained at the High Court in his action against the company and the appellant for recovery of debt. The facts are sufficiently set out in the judgment of Akuffo JSC.

COUNSEL

Opoku Adjei (with him Somua-Asamoah) for the appellant.

S K B Matanawui for the respondent.

JUDGMENT OF EDWARD WIREDU JSC.

I have had the privilege to read beforehand the able and learned opinion about to be read by my sister Akuffo JSC. I agree with her reasons and conclusion that the plaintiff’s action be dismissed and I have nothing more useful to add.

JUDGMENT OF AKUFFO JSC.

Pursuant to a sale agreement dated 22 May 1990 and made between the respondent herein (acting as the agent for Faroe Sea Food of Faroe Island) and East Coast Fisheries Ltd (hereinafter referred to as the first defendant), 400 metric tons of frozen fish, valued at $180,000, was supplied to the first defendant. That the consignment was received is not in serious dispute.

The appellant, as a director, and another director witnessed the execution of the agreement by the first defendant. In accordance with the agreement, the first defendant paid a deposit of $16,000. The remaining balance, being $171,000 was to be paid by 30 August 1990. The payment of the said balance was guaranteed by one Sammy Quaye of Bossogie Engineering Services who indemnified the first defendant against all claims that may be made against it by the supplier.

As at 23 August 1990, however, only $8,427 had been paid and, by a letter, exhibit B, the first defendant undertook to settle the remaining balance by the end of September 1990. When by the middle of October 1990 the balance was not paid, the respondent herein sued the first defendant, and the appellant, who was the chief executive officer, a director and a shareholder of the first defendant. The State Fishing Corporation, in whose cold stores the consignment

[p.726] of [1999-2000] 1 GLR 721 was stored, was also sued as the third defendant. By his writ of summons, the respondent, claimed from the first defendant and the appellant, jointly, the sum of $188,035.08, being the value of 500 tons of fish supplied, plus bank and telex charges, together with interest on the amount claimed at the rate of 30 per cent. He also sought an order of perpetual injunction restraining the third defendant from selling the remainder of the fish in its custody.

The first move made by the respondent, after the institution of the suit, was to apply by an ex parte motion, for orders of interim injunction and interim attachment of the fish in the defendants’ custody. However, after obtaining these reliefs, counsel for the respondent on 9 November 1990 requested the court (presided over by Lutterodt J (as she then was)) to discharge the orders, since an arrangement had been made for the settlement of the amount due.

Appearance was entered for the first defendant and the appellant on 2 November 1990 and they filed a joint statement of defence on 20 November 1990. The third defendant never appeared and is not part of this appeal. On 15 March 1991 the respondent applied for leave to enter summary judgment against the first defendant and the appellant. In the accompanying affidavit, it was deposed that an amount of $112,943.00 had been paid, leaving a balance of $75,092.68. Together with the interest claimed, the total amount due was claimed to be $86,760.73, in respect of which the respondent sought summary judgment. The affidavit in opposition to the summons was deposed to by Samuel Quaye, who described himself as a director of the first defendant and, in the first paragraph, claimed to have the authority of the appellant to depose thereto on her behalf. On 2 June 1991, Lutterodt J (as he then was) entered judgment for the respondent, as prayed.

The appellant and the first defendant then applied to the court for an order of stay of execution and payment of the judgment-debt by instalments. Subsequently, on 19 July 1991, however, the appellant and the first defendant also filed an application for stay of execution and the setting aside of the summary judgment. They then withdrew their first application, which was, therefore, struck out by Lutterodt J (as she then was) on 22 July 1991.

It was in the affidavit in support of the application for stay of execution and setting aside of the summary judgment that the appellant, for the first time, put into issue the propriety of her being

[p.727] of [1999-2000] 1 GLR 721 sued jointly with the first defendant. In paragraphs (8) and (9) of the said affidavit, Samuel Quaye, again claiming to be acting on behalf of the appellant, deposed as follows:

“(8) that the agreement for sale of fish was between the plaintiff acting as the agent in Ghana for Faroe Sea Food and East Coast Fisheries … a limited liability company and not with the second defendant personally …

(9) that I am told and verily believe same to be true that it was wrong for the plaintiff to have sued the second defendant, though a director of the first defendant company.”

In a supplementary affidavit filed on 29 July 1991 Samuel Quaye also challenged the amount claimed by the respondent and averred that a total amount of $24,427 had been paid to the respondent, which payment he had failed to take into account in his claim. Attached to this supplementary affidavit was a copy of the agreement (exhibit A). This exhibit shows that the agreement was, indeed, entered into by the first defendant, with two directors, ie the appellant and the said Quaye, signing as witnesses to the affixing of the seal of the first defendant.

The application for stay of execution and setting side of the summary judgment was eventually heard by Sampson J who on 15 July 1992 dismissed the same as being without merit. He also ordered the amount admitted by the defendants to be paid to the respondent, together with 30 per cent interest thereon. It is clear from the ruling that Sampson J did not consider at all, the issue raised in the affidavit that the appellant was not a proper party to the suit.

The appellant then appealed to the Court of Appeal to set aside the ruling, as well as the summary judgment. On May 30 1996, the Court of Appeal, by a majority decision, dismissed the appeal. The majority, in an opinion delivered by Baddoo JA and concurred in by Essiem JA, held that the circumstances of the case justified the lifting of the veil of incorporation and, consequently, the appellant could be held personally liable, together with the company, for the debt. The court further held that, the summary judgment having been obtained on 24 June 1991, the appeal against the judgment should have been filed before 24 September 1991. Consequently, their

[p.728] of [1999-2000] 1 GLR 721 lordships held that, under the Court of Appeal Rules, 1962 (LI 218) as amended by the Court of Appeal (Amendment) Rules, 1969 ( LI 618) , the appeal against the said judgment was out of time.

In the instant appeal, the relief sought by the appellant is that:

“The majority decision dismissing the second defendant-appellant-appellant’s appeal against the ruling of the High Court presided over by Sampson J dated 15 July 1992 be set aside and the summary judgment of the High Court against the second defendant-appellant-appellant dated 24 June 1991 be set aside.”

The grounds of appeal are that:

“(1) The Court of Appeal erred when it held that the appeal was statute-barred.

(2) The Court of Appeal erred when it lifted the veil of incorporation as there were no grounds for doing so.

(3) Alternatively, the Court of Appeal erred when it held that the appellant herein was a proper party to the suit, first raised in the motion dated 19 July 1991 to set aside the judgment of the High Court dated 24 June 1991.”

This appeal, therefore, raises two fundamental issues: first, whether or not the appeal to the Court of Appeal was statute barred and secondly, whether or not the appellant was a proper party to the suit. On the first issue, counsel for the appellant, in his statement of case argued that the appeal to the Court of Appeal was against the ruling of 15 July 1992 and not the summary judgment of 24 June 1991. According to counsel, it was this ruling which finally disposed of the rights of the parties and, consequently, it was not an interlocutory order. He, therefore, submitted that the notice of appeal having been filed on 17 August 1992, the appeal was well within time, since, as of right, the appellant had three months within which to file the appeal. Counsel for the respondent, in his statement of case, did not address the issue. However, during the course of oral arguments before us, he contended that the judgment in issue was the summary judgment, rather than the ruling, and, therefore, the computation of time commenced from the date that judgment was delivered.

[p.729] of [1999-2000] 1 GLR 721

The motion filed by the appellant to set aside the summary judgment gave no indication of the procedural rule under which it was being made. However, it is evident that the application falls under Order 14, r 11 of the High Court (Civil Procedure) Rules, 1954 (LN 140A) as amended by the High Court (Civil Procedure) (Amendment) (No 2) Rules, 1977 (LI 1129). This rule, states that:

“11. A judgment given against a defendant who does not appear at the hearing of an application under this

Order may be set aside or varied by the Court on such terms as it thinks just.”

From the record, it is quite clear that the summons for judgment came before the court for hearing only once, this was on 24 June 1991, the same day that the learned judge delivered her judgment. The court notes in the record of appeal, show that the appellant and the first defendant, although they had filed a joint affidavit in opposition, were absent and unrepresented.

Order 14, r 11 of LN 140A does not stipulate the time within which an application may be brought to set aside a summary judgment given in the absence of the defendant. However, the correct position in such a situation appears to be that, where such judgment was entered for an amount greater than what is actually due, it must be set aside ex debito justitiae: see Halsbury’s Laws of England (4th ed), Vol 26, para 559. This is apart from any consideration of whether or not the defendant has a good defence on the merits. Furthermore, the application to set aside such a judgment may be made at any time, even where the judgment debtor obtains a stay of execution. The rationale for this position is that it is the duty of a creditor who obtains a judgment for the wrong amount to have the same set aside. In the case of a judgment given in the absence of the defendant, which is otherwise regular, the application to set it aside ought to be made as soon as the defendant becomes aware of the same, although, according to Halsbury’s Law[sic](1) of England (4th ed), Vol 26, some delay would not necessarily be fatal if the parties can be restored to their former position.

In the light of the foregoing it appears that in this case where the summary judgment was obtained in the absence of the defendants, and for an amount greater than what was in fact due (as acknow-

[p.730] of [1999-2000] 1 GLR 721 ledged by the respondent), the summary judgment could not be treated as final, once the application was filed to set the same aside. Consequently, the proper date from which to compute the time within which an appeal could be made to the Court of Appeal was 15 July 1992, the date of Sampson J’s ruling, rather than the date of the summary judgment. The appeal was, therefore, within time and not statute barred. For us to conclude otherwise would be to neutralise the effect of Order 14, r 11 of LN 140A since, in the event the court does not dispose of an application within six months from the date that a summary judgment is entered, an applicant who loses her application would also have lost, forever, any chance of an appeal. Such a result could not have been the intent of the amendments effected by LI 1129, which were, rather, intended to improve upon the original rules of LN 140A.

We now turn to the second issue. In arriving at its conclusion that the appellant had been properly sued, the majority of the Court of Appeal made a finding that the circumstances of the case merited the lifting of the veil of incorporation. This conclusion was reached on the basis of the averments contained in the affidavit deposed to by the respondent on 29 October 1990. The relevant paragraphs of this affidavit are as follows:

“(6) That the first and second defendants have been selling the stock of fish in the third defendant’s cold stores but have failed to pay any money to me as have been promised.

(7) That I am informed and verily believe same to be true that the first and second defendants have been using cash proceeds from sales of the fish supplied to pay debts they are owing to the banks.

(8) That further, I am informed and verily believe same to be true that the first and second defendants have also been giving out certain quantities of fish to the said bank’s managers to sell at very low and ridiculous prices to defray debts owed to the banks.”

The majority of the court found that the appellant never denied the very serious allegations of fraudulent trading embodied in paragraphs (7) and (8). In his leading opinion for the majority, Baddoo JA concluded that when the veil of incorporation is lifted, it would

[p.731] of [1999-2000] 1 GLR 721 be found that the real power behind the company was the appellant. Therefore, his lordship continued: “. . . if the second appellant settled her indebtedness with the bank with the proceeds realised from the sale of the fish supplied by the respondent, then she must be held personally liable together with the company for the debts incurred in the sale of the fish.

When the veil of incorporation is lifted, it will be seen that the real power behind the ompany[sic](2), who controlled the finances of the company was the appellant. She settled her indebtedness with he[sic](3) bank with funds realised from the sale of the respondent’s fish. She is the proper person to be sued for the recovery of the price of the fish.”

In arguing grounds (2) and (3), counsel for the appellant, in his statement of case, submitted that the majority erred in lifting the veil on the strength of the allegations contained in the said affidavit. It was further submitted that, even if any acts of the first defendant are remotely deemed to be wrongful, there was no evidence to justify any inference that the appellant had authorised any such wrongful acts because:

(a) The affidavit relied upon by the majority was deposed to in support of the respondent’s ex parte motion for interim injunction and interim attachment.

(b) Although, at the first hearing of the application for the interim orders, the trial judge ordered the respondent to serve hearing notices on the defending parties, this was not done and by the time of the second hearing the application was still ex parte. Therefore, neither the first defendant nor the first appellant had any notice of the allegations and, consequently, they were not in any position to admit or deny the same.

(c) The respondent never made any such allegations in his statement of claim or affidavit in support of his summons for judgment. Rather, in the latter affidavit, the respondent had averred that out of the total price of the fish supplied, an amount of $112,943 had been settled as at the date of the deposition.

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(d) There was no evidence indicative of the corporate status of the first defendant having been used by the appellant as a devise or cloak to frustrate the claims of the company’s creditors.

(e) The due payment of any debt arising out of the agreement between the respondent and the first defendant had been guaranteed by another person and the respondent should have sued the first defendant jointly or severally with the said guarantor, rather than the appellant.

For his part, counsel for the respondent argued that:

(a) The appellant had been sued because she is the one who directs the day to day affairs of the first defendant company and controls the sales of fish.

(b) The appellant is estopped from objecting to being made party to the suit because, at all material times during the suit, she had actively participated as the second defendant and had entered appearance, filed a joint statement of defence with the defendant and had a series of affidavits deposed to on her behalf. Throughout the proceedings, she never raised any objection to her status as a party, until after the summary judgment had been entered and the respondent sought to enforce the same.

The proper defendant in an action on a contract is the person (or persons) who made the promise the breach of which has created the cause of action. Since the first appellant had been sued jointly with the first defendant, she would be a proper party to the suit only if a specific personal liability were established against her, or the veil of incorporation could be lifted to make her acts synonymous with those of the company, or vice versa. It is clear on the face of exhibit A, the sale agreement, that the transaction was between the respondent and the company. Furthermore, the claim against the appellant was grounded solely in this sale agreement. It is also patently clear from the statement of claim that the only reason the appellant was sued was because she was the chief executive, a director and the main shareholder of the first defendant company. The statement of claim made no averments against the appellant that would, prima facie, attach any personal liability to her, or render her jointly liable with first defendant, under the agreement. The fundamental question, therefore, is “were there any circumstances that justified

[p.733] of [1999-2000] 1 GLR 721 the lifting of the veil of incorporation?”

Save as otherwise restricted by its regulations, a company, after its registration, has all the powers of a natural person of full capacity to pursue its authorised business. In this capacity a company is a corporate being, which, within the bounds of the Companies Code, 1961 (Act 179) and the regulations of the company, may do everything that a natural person might do. In its own name, it can sue and be sued and it can owe and be owed legal liabilities. A company is, thus, a legal entity with a capacity separate, independent and distinct from the persons constituting it or employed by it. From the time the House of Lords clarified this cardinal principle, more than a century ago, in the celebrated case of Salomon v Salomon & Co [1897] AC 22, HL it has, subject to certain exceptions, remained the same in all common law countries and is the foundation on which our Act 179 is grounded.

The corporate barrier between a company and the persons who constitute or run it may be breached only under certain circumstances. These circumstances may be generally characterised as those situations where, in the light of the evidence, the dictates of justice, public policy or Act 179 itself so require. It is impossible to formulate an exhaustive list of the circumstances that would justify the lifting of the corporate veil. However, the authorities indicate that such circumstances include where it is shown that the company was established to further fraudulent activities or to avoid contractual liability. In Halsbury’s Laws of England (4th ed), Vol 7(1), at para 90, it is stated as follows:

“Notwithstanding the effect of a company’s incorporation, in some cases the court will ‘pierce the corporate veil’ in order to enable it to do justice by treating a particular company, for the purpose of the litigation before it, as identical with the person or persons who control it. This will be done not only where there is fraud or improper conduct, but in all cases where the character of the company, or the nature of the persons who control it, is a relevant feature. In such cases the court will go behind the mere status of the company as a separate legal entity distinct from its shareholders, and will consider who are the persons, as shareholders or even as agents, directing and controlling the activities of the company. However, where this

[p.734] of [1999-2000] 1 GLR 721 is not the position, even though an individual’s connection with a company may cause a transaction with that company to be subjected to strict scrutiny, the corporate veil will not be pierced.

For the purposes of taxation, there are numerous statutory provisions which in effect require the corporate veil to be pierced; and the courts have in recent years shown an increasing tendency for such purposes to look at the economic consequences of transactions rather than their strict format, thus in effect bypassing the question of corporate identity.”

Therefore, whether or not a situation is one in which the lifting of the veil of incorporation is merited, is dependent on the peculiar factors driving each particular case. Thus, the veil of incorporation was lifted in the case of Re Darby; Ex parte Brougham [1911] 1 KB 95, where Phillimore J found that the company was a mere alias to cloak the identities of two fraudulent and undischarged bankrupts in their financial activities. Also, in Amartey v Social Security Bank; Social Security Bank v Robertson (Consolidated) [1987-88] 1 GLR 497, CA where a demand notice was addressed to the managing director of a company indebted to the bank, rather than to the mortgagor as was required by the deed of mortgage securing the repayment of a loan granted to the company, the Court of Appeal held that, since the managing director was also the chairman of the debtor company, as well as being the same person as the mortgagor, the veil of incorporation could be lifted to justify a finding that the mortgagor had been duly notified. The court held that it was fraudulent on the part of the plaintiff (the mortgagor) to deny receipt of the notice, since he had, indeed, received it in his capacity as the managing director of the debtor. In Jones v Lipman [1962] 1 WLR 832, the defendant had contracted to sell his house to the plaintiff. Later, however, he changed his mind and sought to avoid completion of the agreement by conveying the house to a company that had always been under his complete control. The plaintiff brought an action for an order of specific performance against either the defendant or the company. Russell J at 836 found that the company was “a device and a sham, a mask which [the defendant] holds before his face in an attempt to avoid recognition by the eye of equity.” It has also been held that the veil may be lifted if it is established

[p.735] of [1999-2000] 1 GLR 721 that the company is so under the unfettered control of a particular individual as to make it, effectively, his alter ego: see Dallas v Dallas (1960) 24 DLR (2d) 746 at 747.

Turning to the instant case, it is clear from the record that the proceedings, in which the allegations of fraudulent trading were made, were ex parte. It is also clear that in none of the affidavits filed by the respondent in the subsequent proceedings on notice did the respondent repeat these allegations of fraudulent trading. Therefore, it was erroneous for the majority of the Court of Appeal to base their finding that the circumstances justified the lifting of the veil of incorporation, upon these allegations. Neither the appellant nor the defendant was ever in a position or had the opportunity to respond to the same.

Nevertheless, were there any other proven factors driving the case, such as fraud, improper business conduct, deliberate attempts at evasion of legal obligations, or other devises or wilful misdeeds on the part of the appellant, which would have justified the lifting of the veil in order to reach the appellant for redress? It is on record that, by the time of the proceedings before Sampson J, the outstanding balance of the debt had been reduced from $171,000 to $57,591.06, which amount was accepted by the respondent as being what was due. Consequently, as at the date of Sampson J’s ruling, the first defendant, even though in default of the terms of the agreement, had been making efforts, however slow, to settle the debt. It cannot be said, therefore, that the corporate status of the company was being used as a cloak or mask by the appellant to evade contractual obligations. Besides, as Forster JA observed in his dissenting opinion: “East Coast Fisheries was in existence before the sale agreement. The contract for the supply of fish was obviously a matter within the objects of the company.”

In the respondent’s affidavit in opposition to the application to set aside the summary judgment, it was deposed, inter alia, that:

“(5) . . . the second defendant negotiated the said agreement for herself and on behalf of the first defendant company and she is the majority shareholder of the first defendant company, and cannot now be heard to say that it was only the first defendant company which entered into a transaction with the plaintiff.”

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The fact that the appellant was at all material times a shareholder, director and manager of the first defendant is not in dispute, although as to whether she was the majority shareholder, we have no proper evidence and it is, in any event, quite irrelevant. As has already been noted, it is also clear on the face of the agreement that the same was between the first defendant company, per se, and the respondent as agent for his principals. There is no evidence that the appellant negotiated the agreement on her own behalf or for her immediate personal purposes. Rather, what is quite clear is that she negotiated the agreement in the normal course of the first defendant’s business. As the chief executive officer of the first defendant, it would be part of the normal functions of the appellant to negotiate agreements on behalf of the company. Although the appellant co-executed the agreement, she did so with another director of the company, as is the common practice with corporate bodies. The signature of a single director is not usually acceptable in such circumstances. Furthermore, since a company is non-human the only means by which it may execute an agreement is for its directors, or some other authorised person, to sign on its behalf. When an officer of a company, in the normal course of her duties, so negotiates or signs an agreement entered into by the company, no personal liability is thereby created, in the absence of other clear indications to the contrary. We see no such indications in this case.

Additionally, counsel for the respondent, in his statement of case, stated that the appellant was sued so as to ensure that the respondent collects his money. We do not believe this constitutes sufficient justification for lifting the veil, otherwise, every time a company defaults in the settlement of its debts, any person who combines the roles of chief executive, shareholder and director would, ipso facto, become personally liable. This would defeat the very essence of business incorporation. In the absence of cogent evidence, one cannot see how or why the positions held by the appellant or her acts of negotiating and co-signing the agreement would constitute sufficient justifications for lifting the veil. Her multifaceted status in the company cannot, by itself, render the company her alter ego. By its very nature, a company, being a mere creature of the law, needs to work through human beings; they direct its affairs, take decisions for it, collect money and make payments on its behalf. As has already been stated, these human beings are,

[p.737] of [1999-2000] 1 GLR 721 normally, deemed separate from the corporate identity.

Therefore, unless there can be found any conduct on the part of the appellant which is so exceptional as to render it unjust to hold her blameless from the liabilities of the company, she cannot be held personally liable for such liabilities. We have found no evidence of such conduct on the record. There is also no evidence that, upon the collection of the proceeds of the sale, the appellant used them for her personal enrichment or other personal purposes. Indeed, the respondent’s own affidavits in support of the afore-mentioned ex parte application, assuming the allegations therein were true, only averred that the said proceeds were used to settle other debts owed by the first defendant. Galling though such conduct may be to the respondent as a creditor, this does not, in our view, amount to fraud or improper business conduct. Indeed, any economic advantage created by the conduct deposed to in the said affidavit was purely to the benefit of the first defendant, rather than the appellant personally. On the evidence, therefore, the majority of the Court of Appeal erred in lifting the veil and finding that the appellant was personally liable for the first defendant’s debts and a proper person to be sued, with the first defendant, for the recovery of the debt owed by the first defendant.

Regarding the question of estoppel raised by counsel for the respondent in his statement of case, Order 15, r 6 (2) (a) of LN 140A as amended by LI 1129 states as follows:

“(2) At any stage of the proceedings the Court may on such terms as it thinks just and either of its own motion or on application— (a) order any person who has been improperly or unnecessarily made a party or who has for any reason ceased to be a proper or necessary party, to cease to be a party.”

Additionally, see also Order 15, r 6(5) as amended by LI 1129. Although the issue of the propriety of the appellant being made a party to the suit was not raised by an application specifically made under this rule, but was raised as one of the grounds for setting aside the judgment, it seems quite clear from the language of the rule that, once the matter was raised, it was incumbent upon the judge to give [p.738] of [1999-2000] 1 GLR 721 it due consideration. Indeed, it seems that the rationale for the whole of Order 15 of LN 140A is to ensure that proceedings are so managed by the court as to ensure that the dispute before it is resolved in the most efficacious and complete manner possible. It is for this reason that the rule empowers the court, suo motu, to order that a party cease to be a party or that other persons be added as parties. Where, in fact or in law, a person is not a proper party to a suit, then, no matter how actively she participated in the suit, the fact would remain that she was never a proper party. Admittedly, if judgment were entered against her, it would remain effective unless and until she takes steps to have the same set aside. However, it is open to her, at anytime, however belatedly, to dispute the propriety of her having been made a party to the suit, and if she is able to establish that the same is improper, then justice would demand that she be struck out as defendant. Her earlier participation cannot operate in anyway to estop her from raising the objection. At worst, her tardiness in raising the objection would affect any costs to which she might be entitled. It is, therefore, very unfortunate that the learned Sampson J failed to give any consideration whatsoever to the appellant’s objection, but rather chose to disregard the same entirely, when the, matter was raised in the proceedings before him. It is conceivable that, had he done so, a lot of time wastage and litigants’ expenses might have been avoided.

In article 129 (4) of the Constitution, 1992 it is provided that:

“(4) For the purposes of hearing and determining a matter within its jurisdiction and the amendment, execution or the enforcement of a judgment or order made on any matter, and for the purposes of any other authority, expressly or by necessary implication given to the Supreme Court by this Constitution or any other law, the Supreme Court shall have all the powers, authority and jurisdiction vested in a court established by this Constitution or any other law.”

See also section 2 (4) of the Courts Act, 1993 (Act 459). Consequently, having found that the appellant was not a proper person to be sued for the debt incurred by the first defendant, we hereby make the following orders:

(1) pursuant to Order 15, r 6 (2) (a) of LN 140A as amended

[p.739] of [1999-2000] 1 GLR 721 by LI 1129, the appellant is hereby struck out as a party to the suit; and

(2) the summary judgment dated 24 June 1991, as well as the ruling dated 15 July 1992, insofar as they affect the appellant, are hereby set aside.

Before concluding, we need to make a couple of observations. Oddly enough, although under the agreement there was a guarantor who had indemnified the first defendant, it does not appear that the respondent made any prior efforts to recover the balance outstanding from him before bringing this action. Thus, at the time the suit was instituted, the respondent had a contractual recourse which, for his own good reasons, he apparently chose not to pursue. Furthermore, although the first defendant, as far as we are aware, has never appealed against the judgment, it also does not appear from the record that the respondent ever made any efforts to execute the judgment against it. Rather, having obtained the judgment against the first defendant and the appellant, jointly, he opted to execute the same solely against the personal assets of the appellant. This is quite irregular and improper.

JUDGMENT OF KPEGAH JSC.

I have had anxious moments over this appeal. My concern had been whether the issue of “lifting the veil” could be raised by the appellant at the stage at which it had been raised. But after poring over the record of proceedings and perusing the judgment of my sister Akuffo JSC, I share the view of my brethren that there is ample evidence on the record to justify the consideration of the point by the Court of Appeal and this court. This is a case in which summary judgment was signed under Order 14 of the High Court (Civil Procedure) Rules, 1954 (LN 140A) as amended by the High Court (Civil Procedure) (Amendment) (No 2) Rules, 1977 (LI 1129) and an application was brought to have it set aside, and one of the grounds was that the appellant could not be sued personally for the debt of a company of which she is a director. The application was dismissed and the appellant launched an appeal in the Court of Appeal. I think where the state of the record of proceedings is such that it can justify the raising of a legal point on appeal for the first time, an appellate court cannot ignore it when the point is raised; for an appeal is by way of rehearing, entailing the consideration of the record of proceedings as a whole.

[p.740] of [1999-2000] 1 GLR 721

JUDGMENT OF ADJABENG JSC.

I agree that the appeal be allowed.

JUDGMENT OF ACQUAH JSC.

I also agree that the appeal be allowed.

DECISION

Appeal allowed.

LSNA

Endnotes

1 (Popup – Footnote) [sic] same in original. 2 (Popup – Footnote) [sic] same in original. 3 (Popup – Footnote) [sic] same in original.