WADAD HADDAD FISHERIES vs. STATE INSURANCE CORPORATION [1973] 1 GLR 501

CASES REFERRED TO

(1) Ghana Industrial Holding Corporation v. Vincenta Publications [1971] 2 G.L.R. 24, C.A.

(2) Assunta, The [1902] P. 150; 71 L.J.P. 75; 86 L.T. 660; 50 W.R. 544; 18 T.L.R. 570; 9 Asp.

M.L.C. 302.

(3) Harmer v. Bell; The Bold Buccleugh (1852) 7 Moo.P.C.C. 267; 19 L.T. (o.s.) 235; 13 E.R. 267.

(4) Mosi v. Bagyina [1963] 1 G.L.R. 337, S.C.

[p.503] of [1973] 1 GLR 501

(5) Armar v. Armar, Court of Appeal, 21 April 1969, unreported; digested in (1969) C.C. 73.

(6) Craig v. Kanssen [1943] 1 K.B. 256; [1943] 1 All E.R. 108; 112 L.J.K.B. 228; 168 L.T. 38; 87 S.J.

48, C.A.

NATURE OF PROCEEDINGS

ACTION by the plaintiffs, a one man firm, against the defendants, the insurers, for money due under a contract of marine insurance for loss of the plaintiffs’ vessel, wherein the defendants raised a preliminary objection as to the legal capacity of the plaintiffs. The facts are fully set out in the ruling.

COUNSEL

I. Amoo-Lamptey (with him Carl E. Quist) for the plaintiffs.

H. P. Swaniker for the defendants.

JUDGMENT OF ABBAN J.

By their amended writ of summons the plaintiffs are claiming from the defendants the sum of ¢15,810.00 as money due to them under a marine insurance policy, No. 01/43/00141/9, dated 4 September 1969, and issued by the defendants in respect of the fishing vessel Le Martian—T.F. 123. The plaintiffs are also claiming interest on this amount at the rate of eleven per cent, calculated from September 1969, to the date of judgment.

The plaintiffs are the owners of the said vessel, and the vessel was insured with the defendants against all risks. That is, “against losses and damages, howsoever caused.”

In their paragraph (4) of the statement of claim, the plaintiffs alleged that “on or about 20 September 1969, whilst the said fishing vessel was anchored at the inner fishing harbour at Tema, it was discovered that the said vessel had sunk.” The plaintiffs further alleged that the circumstances leading to the loss of the vessel were covered by the terms of the policy. They therefore contended that the sum of ¢15,810.00, for which the vessel was insured, had now become due and payable. The defendants, however, refused to meet the demands of the plaintiffs. Consequently, on 4 April 1970, the plaintiffs sued for this amount on a specially endorsed writ. After the defendants had entered appearance, the plaintiffs, on 30 April 1970, filed summons for judgment under Order 14, r. 1 of the Supreme [High] Court (Civil Procedure) Rules, 1954 (L.N. 140A). The summons was heard, and on 7 May 1970, the defendants were granted leave to defend.

The substance of the defence, as appearing on the pleadings, is that the sinking of the boat was due to the fault of the plaintiffs and “not due to high winds at the harbour, and, in that respect, it was not a peril covered by the said marine insurance policy.” The defendants, again, averred that at the time the insurance was being effected the “plaintiffs wrongfully concealed from the defendants material facts then known to the plaintiffs and unknown to the defendants.” Particulars of the alleged concealment were given in paragraph (5) (a) of the amended statement of defence.

[p.504] of [1973] 1 GLR 501

It will be recalled that hearing of the case, on its merits, was completed on 19 January 1973, and the court adjourned it to 2 February for addresses. But before that date, all sorts of amendments were filed by the parties. That is, the plaintiffs, on 24 January filed notice to amend the endorsement on their writ of summons. The defendants, on 30 January, filed notice to amend their statement of defence. The defendants, again, on 1 February filed another notice of amendment, together with motion on notice and an affidavit, giving reasons why the defendants thought those amendments were necessary.

Because of these amendments the court could not hear the addresses on the said 2 February. The case had to be adjourned to 7 February, for all the various amendments to be considered.

On 7 February, after hearing the submissions of both counsel on the proposed amendments, the court found them to be necessary and therefore all the amendments were allowed, and the defendants were ordered to file a comprehensive amended statement of defence. The case was further adjourned to 23 February for the addresses to be heard. But on that date, before the court could hear the addresses, learned counsel for the defendants raised certain objections against the writ. The objections were based on the new matters which the defendants had pleaded to in paragraph (7) of their amended statement of defence.

Learned counsel for the defendants contended that the plaintiffs had no legal capacity to sue. Because Wadad Haddad Fisheries, referred to as the plaintiffs in the suit, could only be a business name; and since one Madam Wadad Haddad Ramia is the sole proprietress of the said business, the said Ramia could not sue in the business name. Counsel relied on Order 48A, rr. 1 and 11 of L.N. 140A and also on Ghana Industrial Holding Corporation v. Vincenta Publications [1971] 2 G.L.R. 24, C.A.

Learned counsel for the plaintiffs, however, maintaned that the plaintiffs have legal capacity and that Order 48A, rr. 1 and 11 are not applicable to this case, because the present action is an admiralty action in rem. Counsel cited the case of The Assunta (1902) 86 L.T. 660 in support of his contention. He also referred to Halsbury’s Laws of England (3rd ed.), Vol.1, p.35, para. 70. Counsel further submitted that since the case herein is an admiralty action in rem, the case of Ghana Industrial Holding Corporation v. Vincenta Publications (supra) (hereinafter known as the Gihoc case) is also inapplicable.

I think it is important that the nature of the action herein must first be determined. That is, whether the plaintiffs’ action is a personal suit or an admiralty action in rem.

In an admiralty action in rem, as distinct from an action in personam, the proceedings are directed against the res, such as the ship or the cargo, and the form of the writ is quite different from the form when the action is in personam. In the case of Harmer v. Bell; The Bold Buccleugh (1851) 7 Moo.P.C.C. 267, the court had the occasion to consider fully the nature of the distinction between a proceeding

[p.505] of [1973] 1 GLR 501 in personam and a proceeding in rem. Lord Jervis C.J. who delivered the judgment of the court at p. 283 stated that a “proceeding in rem, whether for wages, salvage, collision, or on bottomry, goes against the ship in the first instance.” (The emphasis is mine.) See also Halsbury’s Laws of England (3rd ed.), Vol. 1, p. 35, para. 70 (supra).

Order 2, r. 6 of L.N. 140A prescribes a special form for admiralty actions in rem. The rule provides that, “The writ of summons in every Admiralty action in rem shall be in the Form No. 6 in Appendix A, Part I, with such variations as circumstances may require.” In the said Form No. 6 referred to in this rule, it will be seen that the writ is directed to be served on the owners or the persons interested in the ship or vessel or cargo. The writ issued in the present suit was not directed to be served on the defendants as owners of a ship or cargo. Indeed, these proceedings were commenced by a process unknown in admiralty practice.

The writ was especially endorsed and was directed against an insurance company, not as the owners of any ship or cargo. The endorsement on the said writ of summons also indicates that the plaintiffs’ action is founded entirely on contract, and the statement of claim, which accompanied the writ, sets out the details of the contract. I think this is a clear case of an ordinary action in personam and the proceedings herein are in form proceedings in personam. I therefore hold that the present action is not an admiralty action in rem, and I am of the view that rules 1 and 11 of Order 48A are applicable in this suit.

Those rules provide as follows:

“1. 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.”

“11. Any person carrying on business within the jurisdiction in a name or style other than his own name may be sued in such name or style as if it were a firm name; and, so far as the nature of the case will permit, all rules relating to proceedings against firms shall apply.”

The meaning of the two rules is clear. Under these rules, a single person carrying on business in a firm name can be sued as a defendant under the said firm name. But that person, however, cannot institute an action in the firm name.

The next question to be answered is whether the plaintiffs were bound to comply strictly with the provisions of the said Order 48A, r. 1 and whether their failure to do so has any effect on this action? There is no doubt that “Wadad Haddad Fisheries” is a firm name. Certified

[p.506] of [1973] 1 GLR 501 copies of the certificate of registration and the registration form which had to be completed before the said certificate of registration could be issued, were annexed to the defendants’ affidavit, filed on 1 February 1973. These documents show that one Madam Ramia alone is the sole owner of this firm. That is, this Madam Ramia alone is supposed to be carrying on business in the name of the firm.

In the circumstances, all actions by the firm, “Wadad Haddad Fisheries” ought to be brought in the name of the sole owner, the said Madam Ramia: see the Gihoc case (supra). In that case, the Court of Appeal held that a single person cannot sue in a firm name, either under rule 1 or rule 11 of Order 48A. In delivering the unanimous judgment of the court, Archer J.A. at p.26 of the report, said:

“We think rule 11 should be carefully contrasted with rule 1 of Order 48A. Under rule 1 any two or more persons carrying on business within the jurisdiction may sue or be sued in the firm’s name. Under rule 11, any person carrying on business within the jurisdiction may be sued under the firm name. Rule 1 has a wider ambit whereas rule 11 has a narrow scope. In rule 1, there must be more than one person who can sue or can be sued in the firm name. Under rule 11, one person may be sued as defendant under the firm name. If it had been intended to enable such an individual to sue also as plaintiff under the firm name, rule 11 would have expressly provided for such a case. But the rule is completely silent and it is not open to any court of law to give it a greater field of operation. Rules of court, like the Queensbury rules in boxing, are meant to be observed by litigants and enforced by the courts. Where there is no rule of court enabling a party to take a certain course or mode of action, the party must show legal justification for the course taken.”

I am therefore of the opinion that the plaintiffs herein are in the same position as the plaintiffs in the Gihoc case (supra). The case of The Assunta (1902) 86 L.T. 660, being relied upon by learned counsel for the plaintiffs, has no application in the present case. Because the facts involved in that case are different from those so far known in the case herein. Furthermore, the action in The Assunta case was an admiralty action in rem, while the present suit, as I have held, is an ordinary common law action in personam. Be that as it may, even if the present action had been found to be an admiralty action in rem, I do not think the position of the plaintiffs would have been any better. It would still have been necessary for the plaintiffs to comply strictly with the provisions of Order 48A, r. 1. In The Assunta case, any doubt which might have arisen as to whether or not Order 48A, r. 1 was applicable to admiralty actions in rem, was cleared. In the course of his judgment, Jeune P. at p. 662, said, “if the question in this case was whether Order XLVIIIA, r. 1, applied to Admiralty jurisdiction I am not prepared to hold that it does not . . . “ (The emphasis is mine.)

However, should the court invoke its powers under Order 70, r. 1 in favour of the plaintiffs, and then allow the plaintiffs to amend the

[p.507] of [1973] 1 GLR 501 title by substituting Madam Ramia for the present plaintiffs Wadad Haddad Fisheries? Order 70, r. 1 provides that non-compliance with any of the rules should not “render any proceedings void unless the Court or a Judge shall so direct, but such proceedings may be set aside either wholly or in part as irregular, or amended, or otherwise dealt with in such manner and upon such terms as the Court or Judge shall think fit.” (The emphasis is mine.)

It seems to me that Order 70, r. 1 applies only to the situation where the non-compliance with any of the rules of court merely makes the proceedings irregular and not where it renders them null and void. In the former case, the proceedings are valid, though irregular, and the court has unlimited discretion, under the said rule, as to what order it will make in the circumstances. That is, the court may order amendment or otherwise deal with the proceedings in such manner and upon such terms as the justice of the case may demand. But the court cannot exercise its discretion under Order 70, r. 1 to save the proceedings, if the failure to comply with the rules makes the said proceedings null and void: see the dictum of Akufo-Addo J.S.C. (as he then was) in Mosi v. Bagyina [1963] 1 G.L.R. 337 at p. 346, S.C. That dictum was referred to with respectful approval by Amissah J.A. who delivered the unanimous judgment of the Court of Appeal in Armar v. Armar, 21 April 1969, unreported; digested in (1969) C.C. 73.

The distinction between an order or a proceeding which is a nullity and one which is a mere irregularity was discussed at great length by the English Court of Appeal in the case of Craig v. Kanssen [1943] 1 All E.R. 108. It may be remembered that in that case the proceedings which must be inter partes were taken ex parte, and it was held that that was not a mere irregularity, but had the effect of making the order, based on such proceedings, a nullity, and the appellant was entitled ex debito justitiae to have the said order set aside.

What has happened in the present case is not a mere irregularity which can be dealt with under Order 70, r. 1. It is of a character with which Order 70, r. 1 is not concerned. Because the defect is much more than an irregularity, for it goes to the root of the action and cannot therefore be cured. In other words, Order 48A, r. 1 is mandatory and non-compliance with its provisions will not amount to a mere irregularity which is capable of being waived, but will render void the whole proceedings. Thus, in the first place, the firm herein, as I have held, had no legal status, whether as an individual person or as a corporate person, to institute the action. So legally, there is no plaintiff before the court and so there is nothing to substitute or amend in order to save the proceedings. In short, the writ of summons itself is a nullity and it follows that the subsequent proceedings are also null and void. Consequently, Order 70, r. 1 has no application in a situation like this.

Counsel for the plaintiffs further contended that the objection was not raised timeously. That is, it was not raised “within reasonable time,” but was raised after the defendants had taken a “fresh step with knowledge of the irregularity.” So the defendants’ said objection, counsel

[p.508] of [1973] 1 GLR 501 submitted, is invalidated by Order 70, r. 2. Order 70, r. 2 provides as follows: “No application to set aside any proceedings for irregularity shall be allowed unless made within reasonable time, nor if the party applying has taken any fresh step after knowledge of irregularity.”

It appears the defendants became aware of the defective nature of the plaintiffs’ writ of summons only after the case for the parties had closed and not before. In any event, as already stated, the defect here is a fundamental one and has brought about an irregularity which has made the whole proceedings null and void. And in that case, it does not even lie within the power of the defendants to waive the said irregularity. In the circumstances, even if it had been found that the defendants took a “fresh step” after they had become aware of the said irregularity, that would not have made any difference, neither would that have prevented the court from setting aside the proceedings. Because the court, having found the proceedings to be a nullity, has no option in the matter but to set them aside; and, indeed, the defendants are entitled ex debito justitiae to have them set aside.

In the case of Craig v. Kanssen (supra) Lord Greene M.R., who read the judgment of the court, referred to several authorities dealing with the two classes of irregularity and with the scope of Order 70, and then came to the following conclusion at p. 113 of the report that, “Those cases appear to me to establish that an order which can properly be described as a nullity is something which the person affected by it is entitled ex debito justitiae to have set aside.” I am therefore of the opinion that none of the rules of Order 70 can be applied to rescue the present proceedings. I must also mention that in the Gihoc case (supra), the locus standi of the plaintiffs, Vincenta Publications, was raised or challenged, for the first time, when the case was on appeal before the Court of Appeal, and the said court never thought it was too late in the day for counsel for Ghana Industrial Holding Corporation to raise that objection. In that respect, I am of the view that this case falls within the principles laid down by the Court of Appeal in the said Gihoc case, and that the defendants are not estopped by their delay, if any, or by conduct from challenging the legal status of the plaintiffs.

I therefore hold that since Madam Ramia is the sole proprietress of the firm, Wadad Haddad Fisheries, she cannot come to court as a plaintiff under the said firm name. In other words, the plaintiffs had no legal capacity to bring the action.

In the result, the objection will be upheld. The writ and all the subsequent proceedings are hereby set aside as null and void. Of course, this does not prevent the proper person, Madam Ramia, from instituting fresh action against the defendants.

The defendants will have their costs fixed at ¢98.00 inclusive.

DECISION

Objection upheld.

Order accordingly.

S.Y.B.-B.