RE ASIEDU’S APPLICATION; ASIEDU v. GHANA FIBRE INDUSTRIES LTD. AND OTHERS [1968] GLR 617

DIVISION: HIGH COURT, ACCRA

DATE: 4 JULY 1968

BEFORE: EDUSEI J.

NATURE OF PROCEEDINGS

RULING on a preliminary objection to an application for an injunction to restrain a company from appointing a new director. The facts are sufficiently stated in the ruling.

COUNSEL

J. K. Agyemang for the applicant.

J. B. Quashie-Idun for the respondents.

JUDGMENT TO EDUSEI J.

The applicant, Joseph Agyei Asiedu, is asking this court to make an order restraining Ghana Fibre Industries Ltd. and

[p.618] of [1968] GLR 617

Mr. Frantisek Vaculik and Mr. J. B. Barnes, officers of the company from appointing a new director to sign the company’s statement of accounts since such a step will offend the provisions of sections 217 and 218 of the Companies Code, 1963 (Act 179).

The second respondent in this application, Mr. Frantisek Vaculik raised the point in his affidavit opposing the application that the application for an order of injunction should follow the issue of a writ of summons and since on such writ of summons has been issued by the applicant the injunction application is irregular and it should therefore not be entertained by this court. Section 217 of the Companies Code states:

“217. (1) The Court on the application of any member may by injunction restrain the company from doing any act or entering into any transaction which is illegal or beyond the power or capacity of the company or which infringes any provision of its Regulations, or from acting on any resolution not properly passed in accordance with this Code and the company’s Regulations, and may declare any such act, transaction or resolution already done, entered into, or passed to be void and of no effect: Provided that,

(a) nothing in this section contained shall derogate from the protection afforded by any provision of this Code to any person dealing with the company;

(b) in relation to acts beyond the capacity or power of the company, this section shall be subject and without prejudice to the provisions of section 25 of this Code;

(c) the right afforded to a member to apply to the Court under this section shall be without prejudice to any right he may have to institute proceedings against any director of the company pursuant to section 210 or to apply to the Court under section 218 of this Code.

(2) In any proceedings by a member under this section the Court may, if it shall think fit, order that the member shall give security for the costs of the company and may direct that the application shall be heard in chambers.”

Order 74 of the Supreme [High] Court (Civil Procedure) Rules, 1954 (L.N. 140A), also states:

“Where no provision is made by these Rules the procedure, practice and forms in force for the time being in the High Court

[p.619] of [1968] GLR 617 of Justice in England shall, so far as they can be conveniently applied, be in force in the Supreme Court of the Gold Coast.”

I am of the view therefore that in the absence of any specific provision regulating the procedure for such applications under section 217 of the Companies Code it becomes my judicial duty to seek aid from the practice in force in the High Court of Justice in England. In the 1964 Annual Practice (popularly referred to by lawyers as the White Book) at p. 1268 under the heading—Practice: Originating Notice of motion, there appears the following:

“Where a statute provides for an application to the Court without specifying the manner in which it is to be made, and the Rules do not expressly provide for any special procedure, such application may usually be made by originating motion … The notice of motion must be intituled in the matter of the Act under which application is to be made, and of the trust, property or person etc., to which it relates,….” The Companies Code, 1963 (Act 179), s. 217 provides for an application by way of injunction to be brought without specifying the manner in which it is to be made, and my view is that any such application which adopts the procedure set out in the 1964 White Book is proper and regular; this is exactly what the applicant has done in the case: see the title of this application, also see: Re Meister, Lucius & Bruning Ltd. [1914] W.N. 390. The application must of course state clearly the terms of the order sought. It is then filed in the registry and a reference number is given to the proceedings. This constitute the commencement of the proceedings, and a copy is served on the respondent in the same manner as a writ of summons is served but no appearance need be entered: see Re Abott’s Trade Mark (1904) 48 S.J. 351. In the circumstances of this application therefore I rule that the instant application is not irregular but it is properly before the court. It is a competent application. I must say, in fairness to Mr. John Quashie-Idun, counsel for the respondent, that after hearing the arguments of Mr. Agyemang who appeared for the applicant, he readily capitulated and conceded that the application was in order but pleaded with the court that pleadings should be ordered so that the facts in issue might stand out clearly, His contention was that the issues as stated in the numerous affidavits were not clear, and it is difficult to determine on whom lies the burden of proof. I am not persuaded by this argument when it is considered that averments can also be admitted and denied in affidavits in the same way as in pleadings and the facts in issue will then crystallise for [p.620] of [1968] GLR 617 determination. There is always an inherent power in the court to take evidence in such cases if the justice of the case requires that to be done. It is my considered view that such applications as the present one are much quicker and more effective, and parties then become aware of their rights and legal positions sooner. The legislature undoubtedly in my opinion provided this particular remedy for such matters in disputes as mentioned in section 217, which remedy is much quicker than an institution of proceedings by way of a writ of summons with its attendant stream of pleadings. It must be observed that trading companies must function and the procedure envisaged by section 217 of the Companies Code is to help put an end to those disputes concerning companies sooner. In these circumstances I cannot see any strong reasonable grounds which justify me to order pleadings in the instant application, and I therefore refuse the request of learned counsel for the respondents.

The application is to proceed. Cost of N¢50.00 to the applicant against the second respondent, Mr. Frantisek Vaculik.

DECISION

Objection overruled.

Application to proceed.

K.S.N.-D