NICHOLSON v. T. F. NICHOLSON LTD AND IN THE MATTER OF THE COMPANIES CODE, 1963 (ACT 179) SECTION 35 (1) (a) AND NICHOLSON v. T. F. NICHOLSON LTD. [1971] 1 GLR 67

DIVISION: IN THE HIGH COURT, ACCRA

DATE: 24 NOVEMBER 1970

BEFORE: ABOAGYE J.

CASES REFERRED TO

(1) In re Greater Britain Products Development Corporation, Ltd. (1924) 40 T.L.R. 488.

(2) Re Quartey, deceased; Quartey v. Quartey [1963] 1 G.L.R. 58, S.C.

NATURE OF PROCEEDINGS

APPLICATION to strike out an originating summons brought under section 35 (1) (a) of the Companies Code, 1963 (Act 179), for the rectification of the register of members of the defendant-company.

COUNSEL

U. V. Campbell for the plaintiff-respondent.

Jonathan Arthur for the defendants-applicants.

JUDGMENT OF ABOAGYE J

This is an application by Mr. Jonathan Arthur, counsel for the defendant-company herein, praying that the originating summons issued by the plaintiff be dismissed as being irregular or wrongly issued. The plaintiff had taken out the originating summons for the determination of the following questions: “(1) Whether T. F. Nicholson the plaintiff’s deceased father at the date of his death on 7 September 1969, was possessed of 25,001 shares of no par value in the defendant-company.

[p.69] of [1971] 1 GLR 67

(2) Whether the plaintiff having on 27 July 1970 obtained letters of administration to his aforesaid deceased father’s estate in Ghana is entitled to have his name entered in the register of members of the defendant-company in substitution for T.F. Nicholson.

(3) Whether the defendant-company is entitled in law to refuse to enter plaintiff’s name in the aforesaid register.

(4) Whether plaintiff is entitled to an order of the court on the defendant-company to rectify the register of members by having his name inserted as a member in respect of the aforesaid 25,001 shares.” The application is made under section 35 (1) (a) of the Companies Code, 1963 (Act 179), and is supported by an affidavit sworn to by the applicant, John Nicholson. [His lordship here read the relevant paragraphs of the affidavit in which the allegations of irregularities and fraud were made and continued:] The grounds upon which Mr. Arthur attacks the originating summons are stated in paragraphs 4, 5, and 6 of the affidavit of Eric Trench Anderson, the managing director of the defendant-company. The said paragraphs 4, 5 and 6 read as follows:

“4. That I am advised and verily believe the same to be true that as the plaintiff in the supporting affidavit to the said originating summons has alleged irregularities or fraud in the transfer of shares in T.F. Nicholson Ltd. the originating summons is irregular or wrongly issued.

5. That I am further advised and verily believe the same to be true that on the face of the originating summons the plaintiff is not entitled to any right the determination of which depends upon the interpretation of a statute.

6. That I am further advised and verily believe the same to be true that the determination of the questions posed in the originating summons does not in any way depend upon the construction of any statute.” Section 35 (1) (a) of the Companies Code, 1963 (Act 179), pursuant to which the originating summons was taken reads as follows: [His lordship here read the provisions of the section as set out in the headnote and continued:]

The section (section 35 (1) (a)), does not specify the procedure by which the application is to be made to the court which by section 2 of the Code is the High Court. One therefore has to look at Order 74 of the Supreme [High] Court (Civil Procedure) Rules, 1954 (L.N. 140A), for guidance. Order 74 reads: “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 the Gold Coast.”

[p.70] of [1971] 1 GLR 67

The Gold Coast is now Ghana.

Civil procedure now in force in the High Court of Justice in England is governed by the Rules of the Supreme Court 1965 which came into operation on 1 October 1966 (see the Supreme Court Practice 1970, Vol. 1). By Order 5, r. 3 of the said rules

“Proceedings by which an application is to be made to the High Court or a judge thereof under any Act must be begun by originating summons except where by these rules or by or under any Act the application in question is expressly required or authorised to be made by some other means.”

Order 102, r. 3 (1) of the rules (the English rules of the Supreme Court) provides that: “An application under section 116 of the Act for rectification of the register of members of a company may be made by originating summons or originating motion.” The “Act” mentioned is the English Companies Act, 1948 (11 & 12 Geo. 6., c. 38), and the words of section 116 thereof are congruent with those of section 35 (1)

(a) of our Companies Code, 1963 (Act 179).

Acting under Order 74 of the Supreme [High] Court (Civil Procedure) Rules, 1954, I hold that, subject to what I will shortly discuss, applications for the rectification of the register of members of a company under section 35 (1) (a) of the Companies Code, 1963, should be by originating summons or by motion and both the company and the person in whose name the shares have been registered should be made respondents. The practice in England, as indeed it is in this country, on the use of originating summons is that the summons is not to be entertained, if it is clear that there is something in dispute to call for investigation. See In re Greater Britain Products Development Corporation, Ltd. (1924) 40 T.L.R. 488 and Re Quartey, deceased; Quartey v. Quartey [1963] 1 G.L.R. 58, S.C. In the first case cited Swift J. said at page 489,

“It did not appear to have been pointed out to the Judge that the procedure under section 32 of the Companies (Consolidation) Act, 1908, which was a perfectly proper procedure to adopt, did not produce rectification of the register if there emerged matters of difficulty which could not be conveniently dealt with on a summons in the King’s Bench Division or on a motion in the Chancery Division. It was a convenient remedy, but one on which no order would be made if it appeared that there was some question in dispute to call for investigation.

Where it was clear that there was something to be answered and something to be investigated, the ordinary course, as far back as the Court had been able to trace, had been for the Judge to dismiss the summons or motion, but to leave it open to the party to bring his action.”

In the affidavit attached to the summons it is deposed, inter alia, that the shares which had stood in the name of T. F. Nicholson had been allegedly sold by T. F. Nicholson to Mrs. Joyce Anderson and one

Mrs.

[p.71] of [1971] 1 GLR 67

J.E. Cartwright and that the latter had resold those she had allegedly bought to Mrs. Anderson. It is further deposed that T. F. Nicholson never transferred any of his shares to anybody. The question therefore arises as to whether or not T. F. Nicholson in fact sold and transferred his shares to Mrs. Anderson and Mrs. Cartwright and this can best be decided in an action. In accordance with existing practice I will dismiss the summons with liberty to bring an action. The originating summons is dismissed with N¢42.00 costs to the defendant-company.

DECISION

Application granted.

N. A. Y.