REPUBLIC vs. NON-PERFORMING ASSETS RECOVERY TRUST; EX PARTE BANK FOR HOUSING & CONSTRUCTION [1995-96] 1 GLR 591

CASES REFERRED TO

(1) Republic v High Court, Sekondi; Ex parte Mensah (Consolidated), 24 May 1994, unreported.

(2) Republic v High Court Registrar, Kumasi; Ex parte Yiadom I [1984-86] 2 GLR 606, SC.

NATURE OF PROCEEDINGS

APPLICATION by the Bank for Housing and Construction (BHC) to the Supreme Court for, inter alia, an order of certiorari to quash the decision of the Non-Performing Assets Recovery Tribunal requiring BHC to pay a specified sum to the other shareholders of Nsemmere Quary Ltd, which BHC held majority shares, and for an order restraining the tribunal from levying execution on the property of BHC. The facts are sufficiently set out in the ruling of Charles Hayfron-Benjamin JSC.

COUNSEL

John Davies for the applicant.

Charway Dodoo for the respondent.

JUDGMENT OF CHARLES HAYFRON-BENJAMIN JSC

Charles Hayfron-Benjamin JSC delivered the first ruling at the

[p.593] of [1995-96] 1 GLR 5 invitation of Aikins JSC. On 22 May 1996 consequent upon an application by the Bank for Housing and Construction invoking our supervisory jurisdiction in the matter of a ruling by the Non-Performing Assets Recovery Tribunal made on 14 December 1995, the Non-Performing Assets Recovery Trust (hereinafter referred to as the trust) filed a “notice” that at the hearing of the instant application, the trust by their counsel will raise no fewer than fourteen preliminary objections.

It is difficult to deduce from these general objections which of them were really such preliminary objections as would induce the court to dismiss the application in limine. However, it was contended that the application was misconceived. In the main, the trust having tried to make capital of the provisions of the Non-Performing Assets (Loans, Investments) Recovery Law, 1990 (PNDCL 242) concluded by paragraph (13) of their notice of preliminary points for legal arguments that:

“(13) The trust contends that certiorari does not lie on the facts; and that Bank for Housing and Construction has misconceived the scope and powers of the trust and the NPAR Tribunal. Because where it is within the powers of the trust, the NPAR Tribunal is clothed with jurisdiction and has competence to examine the matter in issue and to give a ruling thereon.”

By this statement, counsel was understood to mean that the NPAR Tribunal was “clothed with jurisdiction” and the exercise of that jurisdiction could not be challenged in the superior courts by resort to prerogative applications.

As it turned out, counsel was in grave error because with the inauguration of the Fourth Republic and the Constitution, 1992 the existing law had to be brought into conformity with the Constitution, 1992. Accordingly, PNDCL 242 had been amended in relevant parts by the Supreme Court Rules, 1970 (CI 13) and the substratum of counsel’s objection had been removed. His “preliminary points for legal arguments” therefore failed. In my respectful opinion; the Bank for Housing and Construction’s application is not misconceived for the grounds averred by the trust and I will overrule it.

The instant application is of rather small compass. The applicant

[p.594] of [1995-96] 1 GLR 591 prays in aid the exercise of this court’s supervisory jurisdiction:

“for an order of certiorari to remove into the honourable court for the purpose of its being quashed the ruling of the NPAR Tribunal given on 14 December 1995 and for an order to restrain the NPAR Tribunal, its servants or agents from levying execution on the property of the applicant and for such further orders as this court may deem just.”

In the applicant’s affidavit in support of its action, it was contended on its behalf, inter alia, that the applicant was not originally a party to the litigation between the trust and a limited liability company called Nsemmere Quary Ltd of Sunyani, Brong Ahafo Region. The Bank for Housing and Construction being the majority shareholder and the financier of the Nsemmere Quary Ltd, had been invited by the Tribunal to explain certain matters and had been drawn into the litigation as an interested party because its interest was being threatened: That the “foreign risk element” which was not borne by the Government of Ghana was “erroneously” passed on to the Nsemmere Quary Ltd.

The Bank for Housing and Construction further contended that the particular non-performing asset of Nsemmere Quary Ltd which was by the order of the Bank of Ghana transferred to the trust was “the loan balance and not the company”, ie Nsemmere Quary Ltd. In the view of the Bank for Housing and Construction, the NPAR Tribunal failed to appreciate the dual role played by the bank as a financier and as a shareholder of the company.

The decision of the NPAR Tribunal made on 14 December 1995 had the effect of not only removing the Bank for Housing and Construction as a member of the company, but also that the amount of ¢8,470,190.14 should be paid by the Bank for Housing and Construction to the shareholders and not to the company.

This amount of a little over ¢8 million represented “the over-payment made by Nsemmere Quary Ltd if the exchange risk element had not been passed on to it.” After complaining against costs of ¢1 million awarded against it, the Bank for Housing and Construction asserted that the government bonds in respect of the company’s indebtedness to it were given to it as the financiers and not as shareholders of the company.

Finally, the applicant, the Bank for Housing and Construction

[p.595] of [1995-96] 1 GLR 591 averred that:

“ . . . the tribunal erred in ordering that the amount of ¢8,470,190.14 should be paid to the other shareholders and not to the company as a whole in view of the fact that the company is still in operation.”

It is unfortunate that the respondent, the NPAR Tribunal, and the interested parties did not seem to appreciate the nature of the application which the applicant-bank had presented to the court. The interested parties rather went into the merits and, as it were, requested the Bank for Housing and Construction’s motion to be “struck out” and the matter gone into afresh. It must however be said in favour of the NPART Tribunal that it recognised that:

“(7) The issues that emerged from the pleadings for determination were two-fold, namely: whether or not the company was in fact indebted to the Bank for Housing and Construction at all; and whether the company had overpaid its debt, and if so how much is the Bank for Housing and Construction to refund to the company.”

It seems to me that the NPAR Tribunal proceeded entirely by a different method of reasoning which was unsupported by the pleadings before it. The applicant — the Bank for Housing and Construction — complains that the NPAR Tribunal did not apply the High Court (Civil Procedure) Rules, 1954 (LN 140A) which it was bound to comply with. Thus even though the Bank for Housing and Construction was not joined as a party, yet it was made to bear the brunt of the decision.

Yet again, the NPAR Tribunal found that:

“it was the Bank for Housing and Construction which being the majority shareholder passed on the risks aspect of the operations of the defendant to the defendant-company contrary to the agreement executed between the Government of Ghana and the defendant-company.”

It was admitted by the Bank for Housing and Construction that it had only intended to transfer the foreign exchange risk element in the loan to the NPART and if the error had not occurred it could not be said that

[p.596] of [1995-96] 1 GLR 591 the assets of the company — Nsemmere Quary Ltd — would not have been non-performing within the meaning of PNDCL 242. Besides, the Bank for Housing and Construction by paragraph (19) of their affidavit in support of their application averred that “. . . the company is still in operation.” If indeed the company is still in operation then its assets were not “non-performing” and there was therefore no jurisdiction in the NPAR Tribunal to deal with the affairs of the Bank for Housing and Construction with any liabilities of the company.

It seems to me, having regard to the matters discussed in the decision of the NPAR Tribunal, that it exceeded its jurisdiction when it failed to direct its attention to the provisions of section 7 of PNDCL 242 and in particular to subsection (2)(a) thereof which authorises the sale of “enterprises” or “ventures.” Certainly within the context of this subsection the sale or transfer of an individual’s or member’s shares is not one of the powers conferred on the trust capable of being enforced by the NPAR Tribunal.

The peculiar nature of this application arises from the fact that the NPAR Tribunal is one whose decision is by section 18(1) of PNDCL 242 final and there is no provision for appeal from its decision. But with the removal of the restrictions on the powers of the superior courts to extend their supervisory powers to such a tribunal as is contained in CI 13 this court in exercise of its constitutional powers may in appropriate cases exercise its jurisdiction to keep all adjudicating and administrative authorities and tribunals within due bounds.

In Republic v High Court, Sekondi; Ex parte Mensah (Consolidated), 25 May 1994, unreported, I had occasion to discuss the scope and extent of our constitutional powers of supervision of the courts within our municipality. Having considered the case of Republic v High Court Registrar, Kumasi; Ex parte Yiadom I [1984-86] 2 GLR 606, SC which considered similar provisions as to the scope and limits of article 132 of the Constitution, 1992, I then concluded with respect to Ex parte Yiadom I (supra) that: “In my respectful opinion, if there was any doubt about the scope and limits of the supervisory jurisdiction of this court—and indeed of the High Court — the matter has been put to rest by the provisions of article 132 of the Constitution, 1992 (and article 141 for the High Court). The article states:

‘132. The Supreme Court shall have supervisory jurisdiction

[p.597] of [1995-96] 1 GLR 591 over all courts and over any adjudicating authority and may, in the exercise of that supervisory jurisdiction, issue orders and directions for the purpose of enforcing or securing the enforcement of its supervisory power.”’

(The emphasis is mine.)

The issue of the supervisory writs is consigned to the interpretation provision of article 161 of the Constitution, 1992 which reads: “‘ . . . supervisory jurisdiction’ includes jurisdiction to issue writs or orders in the nature of habeas corpus, certiorari, mandamus, prohibition and quo warranto.” Thus the distinction made in Ex parte Yiadom I (supra) has gained constitutional acceptance. The purpose of the constitutional provision is to enable the Supreme Court and the High Court to control the actions of all other courts in matters not necessarily involving the issuance of prerogative writs and to issue such orders and give such directions as will ensure fairness and the expeditious disposal of cases. The court does not go into the merits of the case.

By article 132 of the Constitution, 1992 this court may “in the exercise of its supervisory jurisdiction, issue orders and direction for the purpose of enforcing or securing the enforcement of its supervisory powers.”

The application succeeds and the applicant will be entitled to the reliefs contained in the prayers on his motion paper. The decision of the NPAR Tribunal dated 14 December 1995 in the case Non Performing Assets Recovery Trust v Nsemmere Quary Ltd is hereby ordered to be brought up into the registry of this court that the same may be quashed and it is hereby quashed.

JUDGMENT OF AIKINS JSC.

I agree.

JUDGMENT OF BAMFORD-ADDO JSC. I agree.

JUDGMENT OF ADJABENG JSC. I agree.

JUDGMENT OF AKUFFO JSC.

I also agree.

DECISION Application granted.

DRKS