Northern Engineering Co., Ltd. v. Djokotoe [1980] GLR 332.



Page 334

Taylor J. The plaintiffs, the Northern Engineering Co., Ltd. claim against the defendant, Mr. C. K. A. Djokotoe, the sum of ¢5,306.80 being the amount which the defendant is alleged to have caused to be paid to one Cletus K. Amoah from the plaintiffs’ funds without the lawful authority of the plaintiffs. The writ of summons was specially endorsed and so proceeding under the provisions of Order 14 of the High Court (Civil Procedure) Rules, 1954 (L.N. 140A), the plaintiffs have moved the court for liberty to enter judgment against the defendant for the claim so endorsed on the said writ of summons.

On the hearing of the application, counsel for the defendant has raised a preliminary objection to the locus standi of Mr. A. A. Luguterah, the counsel for the plaintiffs in these proceedings, to act as solicitor or counsel for the said plaintiffs (hereinafter referred to as N.E.C. where appropriate). He has pointed out that Mr. A. A. Luguterah is the acting managing director of the N.E.C. He has also drawn attention to a fact conceded by Mr. A. A. Luguterah that he, Mr. Luguterah, is a practising lawyer. On the basis of these facts he argues that by the provisions of rule 1 (2) (a) of the Legal Profession (Professional Conduct and Etiquette) Rules, 1969 (L.I. 613), Mr. Luguterah is not entitled to act as solicitor or counsel in this case.

The relevant provisions of the rules are:

“1. (1) A lawyer in practice is—

(a) a lawyer who is entitled to practise and who holds himself out as ready to do so, or is employed in a whole-time occupation where he performs legal duties; or

(b) a lawyer whose regular occupation is that of editor or reporter of any series of Law Reports entirely written and edited by lawyers for use by the legal profession.

(2) A practising lawyer shall not—

(a) be a managing director or executive chairman in any company or an active partner in any business.

(b) carry on any other profession or business which conflicts or involves a serious risk of conflict with his duties as a practising lawyer;

Provided that the General Legal Council may for the avoidance of doubt give a ruling on an application made to it in writing in any particular case as whether a profession or business conflicts or involves a serious risk of conflict with the duties of a person as a practicing lawyer.”

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I must say at this stage that I find Mr. Mensa-Etsi’s argument very simple and straightforward having regard to the language of rule 1 (2) (a) of L.I. 613. However, as against his argument, Mr. Luguterah as counsel for the N.E.C. has submitted that the preliminary objection is misconceived. He cited the provisions of section 208 of the Companies Code, 1963 (Act 179), which provides:

“208. Unless otherwise provided in the company’s Regulations, any director may, notwithstanding section 205 of this Code, act by himself or his firm in a professional capacity for the company, except as auditor, and he or his firm shall be entitled to proper remuneration for professional services as if he were not a director.”

It will be recalled that under section 205 of the Companies Code, 1963, a director is enjoined, inter alia, not to place himself in a position where his duty to the company conflicts or may conflict with his personal interests or his duties to other persons. In view of these provisions Mr. A. A. Luguterah submitted that as a practising lawyer he is a professional man and that under the provisions of the said section 208 of Act 179, he as a director of the N.E.C. is entitled to practise his profession and render services to the N.E.C. either by himself or his firm and to receive remuneration for such services. He submitted that the proviso to rule 1 (2) (b) of L.I. 613 applies to the whole of rule 1 of the said rules and not merely to rule 1 (2) (b). He submitted further that rule 1 (2) (a) was not intended and could not reasonably be intended to debar practising lawyers from holding the offices specified therein, in business generally but only in such businesses where there is obviously going to be a conflict or where there is likely to be conflict between the interest of the company and the interest of the individual concerned in his professional capacity. I am afraid I find counsel’s submissions on behalf of the N. E. C. to be rather far-fetched and contrary to the plain language of the statutory provision to which Mr. Mensa-Etsi referred me.

Be that as it may, having heard counsel for the parties, it seems to me that the issues are quite simple although the arguments advanced by counsel for the plaintiffs tended to confuse the issues. It seems to me from a reading of the whole of rule 1 that the proviso is obviously meant to apply to rule 1 (2) (b) because that is the only sub-rule dealing with conflict of interests. Although Mr. Luguterah argued the contrary, I do not see how even that argument if accepted can advance his case, or help to explain rule 1 (2 (a). In any case the reference to section 208 of Act 179 is clearly irrelevant. That section is quite obviously dealing generally with directors, whereas, rule 1 (2) (a) of L.I. 613 is primarily concerned with the specific

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status of a managing director. The reference to section 208 of Act 179 is therefore uncalled for. Indeed section 208 of Act 179 is dealing with directors not managing directors. Rule 1 (2) (a) of L.I. 613 is really easy to understand. As a preliminary to understanding its provisions, I have kept in mind the well-known statutory provision contained in section 27 of the Interpretation Act, 1960 (C.A. 4) that is “ ‘shall’, shall be construed as imperative” and is thus not permissive or empowering. The provision that “A practicing lawyer shall not be a managing director ... in any company” is so clear and mandatory in its legislative language and that I cannot understand how its implication can be avoided by permitting a practicing lawyer to be a managing director or to act as a managing director in a company. Speaking for myself I think the only argument that can conceivably be advanced to resist the clear meaning of this provision is the rather artificial and not convincing proposition that Mr. Luguterah is only holding an acting appointment but that he is not the substantive holder of the post of managing director. Since the duties of an acting managing director and those of the managing director must in the nature of things be the same, this argument is not persuasive and it is demonstrably hollow and of course counsel did not resort to it. Counsel however has argued by reference to the provisions of the Companies Code and the proviso to section 1 (2) that he is entitled as a practising lawyer to act as the managing director of N.E. C. His thesis obviously is that in order to understand properly the meaning of section 1 (2) (a) of L.I. 613, one must have to consider sections 205 and 208 of the Companies Code, 1963, as well as the provisions of sections
23 and 53 of the Legal Profession Act, 1960 (Act 32). These provisions of the Legal Profession Act are the empowering provision under which L.I. 613 was promulgated. The recourse to these devices for the purpose of construing the meaning of section 1 (2) (a) of L.I. 613 recalls to my mind a question which an eminent English judge once asked. Lord Macnaghten in Mersey Docks and Harbour Board v. Turner, The Zeta [1893] A. C. 468 at p. 491, H.L. asked this pertinent question: “why should we reject the plain and ordinary meaning of words which we find in the statute?”

I am afraid in all his efforts counsel did not answer this rather relevant question. The attempt to interpret the provisions of rule 1 (2) (a) of L.I. 613 is in my view uncalled for, for as Scott L.J. said in Croxford v. Universal Insurance Co., Ltd.; Norman v. Gresham Fire and Accident Insurance Society [1936] 2 K.B. 253 at p. 280, C.A.; “Where the words of an Act of Parliament are clear, there is no room for applying any of those principles of interpretation, which are merely presumptions in cases of ambiguity.” Page 336

It is my considered opinion and I so hold that, as a practising lawyer, Mr. A. A. Luguterah is debarred from acting as managing director of N.E.C. This is because that is what in effect section 1 (2) (a) of L.I.
613 provides, and carried to its logical limits, it can be rendered in another way, namely, that as acting managing director, Mr. Luguterah shall not act as a practising lawyer.

Mr. Luguterah has been appearing before me as a practising lawyer in a number of cases. He is also currently appearing before me in two other N.E.C. cases which were adjourned to await this ruling. I have read and studied the provisions of the Legal Profession Act, 1960 and L.I. 613. They contain a lot of prohibitory provisions but substantially they do not in terms impose sanctions for their breach apart from advocating a reference of disciplinary cases to the disciplinary committee of the General Legal Council.

In this particular case I have no doubt that counsel did not set out deliberately to misconduct himself in his profession. I am quite sure counsel took on the job of acting managing director without adverting to the provisions of L.I. 613. In the circumstance I do not propose to refer the matter to the disciplinary committee of the General Legal Council pursuant to the provisions of section 18 of the Legal Profession Act, 1960; instead I will uphold the preliminary objection of counsel, holding as I have, that Mr. Luguterah while acting as managing director of N.E.C. is by law not permitted to be a practising lawyer. I hereby refuse to give him further audience in this case. I order therefore that until Mr. A. A. Luguterah files an affidavit in the registry of this court that he has ceased to act as managing director of N.E.C. he is hereby debarred from appearing before this court or any other court in Ghana.

The preliminary objection is upheld. The further hearing of the case will be adjourned to 14 June 1979 to enable the N.E.C. to advise itself. By agreement of parties there will be no order as to costs.

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