NAME: OPHELIA AKOSUA MENSAH

STUDENT ID: WIUC/10/0680

COURSE: COMPANY LAW 2

LECTURER: GUURE BROWN GUURE

DATE: 27TH FEBRUARY, 2022.

ASSIGNMENT: WRITE SHORT NOTES ON THE CASE OF QUARCOOPOME V. SANYO ELECTRIC TRADING CO

LTD & ANOTHER, 2009 SCGLR 213.

QUARCOOPOME V. SANYO ELECTRIC TRADING CO LTD & ANOTHER

In this case, the plaintiff, Quarcoopome, alleged that he was appointed a director by the defendants by
oral contract. After he was relieved of his position, he brought an action against the defendants for
claims inter alia, remuneration for the services he rendered to the defendant company. The trial court
found that although there was no written contract, the plaintiff had rendered his services to the
defendants and hence, deserved some form of remuneration on quantum meruit.

This judgment by the trial court was set aside upon appeal. The Court of appeal held that the
remuneration on quantum meruit was in contravention to section 194 of the Companies Code 1963, Act
179. A second appeal brought this case to the Supreme Court. The plaintiffs sought for the Supreme
Court to set aside the ruling of the Court of Appeal and re-instate the trial court ruling.

The issues that were tackled by the court was related to the position of the plaintiff as director of the
defendant’s company and also whether the unpaid plaintiff/appellant’s remuneration for service
rendered as a director of the respondent company was maintainable and if so, whether it was to be
determined in Quantum Meruit or in accordance with Section 194 of the Companies Act, 1963, Act 179?

The court laid down certain undisputable facts of the case, gathered from evidence from the trial case
till that time. First of all, that, the plaintiff appellant rendered services as a director to the defendant’s
company.

Both the trial court and the Court of appeal held that there was enough evidence to prove that the
plaintiff was indeed, a director of the defendant’s company. However, according to Section 181 of the
Companies Code, 1963, Act 179, the plaintiff was to consent to his appointment as a director in writing.
Also, the names of the first directors of companies are found in the company’s regulations. Here, there
was no ordinary resolution of the company in a general meeting appointing the plaintiff. There was also
no evidence to his consent in writing to his alleged appointment. The only written evidence of his
position as director was a letter from the managing director to the board informing them that the
plaintiff had just been appointed as a director. Also, in examination, the defendant’s agreed that the
plaintiff was a director in their company. This, according to Section 179 of Act 179 proves that the
plaintiff was no in fact ‘duly’ appointed as a director however, since he acted and held out himself and
allowed himself to be held as a director, he was a ‘de facto’ director.

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The second part of the issue was whether he was entitled to remunerations. Section 194 states that any
remunerations to directors are to be determined from time to time by ordinary resolution of the
company and not by any regulations or agreement. Although in order to protect directors, Section
185(7) says that they are still entitled to bring an action for compensation they are entitled to.

Now, while the trial judge held that the plaintiff had rendered service to the defendant and was entitled
to remunerations on quantum meruit basis, the Court of Appeal did not agree. ‘Quantum Meruit” is
Latin for ‘what he has earned’ or ‘as much as he deserves’. The judgment of the Supreme Court suggests
that the trial court judge did not analyze or take the Section 194 of Act 179 into consideration before
making his judgment, and that if he had, the judgment would have been different and in agreement to
that of the Court of Appeal. This is because the law clearly stated that remunerations are to be agreed
only by ordinary resolutions of the company and nothing else. Not even a court order.

CURRENT LAW ON THE MATTER

Section 170(2) (a) of the new Companies Act, 2019 (Act 992) defines a de facto director.

Section 185 of the new Companies Act, 2019 ( Act 992) states clearly again that the remunerations a
director is entitled to is determined from time to time by an ordinary resolution by a company and not
by any regulation or agreement.

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