Acellam v Julia Guest House Limited & 2 Others (Petition Cause 5 of 2020) [2023] UGRSB 15 (3 March 2023)


#### THE REPUBLIC OF UGANDA

### IN THE MATTER OF THE COMPANIES ACT NO.1 OF 2012

## AND

# IN THE MATTER OF JULIA GUEST HOUSE LIMITED

**COMPANY PETITION CAUSE NO.0005 OF 2020**

ROBERT ACELLAM:::::::::::::::::::::::::::::::::::

#### **VERSUS**

## 1. JULIA GUEST HOUSE LIMITED

2. JULYA OTTI

3. MARGRET OTTI::::::::::::::::::::::::::::::::::

## **RULING**

## (Before Muliisa Solomon Registrar of Companies 03/03/2023)

## A. Background

- 1. On 20/08/2020, Robert Acellam filed a petition seeking for orders that; - a) That the Registrar General refers the question of ownership, operations, accountability for the proceeds of the company property comprised in LRV 2405 Folio 7 at Plot 14-22 Okwok Road, Kitgum Town, and the determination of appropriate remedies to the High Court. - b) That the Registrar General appoints one or more competent inspectors to investigate the affairs of the company.


- c) That the current shareholding structure of the company be reviewed and reverted to the position it was at incorporation in 1995. - d) That the Registrar General makes orders for the $2^{nd}$ and $3^{rd}$ respondents to account to the petitioner for the conduct of the company affairs for the past 20 years. - e) That the Registrar General makes orders for the proper regulation of the conduct of the company's affairs in the future including calling of meetings. - f) That the Registrar General makes any other orders as he/she may think fit with regard to the Companies Act. - g) That the costs of the petition be awarded to the petitioner against the respondents. - **B.** Representation - 2. The petitioner was represented by Ivan Omoloi and the respondents were represented by Owundo David Wandera together with Kidega Christopher. - C. The brief facts of the petition were; - 3. The petitioner alleges that the shareholding structure was altered without the involvement or consent of the other shareholders when the resolution dated 23<sup>rd</sup> September 2008 was filed. That at incorporation, the company shareholding structure included Julya Otii with 50 shares, Cedrick Owor with 25 shares, and Robert Acellam with 25 shares, and it was changed to Julya Otti with 50 shares and Margret Otti with 50 shares. - 4. That the annual returns of the company in $2017$ filed with the company registry show a further alteration of the shareholding structure of the company to Julia Otii 5 shares and Margret Otii 95 Shares without the participation of the other shareholders including the petitioner.


- 5. That the said alterations in the shareholding structure of the company were done illegally and unlawfully and were designed to further the selfish interests of the one of the original shareholders of the company namely Julia Otti and to benefit her daughter Margret Otti and to further dilute the Company's shareholding structure and erase the petitioner completely from the company. - 6. That the company owns a developed commercial property in Kitgum Town comprised in LRV 2405 Folio 7 at Plot 14-22 Okwok Road, Kitgum Town, Wherefrom, the $2^{nd}$ and $3^{rd}$ respondents have been collecting rental money, and illegally converting the same to their personal use, without making an account for the proceeds for the past 20 years. - 7. That the petitioner has been illegally and unlawfully kept out of all activities, operations, decision making and management of the company. - 8. That the company has been grossly mismanaged and is now heavily indebted in taxes and municipal remittances, and losses that there is need for a forensic audit to trace and recover its lost assets and income for the past 20 years. - 9. That the $2^{nd}$ and $3^{rd}$ respondents have not been complying with the companies Act in their illegal activities and the manner in which they are conducting the company affairs is oppressive and unfairly prejudicial to the petitioners' interests as a member of the company. - 10. That the respondents have deliberately refused to participate in company meetings that the petitioner called for, with manifest intentions of not accounting to the petitioner on the affairs of the company, and sanctioning statutory compliance as required by the law. - 11. A series of meetings were conducted before different registrars to have the dispute resolved and all attempts were futile since the parties failed to agree. - 12. I summoned parties to appear before me on the $12/12/2022$ and on that day, the Petitioner was represented by Ivan Omoloi whereas


the Respondents were represented by Kidega Christopher and Owundo David Wandera.

- 13. In that session it was greed that that the petitioner files his statutory declaration in support of the petition on $14/12/2022$ and the respondents to file their statutory declarations in defense on $29/12/2022$ and any statutory declaration in rejoinder by the petitioner on $2/01/2023$ . - 14. The parties were allowed to mediate and in case any consent was to be reached upon the parties, it would be filed at the next hearing that was scheduled for 18/01/2023 at 10am. - 15. On $18/01/2023$ , the parties appeared; - 16. The representation was the same as that of $12/12/2022$ , the parties had failed to reach an agreement and it was agreed by the parties that the matter be set down for hearing. - 17. It was agreed that the parties file a joint scheduling memorandum on $20/01/2023$ , the petitioner files his written submissions by $27/01/2023$ , the respondents file their submissions on 3/01/2023 and the petitioner file a rejoinder by $06/01/2023$ . the ruling was to be delivered on Notice to the parties. - 18. The parties filed accordingly. - 19. From the joint scheduling memorandum filed on 02/02/2023 the agreed issues for determination were; - a) Whether the petitioner has a cause of action - b) Whether the petitioner lawfully ceased to be a member of the company - c) Whether the petitioner is entitled to the remedies sought.

Issue 1

Whether the petitioner has a cause of action.

- D. Petitioners Submissions. - 20. Counsel for the petitioners defined a cause of action according to the decision of Al Hajj Nasser N Ssebaggala Vs the Attorney

General Constitutional Petition No.1 of 1999 where a cause of action was defined as every fact, which if traversed, would be necessary for the plaintiff to prove in order to support his right to a judgement of court. It must include some act done by the defendants and it is not limited to the actual infringement of the right sued on but includes all material facts on which it is founded. It does not comprise evidence necessary to prove the facts but every fact necessary for the plaintiff to prove to enable him to obtain a decree and everything that if not proved would give the defendant a right to an immediate judgment must be part of the cause of action. The action of action must be antecedent to the institution of the suit

21. Therefore, that for one to claim a cause of action the following essentials must be must be demonstrated; The plaintiff enjoyed a right.

The right was violated.

The defendant is liable.

- 22. That with regards to the petition presented, the petitioner avers and contends that he was a shareholder in the $1<sup>st</sup>$ respondent which was his right and he enjoyed the same, his rights to the said shares was violated by unlawfully being transferred to the $3<sup>rd</sup>$ respondents and these actions of causing such transfer were initiated by the $2^{nd}$ and $3<sup>rd</sup>$ respondents. - 23. That the petitioner indeed has a valid cause of action against the respondents. - **E. Respondents Submissions** - 24. The respondents stated that they agree with the petitioners' cause of action, however to resolve this issue more appropriately, the question to ask is whether the petitioner has locus standi to bring this petition. - 25. Locus standi according to the black's Law Dictionary 5<sup>th</sup> Revised **Edition** is the right or capacity to bring an action or to appear in court. This petition was brought under a specific law that is **Section**


**247 of the companies Act;** under this Section, it is only a member of the company who can lodge a complaint.

- 26. That it is an agreed fact in the joint scheduling memorandum that the petitioner ceased to be a member of the company on 23<sup>rd</sup> September 2008 when the company resolution was filed with the Registrar of Companies. Under Section 57 of the Evidence Act, agreed facts need not be proved and this was the position reached by the Supreme Court in SCCA No.7 of 2003 Administrator General Vs Bwanika James and 9 others. - 27. That in light of the above provisions of the law, the petitioner has no locus standi to bring this petition and thus lack a cause of action against the respondent. This petition is therefore wrongly before this court having been brought without locus and pray that the issue is answered in the negative.

#### **F.** Petitioners' submissions in rejoinder

- 28. The petitioner contends that the issue for determination is whether the petitioner has a cause of action against the respondents or not. - 29. Based on the petitioners' submissions, counsel for the petitioner concedes that indeed from the definition advanced the petitioner has a cause of action against the respondents, however, the respondents' counsel seeks to amend their pleadings by introducing the question of locus standi whereas the same was not framed as an issue for resolution by this honorable court. - 30. It is the petitioners' submissions that if counsel wished to amend their pleadings, they should have sought leave to be able to amend their pleadings. To seek to amend pleadings through submissions is a departure from pleadings which is not permissible in the eyes of the law especially concerning amending of pleadings. - 31. That it is the petitioner's submission that this honorable court be pleased to find that the petitioner has a cause of action against the respondents. - 32. I have carefully considered the written submissions of both Counsel and tried to set out the gist of those submissions above.


#### **G.** Determination

#### Issue 1

#### *Whether the petitioner has a cause of action*

- $33. A$ cause of action is defined as every fact which is material to be proved to enable the plaintiff succeed or every fact which if denied, the plaintiff must prove in order to obtain a judgment. (Cooke vs Gull LR 8E. P 116, Read v Brown 22 QBD P.31). It is disclosed when it is shown that the plaintiff had a right, and that right was violated, resulting in damage and the defendant is liable. This position has been reiterated in the Supreme Court decision of *Tororo Cement Co.* Ltd v Frokina International Limited SCCA No.2 of 2001. - 34. The question of whether a petition discloses a cause of action must be determined upon perusal of the petition alone together with anything attached so as to form part of it. See; Kebirungi v Road Trainers Ltd & 2 others [2008] HCB 72, - 35. In Attorney General vs. Oluoch (1972) EA 392 the East African Court of Appeal, Spry Ag. P held that *in deciding whether or not a suit* discloses a cause of action, one looks, ordinarily, only at the plaint and assumes that the facts alleged in it are true. This was cited with approval in Ismail Serugo vs. Kampala City Council and the Attorney General Constitutional Appeal No.2 of 1998. Coffee Works Ltd v NPART CACA No. 3 of 2000. - 36. In the present case, the Petitioner pleaded in paragraph 3 of the petition that he was the owner of 25 shares in the $1<sup>st</sup>$ respondent that were taken away from him in a manner allegedly unlawful from a resolution filed on $23<sup>rd</sup>$ September 2008. - 37. That at incorporation of Julia Guest House Ltd, the shareholding was Julya Otti 50 shares, Cedric Owor 25 shares and Robert Acellam 25 shares. - 38. That the Petitioner owned the 25 shares and an eminent threat by the $3<sup>rd</sup>$ respondent to take over the suit shares through her actions of taking over the shares and hindering the petitioner from owing the shares by the $1^{st}$ respondent allotting them to her.


- 39. It is settled that a cause of action arises when a right of the plaintiff is affected by the defendant's acts or omissions. (See; Elly $B$ . Mugabi v Nyanza Textiles Industries Ltd [1992-1993] HCB 227). - 40. The respondent brought this Petition under Section 247 of the **Companies Act** which provides;

$(1)$ A member of a company who complains that the affairs of the company are being conducted in a manner oppressive to some part of the members including himself or herself or in a case falling within section 178(5) may make a complaint to the registrar by petition for an order under this section.

$(2)$ Where on any petition under subsection $(1)$ the registrar is of the opinion - 225 Act 1 Companies Act 2012

(a) that the company's affairs are being conducted as referred to in *subsection* $(1)$ *; and*

(b) that to wind up the company would unfairly prejudice that part of the *members but otherwise the facts would justify the petitioning for a winding* up order on the ground that it was just and equitable that the company *should be wound up,*

*the registrar may, with a view to bringing to an end the matters complained* of, make such order as he or she thinks fit whether for regulating the conduct of the company's affairs in future or for the purchase of the shares of any members of the company by other members of the company or by the company and in the case of a purchase by the company, for the reduction *accordingly of the company or by the company's capital, or otherwise.*

41. For any one to bring a petition under this section, he or she must be a member in the company and from the petition filed by the petitioner, he claims that he was unlawfully removed from the company and premised his cause of action under **Section 247 of the Companies Act.** Therefore, the petitioners' proper cause of action lies under **Rule 8** of **The Companies (Powers of the Registrar) Regulations, 2016** for rectification of the register not under **Section 247 of the Companies Act** because the petitioner is no longer a member in the company as per the agreed facts in the Joint Scheduling Memorandum. (*Emphasis mine*)

- 42. This therefore, means that there was no diversion from the agreed facts by counsel for the respondents because for there is no way I can address the issue of cause of action without addressing locus of the petitioner to file this petition. - 43. The term "locus standi" is defined by **Osborn's Concise Law Dictionary Eleventh Edition Sweet and Maxwell simply as:**

[a place of standing]. the right to be heard in a court or other proceeding."

- 44. There is no need to elaborate any further on the definition as it captures the entire meaning in this controversy. Does the petitioner have a right to commence this action against the respondents and for the remedies prayed for? The respondent's objection arises from the fact that the petitioner brought this petition under **Section 247 of the companies Act** yet it is not in dispute that he is no longer a shareholder in the 1<sup>st</sup> respondent and therefore cannot seek for any remedies under that provision of the law. - 45. Therefore, this petition is premised under the wrong cause of action and the petitioner does not have locus to bring this petition under Section 247 of the Companies Act.

#### Issue 2

Whether the petitioner lawfully ceased to be a member of the company

#### **Petitioners' submissions**

- 46. The petitioners in their submissions intended to deal with this aspect in 2 ways; - a) Whether there was a proper call on shares of the petitioner - 47. That the $2^{nd}$ respondent at paragraph 4 of her statutory declaration states that "at incorporation, I put the names of the petitioner and Cedric Owor in the memorandum and articles of association as my grandchildren, but these two did not pay for any shares in the company". That implication of the $2^{nd}$ respondent's statement is that a call on shares was made and the petitioner and Cedric Owor never honored the same. The question then that needs to be answered is whether the proper procedure on the call on shares was followed. - 48. Article 16 of the Articles of Association of Julia Guest House Ltd makes it a requirement that notice of 28 days must be issued to the

 member calling upon such member to pay up on the shares, however looking at the entire record, the respondents do not state anywhere that notices were served on the petitioner and Cedric Owor calling upon them to pay up on their shares. We seek to rely on the decision by **Justice Geoffrey Kiryabwire in Company Cause** No.24/2005 in the matter of Greenville College Limited wherein no notices were issued and court found that meetings that were held with noncompliance of the companies' articles were irregular and as such there was no quorum to transact.

- 49. It is the petitioner's submission that I be pleased to find that there was no call on shares for the petitioner and respondent and the resultant meeting that passed the undated resolution that was registered with the registrar of companies on 23<sup>rd</sup> September 2008 void and illegal. - $50$ . Section 85(1) of the companies Act provides that notwithstanding anything in the articles of the company, it is not lawful for the company to register a transfer of shares in or debentures of the company unless a proper instrument of transfer has been delivered to the company. - 51. That the record will demonstrate that the respondents have no instrument of any transfer of shares that they have delivered to the company meaning whatever they did was unlawful. - b) Whether there was quorum to conduct the company business that resulted into the registered resolution - 52. It is the Petitioner's submission that its' proven that the respondents never issued any notices of whatever kind to both the petitioner and Cedric Owor, there is no way they could have attended if they had no knowledge of such a meeting, the petitioner made reference to paragraph 8, 9 and 15 Cedric Owor's Statutory Declaration and paragraphs 5 and 12 of the Petitioner's Statutory Declaration. - 53. It is not in doubt that the resolution registered with the Registrar of Companies on $23/09/2008$ is not dated making it very hard to tell when exactly the meeting was held and whether there was signing of any register of members that attended. **Article 34 of the articles** of association of Julia Guest House Ltd prescribes that quorum for


the meeting shall be two members. The respondents have not stated anywhere in their evidence that the petitioner and Cedric Owor were present nor was the $2^{nd}$ respondent present in the said meeting making the resolution suspect to the extent of forging the petitioner's and Cedric Owor's signatures on the attendant resolutions.

54. That it is their submission that whatever meeting resulted into the resolution of $23^{rd}$ September 2008 was only known by the $2^{nd}$ and $3^{rd}$ respondents and therefore be pleased to find that there was no quorum to conduct any business as alleged by the $2^{nd}$ and $3^{rd}$ respondents.

## **Respondent's submissions**

- 55. That the petitioner signed the resolution annexed to his statutory declaration wherein he agreed to cease to be a shareholder and sold his shares to Margaret Otti. - 56. Looking at the signature of the petitioner in the memorandum and articles of association on record and the impugned resolution showing the signatures, are similar but very different from the signature on the statutory declaration. - 57. That the petitioner in his statutory declaration did not state anywhere that he changed his signature from the one he used on the resolution and memarts. - 58. That the petitioner alleges that his signature was forged on the resolution, he adduced no evidence to prove this. It is trite that forgery is a very serious allegation and this has never been reported anywhere. There is no police reference pointing to this forgery and it is now settled law that he who alleges forgery must prove the forgery by providing a hand writing expert's report to prove the forgery. It was held in Nelson Ochaya Marie Vs Kamenge **Deudonne & 2 Ors COCA No.158 of 2015 that he who alleges must** prove, it was further held "....save for the appellant saying that this is not my signature, he did not produce any evidence be it of an independent witness expert... if the appellant had proved his signature was forged as it is only then that the 1<sup>st</sup> respondent would be required to prove that it was not forged. That in the instant case,

the appellant is the party who would fail if no evidence was presented by either party."

- 59. That even to the naked eyes as was stated in Nelson Ochaya Case (Supra) the signature on the resolution and the signature in the memarts are similar and this rules out any possibility of forgery in the absence of an expert report. The petitioner used a totally different signature in his statutory declaration in order to mislead court and this should be condemned with two possibilities, that the petitioner either did not sign the memorandum and articles and therefore he is not a member, but if the signature in the memarts is his, which he has not denied, the signature on the resolution is also his, or he is not the one who signed the statutory declaration, and therefore there is no evidence before this court in support of the Petition. This court cannot be left to assume that the two signatures in the memarts and the resolution on the one part and that of the signature on the statutory declaration on the other part belong to the same person. Court would be stretching itself too far. - 60. That it is the respondent's submission that the allegation of forgery is unfounded and not proved. The $2<sup>nd</sup>$ respondent in her Statutory Declaration at paragraph 5 stated that, the petitioner left the company voluntarily after signing the resolution which was filed on $23<sup>rd</sup>$ September 2008. - 61. This petition is therefore an afterthought, it is being filed 15 years after he signed a resolution ceasing to be member of the company. - 62. That in any case, issues of forgery and matters raised by the petitioner on whether there was a call or quorum to conduct business can only be resolved by the High Court but not this forum since evidence of forgery by statutory declaration is not sufficient. But, in any case as submitted herein above, there was quorum while passing the said resolution - 63. The respondents pray that this court finds that the petitioner lawfully ceased to be a member of the 1<sup>st</sup> respondent company, and therefore answer the $2^{nd}$ issue in the affirmative.

Petitioner's submissions in rejoinder

- 64. That **Section 57 of the Evidence Act** provides that all facts admitted need not to be proved by the parties. It is the petitioner's submission that the record will equally reveal the same that the former lawyers of Apwonya & Co. Advocates through a Lawyer Miss. Jorolyn Opwonya confirmed to this Honorable Court that the respondents concede that what they undertook and did was illegal. This itself makes the decision of Nelson Ochaya Marie Vs Kamenge **Deudonne & 2 others COCA No.158 of 2015** not applicable to this matter as the facts regarding the removal of the petitioner was already conceded to. - 65. That for clarity, at the request of current counsel, he requested that he be allowed time to brief his clients about the state of affairs, however he never withdrew the admission that was already captured on record having been made by former counsel. Further, the petitioner called a witness by the name of Cedric Owor who submitted a statutory declaration as evidence towards the alleged illegalities. With those admissions, there was no need for further evidence to be availed to determine whether indeed the petitioner was illegally removed from the company. - 66. That on the question of proof of forgery, the petitioners seek to rely on the decision of **Re-First Investor Corporation** (1988) WWR 22 quoted by Honorable Justice Sekaana In Lafras Vs Special Services Limited Company Cause No.11/2019. For the principle that the Companies Act does not prescribe the standard of proof that must be met however, it was stated that an applicant for an order is not required to prove beyond reasonable doubt or on a balance of probabilities the conduct complained of. The only proof which is necessary is that there is sufficient ground to warrant an investigation. - 67. That counsel for the respondents submitted that questions concerning quorum at meetings is only decided by the High Court. It is the respondents' submission that Counsel for the respondents is wrong on the point. The petitioners submit that this honorable court is vested with powers under Regulation 3 of the (Companies


**Powers of the Registrar) Regulations, 2016** which empowers the registrar to carry out investigation into the affairs of the company. In carrying out this function, the registrar is empowered to make findings on quorum where there is need. That on the powers of the registrar, the petitioner referred to the decision of **Honorable** Justice Sekaana in Lafras Vs Special Services Limited Company Cause No.11/2019.

- 68. That it is the petitioner's submission that this honorable court finds merit in the petition and grant all the prayers sought. - 69. I have carefully considered the written submissions of Counsel and tried to set out the gist of those submissions above.

## **Resolution by the Registrar**

## Whether the petitioner lawfully ceased to be a member of the company.

- 70. On 23/09/2009, two resolutions and a Form 10 were registered on the file of the 1<sup>st</sup> Respondent. One of the resolutions stated that; the petitioner and Cedric Owor cease to be shareholders in the company by selling their shares to Margret Otti and the Second stated that the company allots its shares by giving Julia Otti 50 shares and Margret Otti 50 Shares and a Form 10 reflecting the same allotment was filed on the same date. My understanding of the 3 documents is that the company did not intend to make a transfer of shares, but rather allotment of the said shares. - 71. In Mathew Rukikaire Vs Incafex Supreme Court Civil Appeal **No.003 of 2015**, Court held that:

The process of incorporating a company limited by shares involves registration of the company's memorandum and articles of association which are signed by subscribers. A 'subscriber' is the term applied to the $\frac{1}{2}$ first members of a private limited company who; add their names to the *memorandum of association during the company formation process. By so* doing, they agree to form a company and become members/shareholders in *the company.*

72. However, other persons can become members of the company when shares in the company are allotted. When a person either


individual or corporate is allotted shares subsequent to the formation of the company, that person becomes a 'shareholder', 'member' or 'owner 'and stands in the same position as the subscriber. Such persons agree to become part of a company by taking a particular number of shares through a process known as allotment. Indeed David J. Bakibinga in his book, Company Law in Uganda, 2001 at page 66 states that, agreement to become a member can be through allotment of shares. This position was also reflected in Section 27(2) of the Companies Act Cap 110, Section 27 of the then Companies Act Cap 110 now Section 47 defines a member as follows:

Definition of member.

1. The subscribers to the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration shall be entered as members in its register of members.

*2. Every other person who agrees to become a member of a company,* and whose name is entered in its register of members, shall be a *member of the company.*

What can be deduced from the section is that a person may become a member of a company in two ways;

- a) by subscribing to the memorandum of association; and - b) by agreement to be a member subsequent to the formation of a company.

## The law on Allotment of company shares and membership

- 73. The word allotment was not defined in the Companies Act Cap 110 and neither is it defined in The Companies Act No.1 of 2012 as amended in 2022. However, Section 54 of the said Companies Act Cap 110 now Section 61 of the Companies Act No.1 of 2012, requires a company to file a return of the allotment of its shares with the company Registrar within 60 days of the making of the allotment. - 74. Chitty Jin Re Florence Land and Public works Company (1885) L. R.29 Ch. D 421 stated:

What is termed allotment is generally neither more nor less than the *acceptance by the company of the offer to take shares.... The offer is to take* a certain number of shares, or such a less number of shares as may be allotted.

- 75. The above definition was adopted by the Supreme Court of India in Sri Gopal Jalan and Company vs Calcutta stock 1964 Air 250/1964 SCR (3) 698. Gower and Davies, in Principles of Modern Company Law, 8<sup>th</sup> edition at page 845 define the term "allotment" as the process by which the Company finds someone who is willing to become a shareholder of the company. Gower and Davies further explain that the process of becoming a shareholder is a two-step one, involving first a contract of allotment and then registration of the member. - 76. The $2^{nd}$ respondent in Paragraph 4 of her statutory declaration stated that at incorporation, she put the names of the petitioner and Cedric Owor in the Memorandum and articles of association as her grandchildren, but these two did not pay for any shares in the company. The petitioner does not deny the fact that at incorporation of this company on $31/07/1995$ , he did not make any capital contribution and therefore, the company was free at any time to allot shares to any person who would contribute capital to the company and this does not require a call on shares as alluded to by Counsel for the petitioner in his submissions because allotment and forfeiture of shares are two different procedures. Therefore, the resolution and Form 10 bearing a lower date of $23/09/2008$ and registered on the same day signed the director and secretary were legally filed. - 77. Going back to the resolution in Issue, where it is stated that the shares belonging to the Petitioner and Cedric Owor be transferred to Margaret Otii, this resolution was purportedly signed by the Petitioner, Cedric Owor and then company Secretary Amone Ronnie Roger and comparing the signatures in the Memorandum and Articles of Association registered on $31/07/1995$ and those on the suit resolution, the signatures of the Petitioner and Cedric Owor are similar on both documents and no substantial evidence has been brought by the Petitioner to prove that the signature on the suit


resolution does not belong to him as alleged in Paragraph 6 of his statutory declaration.

- 78. It is indeed trite as stated by Counsel for the respondents, that forgery is a very serious allegation and this has never been reported anywhere. There is no police reference pointing to this forgery and it is now settled law that he who alleges forgery must prove the forgery by providing a hand writing expert's report to prove the forgery. It was held in Nelson Ochaya Marie Vs Kamenge **Deudonne & 2 Ors COCA No.158 of 2015 that he who alleges must** prove, it was further held ".... save for the appellant saying that this is not my signature, he did not produce any evidence be it of an independent witness expert... if the appellant had proved his signature was forged as it is only then that the $1<sup>st</sup>$ respondent would be required to prove that it was not forged. That in the instant case, the appellant is the party who would fail if no evidence was presented by either party." - 79. Even to the naked eyes as was stated in Nelson Ochaya Case (Supra) the signature on the resolution and the signature in the memarts are similar and this rules out any possibility of forgery in the absence of an expert report. - 80. Counsel for the petitioner in his submissions on this issue alluded to the fact the record will reveal that the former lawyers of Apwonya & Co. Advocates through a Lawyer Miss. Jorolyn Opwonya confirmed to this Honorable Court that the respondents concede that what they undertook and did was illegal. This itself makes the decision of **Nelson Ochaya Marie Vs Kamenge Deudonne & 2 others COCA No.158 of 2015** not applicable to this matter as the facts regarding the removal of the petitioner were already conceded to. - 81. However, my record reveals no such consent between the parties that there was an error made and conceded to by the respondents because no consent, signed by both parties was entered on record and when counsel for the respondents was given an opportunity to consult with his clients whether there was such consent, he returned on the hearing conducted on the $18/01/2023$ , and notified me that his clients were not aware of any such consent that could have been


entered by the former lawyers and therefore the same consent and alleged admissions cannot be relied upon because they were refuted by the respondents.

- 82. In my opinion, it was not the intention of the company to transfer shares through the impugned because there were no executed transfer forms to that effect and when the company intended to transfer shares in 2009, the resolution and transfer forms were duly executed and the shares were legally transferred. - 83. Therefore, the company lawfully allotted the 50 shares to Margret Otii and the petitioner was lawfully removed from the company. - 84. From the company record, the petitioners' input is only seen on the suit resolution which he himself disputes. The Company has opened up a bank, changed name all without input of the Petitioner and all allegations raised by the petitioner have not been proved and this petition is only an afterthought. - 85. Owing to the above, I make the following orders; - a) That Petitioner's cause of action was premised under the wrong law. - b) That petitioner was lawfully removed from the company. - c) That the correct shareholders in the company are; Margret Otii - 95 Shares. Julia Otti - 05 Shares. - d) Each party to bear its own Costs.

I so order.

Muliisa Solomon **Registrar** 03/03/2023.