Administrators of the estate of the late Sam Musoke v Kabaale & Another (Company Complaint 14356 of 2023) [2023] UGRSB 9 (8 September 2023)


# THE REPUBLIC OF UGANDA

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

## IN THE MATTER OF FORTUNE INVESTMENTS COMPANY LIMITED

## (80010003101143)

## COMPANY COMPLAINT NO. 14356 OF 2023

## ADMINISTRATORS OF THE ESTATE OF THE LATE SAM MUSOKE

KIRUNDA ::::::::::::::::::::::::::::::::::::

## **VERSUS**

- 1. IMMACULATE KABAALE - 2. MUSOKE BEN KYOBE::::::::::::::::::::::::::::::::::::

## **RULING**

## BEFORE: MULIISA SOLOMON, REGISTRAR OF COMPANIES

## **A. Introduction**

1. The Complainants brought Company Complaint No. 14356 of 2023, in their capacity as the Administrators of the Estate of the Late Sam Musoke Kirunda, against the Respondents jointly and severally for a declaration that the transfer and registration of 50 shares to the

Respondents in Fortune Investments Company Limited a private company limited by shares is illegal and unlawful. Secondly, the Complaint is for recovery by the Complainants of the 50 shares in the aforementioned company stated to be illegally and/or fraudulently converted, expropriated, transferred and registered in the names of the $1<sup>st</sup>$ and $2<sup>nd</sup>$ Respondents. Thirdly, it is for an order for the cancellation of the transfer and registration of 50 shares in the names of the 1<sup>st</sup> and $2<sup>nd</sup>$ Respondents and an order for reinstatement of the Complainants as members, directors and shareholders of 50 shares in the aforementioned Company. The 1<sup>st</sup> and 2<sup>nd</sup> Respondents jointly and severally denied the contents of the Complaint.

- B. <u>Background</u> - 2. The Late Sam Musoke Kirunda owned 50 shares in Fortune Investments Company Limited. On the 16<sup>th</sup> day of March 2020, a resolution was passed by the aforementioned company wherein the Late Sam Musoke Kirunda sold all his 50 shares to the Respondents. The said resolution and transfer of share stock form were then registered on the 12<sup>th</sup> day of February 2021 and as a result, the 1<sup>st</sup> and $2<sup>nd</sup>$ Respondents became the sole directors and shareholders of the company well as the late Sam Musoke Kirunda ceased being a member, shareholder, and director of the company. - 3. Consequently, the Complainants filed a complaint to the Registrar of Companies on the 31<sup>st</sup> day of October 2022, alleging that the transfer


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of the said shares was done illegally and in bad faith because the purported signature of the Late Sam Musoke Kirunda on the resolution and transfer of share stock form as a director and member of the company at that time was forged.

- 4. On the 24<sup>th</sup> day of January, 2023 summons were issued to all parties to appear before me on the 13<sup>th</sup> day of March, 2023 at 10 am to resolve issues of mismanagement and illegal registration. The Respondents were correspondingly directed to file their defense by way of statutory declaration not later than the 17<sup>th</sup> day of February 2023. The 1<sup>st</sup> Respondent filed her defense by way of statutory declaration on the $2<sup>nd</sup>$ day of February, 2023 well as the $2<sup>nd</sup>$ Respondent filed his defense by way of a statutory declaration on the 6<sup>th</sup> day of February, 2023. The complainants had no statutory declaration supporting their complaint. - 5. On the $13^{th}$ day of March, 2023 all parties were present for the hearing before me, with Counsel Helga Pricilla Naluwoza representing the Complainants well as the Respondents were representing themselves. Unfortunately, the hearing did not proceed because the Respondents argued they were not effectively served. - 6. Consequently, on the 20<sup>th</sup> day of March, 2023 I issued fresh summons to all parties to appear for a hearing on the $13<sup>th</sup>$ day of April, 2023 at 10 am. During the hearing, Counsel Helga Pricilla Naluwoza representedthe Complainants who were present to wit; Andrew Zziwa Kirunda, Namukasa Dorothy and Nanyonjo Sylvia. The 2<sup>nd</sup> Respondent was

present and represented himself well as the 1<sup>st</sup> Respondent was not present. Unfortunately, the hearing did not proceed because Counsel for the Complainants argued that they were ambushed since they were served on the 12<sup>th</sup> day of April, 2023 and yet the hearing was scheduled for the $13$ <sup>th</sup> day of April, 2023.

7. As a result, fresh summons were issued on the $9<sup>th</sup>$ day of May, 2023 requiring all parties to appear before me on the $13<sup>th</sup>$ day of June 2023 at 10am. All parties were present for the hearing before me on the 13<sup>th</sup> day of June, 2023 with Counsel Helga Pricilla Naluwoza representing the Complainants well as Counsel Deborah Nakato represented the Respondents. The parties were ready to proceed. The 2<sup>nd</sup> Respondent was put under oath for Cross-examination in relation to the signing and execution of the contested documents and why the said documents were registered after the death of the Late Sam Musoke Kirunda. Counsel for the complainant did not cross examine the 2<sup>nd</sup> Respondent but only sought for clarity on why the documents were registered after the demise of Sam Musoke Kirunda. He answered that there was no need to rush the registration and further stated that the registration was delayed due to the national wide lockdown that was imposed due to the outbreak of the Covid-19 pandemic. Both parties were directed to file written submissions and a rejoinder which they did.

- C. <u>During the hearing</u>, these issues raised were; - i) Whether there was a valid transfer of 50 (fifty) shares from the Late Sam Musoke Kirunda to the Respondents in Fortune Investments *Company Limited?* - ii) What remedies are available? - D. <u>Arguments for the Complainants</u> - 8. The Complainants filed a complaint contending that the Late Sam Musoke Kirunda's signature was forged as one of the Directors of Fortune Investments Company Limited. In their submissions, Counsel for the Complainants stated that, there was no valid resolution to transfer the 50 shares to the Respondents since the transfer of share stock form and the resolution were not signed by the Late Sam Musoke Kirunda as his purported signature on the documents was forged. - 9. Counsel for the Complainant stated that this amounted to fraud and cited the authorities of Elizabeth Nabeta v. Dr. Anthony Konde Civil Suit No. 391 of 2010 where court relied on the case of Fredrick Zaabwe v. Orient Bank & Ors SCCA No. 4 of 2006 to define Fraud. The Complainants further supported their argument with the authority of Kampala Bottlers Ltd v. Damanico (U) Ltd, SSCA No.22 to state that a person who alleges fraud must specifically plead and strictly prove it. - 10. The Complainants pleaded the claim of fraud with evidence of a report from a handwriting expert, the Principal Government Analyst,


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Catherine Namuwoya; vide Lab. No. FD011/2023 signed and dated 13<sup>th</sup> March, 2023 on the court record, in which she concluded that "there is conclusive evidence to show that the questioned signatures attributed to Sam Musoke Kirunda on exhibits 'A' and 'B' were not authored by the same Sam Musoke Kirunda whose specimen signatures were provided on exhibits $'C'$ , $'D'$ , $'E'$ and $F'$ .

- 11. They further pointed out that the resolution of the meeting purportedly held on 16<sup>th</sup> March, 2020 is dated 2<sup>nd</sup> February, 2020 and was filed a year later on the 12<sup>th</sup> day of February, 2021. The complainants emphasized that these inconsistencies evidently pointed to fraud. They submitted that it is evident that the late Sam Musoke Kirunda never transferred or resolved to transfer the 50 shares to the Respondents. - 12. In their bid to discredit the Respondent's arguments, The Complainants brought to the attention of this court the fact that in proving that the Respondents fraudulently transferred the 50 shares and forged the signature of the Late Sam Musoke Kirunda on both the transfer of share stock form and the Resolution, they availed both primary and secondary documents (original and photocopy documents) to the handwriting expert for proper determination and the Respondents only relied on secondary evidence (photocopies of all documents) yet they were the original executors of the same

documents thus making their documentary evidence inadequate and insufficient.

- 13. On the issue of remedies, the Complainants prayed for punitive and general damages for the pain and suffering caused to them by the fraudulent actions of the Respondents. They further prayed that an order be made to cancel the transfer and registration of the 50 shares in the aforementioned company to the Respondents and reinstatement of the Claimants as members, directors and shareholders of the aforementioned company since they are the Administrators of the Estate of the Late Sam Musoke Kirunda. - E. <u>Arguments for the Respondents</u> - 14. In reply to the Complainant's submissions, Counsel for the Respondents contended that there was no fraud in the transfer of 50 shares that were owned by the late Sam Musoke Kirunda in Fortune Investments Company Limited. They submitted that the deceased while he was alive signed the transfer of share stock form and the resolution that was passed on the $16<sup>th</sup>$ day of March 2020. - 15. The Respondents in their defense against the offence of fraud, discredited the evidence adduced by the Complainants wherein they referred to the report of the Government Analyst Namuwoya Catherine on the court record and submitted that the methods used in the examination of the handwriting were not sufficiently credible enough to be used in the comparison of the questioned signature, they

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argued that there are other advanced methods that are scientific and accurate, and which are utilised by other experts in the field of handwriting analysis.

- 16. They further submitted that the lab report relied on by the complainants does not possess features of authorisation and ownership of the document by the author, the document was not counter signed and it did not have a stamp or a seal of the office, it was alleged to be authored from. They further submitted that the author did not indicate her experience or qualifications to lend credence to her report. - 17. They submitted that the origin and authenticity of the document/report is highly questionable and this puts its credibility to check. In a bid to prove the authenticity of the said signatures, the Respondents adduced evidence of a handwriting expert opinion from the Directorate of Forensic Services of Uganda Police which is on court record. - 18. The Respondents submitted that the report dated 4/5/2023 was made by two Forensic Examiners of the Uganda Police. In order to prove the credibility and authenticity of the report, they submitted that the report is stamped and signed by the author and the forwarding letter bears the Police seal. The respondents further stated that the forensic report, on page 3 shows that the examiner used scientific methods such as a video spectral comarator (VSC 5000 and Regula 4308), sketching

and visual observation method. From the report the Respondents submitted that, the expert concluded that the questioned signature was signed by the deceased and is not a forgery as had been claimed by the complainants.

- 19. The Respondents further submitted that the late Sam Musoke Kirunda is the author of the questioned signature on the Transfer and share stock form and that while still alive, he transferred his shares to the Respondents. Therefore, the allegation of fraud and forgery of the said signature must be dismissed since no proof adduced has been adduced by the Complainants. - 20. On the issue of the late filing of the resolution dated 16<sup>th</sup> March, 2020, the Respondents submitted that the delay in filing was due to the Covid-19 lockdown owing to the fact that in late March 2020, the Government of Uganda locked down the entire country and interfered with the normal running of all activities of citizens. This consequently prevented the respondents from filing the documents with the Companies registry in time, however, the same was filled on 12<sup>th</sup> February, 2021 after the lockdown was lifted. - 21. On the issue of remedies, the respondents prayed for damages to be awarded to them for the damage to their reputation and compensation to them for the distress that the accusations have caused them. They also prayed for costs.

- F. <u>Arguments for the Complainants in Rejoinder</u> - 22. In reply to the Respondent's submissions, the complainants in rejoinder submitted that the Respondents mainly attacked the report of the Government analyst which was a futile attempt to try and mislead this court. - 23. They submitted that the report from the Ministry of Internal Affairs is credible and admissible. They relied on the case of Mawanda & another vs. Kobil Uganda Limited Civil Suit No. 350 of 2008 to state that the handwriting/expert report can be made by anyone and its not only the preserve of the police. Expert qualified under different government *departments can come up with reports too.* - 24. They submitted that the examination of the documents/signature through the physical visual examination of the feature, sketching of features and use of a hand lens for magnification of the features is a recognised method and it does not affect the credibility of the findings/ report. They further submitted that the report being a letter head of the Government Department needed no further authentication by stamping. - 25. In rejoinder, they submitted that someone who is familiar with the handwriting specimen being complained of can ably contend that it is genuine or otherwise. They submitted that the complainants being children of the deceased are familiar with his signature since they grew up with him in the same homestead, and did some transactions with

 him are very competent to submit about the authenticity or otherwise of their father's signature.

- 26. They further submitted that the methodology used by the lay out of the report, mode of reporting and style writing of the report by the Principal Government Analyst leaves no doubt to anyone who reads it, even a stranger to the case that the case was investigated by someone skilled with diligence and experience in the area. - 27. They submitted that a complaint about a forged handwriting need not be necessarily substantiated by an expert report, they invited the court to look at the signatures and observe the genuine ones and those being complained about, make their own comparison and draw a conclusion. - G. <u>Determination by the Registrar</u> - 28. In determining the matter at hand, I shall resolve issue 1 first and then proceed to Issue 2, in that order.

Issue 1

Whether there was a valid transfer of 50(fifty) shares from the Late Sam Musoke Kirunda to the Respondents in Fortune Investments **Company Limited?**

Proof of fraud

29. In her submission, Counsel for the Claimants argued that the Respondents were guilty of fraud. She defined fraud to denote actual fraud or some act of dishonesty by citing Fredrick Zaabwe v. Orient


- Bank & Ors SCCA No. 4 of 2006 and Kampala Bottlers Ltd versus Domanico (U) Ltd SCCA No.22 of 1992. She accordingly submitted that the Complainants had demonstrated that the respondents acquired 50 shares in Fortune Investments Company Limited fraudulently on the ground that the resolution which effected the transfer of the shares to the Respondents was invalid given the fact that the purported transfer of share stock form and the resolution were not signed by the Late Sam Musoke as his signature on the documents was forged. Counsel for the Complainants further pointed out that the resolution of the meeting purportedly sat on the 16<sup>th</sup> day of March, 2020 is dated on the $2^{nd}$ day of February, 2020 and filed a year later on the 12<sup>th</sup> day of February, 2023, and therefore, these inconsistencies amounted to fraud. - 30. I agree with Counsel for the Claimants that fraud denotes any act of dishonesty. This definition has also been noted in the case of **Zabwe** <u>Fredrick versus Orient Bank & Others SCCA No. 4 of 2006.</u> According to that case, fraud constitutes;

"An intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to *surrender a legal right. A false representation of a matter of fact, whether by* words or by conduct, by false or misleading allegations, or by concealment of that which deceives and is intended to deceive another so that he shall act upon it to his legal injury."


31. Allegations of fraud must be proved strictly and to a standard higher than a balance of probability but not as high as beyond reasonable doubt (see Kampala Bottlers Limited v. Damanico (U) Limited, S. C. Civil appeal No. 22 of 1992 and Ratilal Gordhanbhai Patel v. Lalji *Makanji* [1957] EA 314). It thus should be noted that for fraud to form the basis of rectifying the register of Companies, it must meet the requirement stated in *Kampala Bottlers Limited v Damanico (U)* Limited, S. C. Civ. Appeal No. 22 of 1992, where it was held that such fraud must be:

"Attributable to the transferee. I must add here that it must be attributable either directly or by necessary implication. By this I mean the transferee must *be guilty of some fraudulent act or must have known of such act by somebody* else and taken advantage of such act. ... Further, I think it is generally accepted that fraud must be proved strictly, the burden being heavier than on a balance *of probabilities generally applied in civil matters."*

32. To attribute the fraud to the Respondent, the Complainants adduced evidence of a report from the Government Analyst vide Lab. No. FD011/2023 dated on the 13<sup>th</sup> day of March, 2023 herein on the Court record wherein after analysing the two signatures on the standard documents and the questioned documents, the government analyst came to a conclusion that the signatures on the resolution and transfer forms were forged. The complainants further brought to the attention

of this court the inconsistencies in the resolution as regards the date of the meeting and the date when the resolution was signed.

- 33. In their defense against the offence of fraud, the Respondents contested the evidence of the Complainant's report claiming it wasn't authentic since it did not possess features of authorization and ownership by the author save for the signature, and it further did not indicate the experience or credence of the author. The Respondents then further availed to court the evidence of a Police report which came to a conclusion that the signature of the Late Sam Musoke Kirunda on the resolution and transfer of share stock was not forged and they stated that it was authentic since it had the Police seal and stamp. - 34. Since the Respondents raised a concern about the authenticity of the Report, I will briefly talk about the legal principles governing the admissibility of Documentary Evidence.

<u>Admissibility of Documentary Evidence</u>

- 35. The question of admissibility of a piece of evidence be it oral or documentary, basically depends on whether it is relevant to the issue before the court. It is not in doubt that the Report of the Government Analyst is relevant to the issue in court. - 36. In a bid to prove their claim of fraud, the Complainants produced evidence of a report from the Government Analyst vide Lab. No. FD011/2023 dated 13<sup>th</sup> March, 2023 which came to the conclusion that


the signatures on the resolution were forged. The Respondents objected to the said document and stipulated that the report was not authenticated and therefore should not be admitted as evidence on the court record.

- 37. This brings me to the discussion of the admissibility of documentary evidence. Section 60 of the Evidence Act Cap 6 stipulates that the contents of documents may be proved either by primary or secondary evidence. - 38. In the case of Kaggwa v Olal & 6 Ors (Civil Appeal No. 10 of 2017) [2018] UGHCLD 65 (13 December 2018), Justice Stephen Mubiru stipulated that,

"Documentary evidence must be properly authenticated and a foundation laid before it can be admitted at trial. Before any private document offered as *authentic is received in evidence, its due execution and authenticity must be proved either: (a) by anyone who saw the document executed or written; or (b) by evidence of the genuineness of the signature or handwriting of the maker.* Documents must be proved by primary evidence except in the cases in which *The Evidence Act permits secondary evidence (see sections 60 - 64 of the* $Act$ )".

39. The document in context is the Government Analyst report vide Lab No. FD011/2023. The Respondents aver that the document has no stamp and seal and therefore shouldn't be admissible since it's not authentic.

- 40. According to Webster's Dictionary, to "authenticate" means to "render authentic; to give authority to, by the proof, attestation, or formalities required by law, or sufficient to entitle to credit." A signature is added to a document primarily for purposes of authentication. - 41. Furthermore, according to Black's Law Dictionary "Authentication" is defined to mean. "The act or mode of giving authority or legal authenticity to, a statute, record, or other written instrument, or a certified copy thereof, *so as to render it legally admissible in evidence."* - 42. In the case of Lalwak Alex v. Opio Mark Civil Appeal No. 078 of 2018, **the** court stated that;

"The rule of authentication prior to admissibility requires that any item offered as evidence which allegedly has a particular association with an individual, time, or place must be linked with that individual, time, or place *either before or at the time of its admission. Until the necessary connection is made, such evidence is simply irrelevant".*

43. The Report adduced by the Complaints is duly signed on every page by the author who is the Principal Government Analyst Namuwoya Catherine, it is on a headed paper of the Directorate of Government Analytical Laboratory under the Ministry of Internal Affairs however, the same was not counter signed and doesn't bear a stamp or seal of the office it was allegedly authored from. I, therefore, find that the Complainants have not fulfilled the rule of authentication prior to the admissibility of a document by showing that the report is associated

with the author whose signature and seal should be appended on the report.

- 44. In the case Kaggwa v Olal & 6 Ors (supra) court further state that "Once documentary evidence is relevant, it is admissible. A document is admissible if it was made by, or directly or indirectly reproduces, or is derived from statements made by a person who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with by the statements *contained in it".* - 45. I will make a ruling to the effect that the document in question is not fully authenticated but I will not render it inadmissible. However, since the document is a photocopy of an original document this brings me to a brief discussion of the admissibility of secondary evidence. Admissibility of secondary evidence. - 46. Regarding the admissibility of secondary evidence, Section 62 (b) of **The Evidence Act** has two requirements;- first, the copies should be prepared from a mechanical process; and second, the process should be such which in itself ensures accuracy of copy. - 47. In the case of Lalwak Alex Appellant And Opio Mark(supra) court stated that "*a photostat copy of a document which is an accurate reflection of* the original document is admissible as secondary evidence but it had to be *shown that the Photostat copy was an authentic and accurate reproduction of* the original. Before it is admitted in evidence, a Photostat copy should appear to be above suspicion. It must have been prepared and kept in circumstances


and a condition that creates no suspicion about its authenticity. It has to be shown that it was made from the original by a specified person, at particular or specified place and time".

- 48. The Complaints in their bid to prove the claim for the offence of fraud availed a photocopy of the report from a government analyst. They exercised some level of due diligence and produced both the colored photocopies of the report to prove that indeed it is an accurate reflection of the original document. Furthermore, the report is authentic given the fact that it was signed and or authenticated by the author and further it is on headed paper of the directorate of government analytical laboratory of the ministry of internal affairs from where it was signed although it was not sealed and countersigned. The Document is a photocopy thus a secondary document and thus I find that it is authentic to some degree and shall be admitted in court as evidence. - 49. The Complainants in their submission and rejoinder did not object to the police report of the Respondents, therefore, after finding that the Report adduced by the Complainants is admissible, I shall go ahead and analyse the contents of both reports.

<u>Evidence of handwriting expert</u>

50. Since both reports are admissible and have been admitted as evidence and I will now proceed to analyse the contents of the documents.

- 51. The rules that govern the admissibility of expert evidence are well stipulated in our Evidence Act, Cap 6, Section 43 of the Evidence Act **Cap 6** states that when the court has to form an opinion as to the identity of handwriting or finger impressions, the opinions upon that point of persons specially skilled in that foreign law, science or art, or in questions as to the identity of handwriting or finger impressions, are relevant facts as such people are called experts. - 52. This therefore, suggests that no one may be allowed to give evidence as an expert unless his or her profession or course of study gives him or her more opportunity of judging than other people (see $R$ v. Silverlock [1894] 2 Q. B. 766). - 53. In the instant case the Complainants adduced evidence of a report from the Government Analyst, well as the Respondents adduced evidence of the Police Forensics report. The expertise of the author of the Complainants report was however contested by the Respondent. - 54. In light of the above I shall state clearly, that the contest has some weight though insufficient to render the report inadmissible. The Government analyst Namuwoya Catherine has vast experience as a handwriting expert under Directorate of Government Analytical Laboratory in the Ministry of Internal Affairs. Furthermore, her reports have actually been relied on in various cases, a case in point is the case of Kizito Joseph Mubiru vs. Wamala Desire Paul & 2 Others Civil

**Appeal No. 62 of 2018** wherein in the finding of her report in that case were upheld and relied on by the Honorable court of appeal.

- 55. Section 45 of the Evidence Act Cap 6 stipulates that when the court has to form an opinion as to the person by whom any document was written or signed, the opinion of any person acquainted with the handwriting of the person by whom it is supposed to be written or signed that it was or was not written or signed by that person is a relevant fact. - 56. The Complainants in their submissions in rejoinder, stated someone who is familiar with the handwriting specimen being complained of can ably contend that it is not genuine or otherwise. They submitted that the complainants being children of the deceased are familiar with his signature since they grew up with him in the same homestead, and did some transactions with him and are very competent to submit about the authenticity or otherwise of their father's signature. - 57. The principles of dealing with a handwriting expert were laid down in the case of **Kimani vs Republic** (2000) E. A 417, where it was stated as follows: " .......it is now trite law that while the courts must give proper respect to the opinion of expert, such opinions are not as it *were, binding on the courts.....such evidence must be considered along* with all other available evidence and if a proper and cogent basis for rejecting the expert opinion would be perfectly entitled to do $SO$ .........." - 58. In the case of Iwa Richard Okeny Applicant Versus Obol George Okot (supra) court held that Expert evidence is opinion evidence and it cannot take the place of substantive evidence. On the question of the handwriting or fingerprint of a person, the opinion of a handwriting expert is relevant, but it is not conclusive and handwriting or finger print of a person can be proved by other means, for example by a person who saw someone writing or signing a document. - 59. Therefore, this court will not take opinion of a handwriting expert as conclusive proof but will examine the evidence in the light of surrounding circumstances in order to satisfy itself about the findings made. I will now proceed to analyse the two expert reports at length.

## Analysis of the two expert reports

- 60. There is no doubt that the subject matter of reference to the handwriting expert's reports required scientific investigation on the issue of whether the resolution and transfer of stock share form, transferring 50 shares from the deceased to the Respondents were legally executed by the Respondents. - 61. Section 66 of the Evidence Act Cap 6 provides that "if a document is *alleged to be signed or to have been written wholly or in part by any person,* the signature or the handwriting of so much of the document as is alleged to be in that person's handwriting must be proved to be in his or her *handwriting*". Furthermore, **Section 72(1)** of the same Act provides for the comparison of the signature with one which is to be proved.


- 62. In the present case, as already noted there are two contradictory handwriting expert's reports. The first one which was adduced by the Complaints from the Government Analyst vide Lab. No. FD011/2023 which came to a conclusion that the signature of the Late Sam Musoke Kirunda was forged on both the resolution and the transfer of share stock form and the second report adduced by the Respondents from the police forensic department, Vide: IBC/EO/171/04/23 which came to the conclusion that the signatures on the questioned documents were matching. - 63. In the case of Ali Ahmad v Mohammad Ahmad (HCCS 38 of 2011) [2013] UGCommC 198 (25 November 2013) whose facts are paramateria with the case at hand, Justice Christopher Madrama **Izama (as he was then)** stipulated that the determination of whether the transfers were forged would obviously give foundation to determination of the question of whether the transfers were valid. If the transfers were forgeries, then obviously it would be invalid. However, if they were not forgeries the question is whether there is any other matter for trial concerning the transfer *of shares.* - 64. With reference to the report adduced by the Complaints dated 13<sup>th</sup> March 2023, the government analyst used Exhibit C and F although "F" was not clear enough had some variations and Exhibit $E$ and Exhibit F which were photocopies. The government analyst came to the conclusion that "there is conclusive evidence to show that the questioned


signatures attributed to Sam Musoke Kirunda on exhibits 'A' and 'B' were not authored by the same Sam Musoke Kirunda whose specimen signatures *were provided on exhibits* $'C'$ , $'D'$ , $'E'$ *and* $F'$ .

- 65. However, in reference to the report adduced by the respondents dated 15<sup>th</sup> March, 2023, the Police Forensic document examiners used Exhibits B, C, D, E, F, G, H, and I. The police Forensics document examiners came to a conclusion that "there is limited evidence to show that the author of the sample signatures on exhibits $B,C,D,E,F,G$ and H didn't *sign the questioned signature on exhibit* $A''$ *.* - 66. At Page 2 paragraph 3 of the complainant's Expert report, the handwriting expert clearly stated that the sample signature on exhibit "F" was not clear enough and had some variations probably brought on by the difference in the writing surface upon which the signature was made but still went ahead to use it in comparison with the signatures in question. I agree with counsel for the respondents that use of a document which is unclear creates a high likelihood of inaccurate results. - 67. Furthermore, the Respondents in their statutory declarations stated that they were aware of the personal health problems of the deceased, by virtue of this knowledge, I would expect the Respondents to have ensured they file the resolution and transfer of share stock form prior to his demise because registration after raises some suspicion however, the Companies Act allows filing of resolutions out of time but subject

to penalty, waiting a year later to file the resolution and transfer forms cannot be faulted on the respondents because the Section $150(2)$ of the Companies Act prescribes timelines within which certain resolutions should be registered and in case of default, a prescribed penalty thereto. Board resolutions do not have timelines with in which they should be registered and the respondents couldn't have predicted the death of Sam Musoke Kirunda and the prevailing circumstances then, of the outbreak of the Covid 19 pandemic affected lots of transactions including those of a business nature.

- 68. These actions by the Respondents are not in any way related to fraud or forgery although the delay raises a bit of suspicion and thus point to a presumption that indeed the Respondents did not orchestrate the forging of the deceased's signature on the resolution and transfer forms since the complainants have also failed to prove that the meeting held on $16/03/2020$ never took place or that on the said date, the late Sam Musoke Kirunda was away at a place known to them and therefore, could not have signed the said resolution. - 69. In the said resolution, another shareholder Kibuuka Charles Mukasa also transferred his 5 shares to the $1<sup>st</sup>$ respondent and also signed the resolution. The complainants have not laid any evidence by way of statutory declaration from a one Kibuuka Charles Mukasa justifying the fact that there was no meeting of the shareholders on $16/03/2023$ and that indeed the deceased did not attend the same or sign the

resolution and transfer forms in question. If the two respondents were the only shareholders who signed the resolution with exclusion of the other two, then automatically a suspicion of fraud would be inferred because the question would be why only the two shareholders attending and effecting transfer of shares to themselves from the other two shareholders.

- 70. The handwriting expert report ought to have been corroborated with the evidence of any other person justifying that the said meeting did not actually take place. The weight to be attached to an expert opinion depends on whether there is a demonstrably objective procedure that guided the expert to reach the opinion proffered. - 71. An expert opinion can be rejected if it is inconsistent with the rest of the evidence available to court, where the inconsistency between the two is so great as to falsify the opinion. In light of the above, in view of the overall weight of the evidence I find that the evidence of the respondents is more plausible than that of the complainants. I shall accordingly reject the expert opinion presented by the Complainants and agree with the report adduced by the Respondents. - 72. Furthermore, since both experts were not presented before me for examination, I will not rely so much on both expert reports and will proceed to analyse the documents myself. - 73. The complaints were disputing the resolution dated $16/03/2020$ and registered on 12/02/2021 together with two transfer forms dated


$16/03/2020$ and registered on $12/02/2021$ alleging that the signature of the late Sam Musoke Kirunda was forged and therefore, the transfer of his 50 shares to the respondents was illegally and unlawfully done.

- 74. From my own analysis of the signatures on the resolution dated $16/03/2020$ registered on $12/02/2021$ and the two transfer forms dated $16/03/2020$ registered on $12/02/2021$ , the signature of the late Sam Musoke Kirunda that appears in the Memorandum and Articles of Association dated 5/11/2007 and is closely similar to that on the transfer forms and resolution in dispute. - 75. The deceased did not participate much in the affairs of the company and barely signed any resolution apart from one dated 10/09/2012 and registered on $12/09/2012$ , since the affairs of the company were mostly run by the respondents. - 76. The documents in question were purportedly executed on $16/03/2020$ and the deceased passed on the $08/12/2020$ , and the documents were registered on $12/02/2021$ . - 77. There isn't any dispute that had ever been filed on Fortune Investments Company Limited by any member or by the deceased himself and I would presume that the affairs of the company were being conducted in a manner not oppressive or prejudicial to anyone. - 78. The prevailing circumstances after $18/03/2020$ , when the 1<sup>st</sup> lockdown was announced and immediately enforced were so unpredictable

which stifled many activities at the time which could have included registration of certain documents with in time.

79. Therefore, in light of the evidence on the record I find no sufficient evidence to prove that the signatures on the Resolution and transfer forms were forged and also the aspects of forgery or fraud as claimed by the complainants were not specifically pleaded in the complaint and neither did the complainants avail any evidence by way of statutory declaration to support their complaint as per the case of Bryan Xsabo Strategy Consultants (Uganda) Limited & 2 Others Vs Great Lakes Energy Company N. V (Company Cause No. 13 of 2020) [2021] UGHCCD 73 where The registrar did not have any statutory declaration on record as the evidence supporting the complaint (petition or answer to the Petition) this was a procedural irregularity which is contrary to provisions of the companies Act specifically Section 288. The registrar could not act without clear evidence under statutory declaration or evidence taken viva voce. In the instant case, the complainant only submitted a complaint in form of an ordinary letter without any supporting evidence by way of statutory declaration from the administrators of the Estate of the late Sam Musoke Kirunda. 80. Therefore, in resolution of issue 1, the transfer of the 50 shares from the Late Sam Musoke Kirunda to the Respondents in Fortune Investments Company Limited was done legally. Therefore, the transfer of the 50 shares to the respondents is valid.


## Issue 2

## What remedies are available to the Complainants?

- 81. In seeking cancellation or rectification of the transfer of shares on account of fraud, the alleged fraud must be attributable to the transferee. It must be brought home to the person whose registered shares were impeached or to his or her agents (see Fredrick J. K. Zaabwe v. Orient Bank and 5 others, S. C. Civil Appeal No. 4 of 2006 and Kampala Bottlers Ltd v. Damanico (U) Ltd., S. C. Civil Appeal No. 22of 1992). The burden of pleading and proving that fraud lies on the person alleging it and the standard of proof is beyond mere balance of probabilities required in ordinary civil cases though not beyond reasonable doubt as in criminal cases (see Sebuliba v. Cooperative bank Limited [1987] HCB 130 and M. Kibalya v. Kibalya [1994-95] HCB 80). The Complainants were not able to provide evidence to occasion the cancelling of the transfer of 50 shares from the late Sam Musoke Kirunda in Fortune Investments Company Limited to the respondents. - 82. The Complainants under paragraph 5 of their complaint sought redress from the registrar to rectify the register of companies and expunge the share and stocks form and the resolution passed by the Respondents effecting the transfer of 50 shares to the Respondents from the company register.

83. The Registrar has the power to rectify and update the register in instances where the information is misleading, inaccurate, with error, or an illegal endorsement by virtue of Regulations 3, 8, and 9 of the Companies (Powers of the Registrars) Regulations, 2016

84. Therefore, in light of the findings under issue 1;

- 1. The transfer and registration of 50 shares to the Respondents in Fortune Investments Company Limited a private company limited by shares was legal, lawful and therefore valid. - 2. Each party to bear its own costs.

*Right of appeal explained.*

I so order.

Muliisa Solomon

Registrar

08/09/2023