Butemba Dairy Cooperative Society & 3 Others v The Registrar of Cooperatives & 4 Others (Miscellaneous Cause 1 of 2024) [2024] UGHC 1017 (25 October 2024)

Full Case Text

### THE REPUBLIC OF UGANDA

#### IN THE HIGH COURT OF UGANDA HOLDEN AT KIBOGA

# **MISCELLANEOUS CAUSE NO.0001 OF 2024**

BUTEMBA DAIRY COOPERATIVE SOCIETY $1.$ $2.$ NZABARIRWA FALASKO <table>

.................................... $3.$ **MUGISHA ENOCK** $4.$ KALINGANIRE JOSEPH **VERSUS** THE REGISTRAR OF COOPERATIVES 1. $2.$ THE DPC KYANKWANZI $3.$ **MBANZA JAMES** <pre>:::::::::::::::::::::::::::::::::::: $4.$ WANTEGYE MARGARET $5.$ OWOMUGISHA STEVEN

# **BEFORE: HON. JUSTICE KAREMANI JAMSON. K**

# **RULING**

# Introduction.

On 19th April 2024 when this matter came up for hearing, the 1st and 4th respondents in the original notice of motion were struck out of the pleadings. This left the $2^{nd}$ (the registrar cooperatives), 3rd (the DPC Kyankwanzi), 5th (Mbanza James), 6th (Wantegye Margaret) and 7th (Owomugisha Steven) respondents. The remaining respondents were

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$\mathbf{1}$

renumbered as the 1st, 2nd, 3rd, 4th and 5th respondents respectively as shall henceforth be referred to as such in this ruling.

Only the 3rd respondent filed an affidavit in reply. The rest of the respondents never responded to the application despite being served therefore the matter shall proceed ex parte against the $1^{st}$ , $2^{nd}$ , $4^{th}$ and $5^{th}$ respondents.

The 1st applicant is a member based cooperative society established to organize and promote the welfare and economic interests of its members. The $2^{nd}$ , $3^{rd}$ and $4^{th}$ applicants are members of the 1st applicant is averred to be the current acting chairperson, treasurer and secretary respectively of the 1st applicant.

The 1st respondent is a public officer responsible for providing and administering the services required by societies for their formation, organization, registration, deregistration, operation and advancement.

The $2nd$ respondent is the district police commander of Kyankwanzi district,

the $3^{rd}$ 4th and 5th respondents are said to be the chairperson, the treasurer and the secretary of the $1^{st}$ applicant respectively.

The applicants brought this application under Article 139 of the Constitution of Uganda, Section 98 of the Civil Procedure Act and Sections 14 and 33 of the Judicature Act against the respondents seeking the following orders;

- A declaration that the failure by the $1^{st}$ and $2^{nd}$ respondent to implement the $1^{st}$ $a)$ applicant's resolution of $18^{th}$ July 2022 is illegal, irrational and tainted with procedural impropriety and contrary to the law and natural justice; - An injunction doth issue restraining the 3rd, $4^{th}$ and $5^{th}$ respondents from $\mathbf{b}$ conducting any business of the 5th respondent and masquerading as office bearers of the 5th respondent and any business conducted be declared null and void; - An order directing the $3^{rd}$ to $7^{5h}$ respondents to account for all finances of the $1^{st}$ $c)$ applicant from the time they occupied office until the ruling;

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- $d$ ) An order of prohibition doth issue restraining the $3rd$ to $5th$ respondents from interfering in matters concerning the 1st applicant which are outside their mandate as stipulated under the law and further prohibiting the $3rd$ to $5th$ respondents from making orders, decision or directions affecting the normal running of the 1st applicant and denying new elected leaders of the $1^{\text{st}}$ applicant from accessing their offices and the same be opened; - An order of mandamus compelling the 1st and 2nd respondents to put in effect the $e)$ 1st applicant's resolutions of the 18th July 2022 of installing, protecting and having offices open for the $2nd$ to $4th$ applicants as new elected and returned office bearers pending annual general meeting; - $\mathbf{f}$ General damages and punitive damages be paid by the 3rd to 5th respondents; - Costs of the application. $g$

#### Grounds.

The grounds of the application as contained in the application and the supporting affidavit sworn by Karengera James Tumwine on behalf of the 1st applicant and Kalinganire Joseph – the 4th applicant but briefly are that;

- 1. The 1st applicant was formed to promote the social economic interests of its members: - $2.$ The 3rd to $5^{th}$ respondents were elected as the $1^{st}$ leaders but they have since personalized and mismanaged the cooperative to the detriment of the members/cooperative; - The 3rd to 5th respondents' term of office expired but they illegally continued $3.$ occupying office and intentionally refused and/or failed to organize elections; - $4.$ The members caused a general meeting held on 18th July 2022 wherein they resolved to appoint the $2^{nd}$ to $4^{th}$ applicants as committee members to take office with immediate effect;

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- 5. The 3rd to 5th respondents did not attend the meeting of 18th July 2022 in anticipation of what would happen to them like electing them out of office; - Despite the resolutions of $18^{th}$ July 2022, the $3^{rd}$ to $5^{th}$ respondents have continued 6. to denied the elected office bearers access to the offices, to conduct, occupy the 1st applicant's offices which act is illegal, ultra vires and contrary to the law and natural justice; - The 3rd to 5th respondents have refused to leave office or to surrender the office 7. despite of the demands and requests after they were removed from office and their term of office had expired in 2020; - 8. The impugned omissions, actions have cause the applicant and all members of the applicant untold suffering, inconvenience and great loss.

The 3rd respondent Mbanza James filed an affidavit in reply opposing the application on the following grounds;

- $1.$ That he is the chairman of Butemba Cooperative Society limited; - That the application is frivolous, vexatious, devoid of merit and is an abuse of $2.$ court process for which it is prayed that the application be struck out with costs; - $3.$ That the matters complained about in the application allegedly made resolutions purporting to change management of the board; - $4.$ That he is informed by his lawyers that the issues involved in the application are complex and the same cannot be resolved by affidavit evidence; - 5. That the applicants have no locus standi to file the application; - 6. That he and his board have led the 1st applicant in an exemplary manner and the majority of the $1^{st}$ applicant's members are happy with the style of management; - 7. That the appointment of the $2^{nd}$ to $4^{th}$ applicants as committee members was done illegally and without the support of the majority of members of the 1st applicant; - 8. That him and the board members are lawfully occupying office as the annual general meeting has not been held through which new office bearers can be elected:

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9. That the audit report of the cooperative accounts can be obtained at the $1st$ applicant's offices;

The 3rd and 4th applicants did not file any affidavit in support of their application and therefore their application is struck out summarily for lack of an affidavit in support.

### Representation

The 1st and $2^{nd}$ applicants were represented by Mr. Wamimbi Samson of M/S Kajeke, Muguru and Co. Advocates while the 3rd respondent was represented by Ms. Nakazi Margret of M/S Malik Advocates.

Both parties filed written submissions for consideration by this court.

#### **Issues for determination**

- 1. Whether the decision made by the applicants on $18$ th July 2022 is legal and binding on the respondents; - 2. If so, Whether the $1^{st}$ and $2^{nd}$ respondents' failure to implement the $1^{st}$ applicant's resolution of 18th July, 2022 is illegal, irrational and tainted with procedural impropriety and contrary to law and natural justice; - **3.** What remedies are available to the parties?

# **Preliminary objections**

Counsel for the respondents raised preliminary objections to wit;

- 1. That the applicants have no locus standi to bring this application, - 2. That the application has been filed out of time, - 3. Lack of jurisdiction to entertain this application.

The above objection shall be resolved in form of issues

# 1. Whether the applicants have locus standi to institute this application.

Counsel for the respondents submitted that he 1st applicant is a corporate body established under section 6(5) of the Cooperative Societies Act but there is no resolution on court record authorizing the applicants to file the application. Counsel cited the case of **Bugerere Coffee** Growers V Sebadduka and Anor (1970) EA 147 where it was held that a suit/application instituted by a company without the authority of the company members is a nullity.

Counsel for the applicant submitted that in the case of **Re Nakiviubo [1979] HCB 12**, it was held that the *words "persons aggrieved"* ... ... ... must be a man who has suffered a legal grievance, a man against whom a decision has been pronounced which has wrongly deprived him of something, or wrongfully affected his title. That in the instant case, it is not in doubt that the 1st applicant is a body corporate and the $2^{nd}$ to $4^{th}$ applicants are committee members of the 1st applicant who have been aggrieved by the acts of the 3rd to 5th respondents of continuing to illegally hold office after their term expired and after they were voted out of office for mismanagement.

# **Analysis by Court**

A cooperative society is a corporate body which can sue or be sued according to Section 6 (5) of the Cooperative Societies Act cap 107. Case law has had different positions on whether there is need for a company resolution in order for it to bring a suit.

In the Tanzanian case of ER Investment Ltd vs, The Tazania Development Finance Co. Ltd and Anor Civil Case No. 66 Of 1999, the court held that the suit was incompetent for lack of a board resolution. On the other hand, the same court in the case of Tanzania Cigarrette Company Ltd V Burundi Tobacco Company Ltd and Anor Misc. Civil Cause No. 7 Of 2004 held that the board resolution was not a sin qua non requirement for a company to institute a suit.

On the other hand, in the Ugandan case of **Mukisa Biscuit versus West End Distributors** (1969) EA 696, it was held that in determining such a point of law (locus standi), the court

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is perfectly entitled to look at the pleadings and other relevant matters in its record while in the case of Ultra Cellular Services (U) Ltd and 2 Ors V Stanbic Bank (U) Ltd HCMA No. 504 Of 2015 Commercial court of Uganda), the court stated that each case is considered on the basis of its own facts. The question was whether there was authority and this must be considered from the facts.

In the instant case, I take note of the fact that the $2^{nd}$ to $4^{th}$ applicants are allegedly the new leaders of the $1st$ applicant following a meeting that cast a vote of no confidence in the 3rd to $5^{th}$ respondents who were the elected leaders of the $1^{st}$ applicant. In my view it would be very difficult for the applicants to obtain a resolution of the members or the board to file the current application given the fact that the $3rd$ to $5th$ respondents have allegedly denied the applicants access to the offices which they hold and therefore disrupted the proper running of the $1^{st}$ applicant.

It is my finding therefore that in this particular case the circumstances are peculiar since a resolution appears impossible and hence the applicants can be entertained without a board resolution to bring this application. This objection is thus overruled.

# 2. Whether the application has been filed out of time.

Counsel for the respondents submitted that the orders sought by the applicant for judicial review are required to be applied for within a period of 3 months from the date the grounds of the application first arose according to rule 5 (1) of the Judicature (Judicial Review) Rules 2009. That the resolution purporting to change management of the board were made on $18/7/2022$ and the application was filed in court on $4/4/2024$ which is 21 months after the said resolution was passed.

# **Analysis by Court**

Rule 2 of the Judicature (Judicial Review) Rules, 2009 defines judicial review to mean the process by which the High Court exercises its supervisory jurisdiction over the proceedings

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and decisions of subordinate courts, tribunals and other bodies or persons who carry out quasi-judicial functions or who are charged with the performance of public acts and duties.

Judicial review is a procedure that allows a party to challenge the lawfulness of a decision or action made by a public body.

Based on the above definition of judicial review, it is my considered position that this application seeks for an order prohibition and mandamus and hence qualifies to be a judicial review matter.

Whereas the wording and orders sought in this application appear to be of a different category other than judicial review, the fact that it seeks for orders of prohibition against the 3rd to 5th respondents from interfering in matters of the 1st applicant and an order of mandamus seeking to compel the 1st and 2nd respondents who are public servants to put in effect a resolution of the 1st applicant makes it an application for judicial review. The application has its grounds as the failure of the respondents to abide by the decision taken by the applicants on $18/7/2022$ .

According to Section 40 (7) of the Judicature Act an application for judicial review shall be made within three months.

In the instant case the application was made after three months and no leave of court was sought to extend time.

Therefore, an objection relating to timelines of filing an application for judicial review is applicable in this case. It could be the reason why the applicants did not want to come out clearly on the matter being a judicial review so as to disguise and camouflage in order to avoid the strict adherence to the timelines required in an application for judicial review.

TARRIN

This objection is sustained. This application is dismissed with costs for being time barred.

I so order.

"Mauvi"

KAREMANI JAMSON. K

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