In the Matter for an application of rectification of the company register by Kayemba(ms. Equator growers ) (Company Cause No. 5 of 1992) [1992] UGHC 86 (25 September 1992)

Full Case Text

&lt; THE PUBLIC OF N THE HIGH COURT OF UGaNDh. hT K^hl.iLA CaMPaHY CAUSE NO,5 OF 1992 IN THE MATTER OF TH., COMPANIES ACT (C^P 8^)

AND

IN THE, MaTTER GF M/S EQUATOR GRO^S

AND

IN THE MATTER GF nN APPLICaT ON BY RRaNCIS X KaYEMBA BEFORE: The Honou,rab 1e Mrs . Jus tice M. Eire,~ju R ¥ L I N G.

This is an application brought by the applicant Francis X. Kayemba under \*°.118 of the Companies net, Order ?4 A r.4, Or. 48 rr.1 2 and 3 of Civil Procedure Kulos and S. 101 of Civil Procedure Act. The application io by Notice of Motion and seek an order of this court that • the company Register in respect of M/S Equator Growers • Uganda Limited be rectified by re-instating the name of the applicant as a shareholder of 25 c^dinory shares of the .:• company And that notice of such rectification be given : ■■ to the Registrar of Companies, ordering him to effect the P said rectification in the companies Registry•' t ... ,j

The grounds of the application are set out in the • Affidavit of Francis X. Kayemba dated 19/5/^99^» At the hearing of this application the applicant was represented by Mr. Lameck Mukasa, learned counsel and the respondent was represented by Mr. E. K. Ssekandi learned counsel\*

Counsel for the applicant submitted that the main grounds of application were stated in the affidavit, in par. .giap'h 2 it was deponed that the applicant was a shareholder in the said.. company and was a holder of 15 paid up ordinary shares which were allocated to him and paid for in full on 10/5/1935\*

He also deponed to have inherited 19 paid up ordinary shares on the death of his late father. That by a lett r dated 21/12/19?7T the secretary of the Board of Directors of the company informed the that the Board meeting had been convened on 10/12/87-and resolved to terminate his meuborship in the company. The letter is annexed to the affidavit . and marked 'A1., By his letter dated 2/1/1988, annex. 'B' to the affidavit, the applicant objected to the allege? termination as being unlawful.

The applicant, averred that although he was director he was not invited to attend the meeting held on 10/12/87. Hnd since the»t meeting he has never been invited to rotund any of the shareholders meetings. All his efforts to have his shares reinstated on the company's shareholders register have since failed, he refvrr^d to a letter marked Annext 'G\* written by his **lawyers** to the company seeking his shax\*cs to be reinstated. The applicant fu. ther deponed in p^rr 10 of the affidavit that the company has not filed any annual return showing the list of shareholders with the Registrar of Companies. Counsel submitted that if the r gister is not rectified the applicant's interests will continue to'.be prejudge applicants membership could not just be terminated, that he could have forefeited his shares if he was not paid up, and he referred to paragraphs 28,29/^0 of the Articles of Association\* • Counsel submitted that as the applicant was a fully paid up shareholder the said par.graphs did not apply to him Counsel furth-r contended that failure to give the applicant notice of the meeting invalidated the meeting as it «es done wilfully, he referred court to the case of younger Va\*. Indies Imperial Club /1920/2KB \$2^ in support of his cont cutivng

Counsel submitted that there was enough ;.vid nc..- in the letter of the secretary to the Board addressed to uh. applicant to prove that the applicant was a shareholder^ the company and his membership had been terminated. Counsel pr y d that the orders prayed for be ..ranted to the applic nt.

Mr. Ssekandi, counsel for the respondent su^iaitt .d that the application snould be dismissed for lack of ^vitLaco. The application was against an incorporated company in Ug. nda and all documents affecting the company should h-.vd boon brought before court namely the memorandum and Article cf association rather than, just assuming that the coup., ny exists\*. Counsel submitted that the ap licant has not adduced evidence of his shares, namely the share certificatsf . coun. ;1 referred court to sections 75.j76,82,83 & 84 of the complies Act in . •' regard. Counsel submitted that no receipts w:re produced for which he paid for his shar s of grant of probate in respect of shares allegedly inherited from his father.

Counsel further submitted that the applicant tus- 'a- .director of the canjjany but he is accusing the company of net doing its obligations under the Companies Act, counsel contended that the applicant had come to court, with uncleax^ . hands as he was also flouting the law. The applicant did not **obtain** any evidence from the registrar of companies to support his allegations against the company. Counsel **^ubmitt^d\*thatfct** was not clear under which part of S.118 of the companies net the the application is brought, that/application was vague. Counsel concluded by submitting that the application should be dismissed with costs to the respondent.

After listening to submissions by both counsel end and after perusing the Notice of Motion t,ogeth..r .;ith supporting affidavit my task is to decide whether according

to the evidence before court, an order should be m.;.de re-instating the name of the applicant .,s a shareholder of 25 ordin ry shares in the company. Although the application did nut specify under what subsection of section 118 of the Companies' it was b-rought I am of the opinion that it was brought unc.-.r 1l8(i)(a) which states as follows

4 -

**4**

## " 1 If

(a) the name of any person is, without sufficient cause entered in or omitted from the register of members of a company's or,

(b; the person aggrevied, or any member of the company,, or the-company may apply to court for . , rectification of the register"

However, before the court can consider the merits of the application it has to firstsa^^^ itself chjt ths a shareholder in the said company and ho has to state how many shares he has and whether tney are paid up shares or not. The' applicant in this case should have pr^d^ged a share certific.ce in respect of his shares which would have revealed to court that the applicant was at the date of issue of certificate the holder of u Certain number of shares- and secondly the extent to which they were paid up. The Memorandum and articles of Association were also not attached to the application\* Annex ♦A\* to the affidavit which was referred to by counsel for the applicant as proof of the applicant shareholding in the companyt is general and does not tell this court whether the &lt; r- <•

applicant had paid up shares or not and the number of sh-.res is not stated#

*5*

The applicant did not produce any evidence from the ■Registrar of companies to show the position in the company register# I have therefore- found that before I c.m go into the merits of this application I have to first be satisfied that the applicant is a shareholder in the company I have to be satisfied as to what type of shares he h:lds and how many. The burden of providing this evidence to court is on the applicant and he has noi disch? r^».-d this responsibility•

**I** have therefore refused 'to grant **this** applic.ii.n due to lack of sufficient evidence. However the applicant is not barred from bringing fresh application\*

xhe application is accordingly dismissed with costs to the respondent.

J U D G E. 25/9/1992\* M. KIREJU 1<

## **26^/l\$92**

Mr. L. Mukasa - for the applicant Mr. E. K. Ssekandi - for the Respondent Mr. Oburu Court Clerk. Ruling delivered before the above.

•M\* KIREJU '

J U D G E.

25/9/1992