[2009] UGHC 143

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\b\fs28\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 \sbasedon0 \snext17 \sqformat \spriority0 \styrsid3630646 Title;}} {\*\rsidtbl \rsid546264\rsid1518395\rsid1524841\rsid2317013\rsid3304307\rsid3371764\rsid3630646\rsid4344646\rsid4535558\rsid4678092\rsid6248021\rsid8019511\rsid9978291\rsid11027266\rsid11076227\rsid12087849\rsid14168924\rsid15105200\rsid16058544}{\mmathPr \mmathFont34\mbrkBin0\mbrkBinSub0\msmallFrac0\mdispDef1\mlMargin0\mrMargin0\mdefJc1\mwrapIndent1440\mintLim0\mnaryLim1}{\info{\title IN THE HIGH COURT OF UGANDA AT KAMPALA}{\author fkamyuka}{\operator lreporting1}{\creatim\yr2010\mo7\dy23\hr10\min21} {\revtim\yr2010\mo7\dy23\hr10\min21}{\printim\yr2009\mo5\dy27\hr13\min29}{\version2}{\edmins8}{\nofpages3}{\nofwords538}{\nofchars2791}{\*\company }{\nofcharsws3323}{\vern32859}}{\*\xmlnstbl {\xmlns1 http://schemas.microsoft.com/office/word/2003/wordml} {\xmlns2 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)}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \ltrpar\s17\qc \li0\ri0\sl360\slmult1 \widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11027266 \rtlch\fcs1 \ab\af0\afs24\alang1025 \ltrch\fcs0 \b\fs28\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\rtlch\fcs1 \af0 \ltrch\fcs0 \fs24\insrsid3630646\charrsid11027266 THE REPUBLIC OF UGANDA \par }\pard\plain \ltrpar\qc \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11027266 \rtlch\fcs1 \af0\afs24\alang1025 \ltrch\fcs0 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid4344646\charrsid11027266 IN THE HIGH COURT OF UGANDA AT KAMPALA \par \par HCT-00-CV-CI- NO 0027 OF 2009 \par \par }\pard \ltrpar\ql \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11027266 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid4344646\charrsid11027266 HUSSEINALI }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid11027266 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid4344646\charrsid11027266 H. JIVRAJ:::::::::::::::::::::::::::::::::::::::::PLAINTIFF \par }\pard \ltrpar\ql \li360\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid11027266 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid4344646\charrsid11027266 \par }\pard \ltrpar\qc \li360\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin360\itap0\pararsid11027266 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid4344646\charrsid11027266 VERSUS \par \par }\pard \ltrpar\ql \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11027266 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid4344646\charrsid11027266 RANCHERS LIMITED::::::::::::::::::::::::::::::::::::::::::::DEFENDANT \par \par }\pard \ltrpar\qc \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11027266 {\rtlch\fcs1 \ab\af0 \ltrch\fcs0 \b\insrsid4344646\charrsid11027266 \par BEFORE: HON. LADY JUSTICE ELIZABETH MUSOKE}{\rtlch\fcs1 \ab\af0 \ltrch\fcs0 \b\ul\insrsid4344646\charrsid11027266 \par }\pard \ltrpar\ql \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11027266 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid4344646\charrsid11027266 \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid11027266 RULING}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4344646\charrsid11027266 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \ul\insrsid6248021\charrsid11027266 \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11027266 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6248021\charrsid11027266 Moses Segawa\tab \tab -\tab for Applicant \par Applicant is not in court. \par Imelda Nagayi\tab \tab -\tab Court Clerk \par \par This application is brought under Order 38 rule 6(h) and Section 135 of the Companies Act Cap. 110 seeking orders that an extra ordinary general meeting of the Company be }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3630646\charrsid11027266 called}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11027266 , }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6248021\charrsid11027266 held and conducted by the Applicant, Husseinali H. Jivraj, the only surviving shareholder to do }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3630646\charrsid11027266 act}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6248021\charrsid11027266 as in (a) - (c). \par \par }\pard \ltrpar\qj \fi-720\li720\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid11027266 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6248021\charrsid11027266 2.\tab Consequently to the above order, a meeting of the Board of directions be held to do (a) - (b). \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11027266 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6248021\charrsid11027266 \par 3.\tab Orders that costs be provided for by the}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4535558\charrsid11027266 company. \par \par Supported by the affidavit of the applicant deponed on 20/5/2009. \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\ul\insrsid4535558\charrsid11027266 Grounds of applications \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4535558\charrsid11027266 Applicant and one Ryaz Kulji formed Ranchers Limited in 2002. Ranchers held 50% shares in the company both of them directions and joint signatories to all company accounts. \par \par On 2/5/2009, Ruyaz Kulji}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6248021\charrsid11027266 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1518395\charrsid11027266 perished in a motor rally accident. The death has brought the business of the company to a standstill. Applicant is the only remaining member in the company. Provisions of Section }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4678092\charrsid11027266 29 of Company\rquote s Act requiring a company to have two member}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid546264\charrsid11027266 s, the company is now outside their provisions. Applicant risks being personally responsible for company debts of the company. See Section 30 of Company\rquote s Act.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6248021\charrsid11027266 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid546264\charrsid11027266 \par Another legal challenge; Company can neither convene a direction\rquote s meeting since as per Article 37 of the Articles of Association. It is required to have a minimum of two. There is no ordinary resolution reducing the }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2317013\charrsid11027266 number from two}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3304307 .}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2317013\charrsid11027266 \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid2317013\charrsid11027266 Article 43; \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2317013\charrsid11027266 A simple majority of the directions may meet together for dispatch of business. \par \par Applicant cannot call on extra general meeting of the company since such a meeting is called at instance of the Board in which is now non existent. Even if it were called, since there is a }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14168924\charrsid11027266 requirement for a simple majority, it would not be able to come up with a simple majority. See also Section 141 of the Act.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2317013\charrsid11027266 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14168924\charrsid11027266 \par In the context of the prevailing situation, the company is stuck. The applicant is unable to access company funds. Company is not meeting its obligation to suppliers, employees etc. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11076227\charrsid11027266 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid11076227\charrsid11027266 Risk of suits against it. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11076227\charrsid11027266 Based on this, the only way out is the one provided for under Section 135 of the Company\rquote s Act. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9978291\charrsid11027266 \par The predicament of the company falls squarely within the provisions of that Section. The Section empowers court to address such a situation where it is impracticable to call a meeting of the company in any manner. \par \par Court has power to enable applicant constitute such meeting. \par \par Court is invited to grant the orders prayed for. \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\ul\insrsid9978291\charrsid11027266 Court \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9978291\charrsid11027266 What happens to the interest of the deceased? \par \par The applicant is the Managing Director of the company and is under Fiduciary duty }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1524841\charrsid11027266 to exercise his powers at the Board and in management with proper purpose.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9978291\charrsid11027266 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1524841\charrsid11027266 \par When the executor comes in he has not to take over the shares of the legal representative. Legal representative would make the applicant accountable he can convene an extra ordinary meeting a control. \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\ul\insrsid1524841\charrsid11027266 Court \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1524841\charrsid11027266 Ruling on 28/5/2009 at 4.00 p.m. \par \par \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid1524841\charrsid11027266 {\*\xmlopen\xmlns2{\factoidname PersonName}}Elizabeth Musoke{\*\xmlclose} \par JUDGE \par 27/05/2009 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4344646\charrsid11027266 \par }\pard \ltrpar\ql \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid11027266 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12087849\charrsid11027266 \par }{\*\themedata 504b030414000600080000002100828abc13fa0000001c020000130000005b436f6e74656e745f54797065735d2e786d6cac91cb6ac3301045f785fe83d0b6d8 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