[2010] UGHC 229

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\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid479191\charrsid2382016 THE REPUBLIC OF UGANDA}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid15279595\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid7827115\charrsid2382016 IN THE HIGH COURT OF }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid479191\charrsid2382016 UGANDA AT KAMPALA \par IN THE MATTER OF MORINGA LIMITED \par AND \par IN THE MATTER OF THE COMPANIES ACT, CAP 110 \par COMPANIES CAUSE NO. 21 OF 2009 \par \par }\pard \ltrpar\ql \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid479191\charrsid2382016 \par IRENE KULABAKO ::::::::::::::::::::::::::::::::::::::::::::::PETITIONER \par \par VERSUS \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\lang1024\langfe1024\noproof\insrsid479191\charrsid2382016 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\af0 \ltrch\fcs0 \b\insrsid479191\charrsid2382016 MORINGA LIMITED \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid479191\charrsid2382016 \hich\af0\dbch\af0\loch\f0 2.\tab}DAVID CASE\tab \tab ::::::::::::::::::::::::::::RESPONDENTS \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid479191\charrsid2382016 \hich\af0\dbch\af0\loch\f0 3.\tab}CHARLES CASE }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid5526167\charrsid2382016 \par }\pard \ltrpar\ql \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid5526167\charrsid2382016 \par \par BEFORE: }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\ul\insrsid5526167\charrsid2382016 THE HONOURABLE MR. JUSTICE YOROKAMU BAMWINE \par \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\ul\insrsid5526167\charrsid2382016 JUDGMENT}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5526167\charrsid2382016 \par This action was brought by way of a petition under Section 211 of the Companies Act (Cap.110) and Rule 2 (1) of the Companies (Winding up)}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8876056\charrsid2382016 Rules S}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10824610\charrsid2382016 .}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8876056\charrsid2382016 1 10 \endash 2. It is for orders that this Honourable court}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3874168\charrsid2382016 be pleased to order the respondents to purchase her shares at the current market value; that this court be pleased to make such other orders as it may deem fit; that the respondents pay costs of this petition.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5526167\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3874168\charrsid2382016 \par From the pleadings, Moringa Limited, the 1}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid3874168\charrsid2382016 st}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3874168\charrsid2382016 respondent herein, was incorporated on 29/07/2003 as a private limited liability company, with a share capital of Shs.5,000,000/= divided into 100 shares of Shs.50,000/=}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5719150\charrsid2382016 each; the majority shareholders being David Case and Charles Case, holding 50 and 40 shares each respectively. The remaining 10 shares went to the petitioner, Irene Kulabako. }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3874168\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5719150\charrsid2382016 \par From the pleadings also, differences have arisen in the manner in which the affairs of the company are being conducted. It is the petitioner\rquote s case that the affairs of the company are being conducted in a manner }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15807717\charrsid2382016 oppressive to her as a minority shareholder. Hence this petition.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5719150\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15807717\charrsid2382016 \par At the conferencing the parties agreed that: \par \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15807717\charrsid2382016 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \ltrpar\qj \fi-720\li1080\ri0\sl360\slmult1\widctlpar \jclisttab\tx1080\wrapdefault\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1080\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15807717\charrsid2382016 The petitioner is a shareholder in the company. \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15807717\charrsid2382016 \hich\af0\dbch\af0\loch\f0 2.\tab}The 2}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid15807717\charrsid2382016 nd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15807717\charrsid2382016 and 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid15807717\charrsid2382016 rd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15807717\charrsid2382016 respondents are Shareholders and Directors in the company. \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15807717\charrsid2382016 \hich\af0\dbch\af0\loch\f0 3.\tab}The petitioner was removed as director of the company. \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15807717\charrsid2382016 \hich\af0\dbch\af0\loch\f0 4.\tab}Land comprised in LRV 2693 Folio 13 Plot 41 Luthuli Avenue was registered in the names of Moringa Limited on 6/05/04 under Instrument No. 342897. \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1399703\charrsid2382016 \par The following issues have been framed for court\rquote s determination: \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11482901\charrsid2382016 \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1399703\charrsid2382016 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \ltrpar\qj \fi-720\li1080\ri0\sl360\slmult1\widctlpar \jclisttab\tx1080\wrapdefault\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin1080\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1399703\charrsid2382016 Whether the petitioner has been oppressed by majority shareholders and the affairs of the company are being operated in a manner oppressive to the Petitioner. \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7110654\charrsid2382016 \hich\af0\dbch\af0\loch\f0 2.\tab}}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7110654\charrsid2382016 If so, whether the petitioner is entitled to the reliefs claimed.}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1399703\charrsid2382016 \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7110654\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid7110654\charrsid2382016 Representations: \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7110654\charrsid2382016 M/s Omunyokol & Co. Advocates for the petitioner. \par M/s Sebalu & Lule Advocates for the respondents. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13056973\charrsid2382016 \par }\pard \ltrpar\qj \fi-1800\li1800\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin1800\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid13056973\charrsid2382016 Issue No. 1}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13056973\charrsid2382016 : }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid13056973\charrsid2382016 Whether the peti tioner has been oppressed by the majority shareholders of the company and the affairs of the company are being conducted in a manner oppressive to the petitioner. \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13056973\charrsid2382016 I have already indicated that the petition is founded upon Section 211 of the Companies Act. This section provides an alternative remedy for winding up in cases of oppression. It provides: \par \par }\pard \ltrpar\qj \li851\ri851\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin851\lin851\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid13056973\charrsid2382016 \'93 211 (1) Any 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 \'85\'85\'85 ..may make an application to the court by petition for an order under this section.\'94 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid929142\charrsid2382016 \par }\pard \ltrpar\qj \li0\ri0\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid929142\charrsid2382016 If in any such petition the court is of the opinion that the complaint is genuine, it may, with a view to bringing to an end the matters complained of, make such order as it thinks fit, whether for regulating the conduct of the companies affairs in future, or for the purchase of the shares of any members of the company by other members }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15666271\charrsid2382016 of the company or by the company itself.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid929142\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14115100\charrsid2382016 \par }\pard \ltrpar\qj \li0\ri0\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14115100\charrsid2382016 From a historical perspective}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid606734\charrsid2382016 , Section 211 of the Companies Act, as replicated from Section 210 Companies Act, 1948 (U. K), arose out of the need to redress the imbalance between majority shareholder control and minority shareholders rights within the corporate structure. This }{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8334708\charrsid2382016 development was especially significant, according to Company Law in Uganda by D. J. Bakibinga, 2001 Edition at p. 224, given the Courts\rquote reluctance to interfere into the affairs of the company.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3560676\charrsid2382016 \par The difficulty that arises is that there cannot be any universal definition as to what amounts to }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2320901\charrsid2382016 \lquote }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3560676\charrsid2382016 oppressiveness}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2320901\charrsid2382016 \rquote }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3560676\charrsid2382016 in the context of Section}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2320901\charrsid2382016 211}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3560676\charrsid2382016 . Each case must therefore be determined on}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7152674\charrsid2382016 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3560676\charrsid2382016 th}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7152674\charrsid2382016 e}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3560676\charrsid2382016 basis of its own unique facts and circumstances.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14115100\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7152674\charrsid2382016 In }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid7152674\charrsid2382016 R}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid16060900\charrsid2382016 e Nakivubo Chemists (U) Ltd [197}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid7152674\charrsid2382016 7] HCB 312}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7152674\charrsid2382016 the court o bserved that for the petitioner to succeed under Section 211 of the Companies Act, he must show not only that there has been oppression of the minority shareholders of a company but also that it has been the affairs of the company which have been conducte d in an oppressive manner. The oppression must be to a person in his capacity as a shareholder and not his any other capacity.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6711237\charrsid2382016 Lord Keith in }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid6711237\charrsid2382016 Elder vs Elder & Watson Ltd (1952) S. C. 49}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6711237\charrsid2382016 thought that oppressive conduct involved \'93an element of lack of probity and fair dealings,\'94 while Lord Co} {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16517691\charrsid2382016 o}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6711237\charrsid2382016 per in the same case suggested that it was conduct which amounted to a \'93 visible departure from the standards of fair dealing and violation of the conditions of fair play.\'94}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7152674\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7687468\charrsid2382016 From the above discourse, there cannot be an all embracing definition of what in law amounts to \lquote oppression.\rquote }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10356475\charrsid2382016 It (oppression) manifests itself in various ways. One therefore needs to look at the conduct complained of vis-\'e0-vis the genuine exercise of a power, say by the majority in a business organization.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7687468\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10356475\charrsid2382016 I have considered the various complaints raised by the petition}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9131823\charrsid2382016 er }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10356475\charrsid2382016 as the basis for this action. I have also considered the respondents\rquote re}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9131823\charrsid2382016 ply}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10356475\charrsid2382016 thereto. What it adds up to is not any different from a relationship of a couple in a rocky marriage, where the couple can hardly share a bed, in this case, a board room table. \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid10356475\charrsid2382016 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \ltrpar\qj \fi-720\li1080\ri0\sb240\sl360\slmult1\widctlpar \jclisttab\tx1080\wrapdefault\aspalpha\aspnum\faauto\ls4\adjustright\rin0\lin1080\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid10356475\charrsid2382016 Transferring the property of the company to another company owned by the majority}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid13593744\charrsid2382016 shareholders.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid10356475\charrsid2382016 \par }\pard \ltrpar\qj \li0\ri0\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7172780\charrsid2382016 It is an admitted fact that land comprised in LRV 2693 Folio 13 Plot 41 Luthuli Avenue in Bugolobi was registered in the names of Moringa Limited on 6/05/2004. The company was incorporated in July 2003, implying that at the time}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15492950\charrsid2382016 of its acquisition the company was already in }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7995973\charrsid2382016 existence}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15492950\charrsid2382016 . From the records also, by the time this petition was filed}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7995973\charrsid2382016 on April 17, 2009}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15492950\charrsid2382016 , the suit prop}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2552\charrsid2382016 erty was registered in the name of}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15492950\charrsid2382016 Moringa Limited. A copy of the Certificate of title for the property together with the Statement of Search from the Commissioner Land Registration, both confirm that as at 31/08/2009, the registered owner was Moringa Limited.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13593744\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15357693\charrsid2382016 As fate}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10058473\charrsid2382016 would have it, during the pende}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15357693\charrsid2382016 ncy of this suit, the respondents transferred the company property to another company wholly owned by }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid17741\charrsid2382016 the 2}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid17741\charrsid2382016 nd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid17741\charrsid2382016 and 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid17741\charrsid2382016 rd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid17741\charrsid2382016 respondents known as Muwafu Holdings Limited. This was don e despite the }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3478243\charrsid2382016 existence}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid17741\charrsid2382016 of the petitioner\rquote s caveat on the property. The presumption here is that the respondents manipulated the co}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid132080\charrsid2382016 rrupt land registration system to}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid17741\charrsid2382016 their }{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3478243\charrsid2382016 advantage}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid17741\charrsid2382016 to the prejudice of the petitioner.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15357693\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6233502\charrsid2382016 Turning now to the ownership of the su it property, there is evidence that in April 2004 the directors of Moringa Limited resolved that the company applies for a loan of US $125,000. Those directors included the petitioner. The bank gave a written offer to the company which offer the company accepted. There is therefore irrefutable documentary evidence that it is the company which purchased the suit property using the said loan facility. The contention of the respondents is that the 2}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid6233502\charrsid2382016 nd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6233502\charrsid2382016 and 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid6233502\charrsid2382016 rd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6233502\charrsid2382016 respondents were the beneficial owners of the property having used their private funds to repay the loan. The explanation offered for this is that the company\rquote s books of account do not show any monies coming from the company to repay the loan. I think this argument }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9574018\charrsid2382016 is frail}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6233502\charrsid2382016 . An incorporated company is an entity distinct from its members. As long as there is evidence that the borrower was Moringa Limited and that the purpose of the loan was for the purchase of the suit property, the resultant purchase was for the company and not any of the individua l members. It is trite that evidence cannot be admitted (or if admitted it cannot be used) to add to, vary or contradict a written instrument. In relation to contracts, it means that where a contract has been reduced }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4471209\charrsid2382016 to writing, as in the instant case, ne ither party can rely on evidence of terms alleged to have been agreed, which is extrinsic document, that is, not contained in it. Relating this principle to the instant case, it is in my view immaterial that the 2}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid4471209\charrsid2382016 nd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4471209\charrsid2382016 and 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid4471209\charrsid2382016 rd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4471209\charrsid2382016 respondents advanced money to the company in the process of paying off the debt. }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11341352\charrsid2382016 F}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4471209\charrsid2382016 rom the pleadings and available evidence the property}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15729295\charrsid2382016 belonged to the company}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12867596\charrsid2382016 -}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15729295\charrsid2382016 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12867596\charrsid2382016 P}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15729295\charrsid2382016 eriod.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5067365\charrsid2382016 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6233502\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15729295\charrsid2382016 It is submitted by learned counsel for the petitioner that by st}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5067365\charrsid2382016 ri}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15729295\charrsid2382016 pping the company of its priced asset, namely, th e suit property, by transferring it to Muwafu Holdings Limited, a company whole owned by the majority shareholders herein, the majority shareholders acted in a manner that was }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13720028\charrsid2382016 oppressive}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15729295\charrsid2382016 to the petitioner, a minority shareholder. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16714004\charrsid2382016 On the strength of evidence before me, I\rquote m unable to come to a contrary opinion. I therefore accept learned counsel\rquote s submission on this point. \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid2651422\charrsid2382016 \hich\af0\dbch\af0\loch\f0 2.\tab}}\pard \ltrpar\qj \fi-720\li1080\ri0\sb240\sl360\slmult1\widctlpar \jclisttab\tx1080\wrapdefault\aspalpha\aspnum\faauto\ls4\adjustright\rin0\lin1080\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid2651422\charrsid2382016 Paying out colossal sums of money as rent for the company whereas the company was occupying its own premises (the suit property). }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid16714004\charrsid2382016 \par }\pard \ltrpar\qj \li0\ri0\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2651422\charrsid2382016 From the records, the company has paid out huge sums of money as rent for the company in respect of the suit property. During the }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13516128\charrsid2382016 pende}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2651422\charrsid2382016 ncy of the suit, evidence emerged that in September 2007, without the knowledge of the petitioner, the company entered into a tenancy agreement with Muwafu Holdings Limited in which the company (Moringa Limited) rented the suit property}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11612913\charrsid2382016 from the said Muwafu Holdings Limited. This was so despite the fact that even by August 2009 the property was still registered in the names of Moringa }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11737348\charrsid2382016 L}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11612913\charrsid2382016 imited. In other words, a company (Muwafu Holdings Limited) wholly owned by the majority shareholders herein, the 2}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid11612913\charrsid2382016 nd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11612913\charrsid2382016 and 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid11612913\charrsid2382016 rd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11612913\charrsid2382016 respondents, started }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11737348\charrsid2382016 siphon}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11612913\charrsid2382016 ing }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11737348\charrsid2382016 money}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11612913\charrsid2382016 from Moringa Limited}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11737348\charrsid2382016 under pretext of paying rent}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11612913\charrsid2382016 . The respondents\rquote justification for this bizarre conduct is that after all the two respondents (2}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid11612913\charrsid2382016 nd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11612913\charrsid2382016 and 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid11612913\charrsid2382016 rd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11612913\charrsid2382016 ) were the beneficial owners }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13305506\charrsid2382016 of the property. This argument is to say the least absurd. It demonstrates how the majority shareholders can oppress the minority shareholders using t heir numerical strength. In the instant case they (the majority shareholders) acted in a manner oppressive to the petitioner.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2651422\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13305506\charrsid2382016 I so find. \par }\pard \ltrpar\qj \fi-720\li720\ri0\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid5247383\charrsid2382016 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5247383\charrsid2382016 .\tab }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid5247383\charrsid2382016 Forcing the petitioner to sell her shares at a paltry sum of Shs.10,000,000/=. \par }\pard \ltrpar\qj \li0\ri0\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5247383\charrsid2382016 There is evidence to }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6255977\charrsid2382016 the effect}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5247383\charrsid2382016 that when }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15347007\charrsid2382016 the differences between the petitioner and her co-shareholders became irreconcilable, the latter put the former under immense pressure to surrender her interest in the company for a consideration of Shs.10m or else be forcefully ejected from the comp any. In the course of time she lost her directorship. She rejected the Shs.10m offer mainly because:}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5247383\charrsid2382016 \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15347007\charrsid2382016 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \ltrpar\qj \fi-720\li1080\ri0\sb240\sl360\slmult1\widctlpar \jclisttab\tx1080\wrapdefault\aspalpha\aspnum\faauto\ls5\adjustright\rin0\lin1080\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15347007\charrsid2382016 the value of the suit property was excluded; and \par {\listtext\pard\plain\ltrpar \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15347007\charrsid2382016 \hich\af0\dbch\af0\loch\f0 2.\tab}the respondents rejected the component of Goodwill in the computation. \par }\pard \ltrpar\qj \li0\ri0\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15347007\charrsid2382016 I have already }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15012256\charrsid2382016 resolved}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15347007\charrsid2382016 the issue of ownership of the suit property. }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15949705\charrsid2382016 For the avoidance of the doubts, the property belonged to Moringa Limited, and not the }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15012256\charrsid2382016 so called }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15949705\charrsid2382016 beneficial owners, 2}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid15949705\charrsid2382016 nd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15949705\charrsid2382016 and 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid15949705\charrsid2382016 rd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15949705\charrsid2382016 respondents in their individual capacities.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15347007\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2061485\charrsid2382016 From the pleadings, the petitioner with the kn owledge of the respondents engaged the services of auditors, M/S Spring Associates, a firm of Certified Public Accountants to ascertain the value of her shares in the company. They came up with a value of Shs.134,839,795/=. The figure takes into account the value attached to the suit property of Shs.650,000,000/=. Another Firm of Public Accountants, M/s Raitz & Co. Certified Public Accountants, }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4547860\charrsid2382016 have returned a value of Shs.2,137,865/= in favour of }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14701922\charrsid2382016 t}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4547860\charrsid2382016 he petitioner or Shs.13,483,980/= in the even}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14701922\charrsid2382016 t}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4547860\charrsid2382016 that the petitioner\rquote s auditors calculation of net assets of Shs.1,348,397,952/= is accepted without any adjustment. His proposal is based on the current registered shares of Shs.1000 (that is, 10/1000 x 1,348,397,952).}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2061485\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5596528\charrsid2382016 I have looked at both Valuation Reports.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4547860\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5596528\charrsid2382016 Commenting on the basis of valuation, Mr. Siragi Atwine, a partner in Raitz & Co. observed: \par }\pard \ltrpar\qj \li851\ri851\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin851\lin851\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid5596528\charrsid2382016 \'93 I find the method of Valuation (Net Asset Basis) that was used by M/s Irene Kulabako\rquote s appointed a}{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid16277733\charrsid2382016 uditors reasonable and indeed more }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid5596528\charrsid2382016 appropriate.\'94 \par }\pard \ltrpar\qj \li0\ri0\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6699764\charrsid2382016 In view of that concession, I\rquote m unable to fault M/s Katuramu & Co\rquote s valuation }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1922604\charrsid2382016 as regards the value of Plot 41 Luthuli Avenue.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6699764\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1922604\charrsid2382016 As regards Goodwill, I have already indicated that the auditors, M/s Spring Associates, valued the Petitioner\rquote s interest in Moringa Limited based on the disclosed}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14775766\charrsid2382016 properties/assets at Shs.134,839,795/=.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1922604\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14775766\charrsid2382016 The figure contains an element of Goodwill assessed on the Net Assets. \par The basis for rejecting the element of Goodwill in the petitioner\rquote s valuation, according to M/s Raitz & Co., is that in the accounti ng standard for Intangible Assets, IAS 38, internally generated goodwill is not recognized as an asset because it is not an identifiable }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11539703\charrsid2382016 resource controlled by the entity that can be measured reliably at cost. It is the view of these valuers that Goodwill, which is an intangible asset, should not have been included in the valuation of the petitioner\rquote s shares }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4872150\charrsid2382016 in the company since it is very subjective and its value, if any}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5048974\charrsid2382016 ,}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4872150\charrsid2382016 cannot be easily ascertained in the absence of an acquisition of the firm}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5584631\charrsid2382016 . Further, that the computation of goodwill is based on the assumption that the company will continue to have its current clients, which is equally speculative.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14775766\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4593439\charrsid2382016 This is no doubt an interesting subject. What makes it even more interesting is the second valuer\rquote s atte mpt to discredit the valuation report of the first one in a bid to express an opinion that favours the respondent}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5048974\charrsid2382016 s}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4593439\charrsid2382016 on a matter fairly common to both }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11819943\charrsid2382016 value}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5048974\charrsid2382016 rs}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4593439\charrsid2382016 .}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5584631\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4593439\charrsid2382016 I will do the best I can in the unique circumstances of this case. \par The leading authority on the meaning of \lquote goodwill\rquote is to be found }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8810761\charrsid2382016 in the }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid8810761\charrsid2382016 Commissioner of In land Revenue vs Muller & Co.\rquote s Margarine, Limited [1901] A C 217}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16739009\charrsid2382016 where in answer to the question \lquote What is goodwill?\rquote }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9187534\charrsid2382016 Lord Macnaghten said:}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4593439\charrsid2382016 \par }\pard \ltrpar\qj \li851\ri851\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin851\lin851\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid16734447\charrsid2382016 \'93 It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old established business from a new business at its first start.\'94 \par }\pard \ltrpar\qj \li0\ri0\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16539741\charrsid2382016 I agree and would only add that \lquote goodwill\rquote is an intangible asset representing the value of, for example, the company\rquote s client base, its reputation and potential future earnings. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1862393\charrsid2382016 Intangible a}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3277586\charrsid2382016 s}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1862393\charrsid2382016 it is, goodwill is an asset to a company. Like other assets, it can be included in the valuation of a shareholder\rquote s interest in a company. My take on this is that if the business is unprofitable and has to be valued on a break-up basis, the goodwill has no value. If, however, the exit of a minority shareholder is on account of the majority shareholders}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14558180\charrsid2382016 \rquote }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1862393\charrsid2382016 oppression to him/her, the shareholder is in my view entitled to goodwill compensation since his/her departure from the company is viewed as a blessing to the company. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15084305\charrsid2382016 Applying the above principle to the instant case, it is evident that M/s Spring Associates calculated the company\rquote s maintainable profits over a past period of four years and nine months for which accounts were available. It all shows that the petitioner is leaving }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 a profitable company. On the basis of their calculation, the value on the goodwill, taken on the assumption that the company will continue to maintain earnings at the same level for the next 4 years comes to Shs.652,908,000/=.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15026124\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 The International Financial Reporting Standards (IFRS) of 2009,}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid7503132\charrsid2382016 a}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 document which learned counsel for the respondents have availed to me, does not show that goodwill is excluded from consideration in }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6970101\charrsid2382016 all }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 valuations of this nature. \par What is excluded is internally generated goodwill, a distinct form of goodwill where, in a company, expenditure is incurred to generate future economic benefits. Such expenditur}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6970101\charrsid2382016 e does not result in the creation}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 of an intangible asset that meets the recognition criteria in IFRS. \par I have studied the valuation report compiled by M/s Spring Associates. It does not include any element of internally generated goodwill which, }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1379354\charrsid2382016 in the above context}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 , is not recognized as an asset because it is not an identifiable resource (that is, it is not separable nor does it arise from contractual or other leg al rights) controlled by the company that can be measured reliably at cost. In all these circumstances, I am of the }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5458079\charrsid2382016 opinion }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 that the submission of learned couns}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5458079\charrsid2382016 el for the respondents on this p}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 oint }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5458079\charrsid2382016 cannot succeed}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 . }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9777629\charrsid2382016 I}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 t is }{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9777629\charrsid2382016 in my view }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 immaterial that goodwill is premised on the assumption that the company will continue to have its current clients, }{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9777629\charrsid2382016 arguably }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid3219229\charrsid2382016 speculative, as long as it is internationally recognized as an asset for purposes of shares and assets valuation. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11108276\charrsid2382016 From the pleadings, the amount she was off ered as representing her interest in the company was grossly unrealistic. It did not take into account the value of Plot 41 Luthuli Avenue and/or any element of the company goodwill to which she had contributed as director and shareholder. The attempt t o eject her from the company }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13268453\charrsid2382016 before resolution of these two issues }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11108276\charrsid2382016 was in }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13268453\charrsid2382016 my view}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11108276\charrsid2382016 unfair and oppressive. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid674795\charrsid2382016 I would add that matters of managing the company are better resolved in the company board room. In meetings, members normally express their wishes as t o how the affairs of the company ought to be run. This is done through voting for or against resolutions. The decision of the majority will normally prevail, a practice known as the rule in }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid674795\charrsid2382016 Foss vs Harbottle (1843) Hare 461}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid674795\charrsid2382016 . Where there are irreconcilab le disagreements, Section 135 of the Companies Act may be invoked. This is a more civilized way of running the affairs of a company than }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid11025669\charrsid2382016 resorting to intimidatory}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid674795\charrsid2382016 threats. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid990397\charrsid2382016 I would agree with the submission of counsel for the petitioner that stampeding her into accepting a payment of Shs.10m when her interest in the company had not been valued and }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid544865\charrsid2382016 before }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid990397\charrsid2382016 the issue of ownership of Plot 41 Luthu}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid544865\charrsid2382016 li Avenue was resolved;}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid990397\charrsid2382016 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid544865\charrsid2382016 coupled with }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid990397\charrsid2382016 the issuance of threats to throw her out of the company for being stubborn}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid544865\charrsid2382016 ,}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid990397\charrsid2382016 were all oppressive. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6763668\charrsid2382016 As regards reduction of her share holding interest in the company, I have already indicated that she started off with 10%. In the course of time, she was removed from her directorship. The decision to remove her was taken in her absence , despite indication to them that she was not available. Later, the same majority share holders went ahead to increase the share capital on selfish grounds to convert loans allegedly advanced to the company to share capital.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9272705\charrsid2382016 Hence the increase of the share capital to Shs.50m, up from Shs.5m. In the process loans amounting to Shs.4}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid2760501\charrsid2382016 4}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9272705\charrsid2382016 m were converted into shares all to the advantage of the }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid27695\charrsid2382016 majority shareholders. And this in effect reduced her shareholding to a meager 1% }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid15406911\charrsid2382016 or }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid27695\charrsid2382016 even less. I am of the considered view that all these maneuvers were to give the 2}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid27695\charrsid2382016 nd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid27695\charrsid2382016 and 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \super\insrsid27695\charrsid2382016 rd}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid27695\charrsid2382016 respondents full control of the company and to frustrate the petitioner, a minority shareholder. If there has ever been a case of the majority systematically undermining and oppressing the minority in a company, this was it.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6763668\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8595222\charrsid2382016 For the reasons stated above, I would answer the first issue in the affirmative and I do so. \par }\pard \ltrpar\qj \fi-1980\li1980\ri0\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin1980\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid6895090\charrsid2382016 Issue No. 2: }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\i\insrsid6895090\charrsid2382016 Whether the petitioner is entitled to the reliefs claimed.}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6895090\charrsid2382016 \par }\pard \ltrpar\qj \li0\ri0\sb240\sl360\slmult1\widctlpar\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid2382016 {\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6895090\charrsid2382016 It is submitted on behalf of the petitioner that although there are grounds that qualify the company to be wound up, that is, oppression of a minority shareholder, if the company is wou}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8077043\charrsid2382016 n}{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6895090\charrsid2382016 d up, it will unfairly prejudice the interests of the petitioner as the value of the shares would greatly decrease. }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10105182\charrsid2382016 There is meri t in this submission and I hold so}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6895090\charrsid2382016 . \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1919028\charrsid2382016 The petitioner\rquote s main prayer is for this court to order the respondents to purchase }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5140904\charrsid2382016 her}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1919028\charrsid2382016 shares at the current market value. M/s Spring Associates valued the petitioner\rquote s shares in the company. There is evidence that in the course of this exercise the said valuers encountered challenges, including hiding of useful information from them. Taking into account the value of Plot 41 Luthuli Avenue and the element of goodwill in the company, they arrived at a figure of Shs.13 4,839,795/=. I have already indicated with reasons that the valuation by Raitz & Co. is unreliable and therefore unacceptable to the court. In view of this rejection, I\rquote m inclined to the view that the petitioner\rquote s interest in Moringa Limited is indeed in the region of Shs.134,839,795/=}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 and not Shs.13,483,980/= as proposed by the respondents. Taking into account all imponderables, including the possibility that as a human being pro}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid10059326\charrsid2382016 n}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 e to weaknesses the petitioner }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid9184980\charrsid2382016 \par +}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 may have contributed to the bad blood between herself and her colleagues in the company}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid1184441\charrsid2382016 ,}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 directly or indirectly}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid8261008\charrsid2382016 ,}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 I would discount the figure of Shs.134,839,795/= by a factor of }{ \rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13399800\charrsid2382016 20}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 % and assess the value of her interest in the company at Shs.1}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13399800\charrsid2382016 07,871}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 ,8}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13399800\charrsid2382016 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 6/= (i.e. 134,839,795 x }{\rtlch\fcs1 \af0 \ltrch\fcs0 \ul\insrsid4217665\charrsid2382016 20}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4217665\charrsid2382016 = 26,967,959 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13399800\charrsid2382016 less }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4217665\charrsid2382016 Shs.134,839,705/=}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid12127855\charrsid2382016 ).}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4217665\charrsid2382016 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5534408\charrsid2382016 \par 100}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid4217665\charrsid2382016 }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid5333691\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 I do so and order the respondents to pay it to her, i.e. Shs.1}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16396857\charrsid2382016 07}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 ,}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16396857\charrsid2382016 871}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 ,8}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16396857\charrsid2382016 3}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 6/=, a}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16396857\charrsid2382016 s}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 she }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid16396857\charrsid2382016 lets go the affairs of }{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 the company. \par The award shall attract interest of 2}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid6513628\charrsid2382016 0}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 % per annum from the date of judgment till payment in full. \par The petitioner shall also have the taxed costs of the petition. \par Orders accordingly. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid5333691\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid14972029\charrsid2382016 Yorokamu Bamwine \par JUDGE \par 01/04/2010 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid5333691\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid13787031\charrsid2382016 Order}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid13787031\charrsid2382016 : \par This judgment shall in my absence be delivered on my behalf by the Deputy Registrar. \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid1253550\charrsid2382016 \par }{\rtlch\fcs1 \af0 \ltrch\fcs0 \b\insrsid13787031\charrsid2382016 Yorokamu Bamwine \par JUDGE \par 01/04/2010}{\rtlch\fcs1 \af0 \ltrch\fcs0 \insrsid14972029\charrsid2382016 \par }{\*\themedata 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