[2006] UGCommC 51

Source-derived case information.

Citation: [2006] UGCommC 51
Parties: Plaintiff: Joel Odong Amen; Plaintiff: Judith Odong Amen; Defendant: Dr. Ocero Andrew; Defendant: Dr. Jane Aceng Ocero
Court: Commercial Court of Uganda
Jurisdiction: Uganda
Case Number: HCT-00-CC-CS 602 of 2004
Procedural Posture: Civil Suit / Ruling on Preliminary Objection
Outcome: preliminary objection overruled; suit to proceed
Legal Topics: Shareholder Rights, Minority Protection, Derivative Actions, Company Law, Breach of Trust
Source Language: en

Commercial and Corporate Shareholder Rights Minority Protection Derivative Actions Company Law Breach of Trust

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Downloadable case file Legal principles 4 Authorities cited 12 Party arguments 2 Amounts and remedies 2

Parties

Joel Odong Amen

Plaintiff

Judith Odong Amen

Plaintiff

Dr. Ocero Andrew

Defendant

Dr. Jane Aceng Ocero

Defendant

Procedural Posture

Civil Suit / Ruling on Preliminary Objection

Legal Issues

1 Whether minority shareholders have a cause of action against majority shareholders for refusal to account for and distribute sale proceeds of a company.
2 Whether the suit should have been brought by the company or can be maintained by the minority shareholders in their own right.
3 Whether the pleadings disclose a cause of action against the defendants.

Ratio Decidendi

The court held that while the general rule is that only the company can sue for wrongs done to it (Foss v Harbottle), there are well-established exceptions, particularly where the wrongdoers are in control and prevent the company from acting. In this case, the plaintiffs, as minority shareholders, alleged that the majority shareholders (defendants) expropriated company funds and refused to account for or distribute the plaintiffs' 40% share of the sale proceeds. The court found that the pleadings disclosed sufficient allegations of wrongdoing and breach of trust by the majority, and that the plaintiffs fell within the exceptions to the rule, especially since it would be impossible for the...

Court Disposition

preliminary objection overruled; suit to proceed

Orders

The preliminary point of law is overruled.
Costs to be in the cause.

Full Case Text

Judgment text and source record

3 paragraphs

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11}}}{\cs17\insrsid5836488 \par }\pard \s16\ql \li0\ri0\widctlpar\tqc\tx4320\tqr\tx8640\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0 {\insrsid5836488 \par }}{\*\pnseclvl1\pnucrm\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl2\pnucltr\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang {\pntxta .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang {\pntxta )}} {\*\pnseclvl5\pndec\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl6\pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl7\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl8 \pnlcltr\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}{\*\pnseclvl9\pnlcrm\pnstart1\pnindent720\pnhang {\pntxtb (}{\pntxta )}}\pard\plain \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 THE REPUBLIC OF UGANDA \par IN THE HIGH COURT OF UGANDA AT KAMPALA \par (COMMERCIAL COURT DIVISION) \par \par }{\b\lang2057\langfe1033\langnp2057\insrsid5645381\charrsid3550226 HCT-00-CC-CS}{\b\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 -0}{\b\lang2057\langfe1033\langnp2057\insrsid5645381\charrsid3550226 602}{ \b\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 -200}{\b\lang2057\langfe1033\langnp2057\insrsid5645381\charrsid3550226 4}{\b\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\b\lang2057\langfe1033\langnp2057\insrsid5645381\charrsid3550226 JOEL ODONG AMEN \par JUDITH ODONG AMEN}{\b\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 \'85\'85\'85\'85\'85\'85\'85\'85\'85\'85..}{\b\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 PLAINTIFF}{ \b\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\b\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 VERSUS \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\b\lang2057\langfe1033\langnp2057\insrsid5645381\charrsid3550226 DR. OCERO ANDREW \par DR. JANE ACENG OCERO}{\b\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 \'85\'85\'85\'85\'85\'85\'85\'85\'85.. DEFENDANT}{\b\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 \par \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\b\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 BEFORE: }{\b\ul\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 HON. JUSTICE LAMECK N. MUKASA}{\b\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 \par \par }{\b\ul\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 RULING: \par }{\b\ul\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid11103862\charrsid3550226 In this suit the plaintiff Joel Odong Amen and Judith }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 Odong are husband}{\lang2057\langfe1033\langnp2057\insrsid11103862\charrsid3550226 and wife. The defendants Dr. }{\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 Ocero Andrew} {\lang2057\langfe1033\langnp2057\insrsid11103862\charrsid3550226 and Dr. Jane Aceng Ocero are also }{\lang2057\langfe1033\langnp2057\insrsid6830323\charrsid3550226 husband and wife. All }{\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 the four}{\lang2057\langfe1033\langnp2057\insrsid6830323\charrsid3550226 were the only shareholders in M/s }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 Rhino Communication Company}{ \lang2057\langfe1033\langnp2057\insrsid6830323\charrsid3550226 Ltd, a limited liability company. The plaintiff}{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 s}{\lang2057\langfe1033\langnp2057\insrsid6830323\charrsid3550226 }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 jointly owned}{\lang2057\langfe1033\langnp2057\insrsid6830323\charrsid3550226 40% of }{\lang2057\langfe1033\langnp2057\insrsid13253728\charrsid3550226 the shares of }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the said}{\lang2057\langfe1033\langnp2057\insrsid13253728\charrsid3550226 company while the defendants jointly owned 60% of the shares.}{ \lang2057\langfe1033\langnp2057\insrsid11103862\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid13253728\charrsid3550226 \par The plaintiff\rquote s claim as pleaded in paragraph 4 of the plaint is briefly that the shareholders of Rhino Communication Company Ltd agreed to sell the company to Jackson Senyonga and Evelyn Senyonga at Ugshs 50,000,000/=. An agreement, annexture \'93A\'94 to the plaint}{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 , }{\lang2057\langfe1033\langnp2057\insrsid13253728\charrsid3550226 was made to that effect. That on receipt of the sales proceeds the defendants refused to hand over the 40% of the share of sales proceeds belonging to the plaintiff}{ \lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 s}{\lang2057\langfe1033\langnp2057\insrsid13253728\charrsid3550226 and of the account balances in Kampala and Lira Bank accounts of the company. The plaintiffs }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 brought this}{\lang2057\langfe1033\langnp2057\insrsid13253728\charrsid3550226 suit, inter alia, to the recover 40% of the sale proceeds, 40% of the }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 money on}{\lang2057\langfe1033\langnp2057\insrsid13253728\charrsid3550226 the company\rquote s }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 Kampala Bank}{ \lang2057\langfe1033\langnp2057\insrsid13253728\charrsid3550226 account and 40% of the }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 money on}{\lang2057\langfe1033\langnp2057\insrsid13253728\charrsid3550226 the company\rquote s Lira Bank account and general damages}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 for breach of trust.}{\lang2057\langfe1033\langnp2057\insrsid6830323\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 Representation was Mr. Hamu}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 Mugenyi for the plaintiffs and Richard Obonyo for the defendants. \par \par The plaintiffs adduced their evidence and closed their case. When the defence was due to open its evidence Mr. Richard Obonyo raised a preliminary point of }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 law}{ \lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 that the plaintiff}{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 s}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 as shareholders of M/}{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 S Rhine Communication Company}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 Ltd do not have a cause of action in this }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 matter against}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the defendants}{ \lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 . Counsel contended that it should have }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 been the Company }{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 R}{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 hino}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 Communication Company }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 Ltd to}{ \lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 institute the}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 suit if there was any breach. He argued that }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the alleged}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 breaches, if at all committed, were committed against }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the company}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 and }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 not the}{ \lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 plaintiffs. Counsel argued that:- \par \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid11226867\charrsid3550226 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \qj \fi-360\li720\ri0\sl360\slmult1\widctlpar \jclisttab\tx720\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin720\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 In }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 paragraph 3}{ \lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 of the plaint the plaintiffs claim 4}{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 %}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 of the account balances at Centenary Rural Development Bank. \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid11226867\charrsid3550226 \hich\af0\dbch\af0\loch\f0 2.\tab}In }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 paragraph 4}{ \lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 (e) the plaintiffs contend that the proceeds of the sale of the company were managed by M/S Ocen & Co Advocates without authorisation. \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid11226867\charrsid3550226 \hich\af0\dbch\af0\loch\f0 3.\tab}In paragraph 4 (}{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 h}{ \lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 ) }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the plaintiff\rquote s}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 claim that they were not }{ \lang2057\langfe1033\langnp2057\insrsid8019273\charrsid3550226 g}{\lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 ive}{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 n}{ \lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 proper accountability of the sales proceeds and account balances of the }{\lang2057\langfe1033\langnp2057\insrsid8019273\charrsid3550226 Company.}{ \lang2057\langfe1033\langnp2057\insrsid11226867\charrsid3550226 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid8019273\charrsid3550226 \par Counsel further argued that the }{\lang2057\langfe1033\langnp2057\insrsid6163799\charrsid3550226 cause of}{\lang2057\langfe1033\langnp2057\insrsid8019273\charrsid3550226 action is founded on the sale of the }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 Company\rquote s assets}{\lang2057\langfe1033\langnp2057\insrsid8019273\charrsid3550226 , revenue and acc}{\lang2057\langfe1033\langnp2057\insrsid6163799\charrsid3550226 ount balances as exhibited in the Sale Agreement- annexture A to the plaint. He submitted that since the }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 alleged wrongs}{\lang2057\langfe1033\langnp2057\insrsid6163799\charrsid3550226 }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 were committed}{\lang2057\langfe1033\langnp2057\insrsid6163799\charrsid3550226 against }{\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 the company the proper plaintiff to seek redress should have been }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 the company}{\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 itself. Counsel referred to }{ \ul\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 Foss Vs Harbottle (1843) 2 Hare 461 cited by Justice James Ogoola in Allied Bank International}{\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 }{ \ul\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 Ltd Vs Sandr}{\ul\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 u}{\ul\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 Kara & Abdul Kara HCT-00-CC-Cs 0191-2002}{\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 for the general rule that for }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 derivative}{ \lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 actions the proper plaintiff in an action to redress an alleged wrong to a company is the company itself . This is what is referred to as the famous rule }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 in }{\ul\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 Foss}{\ul\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 Vs Harbottle}{ \lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 . As of this rule it is }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 stated in}{\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 }{ \ul\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 G}{\ul\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 o}{\ul\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 wer\rquote s Principles of Modern Company La}{ \ul\lang2057\langfe1033\langnp2057\insrsid6105007\charrsid3550226 w}{\ul\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 }{\ul\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 4}{ \ul\lang2057\langfe1033\super\langnp2057\insrsid2637402\charrsid3550226 th}{\ul\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 Ed}{\ul\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 page 641}{ \lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 that }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 if a}{\lang2057\langfe1033\langnp2057\insrsid11209141\charrsid3550226 }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 complaint is}{\lang2057\langfe1033\langnp2057\insrsid6105007\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 m}{ \lang2057\langfe1033\langnp2057\insrsid6105007\charrsid3550226 a}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 d}{\lang2057\langfe1033\langnp2057\insrsid6105007\charrsid3550226 e that the directors have }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 broken their}{\lang2057\langfe1033\langnp2057\insrsid6105007\charrsid3550226 duties of }{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 loyalty}{ \lang2057\langfe1033\langnp2057\insrsid6105007\charrsid3550226 , ca}{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 r}{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 e}{ \lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 or sk}{\lang2057\langfe1033\langnp2057\insrsid6105007\charrsid3550226 ill }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the company}{ \lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 is the }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 proper plaintiff}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 in an action against them }{ \lang2057\langfe1033\langnp2057\insrsid8019273\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 \par In his submission Mr. Ham}{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 u}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 Mugenyi argued that there are exceptions to the rule in }{ \ul\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 Foss Vs Harbottle}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 (supra). Counsel cited }{\ul\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 Gowers (}{ \ul\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 supra}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 ) pages 642 \endash 643 where }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the learned}{ \lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 auditor spells out }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the following}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 exceptions t}{ \lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 o}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 the rule:- \par \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid9390597\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (i)\tab}}\pard \qj \fi-720\li1080\ri0\sl360\slmult1\widctlpar \jclisttab\tx1080\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1080\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 When it is claimed that the company is acting or }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 proposing to}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 act u}{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 l}{ \lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 tra }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 vires.}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid9390597\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (ii)\tab}When }{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 the act}{ \lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 complained of though not }{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 u}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 ltra vires}{ \lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 ,}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 t}{ \lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 he company}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 could be effective only if resolved upon }{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 by more than a }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 simple majority}{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 vote, say }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 where a}{ \lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 special or}{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 extra ordinary resolution is required and (it is alleged) has not been validity passed.}{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid14031914\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (iii)\tab}}{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 W}{ \lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 here it is alleged that }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the personal}{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 rights of the plaintiff shareholder }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 have been infringed}{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 or are about to be infringed at any rate if the wrong to the }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 plaintiff could}{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 not}{ \lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 be }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 rectified by}{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 an ordinary resolution of the company.

\par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid16582081\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (iv)\tab}Where those who control the company are perpetrating a fraud on the minority, \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid16582081\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (v)\tab}Any other case where the interests of Justice require that the general rule, requiring suit by the company, should be disregarded.

\par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 \par The learned author then states:- \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 \'93Apart from this }{ \lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 fifth except}{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 ,}{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 in so far as it exits, all the}{ \lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 s}{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 e excepts c}{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 ould be reduced to one by saying that an individual }{\lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 shareholder can}{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 }{ \lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 always sue}{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 , }{\lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 notwithstanding the}{ \lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 rule in }{\ul\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 Foss Vs Harbottle}{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 when }{ \lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 what }{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 he complains of could not be validity effected or ratified by }{ \lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 an ordinary resolution}{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 .\'94}{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 In the instant case there are only four shareholders }{ \lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 in }{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 the company. The }{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 plaintiffs are the minority shareholders with 40%}{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 ,}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 while }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the defendants}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 are the majority shareholders with 60}{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 % thus}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 with more control of the company. }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 The defendants}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 just like }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 the plaintiffs}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 are spouses. In the plaint the }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 breach complained}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid2652789\charrsid3550226 is}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 alleged to have been committed by or }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 with the}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 sanctioning of }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 the defendants}{ \lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 . }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 A suit by a company can onl}{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 y be sanctioned by a resolution }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 of the company. }{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 In }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 the above circumstances it}{ \lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 would }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 be quite}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 impossible for the }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 company to}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 pass a resolution to file a suite against the defendant}{ \lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 s}{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 who }{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 are}{ \lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 in its control }{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 for the }{\lang2057\langfe1033\langnp2057\insrsid12136463\charrsid3550226 breaches allegedly committed by them. }{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 \par The fifth exc}{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 ep}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 tion is in line with Article 126 of the Constitution which provides}{ \lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 :}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 \par \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 \'93126}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 (2) }{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 I}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 n adjudicating }{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 case of both civil and criminal }{ \lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 nature}{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 , the}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 Court shall, subject to the law, apply the }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 following principles}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 :- \par \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid6573602\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (a)\tab}}\pard \qj \fi-405\li765\ri0\sl360\slmult1\widctlpar \jclisttab\tx765\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin765\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 Justice shall be done to all irrespective of their social and economic status, \par }\pard \qj \li765\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin765\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 --- \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid6573602\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (e)\tab}}\pard \qj \fi-405\li765\ri0\sl360\slmult1\widctlpar \jclisttab\tx765\aspalpha\aspnum\faauto\ls4\adjustright\rin0\lin765\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 Substantive justice shall be administered without undue regard to technicalities \'93 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 \par In }{\ul\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 Allied }{\ul\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 Bank International}{\ul\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 ltd Vs Sad}{ \ul\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 ru}{\ul\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 Kara }{\ul\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 4}{ \ul\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 }{\ul\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 Another (}{\ul\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 Supra}{ \lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 ) Justice Ogoola, }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 P.}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 J. pointed out that there }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 are exceptions}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 to that general rule, the parameters of which have been carefully }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 crafted and}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 strictly defined. He cited }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 from Modern}{ \lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 Company Law (2}{\lang2057\langfe1033\super\langnp2057\insrsid6573602\charrsid3550226 nd}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 Ed}{ \lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 )}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 page 528 fo}{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 r}{ \lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 the rationale}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 for exception}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 as thus:- \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 \'93If}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 there }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 were no}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 such exceptions, the minority would be completely in the hand}{ \lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 s}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 of the }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 majority.}{ \lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 Even the}{\lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 limitations imposed}{ \lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 by the substantive law }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 would be}{\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 stultified, for as long as }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 the company}{\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 remained a going concern no action could effectively be brought to enforce them.\'94}{ \lang2057\langfe1033\langnp2057\insrsid6573602\charrsid3550226 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 \par In }{\ul\lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 Salim Jamal}{\ul\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 & Others Vs Uganda Oxygen Ltd & Another S. C}{ \ul\lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 , C}{\ul\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 . A}{\ul\lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 , No}{ \ul\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 , 64 of 195}{\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 . Oder JSC stated: \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 \'93}{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 T} {\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 wo }{\lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 recent decisions}{\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 in our jurisdiction will, I think }{ \lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 suffice to illustrate that courts }{\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 will go behind the corporate veil in the interest }{ \lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 of justice}{\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 , on grounds of fraud, to enforce compliance with contractual obligations or enforce economic realities }{ \lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 obtaining under}{\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 a holding company and its subsidiaries.\'94 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 \par His }{\lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 Lordship then}{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 named and }{ \lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 discussed National}{\ul\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 }{\ul\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 Enterprise}{ \ul\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 s}{\ul\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 Corporation Vs Nile }{\ul\lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 Bank Civil}{ \ul\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 Appeal No 17/94 (SCU}{\ul\lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 )}{\lang2057\langfe1033\langnp2057\insrsid3550226\charrsid3550226 unreported}{ \lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 and }{\ul\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 Fam International & }{\ul\lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 Another Vs}{ \ul\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 Ahamed Halid e}{\ul\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 l}{\ul\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 Fathi Civil Appeal No. 6/93 (SCU)}{ \lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 unreported.}{\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 Substantive Justice}{\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 demands that }{\lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 where the}{ \lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 minorit}{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 ies}{\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 rights cannot }{ \lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 be enforced}{\lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 by an action because of the majorities making it impossible for the company }{ \lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 to }{\lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 institute a}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 suit the}{ \lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 n}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 a shareholder }{\lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 can himself}{ \lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 file the suit if he can bring }{\lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 himself within}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 }{ \lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 the ambit}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 of the exceptions to }{\lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 the Foss}{ \ul\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 Vs Harbottle}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 rule. The pleadings in the instant case }{\lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 show that}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 the }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 plaintiffs were}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 in }{ \lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 the circumstances}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 within that ambit}{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 .}{ \lang2057\langfe1033\langnp2057\insrsid7078199\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 \par However, Counsel for }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the defendant}{\lang2057\langfe1033\langnp2057\insrsid665153\charrsid3550226 s}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 submitted that for a shareholder to file a suit within the exception he must by his pleading}{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 s}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 show that his case was within the exceptions to the general rule. }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 He argued first}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 that in the }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 plaintiffs}{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 \rquote }{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 pleadings there was }{ \lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 nothing to}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 indicate that fraud had be}{\lang2057\langfe1033\langnp2057\insrsid3159373\charrsid3550226 en committed }{ \lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 by the defendants}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 and further that there were no particulars of fraud pleaded. Secondly that }{ \lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 in such}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 an acti}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 o}{ \lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 n the }{\lang2057\langfe1033\langnp2057\insrsid5115001\charrsid3550226 company against}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 which }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the alleged}{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 wrong had been committed should }{ \lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 have been }{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 made a party. He submitted that this is a strict requirement which had not been satisfied. Thirdly }{ \lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the plaintiffs}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 must have filed the suit in a }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 repres}{ \lang2057\langfe1033\langnp2057\insrsid665153\charrsid3550226 entative}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 capacity. }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 They should}{ \lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 have shown by their pleadings that }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 they were}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 suing on behalf of }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 the company}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 but }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 that they}{ \lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 had sued in }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 their names}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 having failed to obtain a company resolution to file a suit in the }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 company\rquote s name}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 . and }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 further that}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 the wrongs complained of could not be ratified by the }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 general meeting}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 of the company. \par \par In }{\ul\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 Allied Bank International Ltd Vs Sad}{\ul\lang2057\langfe1033\langnp2057\insrsid665153\charrsid3550226 ru}{\ul\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 Kara & Other}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 (supra) Justice James Ogoola stated:- \par \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 \'93What is abundantly obvious }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 however}{\lang2057\langfe1033\langnp2057\insrsid14747745\charrsid3550226 is the obligation }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 for the}{ \lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 particular shareholder to bring himself squarely within }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the ambit}{ \lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 of the exception }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 to }{\ul\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 Foss}{ \ul\lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 Vs Harbottle}{\lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 . }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 The criteria}{ \lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 for this have been clearly established by among others, }{\ul\lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 Gowers Principles of Modern Company Law (3}{ \ul\lang2057\langfe1033\super\langnp2057\insrsid5143722\charrsid3550226 rd}{\ul\lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 Edn}{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 ).}{ \lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 The principles }{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 were recited}{\lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 , with approval, by Order JSC in the }{\ul\lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 Uganda Oxygen Case}{\lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 supra at page 137 thus.}{ \lang2057\langfe1033\langnp2057\insrsid665153\charrsid3550226 \'94}{\lang2057\langfe1033\langnp2057\insrsid5143722\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 \lquote (i) Normally, the wrong complained of must be such as to }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 involve fraud}{\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 on the }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 minority,}{ \lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 which could not been validly waived by }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the company}{\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 in a general meeting, }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 such conduct}{\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 include: \par \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid12153800\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (a)\tab}}\pard \qj \fi-405\li765\ri0\sl360\slmult1\widctlpar \jclisttab\tx765\aspalpha\aspnum\faauto\ls5\adjustright\rin0\lin765\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 Expropriation of the property of the company or in some circumstances that of the }{ \lang2057\langfe1033\langnp2057\insrsid665153\charrsid3550226 minority}{\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 ; \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid12153800\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (b)\tab}Breach of the directors duties of subjective good faith; \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid12153800\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (c)\tab}Voting for company resolutions not bonafide in the interest of the company; \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid12153800\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (ii)\tab}}\pard \qj \fi-720\li1080\ri0\sl360\slmult1\widctlpar \jclisttab\tx1080\aspalpha\aspnum\faauto\ls6\adjustright\rin0\lin1080\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 It must be shown that}{\lang2057\langfe1033\langnp2057\insrsid665153\charrsid3550226 t}{ \lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 he alleged wrongdoers control the company. \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid12153800\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (iii)\tab}The company must be a defendant in the action \endash the company is the true plaintiff and if }{ \lang2057\langfe1033\langnp2057\insrsid665153\charrsid3550226 a}{\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 money judgment is recovered against the true defendants}{\lang2057\langfe1033\langnp2057\insrsid1118860\charrsid3550226 \endash the wrong doing directors or controllers \endash this will be in f}{\lang2057\langfe1033\langnp2057\insrsid665153\charrsid3550226 avour}{\lang2057\langfe1033\langnp2057\insrsid1118860\charrsid3550226 of }{ \lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 the company and not in favour of the individual shareholder who is nominal plaintiff. The company cannot, in }{\lang2057\langfe1033\langnp2057\insrsid2637402\charrsid3550226 fact be}{ \lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 the plaintiff because neither of its organ \endash the board of directors and the general meeting will authourise suit by it. As the next best thing the court insists upon its being made nominal defendant }{\lang2057\langfe1033\langnp2057\insrsid15362874\charrsid3550226 (}{\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 see }{ \ul\lang2057\langfe1033\langnp2057\insrsid4161397 Spokes Vs Gros}{\ul\lang2057\langfe1033\langnp2057\insrsid15362874\charrsid3550226 v}{\ul\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 enor Hotel (1897) 2 Q B 124}{ \lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 ) }{\lang2057\langfe1033\langnp2057\insrsid12153800\charrsid3550226 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 If the company has ceased to exist and cannot }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 be resuscitated}{\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 --- it seems that no action can be }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 brought:}{ \lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 }{\ul\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 Clarkson Vs}{\ul\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 Davies (1923) AC 100 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\ul\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid14234946\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (iv)\tab}}\pard \qj \fi-720\li1080\ri0\sl360\slmult1\widctlpar \jclisttab\tx1080\aspalpha\aspnum\faauto\ls6\adjustright\rin0\lin1080\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 The }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 shareholder must}{ \lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 sue in a representative capacity or on behalf of himself and the other members other than the real defendant}{\lang2057\langfe1033\langnp2057\insrsid15362874\charrsid3550226 ---}{ \lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 for it ensure}{\lang2057\langfe1033\langnp2057\insrsid15362874\charrsid3550226 s}{\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 that all the other shareholders are also bound by the result of the action (i.e. resjudicata). \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 \par All the above fo}{\lang2057\langfe1033\langnp2057\insrsid15362874\charrsid3550226 r}{\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 m}{\lang2057\langfe1033\langnp2057\insrsid15362874\charrsid3550226 s}{ \lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 a compa}{\lang2057\langfe1033\langnp2057\insrsid15362874\charrsid3550226 c}{\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 t summary and encapsulation of the law on derivative actions. ---\'93 \par \par I will now deal with each one of the above principles:- \par \par }{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 (i) }{\ul\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 Fraud on the minority \par }{\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 In }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the plaint}{\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 i}{ \lang2057\langfe1033\langnp2057\insrsid15362874\charrsid3550226 t}{\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 is stated that the defendants }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 without consulting}{ \lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 and without p}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 ermission of the plaintiffs appointed M/s Ocen & Co Advocates as }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the advocates}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 for the }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 sale of}{ \lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 Rhino }{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 C}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 ommunications }{ \lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 C}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 ompany Ltd who inst}{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 ructed}{ \lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 the purchase}{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 r}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 s Jackson Senyonga and Evelyn Senyonga to channel the }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 sales payment}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 th}{ \lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 r}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 ough the said law firm. Secondly, that }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 on receipt}{ \lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 of the sale proceeds }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 through their}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 advocates, the defendants }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 refused to}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 hand over the plaintiffs}{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 \rquote }{ \lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 40% }{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 o}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 f the shares of the sales proceeds belonging to the plaintiffs. }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 Further that}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 the defendants }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 refused to}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 hand }{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 over }{ \lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 40% of the sums of the money on }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 Centenary Rural}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 Development Accounts at Kampala and Lira branches. Thirdly, that the defendants claimed that they had use}{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 d}{\lang2057\langfe1033\langnp2057\insrsid3804721\charrsid3550226 all the money to clear off the debts of Rhino Communication Company Ltd without the authority and permission of the plaintiffs and had failed to show the }{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 plaintiffs the vouchers of those payment for verification.}{\lang2057\langfe1033\langnp2057\insrsid14234946\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 \par Without going into the merits of the case at this stage the above allegation}{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 s}{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 show a claim of fraudulent expropriation of the }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 company\rquote s}{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 funds and the plaintiffs share interests in }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the proceeds}{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 of the sale of the shareholders shares in the company. The plaintiffs are the minority shareholders. The plaintiffs further plead that the defendants conduct was }{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 u}{ \lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 ntenable and a breach of the trust the plaintiffs has placed on the defendants as the majority shareholders of the company, \par \par }{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 (ii) }{\ul\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 Wrongdoe}{\ul\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 r}{ \ul\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 s being in control of the company}{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 - }{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 the defendants were the majority shareholders with 60% shareholding. Evidence so far adduced shows that the }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 first defendant}{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 , Dr. Ocero Andrew was the Managing Director in the company}{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 and the second defendant Dr. }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 Jane Aceng}{ \lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 Acero was also a director in the company}{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 . They are the alleged wrongdoers and in the circumstances had control of the company. \par }{\lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 (iii)}{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 }{\ul\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 The company must be a defendant}{ \lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 . }{\lang2057\langfe1033\langnp2057\insrsid10441246\charrsid3550226 The requirement}{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 to make }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the company a}{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 party to}{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 }{ \lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 th}{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 e}{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 proceedings as a nominal defendant has not been satisfied in the instant case. However, the underlying intention of derivative actions is to enable the minority redress a wrong }{\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 b}{ \lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 rought upon the company by the miscreant majority. To ensure justice to the minority this Court can invoke the provisions of 0.1 rule 9 CPR which provides: \par \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 \'93No}{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 suit shall be defeated by reason of mis}{\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 joinder or non rejoinder of parties and the Court may in }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 every suit}{\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 deal with the matter in controversy so as far as regards the rights and interests of the parties actually before it. \'94}{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 \par The plaintiffs also have a right under 0.1 rule 13 CPR at any stage to make an application for leave of Court to add }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the company}{ \lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 as defendant. And if found necessary this court can pursuant }{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 to }{ \lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 its in}{\lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 herent}{\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 powers under section 98 of the Civil Procedure Act order the company to be added as a defendant in order to promote the ends of justice or to prevent abuse of the process of Court. \par }{\ul\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 (iv)}{\ul\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 The shareholder to sue in a representative capacity or on behalf of himself and other }{ \ul\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 members other}{\ul\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 }{\ul\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 than the}{ \ul\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 defendants}{\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 - There}{ \lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 were four shareholders in the Company Two of the four are the defendants and }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the two}{ \lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 plaintiffs are the only }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 other members}{\lang2057\langfe1033\langnp2057\insrsid7757480\charrsid3550226 . Therefore, this requirement is satisfied.}{\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 As }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 to the}{\lang2057\langfe1033\langnp2057\insrsid6374600\charrsid3550226 requirement to s}{ \lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 pecifically }{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 plead fraud, in cases of }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 this}{ \lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 nature }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 fraudulent dealing}{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 can be regarded }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 as synonymous}{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 to wrong doing. }{\lang2057\langfe1033\langnp2057\insrsid7757480\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 \par In }{\ul\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 Gower (supra) at page 588}{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 the learned author t}{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 alk}{ \lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 s of a \'93wrong\'94 done to the company interchangeably with \'93fraud\'94 and then specifically list examples of such \'93fraud\'94 as including expropriation, breach of directors duties, voting resolutions that are not bonafide the interest of the company. I therefore find the requirement not so strict in case of }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 this nature}{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 . }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 The plaintiff\rquote s}{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 pleadings have disclosed }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 the defendants\rquote complained}{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 of }{ \lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 wrongdoing which}{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid1129855\charrsid3550226 satisfies that}{ \lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 requirement. \par \par It }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 was also}{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 argued }{\lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 by counsel for the defendants that the agreements attached to the }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 plaintiffs\rquote }{\lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 pleadings were }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 in subsistence}{\lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 executed by the persons }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 named therein without} {\lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 the capacity to bring this suit. In the }{\ul\lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 Uganda Oxygen Ltd}{ \lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 case (supra) Justice Oder, JSC, quoting from }{\ul\lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 Moir Vs Waller Steiner (1975)}{ \ul\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 /}{\ul\lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 All ER}{\lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 849, stated:- \par }\pard \qj \li567\ri567\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin567\lin567\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 \'93\endash }{ \lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 Derivative action is a suit by a shareholder to enforce a corporate cause of action. }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 The corporation}{ \lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 i}{\lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 s a necessary party and the relief }{ \lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 which is granted is a judgment against a third party in favour of }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the corporation}{ \lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 . An action is derivative when action is }{\lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 based upon}{\lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 a primary right of the corporation but is asserted on its behalf by the shareholder because of the }{\lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 corporations failure, deliberately}{ \lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 or otherwise, to act upon }{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 the}{\lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 primary right.\'94}{ \lang2057\langfe1033\langnp2057\insrsid13857232\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid6780577\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 Annexture A to the p}{ \lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 l}{\lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 aint is the sale Agreement. The seller}{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 s}{ \lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 are therein named as }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 \'93Dr}{\lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 . Ocen Andrew, Judith Rose Odongo, Jane Ruth Oceng Ocero and Joel Odong Amen being shareholders of Rhino Communication Company Limited\'94 It is stated therein that \'93the sellers are the t}{ \lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 rue}{\lang2057\langfe1033\langnp2057\insrsid2778668\charrsid3550226 and registered shareholders of all the shares in Rhino Communications Company Limited }{ \lang2057\langfe1033\langnp2057\insrsid6295477\charrsid3550226 and the said company is the holder of a Broadcasting licence ---\'93 Further that \'93the sellers are de}{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 si}{ \lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 rous}{\lang2057\langfe1033\langnp2057\insrsid6295477\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 o}{ \lang2057\langfe1033\langnp2057\insrsid6295477\charrsid3550226 f selling all their shares in the said Rhino Communication Company Ltd and in transferring/divesting all th eir interest in the said licence issued in respect of Rhino Communication Company Limited \endash \'93 By the agreement it is stated in clause 1 thereof that \'93 the sellers HERBY TRANSFER CONVOY and DIV}{ \lang2057\langfe1033\langnp2057\insrsid5836488\charrsid3550226 E}{\lang2057\langfe1033\langnp2057\insrsid6295477\charrsid3550226 ST ABSOLUTELY ALL their share interest in the company (inc luding its back accounts, assets and the equipment annexed hereto as appendix A) and Licence herein before mention .\'94 \par \par The agreement upon }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 which the}{\lang2057\langfe1033\langnp2057\insrsid6295477\charrsid3550226 plaintiffs}{\lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 \rquote }{ \lang2057\langfe1033\langnp2057\insrsid6295477\charrsid3550226 claim is founded was entered into by the plaintiffs and the defendants on }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the one}{ \lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid6295477\charrsid3550226 part }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 thereof as}{ \lang2057\langfe1033\langnp2057\insrsid6295477\charrsid3550226 the sellers of their shares and interests in the company and its properties. In otherwards they were selling }{\lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 the company}{ \lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 as a going concern. The }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 plaintiffs\rquote }{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 grievances against the defendants are}{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 with regard to their 40% share in the}{ \lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 proceeds of the sale and the funds}{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 available on the }{\lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 company\rquote s accounts}{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 . }{\lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 The suit}{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 is essentially }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 not based}{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 on the right of }{\lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 the}{ \lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 company but on the plaintiffs}{\lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 \rquote }{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 individual rights as holders of the shares. \par \par The three essential elements to support a cause of action are that:- \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid15742619\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (i)\tab}}\pard \qj \fi-720\li1080\ri0\sl360\slmult1\widctlpar \jclisttab\tx1080\aspalpha\aspnum\faauto\ls7\adjustright\rin0\lin1080\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 The plaintiff enjoyed a right \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid15742619\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (ii)\tab}The right has been violated \par {\listtext\pard\plain\lang2057\langfe1033\langfenp1033\insrsid15742619\charrsid3550226 \hich\af0\dbch\af0\loch\f0 (iii)\tab}The defendant is liable. \par }\pard \qj \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 \par The law is that if any of }{\lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 the above}{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 essential elements is }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 missing the}{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 plaint is a nullity an}{\lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 d}{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 no amendment can be made as there is nothing to amend. }{\ul\lang2057\langfe1033\langnp2057\insrsid4161397 Auto Garage & other Vs Moto}{\ul\lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 k}{ \ul\lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 ov }{\ul\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 No 3) (1971) EA 515}{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 .}{ \lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid15742619\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 I}{\lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 n}{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the agreement}{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 , annexture A to the plaint, the plaintiffs and the defendants }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 are selling}{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 their share in the company. In the pleading the plaintiffs }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 contend that}{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 they are}{ \lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 holders of 40% of the shares of the company and suc h have a 40% interest in the proceeds from the sale of the shares. The plaintiffs claim in paragraph 4(f) (g) and (h) is that the defendants on receipt of the }{\lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 sale proceeds}{ \lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 have refused to hand over the 40% share of the sale proceeds belonging to }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the plaintiffs}{ \lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 . }{\lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 Further it}{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 is claimed that the defendant\rquote s have }{ \lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 thereby breached}{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 the trust the plaintiffs had placed on them. \par \par The basis of the defendant}{\lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 \rquote }{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 s preliminary objection is that as }{ \lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 shareholders of}{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 M/s Rhino }{\lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 C}{ \lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 ommunications }{\lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 C}{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 ompany Ltd the plaintiffs did }{ \lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 not have}{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 a cause of action, that the plaintiff shou}{\lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 l}{ \lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 d have been the company. The plaintiffs claim against the defendants is }{\lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 in }{ \lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 respect of their entitlement to the proceeds from the sell }{\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 of their}{ \lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 respe}{\lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 ct}{\lang2057\langfe1033\langnp2057\insrsid10300014\charrsid3550226 ive}{ \lang2057\langfe1033\langnp2057\insrsid3895564\charrsid3550226 shares. Having sold their respective shares in the company pursuant to the agreement, annexture A, both the }{\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 plaintiffs and the }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 defendant ceased}{\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 to have any claim or interest in }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 the company}{\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 and /or its assets. However, they }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 each had}{ \lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 an interest and claim to the proceeds from the sale of the shares. The plaintiffs had a 40% right in the proceeds of the sale which }{ \lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 they claim}{\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 the defendants have }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 violated by}{ \lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 refusing to }{\lang2057\langfe1033\langnp2057\insrsid4161397\charrsid3550226 handover to}{\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 them their share of the proceeds from the sell of the shares. A cause of action is thus disclosed by the plaintiffs, in their own right against the defendants.}{\lang2057\langfe1033\langnp2057\insrsid11490754\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid3571126\charrsid3550226 \par \par \par \par \par }{\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 The preliminary point of law is therefore overruled. Cost to be in the cause. \par I so order. \par \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 \par \par \par }\pard \qc \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid9112233\charrsid3550226 Hon. Mr. Lameck N. Mukasa \par Judge \par 1/12/2006 \par \par }\pard \ql \li0\ri0\sl360\slmult1\widctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid3550226 {\lang2057\langfe1033\langnp2057\insrsid6838218\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid3893661\charrsid3550226 \par \par \par }{\lang2057\langfe1033\langnp2057\insrsid13119704\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid12983803\charrsid3550226 \par \par }{\lang2057\langfe1033\langnp2057\insrsid14031914\charrsid3550226 \par \par }{\lang2057\langfe1033\langnp2057\insrsid16582081\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid9390597\charrsid3550226 \par }{\lang2057\langfe1033\langnp2057\insrsid6830323\charrsid3550226 \par }{\b\ul\lang2057\langfe1033\langnp2057\insrsid2378568\charrsid3550226 \par \par }{\insrsid200309\charrsid3550226 \par }}

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