Mayambala Micheal v Uganda Registration Services Bureau (URSB) (Miscellaneous Cause No. 2 of 2022)
Observed later treatment
No later-treatment classification is recorded for this judgment.
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Holding
The High Court held that the Uganda Registration Services Bureau acted illegally, irrationally and with procedural impropriety when it rejected a board resolution transferring shares in a private company and demanded a special resolution instead. The court found that under the Companies Act and Table A Part II Regulation 3, the power to approve and register share transfers in a private company lies with the board of directors, not the general meeting of shareholders. The respondent's refusal to register the board resolution without written reasons and its preference for a special resolution without legal basis constituted illegality and violated natural justice principles. A writ of certiorari was issued quashing the decision and a writ of mandamus compelling registration of the board resolution.
Outcome
Application granted with orders of certiorari and mandamus issued; respondent ordered to de-register the special resolution and register the board resolution
Facts
The applicant sought to acquire 40 shares in M/s Equatorial Sun Hemp Ltd from Dr. Oshaba Francis. After obtaining consent from the existing shareholder and holding a board meeting, a board resolution was passed approving the share transfer. When the company secretary submitted the board resolution to the Uganda Registration Services Bureau for registration, it was rejected. The respondent initially cited non-filing of annual returns, then demanded a special resolution of shareholders instead of the board resolution. The applicant, an advocate, contested this requirement as contrary to the Companies Act and Table A which vest the power to approve share transfers in the board of directors. The respondent eventually registered the transfer using a special resolution, but the applicant challenged the legality of the respondent's decision-making process through judicial review, alleging illegality, irrationality and procedural impropriety.
Issues
- Whether the applicant has a cause of action?
- Whether the affidavit in support of the application is incurably defective?
- Whether the affidavit in reply is incurably defective?
- Whether the applicant has sufficient interest to bring this action?
- Whether the alleged decision or action of the respondent is illegal, irrational and/or procedurally improper?
- Whether the applicant is entitled to the remedies prayed for?
Orders
- A declaration doth issue that the decision or act by the respondent of rejecting to register the board resolution admitting the applicant as a shareholder in M/s Equatorial Sun Hemp Ltd was tainted with illegality, irrationality and procedural impropriety.
- A writ of Certiorari doth issue quashing the decision of the respondent rejecting to register the board resolution admitting the applicant as a shareholder in the company.
- A writ of Mandamus doth issue compelling the respondent to de-register the special resolution and effect registration of the share transfer by way of a board resolution.
- Costs of the application awarded to the applicant against the respondent.
Rules and key headnotes
Legislation cited (18)
- Constitution of Uganda Article 42
- Civil Procedure Act s.98
- Judicature Act Cap 13 s.33
- Civil Procedure Rules Order 52 Rules 1 and 3
- Civil Procedure Rules Order 19 rule 3
- Companies Act 2012 s.13(2)
- Companies Act 2012 s.150(4)
- Companies Act 2012 s.294(2)(a)
- Companies Act Cap 106 s.146
- Companies Act 2012 Table A Part I Regulation 23
- Companies Act 2012 Table A Part I Regulation 26
- Companies Act 2012 Table A Part II Regulation 1
- Companies Act 2012 Table A Part II Regulation 3
- Companies (Powers of the Registrar) Regulations 2016 Regulation 17(1)
- Companies (Powers of the Registrar) Regulations 2016 Regulation 17(2)
- Judicature (Judicial Review) (Amendment) Rules 2019 Rule 3
- Judicature (Judicial Review) Rules 2009 Rule 8(1)
- Civil Procedure Act s.27
Cases cited (18)
- Auto Garage v Motokov No.3 [1971] EA 514
- Tororo Cement Co. Ltd v Frokina International Ltd (Civil Appeal No. 2 of 2001)
- Kapeeka Coffee Works Ltd v NPART (Civil Appeal No. 3 of 2000)
- Electro-Maxx Uganda Ltd v Oryx Oil Uganda Ltd (Miscellaneous Application No. 251 of 2020)
- Male H. Mabirizi Kiwanuka v Attorney General (Civil Application No. 7 of 2018)
- R v Inland Revenue Commissioner, Exparte National Federation of Self Employed and Small Businesses Ltd (1982) AC 617
- R v Inspectorate of Pollution, ex parte Greenpeace Ltd (1994) 4 All ER 329
- Community Justice and Anti-Corruption Forum v Law Council and Another (Miscellaneous Application No. 338 of 2020)
- Ben Muhumuza v Attorney General & Others (Miscellaneous Cause No. 212 of 2020)
- Attorney General v Yustus Tinkasimmire & Others (Civil Appeal No. 208 of 2013)
- Kuluo Joseph Andrew & Others v Attorney General & Others (Miscellaneous Cause No. 106 of 2010)
- Pastoli v Kabale District Local Government Council and Others [2008] 2 EA 300
- ACP Bakaleke Siraji v Attorney General (Miscellaneous Cause No. 212 of 2018)
- Council of Civil Service Unions v Minister for Civil Service (1985) AC 375
- Dr. Lam-Lagoro James v Muni University (Miscellaneous Cause No. 7 of 2016)
- Editors Guild Uganda Limited & Another v Attorney General (Miscellaneous Cause No. 400 of 2020)
- Three Rivers District Council versus Bank of England (3) [3003]2 AC 281
- X (Minors) versus Bedfordshire County Council [1995]2 AC 633
Full judgment
The original judgment as reported. Read the original PDF before relying on any passage.