Wakilii

Fred Watuwa Kulyatte v Dairy Development Authority (Civil Suit No. 125 of 2019)

High Court · [2021] UGHCLD 76 · 2021 Suit and Counterclaim Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil suit with preliminary objection raised by defendant challenging legality of transaction under PPDA Act
Decision
Both suit and counterclaim dismissed for illegality of underlying transaction

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The High Court held that a transaction for the sale of land by a public entity to its employee was illegal and unenforceable for failure to comply with mandatory procedural requirements under the Public Procurement and Disposal of Public Assets Act 2003 and its Regulations. The court ruled that non-compliance with PPDA provisions goes to the core of the Act and leads to fatality, not mere irregularity. Both the suit and counterclaim were dismissed as neither party had locus to file their respective claims under an invalid contract.

Outcome

Both suit and counterclaim dismissed for illegality of underlying transaction

Facts

The plaintiff sued the defendant Dairy Development Authority for orders relating to plot 800, Block 246, land at Kyeyitabya which he had purchased from the defendant authority. The defendant raised a preliminary objection that the transaction was illegal because it did not comply with the Public Procurement and Disposal of Public Assets Act 2003 and its Regulations which came into operation on 21 February 2003. Both parties admitted that the procedural requirements under the PPDA Act had not been adhered to. The parties had acted on the transaction with payments made by the plaintiff and acknowledged by the defendant, subdivisions made, some transfers made, and both parties and third parties had benefitted from the transaction.

Issues

  1. Whether the defendant's objection qualifies as a preliminary objection at law.
  2. Whether or not the defendant can front its own illegalities as a defence.
  3. Whether or not the transaction between the parties was illegal.
  4. Whether or not there are other alternatives to the normal disposal method of public assets which the law permits.
  5. Whether the counterclaim discloses a cause of action against the counterdefendant.
  6. Whether the parties are entitled to any remedy.

Orders

  • Civil Suit No. 125 of 2019 dismissed.
  • The counterclaim dismissed.
  • Neither party entitled to costs.

Rules and key headnotes

Public Procurement — Mandatory Compliance with PPDA Act — Disposal of Public Assets to Public Officers
Provisions of the Public Procurement and Disposal of Public Assets Act 2003 are mandatory and not merely directory, and non-compliance with the procedural requirements for disposal of public assets to public officers renders the transaction illegal and unenforceable, regardless of whether the parties have acted on the transaction.
Contract Law — Illegal Contracts — Enforcement by Courts
No court can enforce an illegal contract or allow itself to be made an instrument of enforcing obligations alleged to arise out of a contract or transaction which is illegal, once the illegality is duly brought to the attention of court, and where a person invoking the aid of the court is implicated directly or indirectly in the illegality, courts of law will not come to his assistance.
Public Procurement — Written Contract Requirement — Section 76 PPDA Act
Under section 76 of the PPDA Act read with section 3, an award decision of an entity is not considered to be a contract until confirmed by a written contract signed by both the provider and procuring entity, and the absence of a written contract is sufficient to invalidate the transaction.
Public Procurement — Breach of PPDA Provisions — Not Mere Irregularity
A breach of the provisions of the PPDA Act is not a mere irregularity since it goes to the core of the Act, and non-observance leads to fatality of the transaction.
Contract Law — Invalid Contracts — Court Cannot Transform Invalid into Valid
A court cannot allow itself to transform an invalid contract into a valid contract and thereafter support enforcement of purported rights of any party accruing under a transaction that fails to meet the criteria set under the PPDA Act and the Regulations thereunder, even where parties have acted on the transaction and both parties and third parties have benefitted.

Legislation cited (12)

Cases cited (10)

  • Mukisa Biscuit Manufacturing Co. Ltd v West End Distributors Ltd (1969) EA 696
  • Read v Brown (1882) 2 QBD 128
  • Tororo Cement Co. Ltd v Frokina International Ltd (Supreme Court Civil Appeal No. 2 of 2001)
  • Makula International Ltd v His Emminence Cardinal Nsubuga & Anor (1982) HCB 11
  • Cullimore v Lyme Regis Corporation [1961] 3 All ER 1008
  • Montreal Street Railways Co v Normandin [1917] AC 174
  • Finishing Touches Limited v Attorney General (High Court Civil Suit No. 144 of 2010)
  • Setramaco International Ltd v Board of Directors/Headteacher Lubiri Secondary School (Commercial Court Civil Suit No. 478 of 2005)
  • Galleria in Africa Ltd v UEDC Ltd (Supreme Court Civil Appeal No. 8 of 2017)
  • SINBA (K) and 4 others v UBC (Supreme Court Civil Appeal No. 3 of 2014)

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Fred_Watuwa_Kulyatte_v_Dairy_Development_Authority_(Civil_Suit_No._125_of_2019)_[2021]_UGHCLD_76_(30_March_2021)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.