Wakilii

Local Government Finance Commission v Craddle Communications Limited (Civil Appeal 59 of 2021)

High Court · [2022] UGCOMMC 122 · 2022 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from Magistrate's Court judgment awarding contract price for publishing services
Decision
Suit dismissed

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

A contract entered into by a public entity without compliance with the Public Procurement and Disposal of Public Assets Act is illegal, void and unenforceable. A claim in unjust enrichment cannot succeed where granting it would have the same effect as enforcing an unenforceable contract prohibited by statute. The appeal was allowed and the lower court's judgment set aside.

Outcome

Suit dismissed

Facts

The respondent, a printing and publishing company, sued the appellant (a government entity) for recovery of shs. 6,500,000 for publishing the appellant's organisational profile in two handbooks. The appellant's Director of Finance and Administration signed an order form endorsed 'to pay when funds are available' on 6 December 2012. The respondent published the profile without following the procurement processes required by the Public Procurement and Disposal of Public Assets Act. The appellant refused to pay, denying that a confirmed contract existed. The trial Magistrate found that a contract came into existence and awarded the contract price plus damages and interest, holding that the procurement law imposed duties on the procuring entity and it would be unjust for the appellant to rely on its own failure to comply.

Issues

  1. Whether a contract existed between the parties where no procurement process was followed.
  2. Whether a public entity can rely on its failure to comply with statutory procurement processes to avoid paying for services rendered.
  3. Whether a claim in unjust enrichment can succeed where it would have the effect of enforcing an illegal contract.

Orders

  • Appeal allowed.
  • Judgment of the court below set aside.
  • Suit dismissed with costs to the appellant.
  • Costs of the appeal awarded to the appellant.

Rules and key headnotes

Contract Law — Illegality — Contracts Prohibited by Statute — Public Procurement
A contract entered into by a public entity financed from the Consolidated Fund without compliance with the Public Procurement and Disposal of Public Assets Act is illegal, void and unenforceable, as the Act impliedly prohibits the use of public procurement methods not included in the law.
Administrative Law — Public Procurement — Mandatory Compliance — Consequences of Non-Compliance
Where the core of a contract is the mischief expressly forbidden by statutory regulation, illegality will be found and the contract will be considered illegal at its formation when it is incapable of performance without an illegal act.
Contract Law — Unjust Enrichment — Illegal Contracts — Denial of Remedy
A claim in unjust enrichment will not be permitted where granting it would have the same effect as enforcing an unenforceable contract that is prohibited by statute, as courts will not assist a claimant to recover a benefit from their own wrongdoing.
Administrative Law — Public Finance — Consolidated Fund — Expenditure Controls
A public body established by statute that operates using funds from the Consolidated Fund is incapable of incurring expenditure that is not within its approved annual budget, and no money may be withdrawn from the Consolidated Fund except to meet expenditure charged on the fund or where the issue of those monies has been authorised by an Appropriation Act or Supplementary Appropriation Act.
Administrative Law — Public Procurement — Emergency Procurement — Distinction from General Non-Compliance
A procurement undertaken in a situation of emergency or where there is substantial compliance with procurement procedures through restricted bidding is distinguishable from a procurement where no attempt was made at all at any procurement process, and the latter remains illegal and unenforceable.

Legislation cited (15)

Cases cited (11)

  • Father Nanensio Begumisa and three Others v Eric Tiberaga (Supreme Court Civil Appeal No. 17 of 2000)
  • Finishing Touches Limited v Attorney General (High Court Civil Suit No. 144 of 2010)
  • Buffalo City Metropolitan Municipality v. Asla Construction (Pty) Limited 2019 (4) SA 331
  • David Taylor & Son v. Barnett Trading Co [1953] 1 Lloyd's Rep. 181
  • Anderson Ltd v. Daniel [1924] 1 KB 138
  • Ashmore, Benson, Pease & Co Ltd v A V Dawson Ltd [1973] 1 WLR 828
  • Dimond v. Lovell [2002] 1 AC 384
  • Wilson v. First County Trust Ltd (No 2) [2004] 1 AC 816
  • Phoenix General Insurance Co of Greece SA v. Halvanon Insurance Co Ltd [1988] QB 216
  • Yango Pastoral Co. Pty Ltd v. First Chicago Australia Ltd (1978) 139 C.L.R. 410
  • Melliss v. Shirley Local Board of Health (1885) 16 Q.B.D. 446

Full judgment

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

Local Government Finance Commission v Craddle Communications Limited (Civil Appeal 59 of 2021) [2022] UGCommC 122 (28 February 2022)
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.