Wakilii

Namutumba District Local Government and Another v Dhikusooka John (Civil Appeal No. 59 of 2018)

Court of Appeal · [2025] UGCA 356 · 2025 Appeal Allowed in Part AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First appeal from a High Court judgment in a civil suit for breach of contract
Decision
Appeal allowed in part; contract declared void ab initio; award of general damages and interest set aside; order for reconciliation of accounts upheld

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court held that a contract entered into by a local government for the collection of market dues was illegal and void ab initio because it was not signed by the Chief Administrative Officer, the accounting officer required to sign procurement contracts under s.26(g) of the PPDA Act 2003 and s.70(1) of the Local Governments Act. No estoppel or doctrine of approbation and reprobation could cure non-compliance with a statute, as equity follows the law. As the contract was void, the award of general damages and interest to the respondent was set aside. The trial court's order for reconciliation of collected public funds was upheld. The appeal was allowed in part, with each party bearing its own costs.

Outcome

Appeal allowed in part; contract declared void ab initio; award of general damages and interest set aside; order for reconciliation of accounts upheld

Facts

Following a procurement process, the 1st appellant awarded the respondent a contract for the collection of market dues from Namutumba Town Council Central Market on behalf of the 2nd appellant. The contract was signed on 18 August 2010, but not by the Chief Administrative Officer (the accounting officer); it was signed on behalf of the 1st appellant by another officer. The respondent performed the contract for over a year, collecting and remitting dues, until officers of the 2nd appellant frustrated his performance and the contract was later awarded to another person. The respondent sued for breach of contract; the 2nd appellant counterclaimed for unjust enrichment and for an account of dues allegedly collected but not remitted. The trial court found a valid contract that had been breached, awarded the respondent UGX 23,899,743.3 in general damages with interest, dismissed the counterclaim, and ordered the parties to reconcile accounts. The appellants appealed.

Issues

  1. Whether a procurement contract entered into by a local government but not signed by the accounting officer (Chief Administrative Officer) is valid.
  2. Whether the trial judge erred in failing to determine the amount of the 2nd appellant's revenue due from the respondent.
  3. Whether the trial judge erred in evaluating the evidence and finding the appellants liable for breach and wrongful termination of the contract.
  4. Whether the trial judge wrongly, irregularly and excessively awarded damages and interest to the respondent.

Orders

  • Appeal allowed in part.
  • Grounds 1, 3 and 4 of the appeal succeed; the contract is declared void ab initio.
  • The trial court's award of general damages, loss of business and interest is set aside.
  • The trial court's order for reconciliation of accounts is upheld, to be carried out under the directions of the Registrar of the High Court with jurisdiction over Namutumba District, within 60 days.
  • Any money found due and owing to the 2nd appellant to be paid by the respondent within 30 days of conclusion of the reconciliation, with a report forwarded to the Registrar, Court of Appeal.
  • Each party to bear its own costs in this Court and the court below.

Rules and key headnotes

Public Procurement — Local Government Contracts — Mandatory Signature of the Accounting Officer
A procurement contract entered into by a local government must be signed by the accounting officer (the Chief Administrative Officer) as required by s.26(g) of the Public Procurement and Disposal of Public Assets Act 2003 and s.70(1) of the Local Governments Act; the statutory requirement is fundamental to the protection of public funds and is not a mere formality, and failure to comply renders the contract illegal and void ab initio.
Illegality — Void Contracts — Inability to Cure by Ratification or Conduct
An agreement that is void has no legal effect and cannot be ratified or validated; no amount of correspondence or conduct recognising the existence of a contract can cure an illegality, and a court may refuse to enforce an illegal contract even where the illegality is not pleaded.
Estoppel — No Estoppel Against a Statute
There can be no estoppel against an Act of Parliament; a party cannot invoke equitable estoppel to defeat a mandatory statutory requirement.
Equity — Approbation and Reprobation — Equity Follows the Law
The doctrine of approbation and reprobation is a doctrine of equity, and equity follows the law; a party who has failed to comply with the law cannot invoke an equitable doctrine to enforce rights under an illegal contract.
Illegality — Remedies — No Benefit from a Void Contract
Where a contract is void ab initio for illegality, no party is entitled to benefit from it, and an award of general damages and interest founded on such a contract cannot stand and must be set aside, since a court cannot lend its aid to a cause of action founded on illegality.
Restitution — Void Agreements — Obligation to Restore Advantage
Under s.53 of the Contracts Act, a person who receives an advantage under a void agreement is bound to restore it or pay compensation; where public funds are collected under a void contract and accountability is incomplete, a court may order a reconciliation of accounts so that sums found due are restored.

Legislation cited (10)

Cases cited (13)

Full judgment

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Namutumba District Local Government and Another v Dhikusooka John (Civil Appeal No. 59 of 2018) [2025] UGCA 356 (16 October 2025)
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.