Tororo District Local Government v Mulowoza Kayondo (Miscellaneous Application No. 41 of 2024)
Observed later treatment
No later-treatment classification is recorded for this judgment.
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Holding
The High Court held that funds held by a local government in statutory accounts (General Fund Collection Account and Cash Operational Account) are held in trust for the public and cannot be attached by garnishee order to satisfy a judgment debt. Money held by a trustee for beneficiaries cannot be garnisheed for a debt incurred by the trustee, as the judgment creditor acquires no greater rights than the debtor. The court declared the attempted attachment illegal, following the principle in Administrator General v Kakooza Umaro that public trust funds are exempt from garnishment.
Outcome
Application granted with declaration that attachment of local government accounts is illegal
Facts
Tororo District Local Government applied for stay of execution and a declaration that attachment of its bank accounts was illegal. The application arose from Civil Suit No. 41 of 2010, with a pending appeal (Civil Appeal No. 322 of 2021) before the Court of Appeal. The respondent, Mulowooza Kayondo, had obtained a garnishee order to attach two of the applicant's accounts: Account No. 9030006249336 (General Fund Collection Account) and Account No. 9030005906767 (Cash Operational Account). The applicant argued these accounts held statutory funds payable from the consolidated fund and were held in trust for the public. The respondent conceded the accounts could not be garnished but argued the court could trace and sever trust funds from non-trust funds.
Issues
- Whether the applicant's Account Numbers 9030006249336 and 9030005906767 are liable to attachment by garnishee order?
- What remedies are available to the parties?
Orders
- Declaration granted that the attachment of the applicant's Account Numbers 9030006249336 and 9030005906767 is illegal.
- Each party to bear own costs.
Rules and key headnotes
Legislation cited (16)
- Civil Procedure Act Cap.282 s.98
- Civil Procedure Act Cap.282 s.44(1)(i)
- Civil Procedure Rules S.I 71-1 Order 43
- Civil Procedure Rules Order 15 R.5(2)
- Judicature (Court of Appeal) Rules r.6
- Judicature (Court of Appeal) Rules r.42
- Constitution of the Republic of Uganda 1995 art.191(1)
- Constitution of the Republic of Uganda 1995 art.191(3)
- Constitution of the Republic of Uganda 1995 art.193(1)
- Public Finance Management Act Cap.171 s.3
- Public Finance Management Act Cap.171 s.15
- Public Finance Management Act Cap.171 s.29(2)(b)
- Public Finance Management Act Cap.171 s.29(3)(a)
- Public Finance Management Act Cap.171 s.30(1)
- Local Government Act Cap.243 s.7(2)
- Government Proceedings Act s.19(4)
Cases cited (6)
- Administrator General v Kakooza Umaro & Anor (HCMA No. 11 of 2017)
- Makula International v His Eminence Cardinal Nsubuga & Other [1982] HCB 11
- Holtby vs. Hodgson Bateson (1889) 24 QBD, 103
- John Imaniraguha v Uganda Revenue Authority (HCMA No. 2770 of 2023)
- Nampongo & Anor v Attorney General (Constitutional Petition No. 43 of 2012)
- Boscawen vs Bajwa (1996) WLR 328
Full judgment
The original judgment as reported. Read the original PDF before relying on any passage.