Wakilii

Volcano Limited v Board of Governors Old Kampala Secondary School (Civil Suit 436 of 2018)

High Court · [2024] UGHCLD 297 · 2024 Judgment for Defendant AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
First instance civil suit for breach of contract and compensation arising from a tenancy agreement declared void by the PPDA Appeals Tribunal
Decision
Plaintiff awarded special damages of UGX 84,000,000 for minor repairs undertaken, being approximately one-third of the sum claimed. Defendant's counterclaim dismissed as defendant already in possession of the suit property.

Observed later treatment

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Holding

Held that the tenancy agreement between the plaintiff and defendant was void ab initio for failure to obtain Attorney General clearance as required under Article 119(5) of the Constitution and PPDA (Contracts) Regulations 2014. The PPDA Appeals Tribunal had correctly nullified the procurement process due to irregularities in the bidding process and failure to secure mandatory approvals. No breach of contract could arise from a void agreement. The plaintiff exceeded the scope of the KCCA renovation permit by undertaking major rather than minor repairs without obtaining architectural plan approvals. The court awarded special damages of UGX 84,000,000 with 10% interest per annum, representing approximately one-third of the plaintiff's claim, reflecting minor repairs reasonably undertaken.

Outcome

Plaintiff awarded special damages of UGX 84,000,000 for minor repairs undertaken, being approximately one-third of the sum claimed. Defendant's counterclaim dismissed as defendant already in possession of the suit property.

Facts

The defendant school executed a 10-year tenancy agreement with the plaintiff on 22 July 2016 for property on Plot 79 Namirembe Road to establish and operate a bus terminal. The plaintiff paid UGX 240,000,000 as 4 years' advance rent and obtained KCCA permission on 19 August 2016 to undertake minor renovations. KCCA halted construction on 15 September 2016 and revoked the permit on 14 October 2016, finding the plaintiff had exceeded the scope of permitted minor repairs and lacked architectural approvals. The PPDA Appeals Tribunal annulled the procurement process finding irregularities in the bidding (improper tax clearance certificate, invalid trading licence, irregular use of defendant's address) and ruled the contract void for lack of Attorney General clearance as required under Article 119(5) of the Constitution. The defendant refunded the UGX 240,000,000 on 16 March 2018 and the plaintiff vacated on 30 October 2018. The plaintiff claimed UGX 252,693,500 for renovation works undertaken.

Issues

  1. Whether or not there was fraud committed by the plaintiff in the events leading up to the tenancy contract between the parties.
  2. Whether the defendant breached the contract with the plaintiff.
  3. Whether the defendant is liable for the sums claimed by the plaintiff.
  4. Whether the defendant is entitled to the reliefs sought in the counterclaim.
  5. What remedies are available to the parties.

Orders

  • Special damages of UGX 84,000,000 awarded to the plaintiff.
  • Interest at 10% per annum awarded on the special damages.
  • No general damages awarded to either party.
  • Each party to bear its own costs.

Rules and key headnotes

Contract Law — Void Contracts — Attorney General Clearance — Constitutional Requirement
A contract to which government or a government entity is a party cannot be validly concluded without legal advice from the Attorney General where the contract value exceeds the statutory threshold, as mandated by Article 119(5) of the Constitution and Regulation 7(1)(f) of the PPDA (Contracts) Regulations, 2014. These provisions are couched in mandatory terms such that a contract entered into without such clearance is void ab initio and cannot be retrospectively validated.
Contract Law — Breach of Contract — Void Agreements — No Enforceable Rights
A breach of contract cannot arise out of a void or illegal contract since no enforceable rights are created by such an agreement. Where a contract has been declared void by a competent tribunal, neither party can claim damages for breach of that contract.
Administrative Law — PPDA — Procurement Irregularities — Effect of Tribunal Decision
Where the PPDA Appeals Tribunal declares a procurement process null and void due to fundamental irregularities in the bidding process, including submission of improper documentation by a bidder and failure to obtain mandatory clearances, the resulting contract is unenforceable. A tribunal's decision as a quasi-judicial body stands unless set aside by a competent court, and parties who fail to challenge such a decision are bound by it.
Contract Law — Extrinsic Evidence — Parole Evidence Rule — Establishing Intention
While the parole evidence rule generally prevents parties from introducing external evidence to alter the terms of a written agreement, exceptions exist where extrinsic evidence is necessary to clarify the true intention of the parties. Where preliminary documents such as tender advertisements and bid specifications reveal the parties' original commercial purpose, such evidence may be admitted to establish the context of the agreement, particularly where the final written contract does not fully reflect that purpose.
Land & Property — Physical Planning — Development Without Permission — Criminal Offence
Under sections 8 and 33 of the Physical Planning Act, no person may carry out any development within a planning area without obtaining development permission from the physical planning committee. Carrying out development without such permission constitutes a criminal offence under section 33(2) of the Act, regardless of whether other parties were aware of or acquiesced in the development.
Contract Law — Damages — Special Damages — Strict Proof Required
Special damages must be strictly pleaded and proved. Where a party claims compensation for renovation works undertaken, the court must be satisfied that the claimed expenses were actually incurred and that the works fall within the scope of what was authorized. Receipts dated before permission was granted or after works were halted, duplicated receipts, and claims for materials not found on site during inspection will not support an award of special damages.

Legislation cited (7)

Cases cited (11)

  • Ebbzworld Ltd & Anor v Rutokiruta (Civil Suit No. 598 of 2013)
  • William Kasozi v DFCL Bank Ltd (Civil Suit No. 7326 of 2000)
  • Kabagambe Mwithoir v Kolhire Nobert (Civil Suit No. 336 of 2016)
  • Nakana Trading Co. Ltd v Coffee Marketing Board (Civil Suit No. 737 of 1991)
  • Aida Atiku v Centenary Rural Development Bank Ltd
  • Joyce Nakagima & 3 others v Nalumansi Kalule and 2 others (Court of Appeal Civil Appeal No. 111 of 2019)
  • Crane Bank v Nipun Naratta m Bhatia (Civil Appeal No. 2 of 2014)
  • F.J.K Zaabute v Orient Bank & 5 Ors (Supreme Court Civil Appeal No. 4 of 2006)
  • Duncan Turydtunga Ruforo & 2 Ors v Attorney General (Supreme Court Civil Appeal No. 5 of 2011)
  • Uganda Breweries Limited v Uganda Railways Corporation (Supreme Court Civil Appeal No. 6 of 2001)
  • Phillip Ongom, Capt. v Catherine Ngero Ovota (Supreme Court Civil Appeal No. 14 of 2001)

Full judgment

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

Volcano_Limited_v_Board_of_Governors_Old_Kampala_Secondary_School_(Civil_Suit_436_of_2018)_[2024]_UGHCLD_297_(19_December_2024)
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.