Delivered by Sir LANCELOT SANDERSON*—David v. de Silva. 201
1933[In the Privy Council.]
Present: Lord Thankerton, Lord Alness, and Sir Lancelot Sanderson.DAVID v. DE SILVA.Business names* registration—New business in own name after registration—Failure to notify change of particulars—Action on contract with respectto new business—Ordinance No. 6 of 1918, ss. 7 and 9.
Where a person, who registered himself under the Registration ofBusiness Names Ordinance as carrying on in a business name a specifiedbusiness, commenced, after the registration^ in his own name a separatebusiness, the particulars of which he failed to notify as required bysection 7 of the Ordinance indicating that there has been a change inthe registered particulars,—
Held, that he was not precluded from suing on a contract made byhim in respect of the new business which he was carrying on in hisown name.
^^PPEAL from a judgment of the Supreme Court.
November 28, 1933. Delivered by Sir Lancelot Sanderson.—
This is an appeal by the plaintiff from a decree of the Supreme Courtof Ceylon dated September 1, 1930, which reversed a decree of theDistrict Judge of Colombo dated September 20, 1929, made in favourof the plaintiff.
The action was brought by the plaintiff Jonathan Edward Davidagainst the defendant S. P. A. de Silva for damages for breach of acontract dated December 10, 1927, and for the recovery of certain sumsadvanced by the plaintiff to the defendant.
Among other defences the defendant alleged that the plaintiff couldnot maintain the action because he had not complied with the provisionsof Ordinance No. 6 of 1918, called an Ordinance for the Registration ofBusiness Names.
All the defences failed in the Trial Court and it was decreed that thedefendant should pay to the plaintiff Rs. 10,015 with interest, and thecosts of the action, and the defendant’s claim in reconvention wasdismissed.
The defendant appealed to the- Supreme Court, which allowed theappeal on the above-mentioned ground, and dismissed the plaintiff’saction without prejudice to his right to bring the action afresh if thedefault be cured.
The only question arising on the plaintiff’s appeal to His Majesty inCouncil is whether the construction of the above-mentioned Ordinancefor the Registration of Business Names adopted by the Supreme Courtis correct and whether the plaintiff by reason of the said Ordinancewas debarred from bringing the action.
202 Delivered by Sir LANCELOT SANDERSON.—David v. de Silva.
The material portions of the Ordinance are as follows:—
“Whereas it is expedient to provide for the registration of firms andpersons carrying on businessunder businessnames andfor purposes
connected therewith: Be itthereforeenacted by theGovernor of
Ceylon, by and with the advice and consent of the Legislative Councilthereof, as follows:—
2(b) Every individual having a place of business in the Colony
and carrying on business under a business name which doesnot consist of his true full names without any additionshall be registered in the manner directed by this Ordinance.
4(1) Every firm or person required under this Ordinance to be
registered shall furnish, by sending by post or delivering to theRegistrar at the register office in that part of the Colony in whichthe principal place of business of thefirmor personis situated, a
statement in writing in theprescribedformcontainingthe following
The business name.
The general nature of the business.
The principal place of business.
(e) Where the registration to be effected is that of an individual, thepresent name (in full), any former name (in full), the nationality,and if that nationality is not the nationality of origin, thenationality of origin, the usual residence, and the other businessoccupation (if any) of such individual.
Whenever a change is made or occurs in any of the particularsregistered in respect of any firm or person, such firm or person shall,within fourteen days after such change, or such further period as theRegistrar may on application allow, furnish, by sending by post ordelivery to the Registrar in that part of the Colony in which theaforesaid particulars are registered, a statement in writing in theprescribed form specifying the nature and date of the change, signed,and, where necessary, verified, in like manner as the statement requiredon registration.
If any firm or person by this Ordinance required to furnisha statement of particulars or of any change in particulars shall, withoutreasonable excuse, make default in so doing in the manner and withinthe time specified by this Ordinance, every partner in the firm or theperson so in default shall be liable on summary conviction, to a finenot exceeding one hundred rupees for every day during which thedefault continues, and the court before which such partner or personshall be tried shall order a statement of the required particulars orchange in the particulars to be furnished to the Registrar withinsuch time as may be specified in the order.
Provided that a Registrar to whom a statement required to befurnished as aforesaid may, if he thinks fit, inste J-. of institutingproceedings as aforesaid, accept from any such pa; uier or personsuch sum of money as such Registrar may consider proper in com-position of the offence committed by him.
Delivered by Sir LANCELOT SANDERSON.—David v. de Silva.203
Provided further that when such Registrar has accepted any suchsum of money as aforesaid, proceedings under this section shall not betaken, or if already taken shall not be continued in respect of suchoffence, against the partner or person so compounding as aforesaid.
9. Where any firm or person by this Ordinance required to furnisha statement of particulars or of any change in particulars shall havemade default in so doing, then the rights of that defaulter under orarising out of any contract made or entered into by or on behalf ofsuch defaulter in relation to the business, in respect of the carrying onof which particulars were required to be furnished, shall not be enforce-able at any time while he is in default, by action or other legalproceedings either in the business name or otherwise.
On receiving any statement or affidavit made in pursuance ofthis Ordinance, the Registrar shall cause the same to be filed, and heshall send by post or deliver a certificate of the registration thereofto the firm or person registering, and the certificate or a certified copythereof shall be kept exhibited in a conspicuous position at the principalplace of business of the firm or individual, and if not kept so exhibitedevery partner in the firm, or the person, as the case may be, shall beguilty of an offence, and liable, on summary conviction, to a fine notexceeding three hundred rupees.
At each of the register offices hereinafter referred to theRegistrar shall keep an index of all the firms and persons registeredat that office under this Ordinance, and at the principal register officea general index of all firms and persons so registered at every officethroughout the Colony.”
By section 17 the Governor in Council has power to make rules ororders relating, among other matters, to the forms to be used under theOrdinance. Forms for the application by an individual for registrationunder the Ordinance and for statement of change under section 7 (amongstothers) were prescribed.
By the Interpretation Clause it is provided that “ Business name ”shall mean the name or style under which any business is carried on,whether in partnership or otherwise and shall include a “ vilasam.”
The material facts of the case are as follows:—In 1924 the plaintiff beganto carry on a business under the business name of “ J. E. David & Coy.”:the nature of that business was that of accountants and auditors. Thatbusiness was duly registered by the plaintiff under the provisions of theOrdinance on May 20, 1925. The material particulars of the Regis-tration are as follows:—
“ 1. Business Name
The General Nature of the Busi-
The Principal Place of the Busi-
The Date of the Commencement
of the Business, if the businesswas commenced after Novem-ber 7, 1918
Any other Business Name or
Names under which the busi-ness is carried on
J. E. David & Co.Accountants and Auditors
No. 2a, Queen street, Fort.Colombo
March 10, 1924
804 Delivered by Sir LANCELOT SANDERSONDavid v. de Silva■
The present Name (in full) of the
IndividualJonathan Edward David
Any former Name (in full) of the
8 The Nationality of the Individual British
The Nationality of Origin of the
Individual if not the same as
the present nationality—
The usual Residence of the In-
The other Business Occupation (if
any) of the Individual ..—
It is to be noted that as the accountancy business was the only businesscarried on by the plaintiff at that time, there was no entry made oppositeNo. 11, “ The other Business Occupation (if any) of the Individual.”
In the year 1926 the plaintiff started a timber business on his ownaccount and carried on that business in his own name without anyaddition.
The timber business was distinct from the accountancy business;it was carried on in separate premises, and there was a separate set ofbooks and bank account for the timber business.
In the course of carrying on the said timber business the plaintiffentered into the above-mentioned contract with the defendant datedDecember 10, 1927.
In the said contract the plaintiff was described as “ carrying on businessunder the * name, style, and firm of J. E. David & Coy., ’ but it wassigned by the plaintiff in his own name ‘ J. E. David.’ ”
The plaintiff was described in the plaint in the action as carrying onbusiness under the name, style, and firm of J. E. David & Coy. In spiteof these matters both the Courts in Ceylon held after careful considerationof the evidence that the plaintiff did not carry on the timber business as“ J. E. David & Co., ” but that he carried it on under his own name“ J. E. David. ”
It is obvious that if he had carried on the timber business under thename of “J. E. David & Co.” he ought to have effected registrationof the business name and other particulars required by section 4.
Their Lordships, however, adopt the findings of fact of both the Courtsin Ceylon in respect of this matter, and they are of opinion that as thetimber business was carried on as a separate business and in his ownname without any addition, it did not come within the purview ofsection 2 (b), and it was not necessary for the plaintiff to register thetimber business under that section.
It was contended on behalf of the plaintiff in the trial Court, and soheld by the District Judge, that when the plaintiff started the timberbusiness in 1926, it was not necessary for him to notify the Registrarof that fact, inasmuch as it did not constitute “ a change of the businessspecified in the register, ” and so was not within the purview of section 7.
The learned counsel for the plaintiff, in his argument before theirLordships, did not rely on this ground.
On the contrary, he admitted and, in their Lordships’ opinion, he rightlyadmitted that the starting of the timber business by the plaintiff didnecessitate a change in the particulars which had been registered in
Delivered by Sir LANCELOT SANDERSON.—David v. de Silva. 205
respect of the accountancy business and that such change should havebeen notified to the Registrar in accordance with the provisions ofsection 7.
As already mentioned, the item 11, viz., “the other Business Occu-pation (if any) of the Individual, ’’ in the registered particulars of theaccountancy business, had been left without any entry against it, andwhen the timber business was started there clearly was a change in theparticulars in that respect, of which a statement should have beenfurnished to the Registrar in accordance with section 7 of the Ordinance.
There remains for consideration the construction which the SupremeCourt placed on the terms of section 9.
The learned Judges of the Supreme Court-were of opinion that thewords of that section, viz., “in respect of the carrying on of whichparticulars were required to be furnished,” referred to all businessesconducted by the plaintiff whether in his own name or ha the name ofJ. E. David & Co.
The learned counsel who appeared for the defendant in effect adoptedthe Supreme Court’s construction of the section, for he urged that oncean individual had to register under the provisions of section 2, he mustregister particulars of all his business activities, and if he failed so to do,the rights of such individual arising out of any contract in relation toany of such business activities could not be enforced by action or otherlegal proceedings while he was in default.
Their Lordships are of opinion that the aforesaid construction istoo wide.
The words at the beginning of section 9, viz., “Where any ….person by this Ordinance required to furnish a statement of particulars, ”in this case must refer to the particulars in relation to the accountancybusiness, which it was necessary for the plaintiff to register, inasmuchas he was carrying on that business under a business name which didnot consist of his own name, without any addition, and which were,in fact, registered by the plaintiff.
Further, the change contemplated in the words “or of any changein particulars, ” must refer to the same particulars which had already■been registered, viz., the particulars of the accountancy business.
That being so, is there any reason for giving a larger or differentmeaning to the material words which follow later in the section, viz.,“the business, in respect of the carrying on of which particulars wererequired to be furnished ”?
Their Lordships think there is no such reason. They are of opinionthat the natural construction to be placed on these words is that theyrefer to “the” business in respect of which particulars had to be fur-nished or in respect of which any change in particulars had to befurnished, viz., the accountancy business.
The position may be summarized by saying that the business, in respect-of which the disablement from suing mentioned in the ninth sectionarises, is the business which the plaintiff was carrying on under a businessname, in respect of which he was required under the Ordinance to furnisha statement of particulars or any change in such particulars, viz., the-accountancy business.
POYSER J<—Dharmaratne v. Kandasamy.
in other words, there was no default in respect of the timber business ;the default was in respect of the accountancy business, by reason of theplaintiffs failure to notify the change in the particulars of the accountancybusiness.
One of the learned Judges in the Supreme Court was of the opinion,that the words of section 9 were not easy of interpretation, and saidthat he had arrived at his conclusion with some hesitation. TheirLordships agreed with the learned Judge that the meaning of the sectionmight have been made more clear.
They are of opinion, however, that if there is ambiguity as to themeaning of the section, inasmuch as it is a disabling section, the con-struction which is in favour of the freedom of the individual should begiven effect to.
Their Lordships, therefore, are of opinion that although the plaintiffwas in default by failing to notify the Registrar of the change in theregistered particulars of the accountancy business, that default did notdeprive him of his right to sue the defendant for the breach of contractmade by him with the plaintiff in relation to his timber business.
For these reasons the appeal must be allowed, the decree of the HighCourt dated September 1, 1930, must be set aside, and the decree of theDistrict Judge dated September 20, 1929, restored. The defendantmust pay to the plaintiff his costs of this appeal and of the appeal in theHigh Court.
Their Lordships will humbly advise His Majesty accordingly.
DAVID v. DE SILVA