Nanayakkara v. Kirieka (Tambiah, J.)
COURT OF APPEAL.
P. S. DE'SILVA, J, AND JAMEEL, J.
C. A. APPLICATION No. 618/81.
JULY 24 AND AUGUST 07, 1985.
Certiorari and Mandamus – Termination of agency to distribute industrialgases – Natural justice – Do certiorari and mandamus lie for breach of contract of acommercial nature ?
Where the relationship between the parties is a purely contractual one of a commercialnature neither certiorari nor mandamus will lie to remedy grievances arising from analleged breach of contract or failure to observe the principles of natural justice even ifone of the parties is a public authority.
Cases referred to:
Mattock v, Aberdeen Corporation  1 WLR 1578, 1594.
University Counci of Vidyodaya University v. Linus Silva (1964) 66 NLR 505 P.C.
Weligama Multi-purpose Cooperative Society Ltd. v. Chandradasa Daluwatte 1 Sri L B 195
APPLICATION for writs of certiorari and mandamus.
Dr. H. W. Jayewardene, Q.C. with N. R. M. Daluwatte. P.C. and MissJ. Keenavinna forthe petitioner.
K N. Choksy. P.C. with Ronald Perera and MissJ. Rodrigo for respondent.
Cur. adv. vult.
Sri Lanka Law Reports
(1985} 2 Sri L A
October 07. 1985.
G. P. S. DE SILVA, J.
This is an application for writs of certiorari and mandamus to quashthe decision of the respondent (Competent Authority, Government ofSri Lanka. Successor to the Business Undertaking of Ceylon OxygenCo. Ltd.) terminating the agency of the petitioner and compelling therespondent to supply industrial gases to the petitioner in accordancewith the agreement entered into. The case for the petitioner, as setout in his application, was that the Ceylon Oxygen Co. Ltd. appointedhim as agent of the company for the distribution of industrial gases inthe Negombo – Ja-Ela area on the terms and conditions set out in theletter dated 26.6.74 (PI); that after the Company was vested in theGovernment of Sri Lanka in terms of the Business Undertakings(Acquisition) Act No, 35 of 1971 the petitioner continued to functionas agent in terms of P1 ; that the respondent cancelled thepetitioner's agency by telegram dated 3.4.81 without prior warningand without notice or inquiry ; that the termination of the agency andthe refusal of the respondent to supply industrial gases has affectedhis livelihood and the livelihood of his employees , that the terminationof his dealership was arbitrary, unreasonable, mala fide and contraryto the principles of natural justice ; that he has no other remedy exceptthe remedy sought for in this application.
Dr. Jayewardene, Counsel for the petitioner, submitted that oncethe business undertaking of the Company vested in the Government interms of the Business Undertakings (Acquisition) Act No. 35 of 1971,it became a governmental activity. The respondent was appointed interms of section 3 of the said Act and was thus an officer of the State.The respondent therefore had all the characteristics 6f a publicauthority. Certiorari to quash the decision of the respondent toterminate the agency of the petitioner was sought on the basis thatthere was a clear violation of the audi alteram partem rule. In short. Dr.Jayewardene urged that the petitioner enjoyed a ‘franchise" and thathe had a right to be heard before his agency was cancelled.
Mr. Choksy, for the respondent, did not contend that petitioner wasgiven a hearing prior to the termination of the agency. He however,raised the objection that the averments in the petition disclosed thatthe relationship between the petitioner and the respondent was purelycontractual in character and that the writ jurisdiction of this court
CAJayawera v. Wtjeratne (G. P. S. Da Silva. J.)41S
cannot be invoked by the petitioner in respect ot an alleged breach ofsuch contractual relationship. In brief, Mr. Choksy argued that theapplication was entirely misconceived in law.
As stated earlier, the petitioner has produced marked P1 his letter ofappointment issued by the Company. P1 states inter alia :
'we have pleasure in appointing you as our Distributing
Agent for industrial gases to cover the Negombo and Ja-Ela
areasWe are agreeable to opening the Agency within the
next two to three weeksWe set out below the terms and
conditions which we shall require you to abide: by in accepting
appointment as our Distributing Agent' On a reading of P1 it
is clear that it sets out the terms and conditions upon which (a) thepetitioner functioned as an agent of the respondent, (b) he coulddeal with the customers of the Agency area. P1 does not fix aperiod during which the agency will be operative. It appears to be anagency revocable at the will of the respondent. As submitted by Mr.Choksy, P1 constitutes the petitioner a commercial agent of therespondent. PI read as a whole shows very clearly that therelationship between the petitioner and the respondent is acontractual relationship of a commercial nature. It is a purelycontractual relationship of principal and agent.
It is true, as submitted by Dr. Jayewardene, that the respondent isthe "Competent Authority' appointed in terms of section 3 of theBusiness Undertakings (Acquisition) Act No. 35 of 1971 to manageand administer the affairs of the business undertaking vested in theGovernment. In that sense it could be said that the respondent is a"public authority". But the fact that one of the parties to the contract isa "public authority" is not a relevant consideration, since the decisionsought to be quashed by way of certiorari is itself one made pursuantto a power derived from the contract. As pointed out by Mr. Choksy,the Sri Lanka Government Railway imports sleepers. TheCommissioner of Food, acting on behalf of the State, imports items offood. If a dispute arises in regard to the termination of such a contract,can the aggrieved party seek relief by way of certiorari or mandamus ?The answer is succinctly stated by Wade : "Powers derived fromcontract are matters of private law and outside the scope ofprerogative remedies" – Administrative Law, 5th Edn. page 550. It isintensely relevant to note that the contractual relationship we are hereconcerned with, is not regulated by statute* While there is no statutory
Sri Lanka Law Reports
(198512 Sri L.R.
obligation cast on the respondent to appoint 'agents', there is nostatutory right in the petitioner to be appointed as 'agent*. This iscertainly not a case where a statute provides for the appointment of an'agent' and stipulates the grounds upon which the agency could belawfully terminated. The petitioner is not the holder of an office , hehas not been given a statutory status or protection. Nor could it besaid that he holds 'a public position fortified by statute", to use thewords of Lord Wilberforce in Malloch v. Aberdeen Corporation (1). Heis no more than an ordinary contractual agent.
•It is of the utmost significance that the decision sought to*bequashed by certiorari is a decision founded purely on contract. The actor decision complained of arose from an alleged breach of contract.The fact that one of the parties to the contract is the 'CompetentAuthority" appointed by statute cannot alter the intrinsic character ofthe decision sought to be quashed by certiorari. The decision is onetaken wholly within the context of the contractual relationship and notin the exercise of the powers of a public authority as such. It invokedno administrative powers or authority. It is a decision made in theexercise of a power which springs from contract. In my view, it is adecision clearly within the area of private law and the remediesavailable are the private law remedies such as damages, declaration,or injunctive relief. On the other hand, Adminstrative Law is primarily, ifnot entirely, concerned with the exercise of powers and duties ofgovernmental, statutory and public authorities. Contractual rights,devoid of a statutory flavour, are manifestly beyond the scope ofcertiorari.
Applying this principle, the Judicial Committee of the Privy Council inthe University Council of the Vidyodaya University v. Linus Silva (2)dismissed the application made by a University teacher for a writ ofcertiorari to quash the decision of the Council of the University toterminate his appointment. Delivering the advice of the JudicialCommittee, said Lord Morris :
'The law is well settled that if, where there is an ordinarycontractual relationship of master and servant, the masterterminates- tfcie contract the servant cannot obtain an order ofcertiorari. If thfe master rightfully ends the contract there can be no
Jayaweera v. Wijeratrte (G. P. S. Da Silva. J.}
complaint; if the master wrongfully ends the contract then the
servant can pursue a claim for damages (at page 507)In a
straightforward case where a master employs a servant the latter isnot regarded as the holder of an office and if the contract isterminated there are ordinarily no questions affecting status orinvolving property rights(at page 516)."
The case before us is one where there is an ordinary contractualrelationship of principal and agent. I therefore hold that the remedy ofcertiorari is not available to the petitioner.
Mandamus too does not lie and the reason for this is pithily put byWade :
"A distinction which needs to be clarified is that between publicduties enforceable by mandamus, which are usually statutory, andduties arising merely from contract. Contractual duties areenforceable as matters of private law by the ordinary contractualremedies, such as damages, injunction, specific performance anddeclaration. They are not enforceable by mandamus, which in the
first place is confined to public duties" (Administrative Law,
5th Ed. page 635).
The petitioner before us,is seeking mandamus to enforce a mereprivate duty arising from a contract. This,clearly, is outside the scopeof mandamus – vide Weligama Multi-purpose Co-operative SocietyLtd v. Chandradasa Daluwatte (3).
For the reasons I have endeavoured to set out above, theapplication for orders in the nature of writs of certiorari and mandamusfails and is dismissed with costs fixed at Rs. 210.
JAMEEL, J. – I agree
-JAYAWEERA v. WIJERATNE