Brown & Co., Ltd. v. Fernando
BROWN & CO., LTD
COURT OF APPEAL.
T. D. G. DE ALWIS. J. AND DHEERARATNE, J.
A. No. 258/77.
C. COLOMBO No. 1/616/M.
FEBRUARY 27. 1986.
Contract – Written estimate detailing items of work and costing the materials – Writtencontract – Prescription – Prescription Ordinance, ss. 6 and 8.
For the purpose of constituting a written contract no special form of writing is required.A contract entered into on a comprehensive written estimate detailing every'item ofwork and costing the materials in minute detail is a written contract for goods suppliedand for work and labour done. The estimates and their acceptance do not merelyconstitute evidence that a contract to do work and deliver goods existed. They set outall the terms and conditions on which the parties were agreed and constitute thecontract. Therefore it is s. 6 of the Prescription Ordinance that applies and not s. 8.
Hence the cause of the action is prescribed only in six years.
Cases referred to:
Walker Sons & Co., Ltd. v. Kandiah -(1919)21 N.L.R. 317.
Amerasinghe v. De Alwis – (1974) 48 N.L.R. 519.
Ceylon Insurance Co.. Ltd. v. Diesel and Motor Engineering Co., Ltd. – (1977) 79N.L.R. VoL 2 page 5.
Pretty v. Selly – (1859) 26 Beav. 606.
APPEAL from judgment of the District Court of Colombo.
J. W. Subasinghe. P. C. with P. Naguleswaram for plaintiff-appellant.
R. D. C. de Silva with N. D. R. Casiechitty for defendant-respondent.
Cur', adv. vult.
April 30. 1986.
T. D. G. DE ALWIS, J.
The plaintiff-company is an engineering firm which carried out work inconnection with the development of a tea factory on Ottery Estate,Dickoya, belonging to the defendant. At the request of the defendant,the plaintiff submitted an estimate dated 13.12.71 for
Rs. 353,550.00 for the development of the factory, which estimatethe defendant duly accepted by his letter dated 23.12.71.Accordingly work on the factory on this estimate commenced and wasconcluded. The defendant has paid the plaintiff a sum of Rs.
in respect of this estimate, and a sum of Rs. 13,092.48is outstanding thereon. On 18.12.72 also at the request of thedefendant the plaintiff submitted a supplementary estimate of Rs.
for extra work on the factory. This estimate was acceptedby the defendant on 28.12.72. Work to the value of Rs. 37,420.00was carried out on the supplementary estimate. Giving credit to thedefendant in a sum of Rs. 315.00 credited in his favour, a sum of Rs.
is due and owing to the plaintiff on the supplementaryestimate. The plaintiff sued the defendant for the recovery of a sum ofRs. 50,197.48 being the aggregate amount outstanding on the twoestimates with'interest thereon at 1 2% per annum from 25.4.74. Thedefendant took the defence that the claim of the plaintiff wasprescribed.
The defendant contended that this was a contract for goods soldand delivered and for work and labour done in respect of which section8 of the Prescription Ordinance applied, and accordingly the claim wasprescribed in one year,whilst the plaintiff contended that there was awritten contract between the plaintiff and the defendant and thatsection 6 of the Prescription Ordinance applied, and that the actionwould be prescribed only after six years. The District Judge held withthe defendant and dismissed the plaintiff's action.
The relevant portion of section 6 of the Prescription Ordinance is:
"No action shall be maintainableupon any written
promise, contract, bargain, or agreementunless
such action shall be brought within six years of such writtenpromise, contract, bargain or agreement"
and the relevant portion of section 8 is:
"No action shall be maintainable for or in respect of any goods
sold and deliveredor for work and labour done
……. unless the same shall be brought within one year after
the debt shall have become due."
In the case of Walker Sons & Co.. Ltd. v. Kandiah (1), the plaintiff, amotor firm, sued the defendant to recover a certain sum of money forrepairs done to the defendant's motor car and for materials supplied in
connection with that work. The order of the defendant requesting theplaintiff to effect the repairs was given by a letter, and the acceptanceof the order by the plaintiff was also by a letter. It was contended forthe plaintiff that the contract was a written contract and that section 7(now section 6) applied. De Sampayo held that it was a contract forgoods supplied and for work and labour done, and that section 9 (nowsection 8) applied. In the case of Amarasinghe v. De Alwis (2)following the judgment in Walker Sons & Co., Ltd. v. Kandiah (supra) itwas held that a claim for repairs effected and materials supplied to amotor car falls within section 8 of the Prescription Ordinance and isbarred after one year because the contract is one for goods sold anddelivered and work and labour done. De Sampayo, J. dealing with thefacts in Walker Sons & Co., Ltd v. Kandiah (supra) states:
"Section 7 (now section 6) relates to actions ‘upon any deed forestablishing a partnership, or upon a promissory note, or upon awritten promise, contract, bargain, or agreement, or other writtensecurity'1. The written contract it would seem, is one in the nature ofa security, and must have a certain degree of formality, and it isdifficult to say that the letters exchanged between the parties inconnection with the motor car is a security in this sense."
It would seem that De Sampayo, J. was here dealing with theparticular correspondence in that case, namely the letters exchangedbetween the plaintiff and the defendant. The nature and contents ofthese letters are not set out in the judgment.
In the case of Ceylon Insurance Co. Ltd. v. Diesel and MotorEngineering Co., Ltd. (3) the plaintiff-company carried out repairs tocertain motor vehicles at the request of the defendant-Company. Twoestimates for carrying out repairs (PI and P4) were submitted by theplaintiff. In these estimates the details and the cost of each item wereset out. By letters P2 and P5 the defendant-company accepted theoffers subject to the modifications set out therein and a promise topay, and on this faith the work was carried out. Vythialingam, J. heldthat all the terms and conditions on which the parties were agreed areset out in the correspondence, and they constituted written contracts.
For the purpose of constituting a written contract no special form ofwriting is required. De Sampayo, J. thought that there must be somedegree of formality to constitute a written contract, and Vythialingam,J. thought that where the correspondence between the partiescontained all the terms and conditions on which the parties wereagreed the contract was a written one. So that in the instant case it
would be useful to examine the terms of the estimates and the letter ofacceptance. The estimates are very comprehensive and as completeand detailed as one could desire. Every item of work that had to bedone is detailed, as is the material that had to be supplied. The cost ofevery item of work and the cost of material are given in minute detail.The ultimate paragraph of the estimates read as follows:
"Our estimate has been prepared on the basis that payment forthe goods supplied and the work done will be made to our HeadOffice in Colombo in accordance with Clause 7 'payment' printed onthe CETA Form 8/69. It is agreed that this contract has been madein Colombo and the customer hereby consents to the District Courtof Colombo exercising jurisdiction in any legal action that maybecome necessary to be filed and waives all objections to suchjurisdiction."
All these terms and conditions the defendant has accepted when in hisletter of acceptance he has stated that he confirms acceptance of theestimates and requests necessary action on the estimates be taken.On the faith of that acceptance the work on the estimates wascompleted, and a large portion of the money due on the estimateswas paid. The estimates and their acceptance do not merelyconstitute evidence that a contract to do work and deliver goodsexisted. They in fact set out all the terms and conditions on which theparties were agreed. They satisfy even the test of a 'degree offormality.' I therefore hold that the contract was a written contract forgoods supplied and for work and labour done.
The further question that arises is whether section 6 or section 8applies to this contract. Since it is a written contract it comes withinsection 6. But it is also a contract for goods supplied and for work andlabour done, and hence comes within the ambit of section 8. Thisconflict would have to be resolved with reference to the Rules ofConstruction of Statutes. This particular Rule of Construction wasenunciated in the case of Pretty v. Selly (4) and also referred to inCraies Statute Law (4th Ed. p. 201) as follows:
"The general rules which are applicable to particular and generalenactments in statutes (if they are repugnant) are very clear. Theonly difficulty is in their application. The rule is that whenever there isa particular enactment and a general enactment in the same statute,and the latter, taken in its most comprehensive sense, wouldoverrule the former, the particular enactment must be operative,and the general enactment must be taken to affect only the otherparts of the statute to which it may properly apply."
CA.Brown & Co., Ltd. v. Fernando (T. D. G. DeAlwis, J.)181
Applying this rule, and following earlier decisions on this point, itwas held in Ceylon Insurance Co., Ltd. v. Diesel and MotorEngineering Co., Ltd. (supra) (that in written promises or contractssection 6 being the particular enactment, must in keeping with therules of construction, prevail over section 8 of the PrescriptionOrdinance which is the general section. Whilst respectfully agreeingwith this judgment, it is also a judgment of the Supreme Court at atime when it was the highest court of appeal in this country, and assuch this Court is bound by that judgment. I therefore hold that theplaintiff's cause of action fell within the prescriptive period of six yearswithin which period this action has been brought. The judgment of thelearned District Judge is accordingly set aside and judgment is enteredfor the plaintiff as prayed for. The plaintiff will in addition be entitled tocosts of appeal which we fix at Rs. 525.
DHEERARATNE, J. – I agree.