HILDA ENID PERERA
v.SOMAWATHIE LOKUGE AND ANOTHER
SUPREME COURTDHEERARATNE, J.
WIJETUNGA, J. ANDBANDARANAYAKE, J.
SC APPEAL NO. 86/99CA REV. NO. 821/97CALA NO. 197/97DC PANADURA NO. 1041/L07th. 30th MARCH. 200026™ APRIL. 2000
Civil Procedure Code – Addition of a necessary party – Section 18 of theCode – Vindicatory action.
The plaintiff-appellant (“the plaintiff") instituted an action in the DistrictCourt against the defendant for a declaration of title to the property indispute and for ejectment and damages. The plaint averred that thedefendant – 181 respondent (“the defendant") was the original owner of theproperty; The defendant sold it to the 2nd respondent, a Finance Company(“the Company") by Deed No. 420 dated 18. 02. 1985; the companyentered into an agreement to sell the property to one Lokuge (thedefendant's nephew); that agreement was cancelled by Deed No. 1116dated 20. 03. 1989 on the ground of Lokuge's default: and thereafter theplaintiff purchased the property by Deed No. 1117 dated 20. 03. 1989.
The defendant filed answer and made an application to add the Companyas a necessary party. The District Judge allowed the application. It wasthe defendant’s position that the alleged sale of the property by her to theCompany on 18. 02. 1985 was not true. Her signature was obtained bythe Company but she never parted with the title to the land in dispute.It was submitted on behalf of the defendant that the Company and theplaintiff had acted together fraudulenty in connection with the land indispute.
In order to avoid multiplicity of actions and to diminish the cost oflitigation and for the effective and complete adjudication of all questionsinvolved in the case, the District Judge was correct when he ordered theaddition of the Company as a party defendant.
Hilda Enid Perera v. Somawathie Lokuge and Another
Cases referred to :]. Arumugam Coomaraswamy v. Andiris Appuhamy and Others (1985)2 Sri L R219
Amon v. Raphael Tuck and Sons Ltd. (1956) 1 All E.R. at 73
Norris v. Beazbey (1877) 2 CPD 80
Byrae u. Browne and Diplock (1889) 22 QBD 657
APPEAL from the Judgment of the Court of Appeal.
Ikram Mohamed, P.C. with Ms. A.T. Shayama Fernando and Ms. SonaliPerera for the appellant.
Bimal RajapakshawUh Raja Peiris and Ms. NishanathaMendis for the 131respondent.
I.S. de Silva with Vinoth Wickramaratne for the 2nd respondent.
Cur. adv. vult.
July 31, 2000.
SHIRANI BANDARANAYAKE, J.The Plaintiff-appellant (appellant) instituted action in theDistrict Court of Panadura against the defendant-respondent(1st respondent) for a declaration of title to property bearingassessment No. 144, Kotagedera, Madapatha, for ejectment ofthe 1st respondent therefrom and for recovery of damages atthe rate of Rs. 10,000/- per month from 27. 07. 1995. Theappellant pleaded in the plaint that:
the 1st respondent was the original owner of the saidproperty;
the 1st respondent sold the said property to PanaduraFinance and Enterprises Ltd., (2nd respondent) by DeedNo. 420 dated 18. 02. 1985;
the 2nd respondent entered into the agreement to sell.No. 421 dated 18. 02. 1985, with one Lalith ChandrasiriLokuge in respect of that property;
the said Chandrasiri defaulted and hence the saidAgreement to sell was cancelled by Deed No. 1116 dated20. 03. 1989;
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the appellant purchased the said property by DeedNo. 1117 dated 20. 03. 1989;
the 1st respondent instituted action No. 416/L in theDistrict Court of Panadura against the 2nd respondent.Chandrasiri and the appellant for cancellation of the saidAgreement to sell No. 421 and for a declaration that alltransactions done thereafter are void;
the said action which was fixed for trial ex-parte wasdismissed on 19. 10. 1994 as the Court was not satisfiedwith the evidence adduced at the ex-parte trial by the 1strespondent. No appeal was filed by the Is* respondentagainst that order of dismissal.
The 1st respondent filed her answer on 11. 10. 1995 andthereafter filed an application to add the 2nd respondent as anecessary party to the present action. This was allowed by theDistrict Judge (D). The 2nd respondent filed an applicationby way of Revision and an application for leave to appealagainst the said order of the District Judge (E). The Revisionapplication and the leave to appeal application were takentogether for hearing by the Court of Appeal; the Court of Appealdismissed the Revision application and refused to grant leaveto appeal (G). The appellant and the 2nd respondent each wasordered to pay the 1st respondent, Rs. 10,500/- as costs of thesaid two applications:
From that judgment of the Court of Appeal, special leaveto appeal was granted by this Court on the following questions:
the finding of the Court of Appeal that the judgmententered in case No. 416/L, instituted by the lslrespondent, cannot operate as a bar against the lslrespondent’s claim in reconvention, is wrong in law;
in arriving at the said finding that the said judgment incase No. 416/L is not “res-judicata” against the claim ofthe 1st respondent made in the present case, the Court ofAppeal has not considered the provisions of section 34(2)
Hilda Enid Perera v. Somawathie Lokuge and Another
of the Civil Procedure Code and hence the finding of theCourt of Appeal is erroneous;
the said order of the Court of Appeal is wrong, in that, the2nd respondent is not a necessary party to be added interms of section 18(1) of the Civil Procedure Code;
the order made for payment of costs of Rs. 10,500/- by theappellant is unjust and erroneous.
At the hearing of this appeal we invited learned counsel forthe parties to confine themselves to the limited question as towhether the 2nd respondent should have been added as anecessary party or not under section 18 of the Civil ProcedureCode. We also indicated that the views expressed by the Courtof Appeal, both on fact and law, on extraneous matters will bequashed by us.
Section 18( 1) of the Civil Procedure Code, reads as follows:
“The Court may on or before the hearing, upon theapplication of either party, and on such terms as theCourt thinks just, order that the name of any party,whether as plaintiff or as defendant improperly joined,be struck out; and the Court may at any time, eitherupon or without such application and on such terms asthe Court thinks just, order that any plaintiff be madea defendant, or that any defendant be made a plaintiff,and that the name of any person who ought to havebeen joined, whether as plaintiff or defendant, or whosepresence before the Court may be necessary in orderto enable the Court effectually and completely toadjudicate upon and settle all the questions involved inthat action, be added.”
Addition of parties in pending civil proceedings, has beensubjected to close scrutiny in several local decisions andperhaps, the most illuminating of those judgments is that ofRanasinghe, J., (as he then was) in the case of ArwnugamCoomaraswamy v. Andiris Appuhamy and others111. Inconsidering the applicability of section 18(1) of the Civil
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Procedure Code, Ranasinghe, J., having carefully consideredthe Rules of the Supreme Court of England and severaldecisions both local and English, was constrained to choosebetween two strands of English decisions, labelled by Devlin,J., in Amon v. Raphael Tuck and Sons Ltd.121 as the 'narrowerconstruction’ and the ‘wider construction'. The narrowerconstruction is best reflected in the case of Norris u. Beazlei/31.in the words of Lord Coleridge, Cj., as follows:
“It seems to me to be correctly argued that those wordsplainly imply that the defendant to be added must bea defendant against whom the plaintiff has some causeof complaint which ought to be determined in theaction, and that it was never intended to apply wherethe person added as a defendant is a person againstwhom the plaintiff has no claim and does not desire toprosecute any."
It would be appropriate, in relation to the facts of thepresent case, to substitute the word ‘defendant’ wherever theword “plaintiff appears in the above statement.
The ‘wider construction’ was expounded by Lord Esher inthe case of Bume u. Browne and Diplockf41 in the followingterms:
“One of the chief objects of the Judicature Act wasto secure that, whenever a Court can see in thetransaction brought before it that rights of one of theparties will or may be so affected that under the formsof law other actions may be brought in respect of thattransaction, the Court shall have power to bring all theparties before it, and determine the rights of all in oneproceeding. It is not necessary that the evidence in theissues raised by the new parties being brought inshould be exactly the same; it is sufficient if the mainevidence and the main inquiry will be the same, and theCourt then has the power to bring in the new partiesand adjudicate in one proceeding upon the rights of all
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parties before it. Another great object was to diminishthe cost of litigation. That being so, the Court ought togive the largest construction to those acts in order tocarry out as far as possible the two objects I havementioned."
After an exhaustive examination of the English and localauthorities on the subject, Ranasinghe, J., was of the viewthat,
“On a consideration of the respective views… which havebeen expressed by the English Courts in regard to the natureand the extent of the construction to be placed upon the ruleregulating the addition of a person as a party to a proceedingwhich is already pending in Court between two parties, the“wider construction” placed upon it by Lord Esher, which hasbeen set out above commends itself to me. The grounds whichmoved Lord Esher to take a broad view, viz: to avoid amultiplicity of action and to diminish the cost of litigation,seem to me. with respect, to be eminently reasonable andextremely substantial. Lord Esher's view though givenexpression to almost a century ago is. even to-day.as constructive and as acceptable (emphasis added)(supra Pg. 229).
Learned President’s Counsel for the appellant correctlysubmitted that the 1st respondent’s application to add the 2ndrespondent, as a party necessary for the proceedings, wasbased upon the transfer made by the 2nd respondent bearingNo. 420 dated 18. 02. 1985. After the said transfer, the 2ndrespondent had entered into an agreement (No. 421 dated18. 02. 1985 (A2)) with the 1st respondent’s nephew. By thisagreement the vendee was given time till 18. 02. 1988 to paya sum of Rs. 73,150/- in 36 instalments of Rs. 2031/95 andto purchase the said property. It was agreed in terms of clause17 of that agreement, that in the event of the vendee’s failureto pay any 3 instalments referred to above and/or hiscommitting a breach of any term or condition thereof, theagreement became ‘ipso facto’ terminated and void, without
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any notice. Thereafter the appellant purchased the property inquestion by Deed No. 1117 executed on the same day.
It was contended for the appellant that the 2nd respondentis not a necessary party for the Court to determine thegeneral disputes which have arisen in this case; if at all. arepresentative of the 2nd respondent may be a necessary'witness for the 1st respondent. It was submitted on behalf ofthe 1st respondent that the 2nd respondent and the appellanthave acted together fraudulently in connection with the landin dispute; that the documents on which the 2nd respondentobtained the signature of the 1st respondent on 18. 02. 1985are not what they purport to be. The 1st respondent denies thatshe ever parted with the legal title to the land in dispute. It wassubmitted that the circumstances of the case demanded aninvestigation by Court, of the conduct of the 2nd respondent,which affected the rights of the parties to the case.
In order to avoid multiplicity of actions and to diminish thecost of litigation as pointed out by Ranasinghe, J., in ArumugamCoomaraswamy’s case(Supra), and for the effective andcomplete adjudication and settlement of all questions involvedin this case, the learned Trial Judge was correct when he madethe order to add the 2nd respondent as a party defendant.
We dismiss the appeal and affirm the order made by theDistrict Court dated 07. 10. 1997. As regards the judgment ofthe Court of Appeal dated 01. 04. 1999, we affirm that part ofthe judgment relating to the addition of the 2nd respondent asa party and costs. All other matters of fact and law referred toin the judgment of the Court of Appeal are quashed. In thecircumstances of this case, we make no order as regards costsof the appeal. We direct the District Court to proceed with themain action as expeditiously as possible.
DHEERARATNE, J. I agree.
WIJBTUNGA, J. – I agree.
Appeal Dismissed; subject to a qualification.
HILDA ENID PERERA v. SOMAWATHIE LOKUGE AND ANOTHER