007-SLLR-SLLR-1999-V-3-CEYLON-INSURANCE-CO.-LTD.-v.-NANAYAKKARA-AND-ANOTHER.pdf
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CEYLON INSURANCE CO., LTD.
v.NANAYAKKARA AND ANOTHER
COURT OF APPEAL.
DE SILVA. J„
WEERASURIYA. J.
A.L.A. NO. 203/97.
C. GALLE NO. 6055/M.
DECEMBER 8. 1998.
JANUARY 14, 1999.
FEBRUARY 10. 1999.
Civil Procedure Code – Amendment No. 9 of 1991, S. 80 – S. 93 (2) – Amendmentof pleadings – Grave and irremediable injustice ~ Delay – Trial de Novo -Judicature Act S. 48, – What is the first date of Trial?
The plaintiff-respondent instituted action against the defendant-petitioner claiminga certain sum due on a contract of insurance. The defendant disclaimed liability.Trial commenced on 28.7.95; after recording issues, it was postponed for 16.10.95.On this date certain objections were taken and when the trial resumed agan on9.1.97 a trial de novo was ordered on 13.5.97. On 7.5.97 the plaintiff sought toamend his pleadings, which was allowed by Court.
Held:
S. 93 (2) prohibits Court from allowing an application for amendment, unlessit is satisfied that grave and irremediable injustice will be caused if theamendment is not permitted and the party applying has not been guiltyof laches.
The Court is required to record reasons for concluding that both conditionsreferred to have been satisfied.
The application to amend by pleading mistake or inadvertance can in nosense be regarded as necessitated by unforeseen circumstances. Theplaintiffs' conduct point to one conclusion, viz that they have acted withoutdue diligence; this error could have been discovered with reasonablediligence; the need for the amendment did not arise unexpectedly.
The plaintiffs had failed to adduce reasons for the delay of over 3 yearsfor making an application to amend the plaint on the basis of a purportedmistake by the defendant.
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Ceylon Insurance Co., Ltd. v. Nanayakkara and Another
(Weerasuriya, J.)
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S. 80 CPC provides for fixing the date of trial, and such date constitutesthe day first fixed for trial. The discretion vested in the Judge either tocontinue with the trial or to commence proceedings afresh does not affectthe nature of the Order made under S. 80 CPC relating to the fixing ofthe first trial date. The order made fixing the date of trial in terms of
S.80, becomes the day first fixed for trial with the meaning of s. 93 (2)CPC.
APPLICATION for leave to Appeal from the Order of the District Court, Galle.
Cases referred to:
Kuruppuarachchi v. Andreas – [1996] 2 Sri L.R. 11 at 13.
Gunasekera v. Abdul Latiff – [1995] 1 Sri L.R. 225.
Bisomenike v. de Alwis – [1982] 1 Sri L.R. 368 at 378.
Lindrey Petroleum Co. v. Hurd – 1874 LR 5 PC 221, 239, 240.
Loku Balakumar v. Balasingham Balakumar – SC 125/94 SCM 11.9.95.
R. E. Thambiratnam with K. Gunaretnam for defendant-petitioner.
D. Wickremanayake with R. Y. D. Jayasekera and Ms. Anandi Cooray for
plaintiff-respondent.
Cur. adv. vult.
April 28, 1999.
WEERASURIYA, J.
The plaintiff-respondents (hereinafter referred to as the plaintiffs) bytheir plaint dated 21.02.94, instituted action against the defendant-petitioner (hereinafter referred to as the defendant) seeking judgmentin a sum of Rs. 3,277,518.35 with legal interest arising out of a claimbased on a contract of insurance. The defendant filed answer dis-claiming liability on the insurance policy and prayed for dismissal ofthe action. The trial commenced on 28.07.95, wherein after recordingof admissions and issues further trial was postponed. On 16.10.95when further trial commenced, the second plaintiff in the midst of hisevidence sought to describe the building as having a ground floorand two upper floors contrary to the description in the insurance policyto which the defendant objected; the learned District Judge upheldthe objections of the defendant. The plaintiffs thereafter, sought leaveto appeal from the aforesaid order, which was disallowed by this Court.On 09.01.97 trial was resumed before a new District Judge whodirected a trial de novo on 13.05.97. Meanwhile on 07.05.97, theplaintiffs filed an application seeking to amend the plaint by the
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inclusion of an averment that although they required insurance coverfor a building comprising a ground floor and two upper floors, thedefendant had by mistake or inadvertence issued insurance cover fora building comprising a ground floor and one upper floor only. On13.05.97 when the said application to amend the plaint was supported,the defendant objected to the proposed amendment and the DistrictJudge directed the parties to file written submissions. On 13.10.97,the District Judge made order accepting the amended plaint. Thisapplication has been filed against the aforesaid order of the DistrictJudge.
At the hearing of this application, learned counsel for the defendantsubmitted that the District Judge had misdirected himself on the lawrelating to the meaning and effect of the provisions of section 93 ofthe Civil Procedure Code.
Section 93 of the Civil Procedure Code as amended by ActNo. 9 of 1991 read as follows:
"93 (1) – Upon application made to it before the day first fixedfor trial of the action, in the presence of, or after reasonable noticeto all the parties to the action, the Court shall have full power ofamending in its discretion, all pleadings in the action, by way ofaddition, or alteration, or omission.
– On or after the day first fixed for the trial of the actionand before final judgment, no application for the amendment ofany pleadings shall be allowed unless the Court is satisfied forreasons to be recorded by the Court that grave and irremediableinjustice will be caused if such amendment is not permitted, andon no other ground, and that the party so applying has not beenguilty of laches . . ."
It is to be appreciated that, section 93 as it stands now providesfor amendment of pleadings at two stages namely, (i) prior to thefirst date of trial, and (ii) after the first date of trial.
As set out in section 93 (2), the amendment of pleadings onor after the first date of trial can now be allowed only in limitedcircumstances. It prohibits Court from allowing an application foramendment –
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Ceylon Insurance Co., Ltd. v. Nanayakkara and Another
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unless it is satisfied that grave and irremediable injustice willbe caused if the amendment is not permitted; and
the party applying has not been guilty of laches.
Further, the Court is required to record reasons for concluding thatboth conditions referred to above have been satisfied.
The purpose and scope of section 93 .was explained inKuruppuarachchi v. Andreas01 in the following manner:
"The amendment introduced by Act No. 9 of 1991 was clearlyintended to prevent the undue postponement of trials by placinga significant restriction on the power of the Court to permitamendment of pleadings on or after the day first fixed for trial ofthe action. An amendment of pleadings on the date of trial,more often than not, results in the postponement of thetrial . . . While the Court earlier "discouraged” amendment ofpleadings on the date of trial, now the Court is precluded fromallowing such amendments save on the ground postulated in thesubsection."
The doctrine of 'laches' was referred to in Gunasekera v. AbdulLatifP> to mean slackness or negligence or neglect to do somethingwhich by law a man is obliged to do.
The doctrine of laches in Courts of equity is not an arbitrary ortechnical doctrine. In Bisomenike v. De Alwid3) Sharvananda, J. (ashe then was) quoted with approval the following observations fromLindsey Petroleum Co. v. Hurd4):
"Where it would be practically unjust to give a remedy eitherbecause the party has, by his conduct, done that which might fairlybe regarded as equal to a waiver of-it, or where by his conductand neglect he has, though perhaps not waiving that remedy, yetput the other party in a situation in which it would not be reasonableto place him if the remedy were afterwards to be asserted, in eitherof these cases lapse of time and delay are most material. . . thevalidity of that defence must be tried upon principles substantiallyequitable. Two circumstances always important in such cases arethe length of the delay and the nature of the acts done during
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the interval which might affect either party and cause a balanceof justice or injustice in taking the one course or the other, sofar as related to the remedy."
Further, in Lulu Balakumar v. Balasingham Balakumai<s> Fernando,
J. dealing with the question of laches observed as follows:
"… mere delay does not automatically amount to laches… the circumstances of the particular case, the reasons for thedelay and the impact of the delay on the other party must all betaken into account … In any event the question of laches cannotbe determined only by considering, how many trial dates or howlong a period of time has elapsed. The circumstances arerelevant …"
The following facts set out in their chronological order are highlyrelevant in arriving at a decision in this application.
On 13.11.92 the plaintiffs submitted to the defendant a proposalfor the insurance of a tea factory under construction, which oncompletion will be ground floor and one upper floor.
On 24.11.92, on the basis of the said proposal for insuranceand upon payment by the plaintiffs of the premium of the firstyear, an insurance policy effective from 13.11.92 was issuedto the plaintiffs.
In the schedule to the said insurance policy the property wasdescribed as a building being constructed with wall of bricksand on completion will be ground floor and one upper floor.
On 05.03.93, the plaintiffs submitted a claim to the defendantclaiming the insured value of the building that was beingconstructed on the ground that on or about 21.02.93, thebuilding had collapsed.
By letter dated 15.07.93 the defendant informed the plaintiffsthat their inquiries revealed that the building that had collapsedwas not of the type described in the proposal and the policyof insurance.
CACeylon Insurance Co., Ltd. v. Nanayakkara and Another
(Weerasuriya, J.)|55
By letter dated 24.01.94 the defendant making reference to theletter dated 15.07.93, informed the plaintiffs that having carefullyconsidered the' matter, the defendant was unable to acceptliability for the plaintiffs' claim.
On 21.02.94 the plaintiffs filed plaint with the knowledge thatthe defendant had disclaimed liability for the loss incurred byhim, on the ground that the building that collapsed was not inconformity with the description of the property that was in factinsured.
The defendant filed answer on 13.10.94 and specifically averredin paragraph 7 thereof that the building that collapsed wasnot in conformity with the property described in the policy ofinsurance.
On 16.10.95 the 2nd plaintiff in the midst of his evidence soughtto describe the building that was being constructed as havinga ground floor and two upper floors and objection was takenfor the reception of such evidence by the defendant which wasupheld by the District Judge.
The plaintiffs thereafter filed an application seeking leave toappeal against the said order of the District Judge and the Courtof Appeal by its order dated 01.03.96, refused the application
in limine.
On 09.01.97, the District Judge who heard the case having goneon transfer, the case was fixed for trial de novo by the DistrictJudge who succeeded him.
On 07.05.97, the plaintiffs filed an application seeking to amendthe plaint by asserting that although he desired an insurancepolicy providing insurance cover for a building comprising aground floor and two upper floors, the defendant inadvertentlyissued a policy for a building having a ground floor.
In the light of the above facts, the application to amend the plaintby pleading mistake or inadvertence can in no sense be regardedas necessitated by unforeseen circumstances. The plaintiffs will behard put to satisfy Court that they were taken by surprise or the errorcould not have been discovered with reasonable diligence. The plain-tiffs' conduct point to one conclusion, namely that they have acted
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without due diligence. It is manifest that the need for the amendmentdid not arise unexpectedly, since the defendant by letter dated 15.07.93informed the plaintiffs that the building that had collapsed was notof the type described in the proposal and the policy of insurance.The plaintiffs had failed to adduce reasons for this delay of over 3years for making an application to amend the plaint on the basis ofa purported mistake by the defendant.
It is no excuse for the plaintiffs to assert that they proposed toraise an issue on the question of a mistake in the policy of insuranceat the trial.
Learned counsel for the plaintiffs argued that the application foramendment of the plaint would fall within the ambit of section 93 (1).He submitted that trial which commenced on 28.07.95, was not continuedbefore the new District Judge and the order was made for a trial denovo, on 13.05.97 and therefore the new trial date could be construedas the first date of trial. It is to be observed that section 80 of theCivil Procedure Code provides for fixing the date of trial and suchdate constitutes, the day first fixed for trial. Section 48 of the JudicatureAct provides for continuation of a trial before the Judge who succeedsthe Judge before whom trial commenced. The discretion vested inthat succeeding Judge either to continue with the trial or to commenceproceedings afresh does not affect the nature of the order made interms of section 80 of the Civil Procedure Code relating to the fixingof the first trial date.
Thus, the order made fixing the date of trial in terms of section80, becomes the "day first fixed for trial" within the meaning of section93 (2) of the Civil Procedure Code. Thus, the order made by the DistrictJudge allowing the amendment of plaint cannot be supported, con-sidering the circumstances of this case. Learned District Judge hadfailed to appreciate the relevant facts and circumstances material tothe application for amendment of the plaint. Therefore, I set asidethe order of the District Judge dated 13.10.97 allowing the applicationto amend the plaint.
This application is allowed with costs.
DE SILVA, J. – I agree.
Application allowed.