JOHN KEELS LTD.,V.
COURT OF APPEAL.
DR. GUNAWARDENA, J (P/CA)
DE SILVA, J.
DC COLOMBO 95596/MOctober 16,1996
Civil Procedure – S.408, S.430 – S.436. Compromise – Commission toverify the statement of accounts – Is it a settlement?
The Plaintiff Petitioner instituted action against the Defendant Respond-ent claiming a certain sum. The Defendant-Respondent took up the posi-tion that he is not liable to pay the said sum, and the Plaintiff cannot main-tain the said action. On.7.6.1989 Court suggested that a Commission beissued as a practical step to verify the statement of accounts; and as bothparties agreed to this suggestion a Commission was issued in terms ofS.430 of the Civil Procedure Code. After the return of the Report, afterseveral dates of postponement of the trial, on 9.5.94 the Plaintiff invitedCourt to enter judgement in favour of the Plaintiff, as the Report showed alarge sum of money due from the Defendant. The Defendant denied thatthe parties have entered into a settlement. The learned District Judge re-fused the application of the Plaintiff-Petitioner.
(1) S.408 of the Civil Procedure Code is intended to provide an easy andinexpensive means of giving effect to agreements of parties instead ofdriving them to separate actions for specific performance. Therefore theremust be a definite agreement by the parties in respect of the matter in-volved. On a perusal of the document it is clear that (1) the joint Commis-sion was issued in terms of a suggestion made by Court as a practicalstep and not in terms of – a settlement, (2) No settlement had been re-corded (3) the Parties did not agree to settle the case. Thus there is nospecific settlement arrived at by the parties.
"It is fundamentally necessary before S.408 can be applied that it shouldbe clearly established that what is put forward as an agreement or com-promise of an action by the parties was intended by them to be so."
The petitioner further sought a direction from the Court of Appeal to theDistrict Court to accept the Commission report without any further docu-ments in support thereof,
(2) S.432 (2) makes it clear that the report is to be used as evidence in thecase and that either party may examine the Commissioner personally inopen Court. The report therefore is of evidential value only and the findingsof the Commissioner are not judicial findings, Law on this question isquite clear, issuing directions to the District Judge to admit the reportdoes not arise.
APPLICATION in revision from an order of the District Court of Colombo.
Romesh de Silva P.C. for Plaintiff-Petitioner.
Ajantha Cooray for Defendant – Respondent.
Cur. adv. vult.
J.A.N. DE SILVA, J.
This is an application to revise the order of the learned District Judgedated 15.07.1994 wherein he had disallowed the plaintiff-petitioner's(hereinafter referred to as the plaintiff) application to enter judgementand decree in accordance with a Commission Report marked as E2.By this application the petitioner has also sought an order from thisCourt directing the learned District Judge to accept the said Commis-sion Report as evidence without any proof of the contents thereof.
Petitioner and the Defendant-Respondent (hereinafter referred to asthe Defendant) filed written submissions on the 18th of October 1995.Thereafter this application had been listed for argument on several
occasions. However due to lack of time it had not been taken up forargument and on 02.04.1996 parties agreed to dispose of the applica-tion on the written submissions.
This matter arose in the following manner.
The Plaintiff instituted action on 18.09.85 against the Defendant,claiming a sum of Rs. 4,147,115709 with interest. The Petitioner’s casewas based on a statement of accounts which was annexed to theplaint and was marked as 'A'.
The Defendant filed an amended answer on 15.11.88 denying theaverments in the plaint and took up the position that he is not liable topay the said sum and Plaintiff cannot maintain this action.
When the case came up for trial on the 7th of June 1989 it wassuggested by Court that a Commission be issued as a practical stepto verify the statement of accounts. Both parties agreed to this sug-gestion and accordingly a Commission was issued in terms of Section430 of the Civil Procedure Code.
After the Commissioner submitted the report the Court fixed thecase for trial 2nd thereafter the trial had been postponed several timesfor various reasons. On the 9th of May 1994 when the case was takenup for trial counsel for the Plaintiff has stated to Court that according tothe Commissions report there was a large sum of money due from theDefendant to the Plaintiff and as there was a compromise reachedbetween the parties on 07.06.89 in terms of Section 408 of the CivilProcedure Code, the Court should enter judgement and decree in fa-vour of the Plaintiff.
Counsel for the Defendant denied that the parties have entered intoa settlement and moved that the trial be proceeded with.
After hearing oral submissions o' Loth parties the Court ordered par-ties to file written submissions. Thereafter the learned District Judgeby his order dated 15.07.1994 refused the application of the Plaintiff -Petitioner.
The present application is to set aside the said order of the learnedDistrict Judge.
The main submission of the counsel for the Petitioner is that thecompromise reached was in terms of Section 408 of the Civil Proce-dure Code and decree should be entered in terms of that Section.
Section 408 of the Civil Procedure Code reads as follows:
"If an action be adjusted wholly or in part by any lawful agreementor compromise, or if the Defendant satisfy the plaintiff in respectto the whole or any part of the matter of the action, such agree-ment, compromise, or satisfaction shall be notified to the Courtby motion made in presence of, or on notice to, all the partiesconcerned, and the Court shall pass a decree in accordance there-with, so far as it relates to the action, and such decree shall befinal, so far as relates to so much of the subject matter of theaction as is dealt with by the agreement, compromise, or satis-faction".
This provision is intended to provide an easy and inexpensive meansof giving effect to agreements of parties instead of driving them to sepa-rate actions for specific performance. Therefore there must be a defi-nite agreement by the parties in respect of the matter involved in theaction.
In the instant case to ascertain whether there was an agreementone has to look into the proceeding of 7th June 1989 which was markedand produced as 'C'. On a perusal of the document it is clear that (1)the joint Commission was issued in terms of a suggestion made byCourt "as a practical step" and not in terms of any settlement (2). Nosettlement had been recorded on the 7th. (3) Parties did not agree tosettle the case. Thus there is no specific settlement arrived at by theparties.
It is fundamentally necessary before Section 408 can be appliedthat it should be clearly established that what is put forward as anagreement or compromise of an action by the parties was intended bythem to be so. This is not so in this case. In my opinion therefore thePlaintiff has failed to establish that there was infact a settlement. Inthe circumstances, I hold that Section 408 of the Civil Procedure Codeis inapplicable to this case.
The Petitioner is also seeking a direction from this Court to DistrictCourt to accept the Commission report without any further documentsin support thereof.
The provisions of law relating to the issue of Commission to exam-ine accounts are set out in Sections 430 to 436 of the Civil ProcedureCode. The plain language of the Section makes it very clear that theseprovisions are intended to be used by Court whenever it requires theassistance by way of a report on accounts. The words in Section 432(2)make it clear that the report is to be used as evidence in the case andthat either party may examine the Commissioner personally in openCourt. The report therefore is of evidential value only and the findings ofthe Commissioner are not judicial findings. Since the law on this ques-tion is quite clear, it is my view that issuing directions to the learnedDistrict Judge to admit the report does not arise. In the circumstanceswe see no reason to interfere with the order of the learned DistrictJudge. We dismiss this application with costs fixed at Rs. 2500/-.
The Petitioner has filed a leave to appeal application bearing No:CA/LA No: 181/94 on the same matter. The decision in this applicationwill be applicable to the said leave to appeal application too. The saidleave to appeal application is hereby dismissed without costs.
DR. GUNAWARDANA, J. (P/CA)-1 agree.
JOHN KEELS LTD v. KURUPPU