MARTIN V. SUDUHAMY

024-SLLR-SLLR-1991-V2-MARTIN-V.-SUDUHAMY.pdf


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Martin v. Suduhamy
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MARTIN
V.
SUDUHAMY
SUPREME COURT.
BANDARANAYAKE, J.. FERNANDO. J. AND KULATUNGA. J.S. C. APPEAL NO. 33/90.
S. C. (SP. L. A.) NO. 85/90.
A. APPEAL NO. 661/83(F).
C. HAMBANTOTA NO. L/542.
OCTOBER 26. 1990.
Appeal – Hypothecation of security – Material prejudice – Discretion ofcourt – Sections 757(1) and 759(2) of the Civil Procedure Code – Failure tocomply with requirements of S. 757 (1).
The District Court gave its judgment on 18.10.83. Notice of appeal waspresented to the District Court on 28.10.83 accompanied by the requiredsecurity (a sum of Rs. 750/-) in terms of S. 755 (2) of the Civil ProcedureCode. A petition of appeal was subsequently filed on 16.12.83 in terms of S.755(4). The security deposited was not hypothecated by bond as security forthe costs of appeal as provided for by S. 757(1) of the Code. When objectionto the hearing'was taken on this ground the appellant took a postponementbut took no meaningful steps to rectify the omission. Instead at the hearinghe argued that he need not comply with this requirement where security is incash. What is therefore suggested by the failure to hypothecate is that theomission to hypothecate was not a mere mistake or oversight but inten-tional.
Held:
If non-compliance with the relevant provisions did cause material preju-dice to the respondent both before and after 1977 (when the provisions relat-ing to appeal were amended) the appeal had to be dismissed. If such non-compliance did not cause (material prejudice, prior to 1977 there wasprohibition on the rejection of the appeal; and the Court was required togive the appellant an opportunity of putting1 matters right before rejectingthe appeal. After the amendments of 1977 there is no such prohibition.Instead the Court has a discretion either to grant reHef, or to reject theappeal. Two questions thus arise -Does the Court of Appeal have jurisdiction
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to grant relief in respect of any mistake, omission or defect in complyingwith the relevant provisions? If it has jurisdiction, do the circumstances war-rant the exercise of its discretion to grant relief7
The continuance of litigation cannot be treated, as the Court of Appealdid, as material prejudice because that wilt be true of every case. What iscontemplated is prejudice caused by or in consequence of the non-compliance. While relief will more readily be granted if the non-complianceis trivial, or where an excuse or explanation is offered, relief can still begranted even in respect of total or substantial non-compliance and even if noexcuse is forthcoming but not where the non-compliance is, as here, deliber-ate. The discretion under section 759(3) is a judicial discretion. It wasincumbent on the appellant to place the necessary material before the Courtand to invite the Court to exercise that discretion. This the appellant failedto do. The appeal should therefore have been rejected in the exercise of thediscretion vested in the Court of Appeal.
Per Kulatunge J:
Under S. 759(2) of the Civil Procedure Code “what is required to barrelief is not any prejudice but material prejudice i.e. detriment of the kindwhich the respondent cannot reasonably be called upon to suffer. If there issuch prejudice it is no argument for the appellant to contend as a matter ofright that it can be mitigated by appropriate terms such as the payment ofcosts”.
Cases referred to:
Abdul Cadet v. Sittinisa (1951) 52 NLR 536
Sameen v. Abeyewickrema (1963) 64 NLR 553, 560, 561, 562, 563 PC
Pathioayake v. Kannangara (1958) 60 NLR 188
De Silva v. Seenathiunma 41 NLR 241, 245, 247
Dona Ceciliana v. Kamala Piyaseeli [1990] 1 Sri LR 226, 234
Wood v. Riley [1867] LR 3 CP 26, 27
Silva v. Goonesekera 31 NLR 184
Ramalingam v. Velupillai 38 NLR 255
Zahira Umma v. Abeysinghe 39 NLR 84
Careem v. Uvais – 57 NLR 72
Noris Appuhamy v. Udaris Appu 58 NLR 441
Cbelliab v. Selvanayagam 59 NLR 119
Ratoayake v. Bandara [1990] 1 Sri LR 156, 158, 162
Arulanpalam v. Daisy Fernando [1956] 1 CALR 651
Careem v. Ameiasinghe 1 Sriskantha’s L. Rep. 25
Silva v. Cumaratunga 40 NLR 139, 140
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Kiri Banda v. Ukku Banda [1986] 2 CALR 191, 194
Vithana v. Weerasinghe [1981] 1 Sri LR 52, 57
APPEAL from a judgment of the Court of Appeal.
P. Nanayakkara with Edward Rodrigo and Saratft Upvl Fernando fordefendant -appellant.
M. S. A. Hassan with ALL WafTa for respondent.
Cur.adv.vuit.
January 28, 1991.
BANDARANAYAKE, J.
1 have had the advantage of reading the judgments in draftof my brothers Kulatunga, J. and Fernando, J.
The question that arises for consideration is whether anappeal presented to the original Court but which has not beenperfected by the hypothecation of security in violation of S.755 (2) read with S. 757 (!) can be cured by the provisions of
S.759 (2) of the Civil Procedure Code.
The facts are as follows: The District Court gave Ks judg-ment on 18.10.83. Notice of Appeal was presented to the Dis-trict Court on 28.10.83 accompanied by the required security(a sum of Rs. 750/-) in terms of S.755 (2) of the Code. A peti-tion of appeal was subsequently filed on 16.12.83 in terms of
S.755 (4). The security deposited was not however hypothe-cated by bond as security for the costs of appeal as providedfor by S. 757 (1) of the Code.
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The former Civil Procedure Code provided for the depositof security and hypothecation by bond in terms of S. 757 of thatCode. The Administration of Justice Law which replaced thatearlier Code provided for the deposit of cash in’ a Bank interms of the Rules made under S. 15 thereof. There was noneed for hypothecation. However, under the present law theCivil Procedure Code – Law No. 19 of 1977 – there is expressprovision for hypothecation in terms of s. 757 (1). Early caselaw has treated the necessity for hypothecation as beingperemptory, affecting the validity of an appeal. Vide – Careemv. Uvais (10), Nonis Appuhamy v. Udaris Appu (11) Chelliahv, Selvanayagam (12). The Privy Council in Sameen v. Abey-wickrema (2) took a more liberal approach to which I amattracted. In more recent times the Court of Appeal in DonCeciliyana v. Kamala Piyaseeli (5) has held that failure tohypothecate is fatal as it is the act of execution of the bondthat provides the security required by the Code.
In the instant case the Court of Appeal held that hypothe-cation was integral to a valid appeal and rejected the appeal. Itis ■(rue that there has been no compliance with the requirementof hypothecation but the relief available under S. 759 (2) is for
non-compliance with ” any of the preceding provisions
of Chapter LVII “which therefore should include relief fornon-compliance with the requirement of hypothecation con-tained in S, 757 (1), provided the Court forms the opinion thatthe respondent will not be materially prejudiced if relief isgranted. This means the Court can grant relief but need not.The opinion of the Court could be either —
that it will prejudice the respondent if relief is granted,or,
that it will not.
The Court can form an opinion only upon a considerationof all circumstances relevant to the appellant’s failure to
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comply with the requirement for hypothecation. I am inagreement with the views expressed by Fernando, J on thismatter.
Thus on the question as to why the appellant failed tocomply with the need for hypothecation we have the fact thatwhen the objection to the hearing of the appeal was taken onthis ground the appellant took a postponement but took nomeaningful step thereafter to rectify the omission. The appel-lant merely argues before us that he need not comply with therequirement. His conduct and his failure to offer an explana-tion suggest that his failure to hypothecate was not by a meremistake or oversight but probably intentional. Such conduct inmy view shoud be regarded as materially prejudicial to therespondent and not a trivial inconvenience. The appeal shouldtherefore be rejected. The appeal is dismissed with costs.
FERNANDO, J.
I have had the advantage of reading the judgment, in draft,of my brother Kulatunga, and while I am in agreement withhis conclusion that this appeal should be dismissed. I wish toset out my reasons briefly.
The Civil Procedure Code requires that a “notice of appeal
shall be accompanied bysecurity for the respondent’s
costs of appeal in such amount and nature as is prescribed inthe rules made under section IS of the Administration of Jus-tice Law, No. 44 of 1973” (section 755(2) (a)), and that “thesecurity to be required from a party appellant shall be by bond
[with sureties], mortgage of immovable property, or
deposit and hypothecation by bond of a sum of money suffi-cient to cover the cost of the appeal and to no greateramount” (section 757 (1)). When these two sections and therules are considered together, there is no ambiguity or incon-sistency: where cash is offered as security, the rules prescribethe amount (Rs. 750/-), and section 757(1) requires that thissum be deposited and hypothecated by bond. Section 755
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(2)(a) does not make the rules applicable in their entirety, butonly that part of the rules which relates to the nature andamount (in this instance cash in a sum of Rs. 750/-). Neithersection 755(2)(a) nor the rules make any provision as to themanner and form in which this sum is to be “secured” to meetthe successful respondent’s costs of appeal. It is section 757(1),which specifies the manner (i.e. deposit) and the form (i.e.hypothecation by bond). I therefore agree with my brotherKulatunga that the Appellant's first contention – that hypoth-ecation is not required – fails; the fact that this contention wasthroughout placed in the forefront of the Appellant’s casestrongly suggests that the failure to comply with section 757(1)was deliberate.
What then are the consequences of the Appellant’s failure tocomply with the requirements of section 757(1)? The law priorto 1960 was strict. Section 756(2) then provided that where theappellant “has failed to give the security and to make the dep-ositthe petition of appeal shall be held to have abated”.
The power granted by section 756(3), to give relief in respect “of
any mistake, omission or defectin complying with the
provisions of this section” (i.e. section 756 only) was narrowlyconstrued. Our law reports of the 1950’s are full of instanceswhere non-compliance in respect of security and other mattersresulted in the rejection of appeals. However, there were judi-cial pleas for legislative relaxation. Thus in Abdul Cader v.Sittinisa, (1) only Rs. 21)/- (instead of Rs. 25/-) had been dep-osited as fees for typewritten copies; although the appeal wasdeclared to have abated, the Court acted in revision andgranted relief to the appellant. Gratiaen, J., observed —
“until the present rule is relaxed I see no reason why therevisionary powers of this Court should not be exercisedin appropriate cases”.
Pulle, J., considered it —
“unfortunate that whereas the Legislature has madeexpress provision in section 756(3) to relieve an
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appellant from mistakes, omissions or defects in comply-ing with section 756(1) there is no corresponding rule toenable the Court to grant relief in respect of mistakes oromissions in applying for typewritten copies. The fre-quency with which objections based on non-compliancewith the rules are taken, and the extremely harshmanner in which they operate in certain cases aregrounds which call for an urgent amendment of therules”.
The Supreme Court Appeals (Special Provisions) Act, No. 4 of1960, provided that, where an appeal has been presentedwithin the prescribed time, “the Supreme Court shall not exer-cise the powers vested in such Court by any written law toreject or dismiss that appeal on the ground only of any error,omission or default on the part of the appellant in complying
with the provisions of any written lawunless material
prejudice has been caused thereby to the respondent” [section4(1)]; and in the case of an appeal which is not rejected or
dismissed “shall direct the appellant to comply with
such directions as the Court may deem necessary for the pur-pose of rectifying, supplying or making good any error, omis-sion or defaultwithin such time and upon such condi-tions as may be specified” (section 4(2)). This legislative
change was supplemented by a more liberal judicial approachreflected in Sameen v. Abcyewickrema, (2) P.C., to which nofurther reference is necessary in view of the full discussion inmy brother Kulatunga’s judgment.
This prohibition on the rejection of appeals for mere“technicalities”, not causing material prejudice, was continuedby the Administration of Justice Law (sections 353(2) and (3))but not in the Civil Procedure Code as re-enacted in 1977.However, two changes made in 1977 are significant: the formersection 756(2) was omitted, and while section 759(3) was sub-stantially a re-enactment of the old section 756(3), it is wideras it is applicable to non-compliance with the provisions of
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“the foregoing sections”, (and not merely one section). Suchre-enactment can be taken to be a legislative confirmation ofthe more liberal interpretation adopted by the Privy Council inSameen v. Abeyewickrema.
The resulting position is that if non-compliance with rele-vant provisions did cause material prejudice to the respondent,both before and after 1977 the appeal had to be dismissed. Ifsuch non-compliance did not cause material prejudice, prior to1977 there was a prohibition on the rejection of the appeal;and the Court was required to give the appellant an opportun-ity of putting matters right before rejecting the appeal. Now,however, there is no such prohibition. Instead, the Court has adiscretion either to grant relief, or to reject the appeal. Twoquestions thus arise – Does the Court of Appeal have jurisdic-tion to grant relief in respect of any mistake, omission ordefect in complying with the relevant provisions? If it hasjurisdiction, do the circumstances warrant the exercise of itsdiscretion to grant relief?
If the Court of Appeal is of opinion that the respondenthas not been materially prejudiced, by non-compliance withrelevant provisions, it has jurisdiction to grant relief. In thepresent case, the Court of Appeal was clearly in error in hold-ing that “the very continuance of litigation would itselfamount to material prejudice”: if that be correct, that wouldbe true of every case (including Sameen v. Abeyewickrema) inwhich relief is sought under section 759(3), and every applica-tion for relief would have to be refused on that ground. Suchan interpretation must be resisted, unless compelled by clearwords. What is contemplated is prejudice caused by or in con-sequence of the non-compliance- Since the judgment underappeal sets out no other basis or ground for holding thatmaterial prejudice had been caused to the Respondent, it isunecessary to consider this aspect any further. It must, how-ever, be pointed out that the view taken by the Court ofAppeal is contrary to Sameen v. Abeyewickrema, and is alsoinconsistent with Patbinayake v, Kannangara, (3) where a
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bond was furnished by the appellant which did not contain aclause hypothecating the money deposited as security. Theprejudice to the respondent is the same, whether there is nobond, or whether there is a bond which lacks a vital clause,namely, it gives rise to the possibility that the sum depositedas costs might not be available to the successful respondent.But is this prejudice “material”? In the context of prevailingcosts of litigation in the appellate Courts, I find it difficult toregard the prejudice caused by the possible non-availability ofa sum of Rs. 750/- as “material” or “substantial”, in a casewhere the respondent has obtained judgment in a sum of Rs.26,000 with interest from 1978, as well as damages at the rateof Rs. 13,000 per annum from 1978.
It then becomes necessary to consider whether the Court ofAppeal ought to have exercised its discretion to grant relief.While relief will more readily be granted if the non-complianccis trivial, or where an excuse or explanation is offered, I am inrespectful agreement with Lord Chancellor in Samcen v.Abeyewickrema that relief can be granted even in respect oftotal or substantial non-compliancc, and even if no excuse isforthcoming. But while the Appellant’s non-compliance was byno means substantial, the material before us suggests that theAppellant deliberately did not comply with section 757(1);obtained a postponement of the hearing when the objectionwas taken, but refrained from taking any steps to cure hisdefault; and made no application for relief to the Court ofAppeal. The discretion under section 759(3) is a judicial discre-tion; it was incumbent on the Appellant to place the necessarymaterial before the Court and to invite the Court to exercisethat discretion. This the Appellant failed to do, and the appealshould have been rejected in the exercise of the discretionvested in the Court of Appeal. I therefore agree that theappeal must be dismissed with costs.
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KULATliNGA, J.:
This is an appeal against a judgment of the Court ofAppeal rejecting ah appeal made to that Court by thedefendant-appellant from a judgment of the District Court ofHambantota. The plaintiff respondent took a preliminaryobjection that the appeal is invalid for the reason that the sumof Rs. 750/- deposited as security for the respondent’s costs ofappeal had not been hypothecated by bond, as required by S.755 (2)(a) read with S. 757(1) of the Civil Procedure Code. TheCourt held that the failure of hypothecation is fatal and hencecannot be cured by recourse to S. 759 (2) of the Code. TheCourt was also of the opinion that (in any event) materialprejudice has been caused to the respondent by such failureand hence no relief can be granted under S.759 (2): in theresult it upheld the preliminary objection and rejected theappeal. This Court granted special leave to appeal from thatjudgment as the case involves the interpretation of s.759 (2) ofthe Code in regard to which there now appear to be conflictingdecisions.
In the year 1940 a Bench of five Judges in dc Silva v.Seenathumma (4) endeavoured to resolve what Socrtsz J. des-cribed therein as the “deplorable" misapprehension and uncer-tainty as to the meaning of S. 756 of the then Code. Sub-section 3 of that section corresponds to S. 759(2) of thepresent Code. However, it was only after the lapse of morethan two decades thereafter that the matter was finally decidedby the Privy Council in Samcen v. Abcvwickrema (2). Despitethat decision, the same or similar controversy has again arisenon the interpretation of the relevant provisions of the newCode possibly for the reason that the Court of Appeal has notthought it necessary in deciding cases before it to make ageneral survey of the previous decisions for ascertaining theprinciples which may be adopted in interpreting the provisionspresently in force. I consider this an appropriate case toundertake such survey. The facts of this case are as follows;
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On 18.10.83 the District Judge gave judgment declaring theplaintiff-respondent to be the owner of a paddy land and forthe ejectment and damages against the defendant-appellantwho was in possession thereof in the purported exercise of therights of a tenant cultivator. The notice of appeal against thesaid judgment was filed on 28.10.83 and was accompanied bysecurity for the respondent’s costs of appeal in a sum of Rs.750/- in terms of S. 755 (2) (a) of the Code. The petition ofappeal in terms of S. 755(3) was filed on 16.12.83 and on thesame day the District Judge ordered that the appeal and otherpapers be forwarded to the Court of Appeal as required by S.755(4).
It is common ground that the security deposited as abovehad not been hypothecated by bond as required by S. 757(1) ofthe Code and this point was taken as a preliminary objectionto the appeal when it came up for hearing on 11.05.90. After apostponement which was applied for and obtained by therespondent in view of the preliminary objection the matter wasargued on 05.06.90 at which the appellant’s Counsel submitted
that hypothecation of security by bond under S.757(1) isnot a step necessary to lodge a valid appeal but is only alimitation placed on the right of a respondent to demandsecurity, which is seen by the last five words of that sec-tion;
In any event the respondent has not been materiallyprejudiced by such omission or mistake and thereforethe appeal should not be rejected.
As a matter of fact, the appellant gave no explanation forthe failure to hypothecate the security by bond and the ques-tion of prejudice was not considered by the Court in depthapart from a statement in the judgment that the very continu-ance of litigation would itself amount to material prejudice.
In its judgment given immediately after the arguments theCourt upheld the preliminary objection and rejected the
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appeal, applying a previous decision of that Court in DonaCeciliana v. Kamala Piyaseeli (5) which, inter alia, held thatthe failure to hypothecate by bond the sum deposited as secur-ity for respondent’s costs of appeal is fatal. As stated abovethe Court also took the view that there has been material prej-udice to the respondent.
This appeal was argued before us on very much the samegrounds as were urged before the Court of Appeal. Thelearned Counsel for the appellant first submitted that upon aproper construction of the provisions of S.755(2)(a) read withS.757 (1) and the relevant rules, hypothecation by bond of thesum deposited as security for the respondent’s costs of appealis no longer required although such hypothecation wasrequired under S.756(1) read with S.757 of the C.P.C. whichwere in force until the enactment of the Administration of Jus-tice Law No. 44 of 1973. He argues that under the old Code,upon the receipt of the petition of appeal security for respond-ent’s costs of appeal tendered by the appellant was determinedby the Court after considering the respondent’s objections, ifany, and where the security tendered is money it had to be bydeposit and hypothecation by bond of a sum sufficient tocover the cost of appeal and to no greater amount (S. 757). S.318 of the Administration of Justice Law requires a “notice ofappeal” instead of a petition of appeal and S.321 requires suchnotice to be accompanied by security for the respondent’scosts of appeal in such amount and nature as is prescribed bythe rules of Court unless the same is waived by the respondentor his registered Attorney. In terms of rules made under S.15of the A.J.L. security may be in cash or mortgage of immova-ble property or bond with surety or sureties at the prescribedrate or value, as the case may be. Where the security selectedis cash all that was required by S.322(1) of the A.J.L. was thedeposit of the same to the credit of the case in a bank. Whenthe old C.P.C. was brought back by Law No. 19 of 1977, withamendments effected by Law No. 20 of 1977, S.754(3) retainedthe provision for lodging an appeal by a notice of appeal and
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S.757(2)(a) retained the provisions for giving security for therespondent’s costs of appeal in such amount and nature as isprescribed in the rules made under S.15 of the Administrationof Justice Law.
On the basis of the above developments learned Counselcontends that S.755(2)(a) read with the rules is exhaustive asregards the giving of security for the respondent’s costs ofappeal; that where the security selected is cash all that isrequired is the deposit of the sum to the credit of the Court;that the requirement in S.757(1) providing for hypothecationby bond of such sum is repugnant to S.755(2)(a); and that asindicated by the words “and to no greater amount” in S.757(1)the said requirement has been introduced as a result of verba-tim reproduction of S.757 of the old Code without consider-ing the fact that after 1973 the entire procedure of lodging anappeal had been changed and is hence superfluous. As such,Counsel submits that we should hold that the deposit of thesum of Rs. 750/- is adequate for the validity of the appeal andhypothecation of that sum by bond is unnecessary.
I am of the view that although the changes in the appealprocedure and the words appearing towards the end ofS.757(1) enable learned Counsel to raise the point it would notbe possible for this Court to interpret S.755(2)(a) as beingexhaustive and to disregard the provision for hypothecation inS.757(1) on the ground that it is repugnant to S.755(2)(a) or issuperfluous. S.755(2)(a) requires the amount and nature ofsecurity to be as prescribed by rules. Where the nature ofsecurity chosen by the appellant is cash, the amount is pres-cribed which in this case is Rs. 750/-. Section 322 of theA.J.L. contained further provision in such a case for the dep-osit of the prescribed sum of money to the credit of the Courtin a bank. Under the present Code such further provision is tobe found in S.757(1) which requires hypothecation by bond ofsuch sum of money. This provision supplements S.755(2)(b);the legislature has expressly provided for hypothecation andthere is no repugnancy between the two sections.
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Even if there is any repugnancy, S.757(l) cannot be disre-garded for as stated in Maxwell, Interpretation of Statutes12th Ed. 187:
“If two sections of the same statute ‘are repugnant, theknown rule is that the last must prevail” (Wood v.Riley) (6).
Where there is repugnancy the Court will endeavour toconstrue the language of the legislation in such a way as toavoid having to apply the rule ‘leges posteriores priores contra-rias abrogant’ on the general principle that an author must besupposed not to have intended to contradict himself. But thereis no real contradiction between the two sections which wchave to interpret since the latter only supplements the formerand hence it is unnecessary to endeavour a reconciliation.
The last two sentences of S.757(1) might have been betterdrafted; but the failure to do so would not empower this Courtto strike out the provision for hypothecation required by thatsection. I see no merit in the first submission of the learnedCounsel for the appellant.
The resulting position is that hypothecation of security bybond is peremptory; and the failure of hypothecation wouldaffect the validity of the appeal. The question then is whether suchfailure is fatal to the appeal or curable under S.759(2) of theCode. If it is curable what are the principles applicable in thatregard? Appellant’s Counsel contends that if hypothecation isa necessary step, it is a technical step. The money is alreadydeposited and lying to the credit of the respondent; no mate-rial prejudice has been caused to -him and the Court shouldhave granted relief under S.759(2). The respondent’s Counselcontends that the non-compliance is fatal to the appeal andthat in any event relief should not be granted in the absence ofa reasonable ground of excuse for such non-compliance whichit is incumbent on the respondent to furnish in the case beforeus. Counsel submits that the respondent has failed to furnish
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any such ground of excuse and hence the Court should notexercise its discretion in his favour.
An examination of the relevant decisions would provide theanswers to the questions posed by me in the preceeding para-graph. The bulk of the case law on the subject consists of thedecisions of the former Supreme Court in which S.756 of theold Code came in for interpretation. Several such decisionswere reviewed by the Privy Council in Sameen v. Abcywick-rema (supra). There are also three recent decisions of theCourt of Appeal and one decision of this Court which I shallexamine.
Silva v. Goonesekera (7) (Fisher CJ – Drieberg J) – the peti-tion of appeal was filed on 14.11.28 and the record remainedin the Court until 27.05.29; but the security bond had not beensigned by any of the appellants and notice of appeal had notbeen given to any of the respondents, as required by S.756(1).It was held that the appellants were not entitled to relief underS.756(3) (corresponding to S.759(2) of the present Code), asthere was substantial non-compliance with the provisions ofS.756(1). Fisher CJ. considering S.756(3) said (p. 185) —
“In my opinion it applies to more or less trivial omissionswhere it may be said that although the strict letter of thelaw has not been complied with the party seeking reliefhas been reasonably prompt and exact in taking thenecessary steps.”.
Ramalingam v. Velupillai (8) (Akbar J.) – objection wastaken to the notice of security for respondent’s costs on theground that the appellant had failed to give such notice‘forthwith’ within the meaning of S.756. The petition of appealwas filed on 31.03.36; notice of security was given only on03.04.36. Held that the appellant may be given relief underS.756 (3) there being no material prejudice to the respondentin giving such relief.
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Zahira Umma v. Abcysinghc (9) (Abraham C.T; Maartenszand Soertsz J.) the petitioner failed to give notice to therespondent that she would give security but produced securityby way of mortgage at the proper time. There was no inquiryas to whether that security was satisfactory. She said that shewas unable at the time when she ought to have given notice ofsecurity to say what form the security was going to take but asshe had produced an adequate security within the proper timeand no material prejudice has been caused to the respondentshe ought to receive relief under S.756(3). On these facts,Abraham CJ. was not prepared to give relief, stating that “thepetitioner says she did everything she could, but has not givenany excuse for not doing what she should”. In refusing reliefhe also expressed the view that in the circumstances, theabsence of material prejudice cannot be regarded as an excusefor non-compliance with an essential term of S.756.
Abraham CJ proceeded to specify two situations in whichthe Court “ought not to give relief’ for a breach of S.756.
Whether material prejudice is caused or not non-compliance is made without an excuse;
even where non-compliance with an essential term istrivial material prejudice has been caused.
In De Silva v. Scenathumma (4) a Divisional Bench of fiveJudges assembled*for the purpose of resolving “uncertainty”as to the meaning of S.756 of the Code, Soertsz J. held thatthe Supreme Court has no power to grant relief where therehas been a failure to comply with an essential requirement ofS.756 regardless of the question of prejudice. The essentialrequirements of the section arc:
(a) notice of security, unless waived, must be given forth-with, that is to say, must be tendered or filed on the dayon which the petition of appeal is received by the Court;
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a copy of the petition of appeal must be furnished at orbefore the time the security is accepted and the depositmade;
The other requirements arc —
security must be tendered and perfected and the depositmade within twenty days from the date of the decree ororder appealed against.
Soertsz J. took the view that the requirements at (a) and(b) are essential and non-compliance is not curable underS.756(3). Regarding the other requirements, particularly at (c),he held that the omission to tender and perfect security and tomake the deposit within twenty days and other omissions, mis-takes and defects occurring in the course of tendering security,and in the course of perfecting the appeal generally may becondoned under S.756(3) in proper eases i.e. if there has been“reasonable" omission, mistake or defect and the respondenthas not been materially prejudiced.
The reason for holding that S.756 (3) does not cover allfailures was that firstly, in the opinion of Soertisz J., if it is tobe interpreted to cover all failures it will have to be recast, forinstance, as follows; “in the case of a failure to comply with orof any mistake, omission or defect in complying with”.Secondly, he said that the requirements which he characterisedas essential are immediately within the appellant’s powerwhilst the other requirements arc not within his power sincethey can be effectively done onlv with notice to the respondent(p.247).
Having so interpreted the section, the Court proceeded todecide the preliminary objection to the appeal namely that thenotice of security had not been served on the respondent.Notice was served through the Fiscal who failed to serve it onthe respondent as he could not be found. Had the appellantproperly advised himself he could have obtained a direction ofCourt under S.356 to serve it on the respondent’s proctor but
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this had not been done. The Court held that there was no fail-ure to comply with any special requirement of S.756 but that itwas only an omission to take a more effective course in comp-lying with an imperative requirement of S.756 which is curableunder S.756(3).
Carecm v. Uvais (10) (Sansoni J.) — The appeal wasrejected on a preliminary objection that the bond docs notprovide for hypothecation of the money deposited in Court assecurity for costs of appeal, as required by S.757. A submis-sion that the error was due to the illness of the appellant’sproctor was not accepted in view of the fact that as the proc-tor had signed the bond it was not open to the appellant tosay that he was not able to contact his legal adviser; the Courtalso held that there was prejudice to the respondent in that thebond not having been hypothecated he has no preferentialright to the money.
Noris Appuhamy v. Udaris Appu (11) (Weerasuriya andSansoni JJ) – The appeal was rejected on a preliminary objec-tion that there has been a failure to give notice to the respond-ent of the tender of security in terms of S.756(1). Held thatthis failure is fatal unless relief can be given under S.756(3).The Court was unable to give relief in view of the bindingdecision of the Divisional Bench in dc Silva v. Scenathumma(supra) where it was held:
“Where there has been a total failure to comply with oneof the terms of S.756 relief will not be given even if itshould be apparent that no material prejudice has beenoccasioned to the respondent by such failure”
Chelliah v. Selvanayagam (12) (Weerasuriya & Sinna-thamby JJ) – On an objection by the respondent to security bybond hypothecating immovable property, the Court ordereddeposit of money on a date beyond the time prescribed forthat purpose by S.756. The money was deposited but the
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appellant failed to hypothecate the same. Held, the failure tohypothecate the sum of money in terms of S.757 within theextended time is a fatal irregularity. The appeal was accord-ingly rejected.
Pathinayake v. Karmangara (3) (Basnayake CJ & Dc SilvaJ) —Where the appellant had furnished a bond for security forcosts of appeal but failed to include a clause therein hypothe-cating the money, the appellant was permitted to cure theomission under S.756(3) by including a clause for that purposeon payment of the respondent’s costs. The record was sentback to the original Court to enable the appellant to furnish abond in the proper form.
Sameen v. Abcywickrema (2) — In this case the PrivyCouncil restated the law in different terms. The dispute whichwent up for its decision arose thus. On the day the appeal waslodged (Saturday the 16th) the appellant’s proctor telephonedthe respondent’s proctor’s office and spoke to Mr. Cooraywho said that the member of the firm who handled the casewas not available but he would receive notice of security onbehalf of the firm. However, when the appellant’s proctorwent there with the notice there was no one to receive it. OnMonday the 18th the notice was taken there again when it wasreceived “subject to objections” and was filed in Court on thesame day. The Supreme Court upheld a preliminary objectionto the appeal that the notice had not been given “forthwith”and did not proceed to consider relief possibly in the light ofSeenathumma’s case which was binding.
The Privy Council held (disagreeing with the view taken inSeenathumma’s case that had the notice been filed in Court onthe 18th for service on the respondents through the Fiscal itshould be treated as having been filed “forthwith”; since thatexpression need not in every case mean the same day”; how-ever the said notice had First been served on the respondent’sproctor without a direction under S.356 for such service andthen filed in Court not for service on the respondents through
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the Fiscal but for the purpose of informing the Court that therespondent’s proctor had received it; and hence it was not inconformity with S.756.
Yet the Privy Council granted relief having regard to the“technicality” of the objection and the fact that the respond-ent had not been materially prejudiced. The Privy Councilthought that Mr. Cooray agreeing to accept notice may wellhave led the appellant’s proctor to suppose that notice was tobe waived and so led him not to file the notice in Court withthe appeal.
However, before granting relief, the Privy Council had toget some of the previous decisions out of the way by adoptinga different and more liberal interpretation of S.756(3). Indoing so their Lordships said that they did not wish to suggestthat relief was not rightly refused in particular cases. The rul-ings of the Privy Council on the legal aspects may be summa-rised as follows:
Disagreeing with the “limitation” placed by Fisher CJon S.756 (3) in Goonasekera’s case (supra) the LordChancellor said (p.560) —
“It does not attempt to'distinguish between substantialor more or less trivial mistakes, omissions or defects,and the sub-section, in their Lordships’ view, applies inrelation not just to some, but to all, the provisions ofS.756”.
On the relevance of an excuse for non-compliance with arequirement of the section adverted to in Abeysinghe’scase (supra) the Privy Council clarified that AbrahamCJ does not appear therein to say that the powers of theCourt under s.756 were in any way restricted. The LordChancellor explained that the existence of an excuse isrelevant to the exercise of the Court’s discretion to grantrelief and said —
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"But the sub-scction itself does not provide that reliefshall not be granted if there is no excuse for non-compliance and to interpret it in this way is in theirLordships’ opinion, wrong” — (p.561).
Commenting on the judgment of Soertsz J. in Seena-thumma’s case (supra), the Privy Council opined —
the view that in the case of a total failure to complywith a term of S.756 relief should not be given evenif no material prejudice has been caused is not acorrect reading of Abraham CJ’s statement inAbeysinghe’s case (supra) — (p.561).
S.756(3) is expressed to apply in relation to anymistake, omission or defect. — (p.562).
the Supreme Court has the power to grant .relief onsuch terms as it may deem just in the case of a fail-ure to comply with an essential requirement ofS.756. "The only limitation imposed by the sub-section is that the Court has not the power to do sounless it is of the opinion that the respondent hasnot been materially prejudiced”. — (p.562).
The Lord Chancellor concluded —
"It does not follow that relief shoujd be given even if therespondents have not been materially prejudiced butrelief should not be lightly withheld, for the effect ofrefusing relief may be to deprive a litigant of access tothe Supreme Court and, if the originial judgment iswrong, amount to a denial of justice”, (p.563).
It seems to me that the above interpretation in the contextof the broad general principles ennunciated by the PrivyCouncil, is both correct and fair. It acknowledges the flexibil-ity which is inherent in S.756(3) corresponding to the presentS.759(2); it does not fetter the discretion of the Court to decidewhether relief may be granted: the Court is free to make its
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decision on the facts and circumstances of each case; andfinally; it does not deny the imperative charactor of therequirements of the section.
The provisions of the A.J.L. and the present Code prescrib-ing the procedure of an appcai are much simpler than thosecontained in S.756 of the old Code and on the whole lessstringent. In particular the express provisions in S.756(2) forabatement of the appeal for failure to give security and makethe deposit as required by the section has been deleted. Hencethe interpretation of S.756(3) by the Privy Council shouldapply to the corresponding S.759(2) of the present Code withgreater force. The Court of Appeal is bound by'the judgmentof the Privy Council but this Court is not so bound. Rat-nayake v. Bandara (13). Nevertheless, for the reasons givenabove I see no reason to depart from the interpretation givenby the Privy Council. Viewed in this light the statements con-tained in the judgment under appeal and in some of the pre-vious decisions of the Court of Appeal are erroneous.
In Arulampalam v. Daisy Fernando (14) the question ofthe validity of the appeal was raised not as a preliminaryobjection to the appeal itself but in proceedings before theCourt of Appeal against an order allowing writ of execution.That order had been obtained'by the plaintiff on an applica-tion made on the 25th day from the date of the judgment inhis favour. By that date the defendant had given the initialnotice of appeal against the judgment. This was followed bythe petition of appeal. The order issuing the writ was chal-lenged by the defendant on the ground that the application forit had been made in breach of S.761 of the Code before theexpiry of the time allowed for appeal i.e. 60 days allowed forfiling the petition of appeal as was held in Careem v. Amara-singhe (15). The plaintiff submitted that the defendant hadfailed to give a valid notice of appeal and as such the barunder S.761 did not apply. The Court of Appeal accepted thissubmission holding that there is no valid notice of appeal inthat —
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it had been signed by an Attorney-at-Law who is not theregistered Attornev-at-Law, in breach of S.755(1) whichis fatal to its validity; and
the money deposited as security had not been hypothe-cated by bond as required by S.755(2)(a) read withS.757(1) which is “a fatal irregularity”.
Jamcel J. (with G.P.S. de Silva J. agreeing) held that as thenotice is bad in law, no appeal could be filed after the lapse of14 days, and the 14 days becomes the operative period of timefor S.761. The application for writ is well beyond this 14 daystime limit and was therefore, not filed during the applicableperiod and pending appeal. In the result the Court allowed theorder allowing the writ.
On the first ground Jameel J. relied on Silva v. Cumara-tunga (16) which held that the petition of appeal should besigned by the proctor whose proxy is on record and that indefault, the Supreme Court, had no power to grant relief. Onthe second ground he cited de Silva v. Seenathumma (supra)and Chclliah v. Selvanayagam (supra) and added that thenotice of appeal is incurably defective. Or. the defendant’sprayer for order to stay execution pending appeal he said —
“In the circumstances, this Court cannot act under
S.759 (2) and grant any relief to the defendant”
I think that the case could have been decided on the firstground alone. The power of the Supreme Court under sub-section (3) of S.756 of the old Code was expressly limited tocuring mistakes etc. in complying with the provisions of thatsection and hence did not cover a defect in the drawing andsigning of the petition of appeal as required by S.755. In theway the new Code has been re-arranged, relief under S.759(2)would, upon a literal construction, appear to apply even tosuch a non-compliance; thus S.759(2) covers “any mistake,omission or defectin complying with the provisions of the
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foregoing sections” and the expression “foregoing sections"can on its plain meaning refer even to S.755(1) relating to thedrawing and signing of the notice of appeal. However, wherethe non-compliance arises by reason of the fact that suchnotice of appeal has been signed by an Auorney-at-Law whois not the registered Attorncy-at-Law- it is a breach not merelyof S.755(l) but of S.24 which requires that an Attorney-at-Law, if he is to represent a party has to be duly appointed;and S.759(2) cannot be invoked to cure such breach. Thus inCumarasinghc’s case (supra) Maartensz J. said (p. 140) —
“The ratio decidendi in the old cases, vith w'hich Irespectfully agree, was that this Court cannot recognisetwo proctors appearing for the same party in the samecause”,
In the circumstances, the statements contained in the Courtof Appeal judgment in relation to the second ground can beregarded as obiter,
Coming to the merits of the second ground it is to be notedthat in Seenathumma’s case cited by Jameel J. SoertszJ, him-self did not classify the provision for hypothecation of themoney deposited as security as an essential requirement thenon-compliance of which is not curable under s.756(3). In Sel-vanayagam’s case Weerasuriya J. gives no reason for treatingsuch non-compliance as a “fatal irregularity”. He may have sodescribed it possibly for the reason that the failure there wasto hypothecate money, deposited beyond the prescribed dateon an order of the Court,
It is also significant that nothing in the judgment of theCourt of Appeal indicates that the defendant's Counsel soughtany relief under S.759(2). On the contrary his submissionwhich the Court refused to accept was that the Court cannotin the course of an application to stay execution pendingappeal, reject the notice of appeal but must postpone the deci-sion as to its validity until the hearing of the main appeal. For
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these reasons too Daisy Fernando’s case cannot be regarded asan authoritative decision on S.759(2).
In Kiri Banda v. Ukku Banda (17) Perera J. (with Banda-ranayake J. agreeing) rejected an appeal on a preliminaryobjection that it had not been presented within 60 days of thejudgment as required by S.755(3). The Court declined to grantrelief under S.759(2) in the absence of “reasonable cause”, ona submission that the mere statement that there has been amistake, omission or defect would entitle a party to seek reliefunder this section in the absence of prejudice to the opposingparty, Perera J. said (p. 194) —
‘If this construction is accepted, even where such
failure in occasioned by gross negligence, carelessness orneglect of the defaulting party or his registered Attor-ney, it would result in such conduct being condoned bythe Court”.
The decision of this Court in Vithana v. Weerasinghe (18)was distinguished. This decision of the Court of Appeal is inaccord with precedent and the principles ennunciated by thePrivy Council in Abeywickrema’s case (supra).
In Dona Ceciliana v. Kamala Piyaseeli (5) GoonawardenaJ. held that the failure to hypothecate money deposited assecurity for the respondent’s costs of appeal is a failure tocomply with an essential step in perfecting the appeal and isnot correctable under S.759(2). He said that the presence ofS. 756(2) in the old Gode providing that “the petition of appealshall be held to have abated”, where the petitioner fails to givesecurity as provided supports the view that S.756(3) of thatCode had no application to a situation where the failure wasto furnish security. Citing the case of Chelliah v. Seivanaya-gam (supra) he thought that this view has equal application tothe present provision. He also relied on the case of Daisy Fer-nando (supra). Assuming that S.759(2) has application, he wasof the opinion that in any event on the facts and circumstances
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of the case material prejudice had been caused to the respond-ent and upheld the preliminary objection and rejected theappeal.
The decision of the Court of Appeal to reject the appealcan be sustained on the second ground alone. It was on thisbasis that special leave to appeal from that decision wasrefused by this Court – S.C. Special L.A. No. 17/90 SCM of
As regards the Court’s opinion on the meaning ofS.759(2) it is observed —
the presence of S.756(2) of the old Code was no bar torelief under S.756(3). It has been held that such reliefmay be sought against an order of abatement underS.756(2) Abeysinghe’s case (supra). In any event S.756(2)of the old Code has been deleted in the present Code.
the Court’s opinion on the meaning of S.759(2) is notsupported even by the very strict construction of thecorresponding S.756(3) of the old Code in Seenathum-ma’s case (supra).
The Court’s opinion is contrary to the Privy Councildecision in Abevwickrema's case (supra) which enlargedthe power of the Court to grant relief which decision isbinding on that Court.
In Vithana v. Weerasinghe (18) this Court adopted the rea-soning of the Privy Council in Abeywickrema’s case (supra).Having cited a passage from the Lord Chancellor’s judgmentWanasundera J. said (p.57) —
“The provisions wc are called upon to consider thoughsimilarly worded are much wider in scope’’
Applying the above principles to the case before us, I holdthat the opinion expressed by the Court of Appeal on theapplicability of S.759 (2) of the Code is wrong. This leaves mewith the question as to whether the respondent ought to havebeen given relief under that section on the facts and circum-
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stances of the case. In view of its strong opinion on theapplicability of S.759(2) the consideration of this question bythe Court of Appeal is scanty and is limited to prejudice aris-ing by reason of the continuation of the litigation. Had thatCourt altogether declined to consider the question of prejudiceand this Court were left with no material on that question Iwould have remitted this case to that Court with a direction toconsider the matter. Since this is not the case here, I am of theview that this Court can and should, in the interest of justice,make the decision in that regard.
Section 759(2) reads —
"In the case of any mistake, omission or defect on thepart of the appellant in complying with the provisions ofthe foregoing sections, the Court of Appeal may, if itshould be of the opinion that the respondent has not■been materially prejudiced, grant relief on such terms asit may deem just".
Precedent shows that these provisions are flexible and thepower of the Court is wide. Such power has to be exercised infurtherence of substantial justice, having regard to the need tocomply with imperative requirements of the law. I am inclinedto the view that it is not a power coupled with a duty as isunderstood in the field of writs. No doubt if the preconditionsexist the Court must grant relief but the evaluation of the rele-vant material and the forming of the opinion as to prejudiceare all matters in the discretion of the Court. It is to be notedin this connection that ‘prejudice’ has not been defined for thepurpose of this section. In this context ‘‘prejudice*’ means‘‘injury, detriment or damage caused to a person by judgmentor action in which his rights are disregarded; hence injury to aperson or thing likely to be the consequence of some action”(The Shorter Oxford English Dictionary 3rd Ed.). It includespast as well as prospective harm or detriment. Prima facie thesection connotes prejudice which has occurred but continuing
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prejudice is not excluded. What is required to bar relief is notany prejudice but material prejudice i.e. detriment of the kindwhich the respondent cannot reasonably be called upon tosuffer. If there is such prejudice it is no argument for theappellant to contend as a matter of right that it can be miti-gated by appropriate terms such as the payment of costs.
The discretion of the Court is exercised on the basis of thefacts and circumstances of each case. The Court may considerthe impact of continuance or the protraction of litigation, inparticular in the context of what Goonawardena J. describedas the “living problems of laws delays” in Dona Ceciliana'scase (5). It is no answer to this to say that the individualappellant himself is not responsible for the delay in the partic-ular case. When a preliminary objection is raised by reason ofthis mistake, the litigation is protracted on that account at theexpense of the respondent. It cannot be repaired by an orderfor costs. The Court may in appropriate cases considerwhether there is an explanation for the mistake, which thedefaulting applicant alone may be in a position to give. In thatevent, he cannot fold his hands and insist on his right to relief.If he cannot explain his failure, the inference of gross negli-gence or carelessness may result. In which event the Courtmay exercise its discretion against him and refuse relief underS.759(2). If that discretion is exercised fairly this Court willnot interfere.
In the instant case, the notice of appeal was filed in 1983and when the preliminary objection was taken on 11.05.90 theappellant obtained a postponement in view of the objection. Ifthat was done in order to check with the registered Attorney-at-Law the reason for the failure to hypothecate security, nomaterial whatever was submitted to the Court when the mattercame up for argument on 05.06.90. Instead, Counsel for theappellant argued that hypothecation is unnecessary as a mat-ter of law and alternatively claimed relief under S.759(2) with
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a mere statement that no material prejudice has been caused tothe respondents by the omission.
I think that in the circumstances of this case the lack ofany explanation for the non-compliance, the fact that the bondnot having been hypothecated, the respondent has no preferen-tial right to the money and the protraction of the litigationmilitate against the grant of relief under S.759(2). As such,the refusal to grant relief under S.759(2) is justified.
In the result, I dismiss the appeal with costs.
Appeal dismissed.