011-SLLR-SLLR-1981-1-SRI-LANKA-PORTS-AUTHORITY-v.-PIERIS.pdf
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Sri Lanka Ports Authority v. Pieris
101
SRI LANKA PORTS AUTHORITY
v.PIERIS
SUPREME COURT.
ISMAIL. J., SHARVANANDA, J. AND WANASUNDERA, J.
S. C. APPEAL No. 30/80—COURT OF APPEAL No. 156/76—D.C. COLOMBO 56938/M.MARCH 16, 1981.
Port (Cargo) Corporation Act, No 31 of 19S8, sections 4 (1) (a), 63 (1)-Demurrage—Whether a "port service" within meaning of section 4 (1) (a) or a "prescribed service"referred to in section 63 (1)—Powers vested in Minister to fix charges—Whether fixingof rates for demurrage ultra vires.
Supreme Court— Appellate jurisdiction —Power to correct all errors in fact or in law onceleave to appeal granted —Exercise of such powers—Whether appellant may urge groundsnot set out in his application for leave.
The plaintiff-corporation sued the defendant to recover a sum claimed by it as'prescribed charges' recoverable on account of demurrage. Judgment was given for theplaintiff as prayed for in the District Court. But this judgment was set aside in appealand the plaintiff's action dismissed and a counter claim by the defendant allowed.The Court of Appeal held that the plaintiff's claim to recover demurrage as 'prescribedcharges' was untenable in law, upholding a contention of the defendant that the saidsum could not be recovered as it was not a 'Port service' referred to in section 4 (11(a) of the Port (Cargo) Corporation Act, nor a 'prescribed service' referred to in section63 (1) of the Act. It was held that it was therefore ultra vires for the Minister to fix ratesfor demurrage by order under section 63 (t) as it was not a 'service' and the claim madeby the plaintiff for demurrage on the basis of the charges so fixed by the Minister couldnot be maintained.
In the District Court there was also a finding of fact that the delay in unloading whichresulted in demurrage being payble was due to the fault of the defendant-respondent,but the Court of Appeal reversed this finding and held that the plaintiff corporationwas responsible for the undue delay and hence could not recover demurrage charges.Before the Supreme Court, counsel for the defendant-respondent took objection tothis question being argued as it had not been raised in the application for leave toappeal.
Held
(1) The ‘prescribed services' referred to in section 63 (1) are the ‘Port services' prescribedin section 4 (1) of the Port (Cargo) Corporation Act. These 'services' involve, inter alia,the provision of cargo barges or lighters by the Corporation for the landing anddischarging of cargo. It is not disputed that the Corporation is entitled to charge hirefor the use of its lighters in connection with the performance of its 'Port services' andsuch hire can be determined not only with reference to the weight of the cargo butalso with reference to the time that the plaintiff's lighters are engaged and detainedin such 'service'. A 'service' of stevedoring and landing is not complete until the lightercontaining the cargo is cleared by the consignee and default on his part in expeditiouslyclearing the cargo will result in the detention of the plaintiff's lighter.
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(2) Accordingly it is legitimate and competent for the Corporation to charge theconsignee for undue detention as incidental to the charges for the hire of its lighters.When the Minister provided for demurrage in the Gazette notification he imposedsuch charge as a charge for the prescribed port services provided by the plaintiff,calculated by the time involved in performing those services and he was entitled to doso. The charge for demurrage was not a charge for a separate 'Port service' but was anenhanced charge for the port service rendered by the plaintiff-corporation in termsof section 4 (1) computed on the basis of the extra time expended in the performanceof its services consequent to the consignee's default in diligently clearing the cargo fromthe corporation's lighters.
Held further
On leave to appeal being granted under Article 128 of the Constitution the SupremeCourt being seised of the appeal has jurisdiction to correct all errors in fact or in lawcommitted by the Court of Appeal or by the Court of first instance. The Court, however,has the discretion to impose reasonable limits, such as refusing to entertain grounds ofappeal not taken in the Court below. It will, however, exercise such discretion looking tobroad principles of justice and will take judicial notice of a point which is patent on theface of the proceedings and discourage mere technical objections. Hence in the presentcase, the objection taken on behalf of the defendant-respondent to the plaintiffappellant questions not raised in its application for leave to appeal to the SupremeCourt cannot be sustained and the finding of fact by the trial judge that delay inunloading was attributable to the defendant-respondent must be restored.
APPEAL from a judgment of the Court of Appeal.
Nimal Senanayake, with N. Talpawela, Miss S. M. Senaratne. Saliya Mathew and Mrs.A. B. Dissanayake. for the substituted plaintiff-respondent-appellant.
H. L. de Silva, with John Kitto. for the defendant-appellant-respondent
May 20,1981.
SHARVANANDA. J.
Cur. adv. vulr.
The plaintiff-appellant is a Corporation established under theprovisions of the Port (Cargo) Corporation Act, No. 13 of 1958.The plaintiff filed this action against the defendant on two causesof action: The first cause of action was for the recovery of a sumof Rs. 8,624 alleged to have been the 'prescribed charges'recoverable on account of demurrage from the defendant-appellant, according to the account particulars filed with theplaint; the second cause of action was for the recovery of a sum ofRs. 586.24 for services rendered by the plaintiff-respondent insupplying and re filling 229 gunny bags. After giving credit to thedefendant for a sum of Rs. 2,500 deposited by him with theplaintiff, the plaintiff sought to recover the balance sum ofRs. 6,710.24 with legal interest from the defendant. Thedefendant filed answer denying the plaintiff's right to claim anysum by way of demurrage and pleaded that the delay, if any, in
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unloading was due to slow, inefficient and unpunctual workingand unloading of lighters by the plaintiff and counter-claimeda sum of Rs. 2,500 with legal interest being the money depositedby him.
Judgment was given for the plaintiff as prayed for with costs bythe District Judge. But on appeal this judgment was set aside withcosts and the plaintiff's action was dismissed and judgmententered for the defendant in a sum of Rs. 1,913.76.
The plaintiff has preferred this appeal from the judgment of theCourt of Appeal.
The Court of Appeal held as untenable in law the plaintiff's claimfor the recovery of the sum of Rs. 8,624 referred to in the firstcause of action as being 'prescribed charges' on account ofdemurrage. It upheld the defendant's contention that the saidsum could not be recovered as it was not a'port service' referredto in section 4(1) (a) of the Port (Cargo) Corporation Act, No. 13of 1958, nor was it a 'prescribed service' referred to in section63( 1). It held that it was ultra vires for the Minister to fix by orderunder section 63(1) rates for demurrage as it was not a 'service'and that therefore the plaintiff could not claim demurrage on thebasis of the charges fixed by the Minister under section 63(1) ofthe Act and published in Gazette P1.
Section 4(1) of the Act reads as follows.
" It shall be the general duty of the Corporation
to provide in the Port of Colombo and in any other portthat may be determined by the Minister by orderpublished in the Gazette efficient and regular services(hereinafter referred to as'port services') for stevedoring,landing and warehousing cargo, wharfage, the supplyof water and the bunkering of coal and any otherservices incidental thereto; and
subject to the provisions of section 2, to conduct thebusiness of the Corporation in such a manner, and tomake in accordance with the provisions of this Act suchcharges for services rendered by the Corporation as wouldsecure that the revenue of the Corporation is not lessthan sufficient for meeting the charges which are proper
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to be made the revenue of the Corporation, and forestablishing and maintaining an adequate general reserve!'
Section 63 provides as follows:
'"l.The charges that may be made by the Corporation forprescribed services rendered by it shall be fixed, and maybe revised from time to time, by order made by theMinister in consultation with the Board of Directors andpublished in the Gazette.
2. The charges that may be made by the Corporation forservices which are not 'prescribed services' shall be fixed,and may be revised from time to time, by an officerauthorised in that behalf by the Board of Directors."
S. Scharenguivel, the Chief Accountant of the plaintiff -corporation, stated in evidence that the claim for payment ofdemurrage was made under the schedule of charges fixed by theMinister by virtue of the powers vested in him by section 63{1) ofthe Act and published in Government Gazette No. 11,464 of1st August, 1959, under Note 10 of the Notes of the Schedule'A' (PI). This Note reads as follows:
"Demurrage at the appropriate rate is payable by theconsignee tor detention of the lighter containing dangerouscargo, if the cargo is not cleared within 48 hours of such lighterarriving at the delivery point. It will not be the duty of theCorporation to inform the consignees of the time of arrival…
Demurrage charges will apply in respect
of other cargo after 72 hours."
Schedule 'A', Item 23, sets out the rate for landing and deliveryof dangerous cargo, such as sulphur in bags at Rs. 16.50 per ton. Itwas admitted that the defendant had imported a consignment of20,000 bags of sulphur and that the 'prescribed charges' in respectof same had been recovered from the defendant. The disputebetween the parties relates to the liability of the defendant underNote 10 read with Schedule 'F' in Gazette P1 for the demurragecharges of Rs. 246.40 for every 24 hours or part thereof that the80-ton lighter that was hired by the plaintiff-corporation wasdetained by the defendant.
SCSri Lanka Pons Authority v. Pieris (Sharvananda, J.)105
Counsel for the defendant had successfully argued before theCourt of Appeal that, while the notification in P1 fixing the ratesfor 'port services' under the various schedules was lawful, fixingrates to be charged for demurrage was ultra vires, as 'demurrage'was not a 'port service' but was a liability arising from delay inunloading or in taking delivery within a specified time. It washowever the contention of counsel for the plaintiff-corporationthat it was intra vires the Minister under section 63(1) to fix ratesfor demurrage payable for cargo on board the Corporationlighters.
Section 4 of the Act requires the plaintiff-corporation toprovide efficient and regular services for stevedoring, landing andwarehousing cargo and any other services incidental thereto.Section 63(1) empowers the Minister to fix by order the chargesfor 'prescribed services' rendered by the Corporation. In thescheme of the Act, when section 63(1) of the Act makes provisionfor "the charges that may be made by the Corporation forprescribed services rendered by it", the services referred to thereinare, in my view, the 'port services' prescribed in section 4(1) of theAct. Section 4(1) specifies the 'port services' that are obligatoryon the Corporation to provide. These include stevedoring andlanding. "Stevedoring" means "loading or unloading of the of thecargo of a ship", and "stevedoring" is defined in section 80 of theAct to mean "the operations connected with the loading,discharging, shipping, trans-shipping and storing of cargo in theholds of , or on board, any vessel". These services involve, interalia, the provision of cargo barges or lighters by the Corporationfor the landing and discharging of cargo. The Corporation has tobring the cargo in the lighter to the delivery point and thereafterthe consignee has to clear the cargo and release the lighter withoutundue delay. The service of stevedoring and landing is notcompleted until the lighter containing the cargo is cleared by theconsignee. Default on the part of the consignee in expeditiouslyclearing the cargo will result in the detention of the plaintiff'slighter. Then the consignee will become liable for damages forsuch detention. 'Demurrage' generally signifies the agreed amountto be paid as-compensation for undue detention beyond thestipulated time.
According to Note 10 of Schedule 'A' in P1, the time stipulatedfor the clearing of dangerous cargo is 48 hours, and in respect ofother cargo 72 hours. The question canvassed in this case is
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whether it is competent for the Minister, in the exercise of hispower under section 63(1) of the Port (Cargo) Corporation Act, toprovide for such demurrage. It is not disputed that theCorporation was entitled to charge 'hire' for the use of its lightersin connexion with the performance of its 'port services'. 'Hire' canbe determined not only by reference to the weight of the cargo,but also by reference to the time that the plaintiff's lighters areengaged and detained in such service.
It is only when the cargo has been cleared by the consigneecan it be said that the plaintiff has performed its stevedoring/landingservices and is discharged from its obligations. Hence it islegitimate and competent for the Corporation to charge theconsignee for undue detention as incidental to the charges for thehire of its lighters. When the Minister provided for'demurrage' inthe Gazette Notification PI, he imposed such charge as a chargefor the prescribed port services provided by the plaintiff, calculatedby the time involved in performing those services and he wasentitled to do so. According to Note 10, 48 hours or 72 hours,depending on the nature of the cargo whether dangerous or non-dangerous, was deemed sufficient to clear the lighters of the cargo.The Defendant was lawfully charged at Rs. 16.50 per ton (Schedule'A', Item 23 in PI). If by the default of the consignee greatertime was involved in the performance of the port services, anadditional charge of Rs. 246.40 for every 24 hours or part thereofthat a lighter was engaged in discharging the cargo is levied. Theadditional charge was, in my view, not a charge for a separate portservice, but was an enhanced charge for the port service renderedby the plaintiff-corporation in terms of section 4(1) computed onthe basis of the extra time expended in the performance of itsservices consequent to the consignee's default in diligentlyclearing the cargo from the Corporation's lighters.
In my view the Court of Appeal was in error in holding that theMinister had acted ultra vires in fixing rates for demurrage. Theprovision respecting 'demurrage' in P1 represents a reasonablepre-estimate of the damages that will result from the detention ofthe plaintiff's lighters beyond the stipulated time. The defendantdoes not complain that the demurrage was excessive or penal. Thedefendant had prior notice by P1 of the amount of demurrage hewould have had to pay for default on his part in expeditiouslydealing the cargo. If the charges relating to demurrage are intravires, then the schedule of charges fixed by P1 is not negotiable
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and the amount can be recovered from the defendant, unless thedefendant satisfies the Court that the plaintiff was responsiblefor the delay in clearance. In the circumstances, the Court ofAppeal has erred in holding that it is necessary for the plaintiffto prove the actual amount of damages suffered by it on accountof the delay attributable to the defendant in clearing the cargo.
The trial Judge has found as a fact that the delay in unloadingwas mainly due to the fact that the defendant did not havesufficient lorries available for the transport of the cargo. TheCourt of Appeal was not on the evidence of record justified inrejecting this finding of fact. The defendant was, in thecircumstances, liable to pay the demurrage prescribed in theGazette.
Counsel for the defendant submitted that the clause in Note 10that it will not be the duty of the Corporation to inform theconsignee of the time of arrival of the loaded lighter imposedgreat hardship on the consignee and is unreasonable. Thoughthere would appear to be substance in the complaint, the validityof this complaint depends on the exigencies of the situation andthe incidents of the port. However, in view of the finding of thetrial Judge that the delay in unloading was mainly due to the factthat the defendant did not have sufficient lorries available for thetransport of the cargo, this complaint loses its relevancy.
Counsel for the defendant-respondent took objection to theplaintiff arguing questions which were not raised in its applicationfor leave to appeal to this Court. The Court of Appeal had grantedleave to appeal to this Court on the ground that "substantialquestions of law in regard to the Port (Cargo) Corporation Actare involved" Counsel for the respondent submitted that it wasnot competent for the plaintiff to urge before this Court groundsof appeal not set out in his application for leave. According tohim, counsel for the appellant should be restricted to thecontention that the imposition of demurrage charges in terms ofthe Gazette Notification in P1 was not ultra vires the Ministerunder section 63 of the Port (Cargo) Corporation Act. Hestrenuously urged that even if the contention of counsel for theplaintiff is upheld, that will not be a sufficient ground forreversing the judgment of the Court of Appeal, as that Court hasheld not only that the demurrage charges are ultra vires theMinister under section 63, but also that the Corporation was
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responsible for the undue delay and hence could not recoverdemurrage charges.
Article 128(1) of the Constitution of the Democratic SocialistRepublic of Sri Lanka provides that an appeal shall lie to theSupreme Court from any final order or judgment of the Court ofAppeal in any matter or proceedings, whether civil or criminal,which invloves a substantial question of law if the Court of Appealgrants leave to the Supreme Court ex mero moto, or at theinstance of any aggrieved party to such matter or proceeding.Article 128(2) provides for the Supreme Court granting specialleave to appeal to this Court.
Article 127 spells the appellate jurisdiction of this Court. Theappellate jurisdiction extends to the correction of all errors infact and/or in law which shall be committed by the Court ofAppeal or any court of first instance. There is no provisioninhibiting this Court from exercising its appellate jurisdiction oncethat jurisdiction is invoked. On reading Articles 127 and 128together, it would appear that once leave to appeal is granted bythe Supreme Court or the Court of Appeal and this Court is seisedof the appeal, the jurisdiction of this Court to correct all errorsin fact or in law which had been committed by the Court ofAppeal or court of first instance is not limited but is exhaustive.Leave to appeal is the key which unlocks the door into theSupreme Court, and once a litigant has passed through the door,he is free to invoke the appellate jurisdiction of this Court "forthe correction of all errors in fact and/or in law which had beencommitted by the Court of Appeal or any court of first instance".This Court, however, has the discretion to impose reasonablelimits to that freedom, such as refusing to entertain groundsof appeal which were not taken in the court below and raised forthe first time before this Court. This Court in the exercise of itsdiscretion will, however, look to the broad principles of justiceand will take judicial notice of a point which is patent on the faceof the proceedings and discourage mere technical objections.
The question of law regarding the powers of the Minister toprovide for demurrage charges according to prescribed rates loomslarge in the judgment of the Court of Appeal, and its view of thelaw has coloured its approch to the question of the defendant'sliability for demurrage. Once the plaintiff-appellant succeeds indemonstrating the untenability of that view of the law, it is
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entitled to proceed to demonstrate the impact of thatmisdirection on the appreciation of the evidence. Since it iscompetent for this Court to entertain an appeal on facts and toreview the facts, the appellant should not be precluded by hisfailure to question the Court of Appeal's findings of fact fromcanvassing them here as the question of law on which leave toappeal was granted is decided in its favour; otherwise the appealwill be a futile exercise for him.
For the above reasons, this Court, though it does not ordinarilyallow questions which are not indicated in the application forleave to appeal to be raised at the hearing of the appeal, grantedcounsel for the appellant the indulgence of making his submissionson the Appeal Court's conclusions of fact. I
I set aside the judgment of the Court of Appeal and allow theappeal and restore the judgment of the District Court. Theplaintiff-appellant is entitled to costs both of this Court and ofthe Court of Appeal.
ISMAIL, J.-l agree.
WANASUNDERA, J.-l agree.
Appeal allowed.