033-SLLR-SLLR-2007-V-1-TISSERA-v.-FERNANDO-AND-OTHERS.pdf
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Tissera v Fernando and Others
303
TISSERA
v
FERNANDO AND OTHERS
COURT OF APPEALEKANAYAKE, J.SARATHDE ABREW, J.CALA 425/01 (LG)
DC PANADURA 554/LJUNE 28, 2004JULY 25, 2006
Civil Procedure Code section 479-763(2) – Act 53 of 1986. Writ pending appeal-judicature Act 2 of 1979 as amended by Act 37 of 1979 – Ingredients necessaryto stay the writ? Defendant a minor – Guardian not appointed – Is it a substantialquestion of law?
Held:
The law applicable to stay of execution of decree pending appeal iscontained in section 23 of the Judicature Act and also in section 763(2)of the Civil Procedure Code.
Where section 23 of the Judicature Act is concerned the rule is theexecution of the writ whereas the exception is the stay of the writ.
On the other hand section 763(2) which is not linked to the provision ofthe Judicature Act stipulates distinctive condition as the court may staythe writ, if the judgment debtor satisfies the court that substantial lossmay result to him and security is given by the judgment debtor for thedue performance of the decree.
Though if a writ is stayed to avoid substantial loss equally unexpectedloss or damage to a certain degree would result to the judgment creditorwho is unable to enjoy the fruits of his victory-however what matters isnot the balance of convenience or inconvenience of the concernedparties but the fact on the material placed before court, the judgmentdebtor should discharge the burden placed on him to the satisfaction ofcourt.
Even in the absence of substantial loss, the existence of a substantialquestion of law Is sufficient ground to stay execution of the writ.
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There is a duty cast on the judgment debtor to take whatever possiblesteps to minimize his loss, he cannot fall back on his inaction and inertiaand claim substantial loss would be caused to him.
Per Sarath de Abrew J.,
“If the dogmatic and arrogant approach of the judgment debtor isallowed to succeed, no judgment creditor would be safe from theclutches of an unscrupulous judgment debtor who has school goingchildren in a school dose to the premises in suit – for if a genuine effortwas made, there was a strong likelihood that the judgment debtor couldhave succeeded in procuring alternative accommodation within strikingrange of the school his children are attending or was about to attend.
It is evidence that the 3rd defendant was a minor at the time the plaintwas filed. The trial judge has failed to comply with the mandatoryprovisions of section 479 of the code and failed to appoint a guardianad litem on behalf of the minor defendant before proceeding with thecase, therefore a substantial question of law will arise as to whether thejudgment or decree would be binding on the 3rd defendant-respondentand what would be the effect it would have on the 1-2 defendant-respondents.
Held further
The amount of security should be such as would reasonably safeguardthe interest of the judgment creditor in the event of the judgmentappealed from being eventually affirmed in appeal.
APPLICATION for leave to appeal from an order of the District Court ofPanadura with leave being granted.
Cases referred to:
Grindlays Bank Ltd. v Mackinon Mackenzie & Co. of Ceylon Ltd 1990 1Sri LR 19
Esquire Industries Garments Ltd v Bank of India – 1993 – 1 Sri LR 130(SC)
Saleem v Balakumar – 1981 – 2 Sri LR 74
Kandasamyv Ghanasekaram – CALA 78/81 -C.A.M. 17.7.1981
Shajahan v Mahaboob and others – CALA 117/89
Mustapa v Thangamani – CALA 70/91
Cooray v lllukkumbura – 1999 – 2 Sri LR 63
Fauz v Gyl and others – 1999 – 3 Sri LR 345
Mohamed v Seneviratne – 1989 – 2 Sri LR 389
Amarange v Seelawathie Weerakoon 1990 – 2 Sri LR 332
H. Dariin Silva v Chithranganie Fernando – 2 CALR 469 at 473
Lalith Siriwardena v Piyasena Munasingha – 1986 1 CALR 496
Somasundaram v Ukku – 44 NLR 446
W. Sobitha Unnanse v Piyaratne Unnanse – 55 NLR 249
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Tissera v Fernando and Others
(Sarath De Abrew, J.)
305
Manohara de Silva PC with Ms. Anusha Perusinghe for the plaintiff-petitioner.ChithralJ. Fernando for the defendant-respondent.
Cur.adv.vult
May 30,2007
SARATH DE ABREW, J.
This is an application for leave to appeal from the order of thelearned District Judge of Panadura dated 06.11.2001 (P2) where thepetitioner had sought to set aside the aforesaid order of the DistrictJudge staying the execution of the decree pending appeal andthereby sought to have the writ executed pending appeal. Leave hadbeen already granted by this Court on 13.12.2005.
The plaintiff-judgment creditor-petitioner (hereinafter sometimesreferred to as the petitioner) instituted the aforesaid action bearing No.554/L in the District Court of Panadura to evict the defendants fromthe land and household premises set out in the schedule to the plaintand recover vacant possession thereof. The premises in suit was a 14perch premises at 14/1, St Joseph Street, Uyana, Moratuwa, wherethe defendants-judgement debtor respondent (hereinafter sometimesreferred to as respondents) were residing. The 2nd and 3rdrespondents were the younger brothers of the 1st respondent,whereas the petitioner was an aunt of the respondents. After trial thelearned trial Judge entered judgement in favour of the plaintiff, furtherordering damages in a sum of Rs. 1000/= per month from 28.04.90the date of the plaint, payable to the petitioner by the respondents.
Being dissatisfied with the aforesaid judgement, the respondentshave lodged an appeal to the Court of Appeal. Thereafter thepetitioner has filed an application for the execution of the decreepending appeal. The learned District Judge of Panadura, who hadsucceeded the learned Judge before whom the trial was conducted,consequent to an inquiry held with regard to the application of thepetitioner to enforce the execution of the decree, has made order on
(P2) refusing the application on the basis that therespondents have succeeded in establishing that substantial losswould be caused to them unless the execution of the decree wasstayed pending appeal. While making this order, the learned DistrictJudge had further ordered the respondents to deposit Rs. 1 lakh as
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security in Court. In his order, the learned judge has not proceeded toconsider the question of the presence of a substantial question of lawas he was satisfied as to the existence of substantial loss to therespondents if the decree was to be executed against them. It isagainst this impugned order dated 06.11.2001 that the petitioner hasmade the present application to the Court of Appeal.
The law applicable to stay execution of decree pending appeal iscontained in the provisions of section 23 of the Judicature Act No. 2of 1978 as amended by Act No. 37 of 1979 and also section 763(2) ofthe Civil Procedure Code as amended by Act No. 53 of 1980. Beforeexamining the material placed before Court as to the merits anddemerits of this application, its is expedient to examine and assessthe implications of the above statutory provisions.
Section 23 of the Judicature Act fas amended by Act No, 17 of19791 provided as follows:-
“Any party who shall be dissatisfied with any judgement, decree ororder pronounced by a District Court may (excepting where such rightis expressly disallowed) appeal to the Court of Appeal against anysuch judgement, decree or order from any error in law or in factcommitted by such court, but no such appeal shall have the effect ofstaying the execution of such judgement, decree or order unless theDistrict Judge shall see fit to make an order to that effect, in whichcase the party appellant shall enter into a bond, with or withoutsureties as the District Judge shall consider necessary, to appearwhen required and abide the judgement of the Court of Appeal uponthe Appeal. ”
It is noteworthy to observe that, as far as the above provision isconcerned, the rule is the execution of the writ whereas the exceptionis the stay of the writ. Furthermore, other than the mandatoryprovision compelling the entering into a bond, the above provisiondoes not spell out or specify any other preconditions as to under whatconditions a writ may be stayed but leaves the entire exercise to thejudicial discretion of the learned District Judge concerned, to make afit and proper order as the justice of the case may demand.
On the other hand, section 76312) of the Civil Procedure Code (asamended bv Act No. 53 of 19801. which is not linked to the provisionin the Judicature Act, stipulates a distinctive condition as follows,
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Court may order the execution to be stayed upon such terms andconditions as it may deem fit, where:-
The judgement -debtor satisfies the Court that substantial lossmav result to the judgment-debtor unless an order for stay ofexecution is made, and
Security is given by the judgment-debtor for the dueperformance of such decree or order as may ultimately bebinding upon him.
On a construction of the above provision, the discretion of thelearned Judge is not unfettered to the extent that in order to stay awrit, there must be sufficient material placed before Court thatsubstantial loss may result to the judgment-debtor. It goes withoutsaying that if a writ stayed to avoid substantial loss being caused tothe judgment-debtor, equally anticipated loss or damage to a certaindegree would result to the judgment-creditor who is unable to enjoythe fruits of his victory after protracted litigation.
However, what matters is not the balance of convenience orinconvenience of the parties concerned, but the fact that on thematerial placed before Court, the judgment-debtor should dischargethe burden placed on him to the satisfaction of Court that substantialloss would be caused to him unless the execution of the writ wasstayed. Therefore, it is now settled law that writ must be stayed untilthe final disposal of the appeal if the judgment-debtor satisfies theCourt that substantial loss mav result to him unless an order for stayof execution is made by Court.
In the case of Grindlays Bank Ltd. v Mackinon Mackenzie & Co. ofCeylon Ltd.W, it had been held that Court should be satisfied of theprobability of substantial loss resulting to the Judgment-debtor if thewrit is not stayed and mere inconvenience and annoyance is notenough to induce the Court to take away from the successful party thebenefit of the decree. Further in the case of Esquire IndustriesGarments Ltd. v Bank of IndiaW the concept of substantial loss hadbeen extended not only to include the immediate pecuniary loss of thejudgment-debtor but also to include the social and economic impacton the employees in the present social context.
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Provisions of section 763 of the Civil Procedure Code is notexhaustive in respect of the relief available to the judgment-debtor. InSaleem v BalakumarP) Abdul Cader, J. with O.S.M. Seneviratne, J.agreeing a substantial question of law to be adjudicated upon at thehearing of the appeal was considered a sufficient ground to stay thewrit till the disposal of the appeal. This judgment had been deliveredsoon after section 763(2) was introduced to the Civil Procedure Codeby Amendment Act No. 52 of 1980. A long line of judgments thereafterhad followed this concept where it had been held that even in theabsence of substantial loss caused to the judgment-debtor, theexistence of a substantial question of law to be decided at the appealwas sufficient ground to stay the execution of the writ. In this respectthe following cases may be cited.
Kandasamyv Ghanasekerani4).
Shajahan v Mahaboob and otherd5).
Mustapa v Thangamanfi).
Cooray v IllukkumburaP).
Fauz v Gyl and othersfi).
It was held in the latter case of Fauz v Gyl (supra) that questions oflaw arising for determination must be substantial in relation to the factsof the case at hand and that one of the interpretations of the word"substantial" is to mean "actually existing."
Having examined the statutory provisions and other case lawauthorities governing the subject, I now proceed to examine all thematerial placed before Court in order to determine the validity andcorrectness of the impugned order of the learned District Judge ofPanadura dated 06.11.2001, with a view to elucidate the presence ofany one of the following ingredients in order to justify the stay ofexecution of the decree.
Whether the respondents have placed sufficient materialbefore Court for the learned District Judge to be satisfied thatsubstantial loss would incur to the respondents if theexecution of the decree was not staved.
Whether the Court could be satisfied of the existence of asubstantial question of law that has arisen for determination atthe hearing of the Appeal.
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Tissera v Fernando and Others
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The following are the main contentions raised by the petitioner inher petition and the oral and written submissions tendered to Court
The learned District Judge erred in holding that there wassubstantial loss caused to the respondents if the writ isexecuted on the sole basis that the 1st defendant-respondenthad school-going children and a child that is going to beadmitted to school.
The learned District Judge erred in disallowing the applicationof the petitioner to execute the writ when it was establishedthat the 1st respondent had not made any attempt to find anyalternative accommodation.
The security ordered by Court was insufficient, in any event.
The following authorities were brought to the notice of Court insupport of the above contentions.
Mohamed v Seneviratnd9)
Amarange v Seetawathie Weerakoori1°)
H. Darlin Silva v Chithranganie Fernando!'1>
Lalitha Siriwardena v Piyasena Munasinghe<12)
Grindlays Bank Ltd. v Mackinon Mackenzie & Co. Ltd. (supra)
On the other hand, the oral and written submissions tendered onbehalf of the 1st respondent have raised the following contentions.
Sufficient material has been placed before Court to showsubstantial loss or damage would be caused to the 1strespondent if the writ was executed.
As the 3rd defendant was a minor at the time plaint was filedon 29.08.90. the failure of the learned Trial Judge to complywith the mandatory provision of section 479 of the CivilProcedure Code in failing to appoint a guardian ad litemwhich was a main ground of appeal, has raised a substantialquestion of law to be determined at the final appeal.
The following authorities were quoted in support of the abovecontentions of the 1st respondent.
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A. Rahuman Shajaham v A. Rahuman Mahaboob (supra).
R. Mohamedv L.S. Seneviratne (supra).
Having carefully examined the entirety of the pleadings,proceedings, oral and written submissions and case law authoritiessubmitted by both parties I am inclined to disagree with the learned trialjudge's finding that execution of the writ would have caused substantialloss to the 1st respondent, for the following reasons.
The 1st respondent giving evidence had stated that his eldest sonattends St. Sebastians College, his elder daughter attends KusinaraSchool while his younger daughter is due to attend the Convent fromthe following year. According to him these schools were situated within• a radius of 21/2 kilometers from the premises in suit. The learnedDistrict Judge had concluded that if the writ was executed it woulddisrupt the education of the two elder school going children while therespondent will have problems in admitting the youngest child to theintended school due to inability to confirm residence within the area. Inhis affidavit to Court the 1st respondent had sought to mislead Courtby stating that St. Sebastians College was situated next-door to hisresidence, whereas in cross-examination he has admitted it wassituated 11/2 kilometers away.
On the other hand examination of the evidence of the 1strespondent at the writ inquiry clearly reveals that he has stubbornlyrefused to seek out an alternative place of abode, not only during theperiod the trial was proceeding from 29.08.1990 to 01.11.2000 whenthe judgment was delivered, but also for one full year thereafter till theorder of the writ inquiry was delivered on 06.11.2001. As there is a dutycast on the judgment-debtor to take whatever possible steps tominimize his loss, he cannot now fall back on his inaction and inettiaand claim substantial loss would be caused to him. If a genuine effortwas made, there was a very strong likelihood that the 1st respondentcould have succeeded in procuring alternative accommodation withinstriking range of the schools his children were attending or was aboutto attend. There was also the possibility of boarding his children in therespective school itself or other suitable place till the 1st respondentprocured suitable alternative accommodation. If the dogmatic andarrogant approach of the judgment-debtor is allowed to succeed, nojudgment-creditor would be safe from the clutches of an unscrupulous
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judgment-debtor who has school-going children in schools close to thepremises in suit. As Justice P.R.P. Perera held in the Grindlays Bankcase quoted above, substantial loss is much more than mereinconvenience and annoyance which is not enough to take away fromthe successful party the fruits of victory and the benefit of the decree.
Therefore for the foregoing reasons, I uphold the contention of thepetitioner that the learned District Judge had erred in law in coming tothe erroneous conclusions that the 1st respondent had placedsufficient material before Court to establish substantial loss.
However, the learned Judge had failed to examine whether asubstantial question of law existed to be decided at the final Appeal,even though the respondents had specifically averred so in theirpetition of appeal. On an examination of the material placed beforeCourt, it is quite evident that the 3rd defendant was a minor at the timeplaint was filed. The learned trial Judge had failed to comply with themandatory provision of Section 479 of the Civil Procedure Code andfailed to appoint a guardian ad litem on behalf of the minor 3rddefendant before proceeding with the case. In fact the issues 06, 07and 08 raised by the defendants on this question at thecommencement of the trial had been ignored by the learned trial judgein making her final order.
Section 479 of the Civil Procedure Code provides that:-
"Where the defendant to an action is a minor, the Court on being' satisfied of the fact of his minority, shall appoint a proper personto be guardian for the action for such minor, and generally to acton his behalf in the conduct of the case."
In Somasunderam v Ukkui13) it was held that where a decree isentered against a minor who is unrepresented by a guardian he maymove to have the proceedings set aside under section 460 of the CivilProcedure Code after he attains majority.
In the instant case, the 3rd defendant-respondent was a minor bornon 05.05.1973 and had not yet attained the age of 18 years when theplaint was filed on 29.08.1990. (Page 69 of Proceedings). This isadmitted by the plaintiff-petitioner in her evidence. The trial hadproceeded without the compliance of section 479 of the CivilProcedure Code. The 3rd defendant had attained majority as the case
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proceeded and was no longer a minor when the judgment wasdelivered. Therefore, a substantial question of law will arise as towhether the judgment or decree would be binding on the 3rddefendant-respondent, and what would be the legal effect it wouldhave on the 1 st and 2nd defendant-respondents. This matter has beenspecifically raised by the respondents in their petition of appeal. Thepetitioner has chosen to be silent on this issue in the writtensubmissions filed. The learned District Judge too has failed to dwell onhis crucial matter in his impugned order of 06.11.2001. Therefore onthe basis of the above findings I am satisfied as to the presence of asubstantial question of law to be adjudicated at the final Appeal.
Therefore I hold that the order of the learned District Judge to staythe execution of writ is justified not on the grounds of substantial lossto be caused to the 1st respondent, but on the grounds of a substantialquestion of law being present for adjudication.
It is now opportune to consider the question of quantum of security.The learned District Judge had ordered the deposit of Rs. 100,000/- incash. In terms of the judgment of the trial Judge, the defendant-respondents were liable to pay Rs. 1000/- per month as damages tothe plaintiff-petitioner. By the time the order in the writ inquiry waspronounced, the total amount of damages accrued was in excess ofRs. 1,25,000/-. If the result of the final appeal is in favour of thepetitioner, by the time the result is achieved, the amount of totaldamages payable would be of excessive proportions. In W. SobithaUnnanse v A. Piyaratne Unnansd14), it was held that "the amount ofsecurity ordered to be furnished should not be unduly excessive. Theamount of security should be such as would reasonably safeguard theinterests of the judgment-creditor in the event of the Judgmentappealed from being eventually affirmed in appeal."
In view of the above circumstances of this case, I am of the viewthat the amount of Rs. 100,000/- ordered to be furnished as security isnot sufficient to safeguard the interests of the petitioner, but a sum ofRs. 150,000/- in cash would meet the ends of justice.
In view of the foregoing findings and reasons, I make orderdismissing the application of the petitioner to set aside the order dated
of the learned District Judge of Panadura. I affirm the saidorder subject to the variation that the defendant-respondents are
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Employees Trust Fund Board v Subasinghe
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directed to furnish security in a total sum of Rs. 150,000/- in cash withtwo sureties acceptable to the learned District Judge of Panadurawithin a period of 03 months this order is conveyed to them by theDistrict Court, and to enter into a bond for the same amount for the dueperformance of the decree if and when required once the appeal isfinally adjudicated. Taking into account all the circumstances of thiscase I make no order as to costs.
Accordingly the application is dismissed subject to the abovevariation.
EKANAYAKE, J. – I agree.
Application dismissed subject to variations.