Union Assurance Limited v. Peiris
UNION ASSURANCE LIMITED
COURT OF APPEALDE SILVA, J.,
A. NO. 635/96.
C. COLOMBO NO. 10089/MR.
JANUARY 14, 1999.
Civil Procedure Code – S. 146, S. 754 (2) – Raising of issues – ConsequentialIssues – Plea of estoppel – Does it amount to a new cause of action – Exceptionalcircumstances not pleaded.
The plaintiff-respondent instituted action claiming a certain sum due on a contractof Insurance entered into with the defendant. The defendant denied liability. Aftercertain issues were accepted by Court, the plaintiff raised a new issue (IssueNo. 15) for which the defendant objected, Court allowed same. It was contendedby the defendant-petitioner that the issue raising a plea of estoppel has notbeen pleaded and the alleged grounds of estoppel in the purported issue hadbeen framed on the basis that they are admitted facts, and that theplaintiff cannot be permitted to alter the nature of the case presented after theclose of pleadings.
It is manifest that issue No. 15 had been raised as a consequential issuearising from issue No. 13 which was accepted by Court. It is an inveteratepractice in the District Court to permit a party to raise consequential issuesarising from issues raised by the opposing party.
The test relating to a consequential issue would be whether such issuearises from an issue raised by the opposing party.
Per Weerasuriya, J.
'The plea of estoppel raised dees not amount to a new cause of action,this plea was only a defence pleaded to issue No. 13 formulated on a clause
Sri Lanka Law Reports
 3 Sri LR.
of the policy of insurance, there is no basis for one to contend that the plaintiffhas changed the nature of the case presented to Court*
The question that would arise is whether or not the defendant had beenprejudiced by such disclosure. The letter referred to in the issue and theresponse of the plaintiff and the consequent conduct of the defendant arenot matters which were outside the knowledge of the defendant
APPLICATION in Revision from the Order of the District Court of Colombo.Cases referred to:
Weeravago v. The Bank of Madras – 2 Ceylon LR 11.
Lokuhamy v. Sirimal – 2 Ceylon LR 125.
Silva v. Obeysekera – 24 NLR 97.
Nandias Silva v. Unambuwa – 76 NLR 25.
Uyanage v. Siriwardena – 1986 1 Colombo Appellate Law Reports 306.
N. S. A. Goonetillake, PC with M. E. Wickremasinghe for defendant-petitioner.Chula de Silva, PC with Kushan dh Alwis for plaintiff-respondent.
Cur. adv. vult.
March 25, 1999.
The plaintiff-respondent (hereinafter referred to as the plaintiff) by hisplaint dated 03. 09. 1990, instituted action against the defendant-petitioner (hereinafter referred to as the defendant), claiming judgmentin a sum of Rs. 1,023,500 due on a contract of insurance enteredinto with the defendant. The defendant filed answer denying liabilityand prayed for dismissal of the action. The trial commenced on18. 06. 1992 wherein two admissions were recorded relating to thejurisdiction and contract of insurance. Thereafter, the defendant objected
CAUnion Assurance Limited v. Peiris (Weerasuriya, J.)183
to the 4 issues formulated by the plaintiff and the learned District Judgehaving directed the parties to tender written submissions by his orderdated 17. 06. 93, allowed the aforesaid issues.
On 16. 02. 96 when further trial commenced, defendant raised 8issues which were objected to by the plaintiff, whereupon the DistrictJudge having directed the parties to tender written submissions byhis order dated 19. 02. 96, accepted issues No. 7 and 13 and rejectedthe rest. The plaintiff thereafter raised issue No. 15 for which thedefendant objected and the District Judge by his order dated01. 08. 96 allowed the same. It is against the said order of the DistrictJudge that the defendant has filed this application for revision.
Learned President's Counsel for the defendant submitted that –
the issue raising a plea of estoppel has not been pleadedby the plaintiff;
the alleged grounds of estoppel referred to in the purportedissue had been framed on the basis that they are admittedfacts; and
the plaintiff cannot be permitted to alter the nature of thecase presented after the close of pleadings.
Issue No. 15 permitted by the District Judge is as follows:
"15 – Is the defendant estopped from pleading that the plaintiffsclaim is out of time by reason of the following matters:
By reason of letter dated 23. 08. 89 addressed by thedefendant's agent, Pioneer Loss Adjusters Limited requestingan estimate to repair the plaintiffs bungalow.
iii) Since the plaintiff has by reason of the aforesaid mattersforwarded such an estimate to the defendant.
Since the defendant has on or about 22. 09. 89 acceptedthe said estimate and forwarded it to its agent.
Sri Lanka Law Reports
 3 Sri LR.
Since the defendant has denied liability for the first time byletter dated 22. 01. 90.°
Learned President's Counsel for the plaintiff contended that issueNo. 15 was raised as a consequential issue arising from issueNo. 13 accepted by the District Judge is as follows:
"13 – In any event was the claim set out in the plaint made afterthe expiry of time."
It is appropriate at this stage to reproduce issue No. 7 which wasfounded on a plea of prescription to illustrate the significance of issueNo. 13.
"7 – In any event, is the plaint prescribed on the face of it.“
Thus, in the light of issue No. 7, issue No. 13 was not foundedon the premise that the claim of the plaintiff was prescribed but thatit was made out of time, in the sense that the claim was made afterthe expiry of a limited period specified in the policy of insurance.
Admittedly, the averment that the plaintiff had failed to makea claim within a specified time had been raised in the answer of thedefendant. However, this averment in any manner cannot be construedto constitute a claim in reconvention. The Civil Procedure Code doesnot provide for pleadings after the tendering of answer except in thecase of a claim in reconvention. Further, pleadings by way of rep-lication is permitted by order of Court after notice to the opposingparty and before the date of trial.
In Weeravago v. The Bank of Madras it was observed thatalthough under the Civil Procedure Code, pleadings are not to gobeyond answer except by special leave, yet if a defendant's answercontains averments requiring to be met, it is none the less incumbentupon plaintiff to meet them, either by obtaining leave to reply or byasking the Court under section 146 of the Code, to frame an issueupon defendant's averments.
In Lokuhamy v. SirimaF' it was held that under the Code thereis no necessity for a replication to any new matter in the answer,
CAUnion Assurance Limited v. Peiris (Weerasuriya, J.)185
but such new matter will be taken as denied or if the plaintiff desiresto question its sufficiency as an answer to the declaration, he mayat the trial have an issue settled by the Court on the point.
It is manifest that issue No. 15 had been raised as a consequentialissue arising from issue No. 13 which was accepted by the DistrictJudge. It is an inveterate practice in the District Court to permit aparty to raise consequential issues arising from issues raised by theopposing party. This is in keeping with the principle that it is withinthe discretion of the District Judge to allow fresh issues to be for-mulated when such a course appears to be in the interest of justiceeven after the commencement of the trial, (vide Silva v. ObeysekaraP).The test relating to a consequential issue would be whether such issuearises from an issue raised by the opposing party.
Learned President's Counsel for the defendant cited the case ofNandias Silva v. Unambuwam in support of his proposition that wherethe plea of estoppel has not been taken in the pleadings, no issuecan be raised therein. However, the above decision was not followedin Liyanage v. Siriwardenaf5) at 308 where it was observed as follows:
"The learned Judge in that case has expressed an opinion whichis purely obiter. There has been no discussion of or reference toany relevant decision. I am, therefore, of the view the case is notan authority for the proposition that an issue relating to estoppelcannot be raised in the absence of pleadings."
Learned counsel for the defendant submitted that in that case thebasic facts on which the plea of estoppel was based were clearlypleaded in the plaint and that there was no introduction of newmaterial. Admittedly, the principal submission of the defendant in thatcase was that the issue was not pleaded and prejudice could becaused by accepting the issue at the trial.
In the instant case, the plaintiff provided the necessary particularson which he based his plea of estoppel affording an opportunity forthe defendant to ascertain with certainty details before the commence-ment of the trial. The particulars provided by the plaintiff were theacts of the defendant covering the period between the demand andthe institution of the action. The question that would arise in this
Sri Lanka Law Reports
 3 Sri L ft
context would be whether or not the defendant had been prejudicedby such disclosure. The letter referred to in the issue and the responseof the plaintiff and the consequent conduct of the defendant are notmatters which were outside the knowledge of the defendant. Thecontention that the particulars provided convey the impression thatsuch facts are true does not prejudice the defendant, if the mattersreferred to by the plaintiff are incorrect or false. The burden of provingthe matters referred to in the issue forming the basis for the pleaof estoppel lay with the plaintiff. The burden lay on the plaintiff toproduce the letter purportedly written by the agents of the defendantand the response of the plaintiff.
The plea of estoppel raised by the plaintiff does not amount toa new cause of action. This plea was only a defence pleaded to theissue No. 13 founded on a clause of the policy of insurance. Therefore,there is no basis for one to contend that the plaintiff has changedthe nature of the case presented to Court.
As was stated earlier, reference had been made in prayer (a) tothis application to the order of the District Judge dated 19. 02. 96.On a reading of the petition, one is justified in forming the impressionthat relief has been sought by way of revision against the order ofthe District Judge dated 01. 08 96.
The defendant has failed to adduce any reason for his failure tocanvass the order of the District Judge dated 16. 02. 96. The failureof the defendant to invoke the provisions of section 754 (2) of theCivil Procedure Code against the order dated 16. 02. 96 cannot beoverlooked. In the absence of exceptional circumstances pleaded bythe defendant, his application for relief should fail.
For the foregoing reasons, this application is dismissed with costs.DE SILVA, J. – I agree.
UNION ASSURANCE LIMITED v. PEIRIS