WARDENA v. AIR CEYLON LIMITED

043-SLLR-1984-V1-SIRIWARDENA-v.-AIR-CEYLON-LIMITED.pdf


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SIRIWARDENA
v.
AIR CEYLON LIMITED
SUPREME COURT
SHARVANANDA, J„ COUN-THOME', J. AND RANASINGHE. J.
S.C. NO. 35/83 ; S.C. SPECIAL LA/21/83 ; C.A./L.A. 67/82 ; D.C. COLOMBO333UB/Z.
APRIL 2. 1984.
Appeal – Order of Court to amend decree under section 189 of the Civil ProcedureCode – Whether such an order has the effect of a final judgment of a civil court ? – Testto be applied – Procedure to appeal – Oirect appeal or application for leave to appeal ?- Civil Procedure Code, sections 184, 189. 754 (1), 754 (21 and 754 (5).
sc
Siriwardena v. Air Ceylon Limited
287
Where the appellant had filed an application for leave to appeal from an Order of theDistrict Judge made under section 189 of the Civil Procedure Code directing theamendment of a decree and the question was whether such an order is one having theeffect of a final judgment of a civil court for the purpose of determining whether thecorrect procedure should have been a direct appeal and not an application for leaye toappeal.
Held-
To decide whether a party dissatisfied with the order of a civil court should lodge adirect appeal under section 754 (1) of the Civil Procedure Code or appeal with the leaveof Court first had and obtained under section 754 (2) of the Civil Procedure Code thedefinitions of 'judgment' and 'order' in section 754 (5) should be applied.
In view of the definition in section 754 (5) of the Civil Procedure Code the procedure ofdirect appeal is available to a party dissatisfied not only with a judgment entered interms of section 184 of the Civil Procedure but also with an order having the effect of afinal judgment, that is, a final order. Orders which are not judgments under section 184of the Civil Procedure Code or final orders are interlocutory orders from which a partydissatisfied can appeal but only with leave to appeal.
The tests to be applied to determine whether an order has the effect of a final judgmentand so qualifies as a judgment under section 754 (5) of the Civil Procedure Code are
It must be an order finally disposing of the rights of the parties.
The order cannot be treated as a final order, if the suit or the action is still left a livesuit or action for the purpose of determining the rights and liabilities of the parties in theordinary way.
The finality of the order must be determined in relation to the suit.
The mere fact that a cardinal point in the suit has been decided or even a vital andimportant issue determined in the case, is not enough to make an order a final one.
By these tests an order amending a decree made under section 189 of the CivilProcedure Code is a final order. Hence the appellant's application for leave to appealwas misconceived and could not be entertained.
Cases referred to
(1| Salamanv. Warner and others, 1189 V 1 Q.B.734, 735, 736. 737 (CA.)
Bozsonv. Aitrincham Urban District Council, (1903) 1 K.8. 547, 548. 54$ (C.A.)
Isaacs & Sons v. Salbstein, (1916) 2 K.B. 139, 147.
Abdul Rahman and others v. Cassim & Sons, AIR 1933 P C. 58, 60.
Ramchand Manjimal v. Goverdhandas Vishandas Ratanchand and others AIR1920 P C. 86,87.
Haron v. Central Securities, [ 1982] 2 All ER 481.
Settlement Officer v. Vander Poorten, (1942) 43 N.L.R. 436.
Fernando v. Chittambaram Chettiar, (1949) 49 N.L.R 217, 219.
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Krishna Pershad Singh v. MotiChand. <1913)40 Cal. 635. (PC.)
Usoofv The National Bank of India Ltd. (1958) 60 N.L.R. 381. 383.
(1.1) Subramaniam v. Soysa, (1923) 25 N.L.R. 344.
* Mohamad Haniffa Rasheed v. Mohamed Ali, S.C. 6/81 : D.C. Colombo
3290/L – S. C. Minutes of 20.11 81
Ex pane Chinery. (1884} 12Q.B.O. 342. 345
Onslow v. Commissioners of Inland Revenue. [1890} 25 O.8.D. 465. 466
Ex parte Moore. (1885} 14 Q.B.D. 627. 632.
APPEAL from an Order of the Court of Appeal.
Nimal Senanayake. President's Counsel, with K. Gunaratne. L. V. P Wettasinghe. andSaliya Mathew lot plaintiff-appellant.
H. W. Jayewardene. Q.C, with R. Thevarajah and S. Sittampalam fordefendant-respondent.
Cur. adv. vult
May 30. 1984SHARVANANDA, J.
The plaintiff-appellant on 22.1 1.1979 filed action against the AirCeylon Ltd., praying :
for a judgment and decree declaring that the plaintiff continuesto be in the employment of the defendant Corporation under aservice agreement in and after September 1979;
for a judgment and decree ordering the defendant Corporationto pay to the plaintiff his salary at Rs. 1,620 per month fromSeptember, 1979 ;
for a judgment and decree ordering the defendant Corporationto pay to the plaintiff a sum of Rs. 3,240 being the salary for themonths of September and October 1979, together with legalinterest thereon ;
for judgment and decree ordering the defendant Corporation topay to the plaintiff damages of Rs. 40,000 together with legalinterest thereon from the date hereof until payment in full ;
for costs together with legal interest and
(/) for such other and further relief as to this court shall.seem meet.
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Siriwardena v. Air Ceylon Limited (Sharvenanda, J.)
289
During the pendency of the action steps were taken by the Presidentof the Republic, as Minister of Defence to dissolve the respondentCorporation and a liquidator was appointed from 1.1.80. On 13.3.80the case was taken up for trial and in view of the absence of therespondent, judgment was entered ex parte for the plaintiff-appellantas prayed for, in terms of paragraphs (a), (b) and (d) and costs of theaction. Decree was thereafter entered in accordance with thejudgment.
On 7.5.1980 the Liquidator, Air Ceylon Ltd., filed petition andaffidavit to set aside the judgment and decree. The District Judge byhis order dated 20.1.81 dismissed this application of the Liquidator.The Liquidator then moved the Court of Appeal in revision to have thesaid order set aside, but the Court of Appeal on 16.12.81, dismissedthe application with costs.
Thereafter the Liquidator on 15.2.82 and on 19.3.82 filed papersin the District Court to amend the judgment and decree, in terms ofSection 189 of the Civil Procedure Code on the ground of anaccidental slip or omission made by the District Judge in his judgment,by the deletion of the relief in prayer "d" and by specifying that theplaintiff is entitled to damages at the rate of Rs. 1620/-per month,namely, from September to December 1979.
After inquiry the District Judge by his order dated 10.5.82 held thatthe defendant's claim to delete prayer d' was not tenable and that theplaintiff was entitled to Rs. 40,000/- with interest, as damages underprayer ‘d He however directed that the decree should be amended inregard to the relief claimed in paragraph ’b’ of the prayer to the plaintas follows .
"To pay the plaintiff Rs. 6480/- as salary from September 1979
to December 1979 at the rate of Rs. 1620/- per month."
From this order dated 10.5.82, allowing the amendment in themanner set out above, the plaintiff moved the Court of Appeal forleave to appeal under Section 754(1) of the Civil Procedure Code.
At the- hearing of the application for leave, Counsel for. thedefendant-respondent opposed the application of the plaintiff on theground that the order dated 10.5.82. made by the District Judge wasa "final order" having the effect of a final judgment under section754(5) of the Civil Procedure Code, and that an appeal lay direct to
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•
the Court of Appeal under Section 754(1) and not with the leave ofcourt, first had and obtained, in terms of section 754(2) of the CivilProcedure Code. He submitted that the application for leave to appealwas misconceived.
tfcunsel for the plaintiff contended that the order of the DistrictJudge dated 10.5.82 was not a "Judgment" but an "Order" within themeaning of the said terms in section 754(5) of the Civil ProcedureCode.
The Court of Appeal by its order dated 9,7.82 upheld the objectionof Counsel for the defendant-respondent and held that the order madeamending the judgment and decree was a final order from which anappeal lay direct to that court under section 754(1) of the C.P C. andrefused with costs the application for leave to appeal.
The plaintiff-appellant, has with the leave of this court preferred thisappeal against the order of the Court of Appeal dated 9.7.82 refusinghis application for leave to appeal. The question that arises fordetermination is whether the order of the District Judge dated
amending the judgment and decree dated 13.3.80 is a"judgment" within the meaning of section 754(1) and 754(5) of theC.P.C., or an "order" within the meaning of section 754(2) andsection 754(5) of the C.P.C.
Section 754(1) provides "any person who shall be dissatisfiedwith any judgment pronounced by any original court in any civilaction, proceeding or matter to which he is a party may prefer anappeal to the Court of Appeal against such judgment, for any errorin fact or in law."
Section 754(2) provides "Any person who shall be dissatisfiedwith any order made by any original court in the course of any civilaction, proceeding or matter to which he is or seeks to be a party,may prefer an appeal to the Court of Appeal against such order forthe correction of any error in fact or in law. with the leave of theCourt of Appeal first had and obtained."
Section 754(5) provides 'Notwithstanding anything to thecontrary in this Ordinance for the purposes of this chapter [LVIII]"judgment" means any judgment or order having the effect of a finaljudgment made by any civil court. and "order" means the finalexpression of any decision in any civil action, proceeding or matterwhich is .not a judgment."
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Siriwardena v. Air Ceylon Limited (Sharvananda. J.)
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The only question that is in issue in this appeal is whether the orderof the Court of Appeal dated 9.7.82 refusing the plaintiff's applicationfor leave to appeal is correct or not. The ground on which the Court ofAppeal refused the application for leave to appeal was that theplaintiff-appellant should have canvassed the order of the DistrictJudge dated 10.5.82 amending the decree entered earlier "bypreferring an appeal and not by applying for leave to appeal, for thereason that the said order is a 'Judgment", within the meaning ofsection 754(5) of the C.P.C.
Counsel for the defendant-respondent submitted that the orderdated 10.5.82 for the amendment of the decree is a final order; sinceit finally determines the rights and liabilities of the parties and has theeffect of a final judgment and brings to an end the dispute between theparties.
On the other hand, counsel for the plaintiff-appellant contended thatthe said order is an interlocutory order, that in an action there can beonly one judgment or order having the effect of a final judgment andthat is the one entered in terms of section 184 of the C.P.C and thatall the orders made by court in the course of the action prior to orsubsequent to judgment entered under section 184 of the C.P.C areorders within the meaning of “Order" under section 754(5) of theC.P.C. He submitted that the order of the District Judge dated10.5.82 directing the decree to be amended to limit payment of theplaintiff's salary till December 1979, is an order within the meaning ofsection 754(2} and 754(5) of the C.P.C. He stated that the plaintiffhad adopted the correct procedure to appeal. He argued that to preferan appeal from the said order dated 10.5.82 he had to proceed byfirst obtaining leave of the Court of Appeal and not by appealing directto that court. I
I shall first discuss the argument of counsel for thedefendant-respondent that the order in question is a judgment ororder having the effect of a "final judgment". He submitted that adirect appeal to the Court of Appeal lies not only from a judgmententered in terms of section 184 of the C.P.C., but also from any finalorder which finally disposes of the rights of parties, and that any otherorder made in the course of any action is an interlocutory order and anappeal to the Court of Appeal against such an order lies only byobtaining the leave of the Court of Appeal.
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/Section 754 provides for appeal from decisions of the original courtin any civil action to the Court of Appeal. These decisions may take theform of -(a) Judgment
Kb) Order having the effect of a final judgment {final orders) and(c) Any other orders (interlocutory orders)
Thus a final order is one that has the effect of a final judgmentbetween the parties. All other orders are interlocutory. In connectionwith the correct procedure for appeal, a crucial question arises ;-whatis the test for determining whether an order is “final" or'interlocutory'?.
On this point certain English cases and judgments of the PrivyCouncil, which have been followed by our courts serve as a guidinglight. In Salaman v. Warner, (1) the defendants had in their defenceraised a point of law that the statement of claim filed by the plaintiff didnot disclose any cause of action. The Divisional Bench, before whichthe case came up for hearing, upheld the defendants' plea anddismissed the action with costs. In appeal, a question having arisen asto whether the order in question was a final order or an interlocutoryone, Lord Esher M.R.Jaid down the test for determining the questionas follows :
"The question must depend on what would be the result of thedecision of the Divisional Court, assuming it to be given in favour ofeither of the parties. If their decision, whichever way it is given, will,if it stands finally dispose of the matter in dispute, I think that for thepurpose of these Rules it is final. On the other hand, if their decision,if given in one way, will finally dispose of the matter in dispute, but. ifgiven in the other, will allow the action to go on, then I think it is notfinal, but interlocutory."
Fry. L. J., expounded the same test in the following words :
'I conceive that an order is 'final' only where it is made upon anapplication or other proceeding which must, whether suchapplication or other proceeding fail or succeed,- determine theaction. Conversely I think that an order is interlocutory where itcannot be affirmed that in either event the action will be determined.Applying this test to the present case, it is obvious that the orderhere was made ort an application of which the result would not inone event be final. Therefore this is an interlocutory order."
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"Lopes L.J., enunciated the same test thus :
"I think that a judgment or order will be final within the meaning ofthe Rules, when whichever way it went it would finally determine therights of the parties."
In Bozson v. Altrincham Urban District Council (2) an order wasmade in an action brought to recover damages for breach of contract,that the question of liability and breach of contract only was to be triedand that the rest of the case, if any, was to go to an official referee.The trial Judge held that there was no binding contract between theparties and made an order dismissing the action. The question arosewhether the order was a final or interlocutory order, for the purpose ofappeal
Lord Alverstone, C. J.. then proceeded to lay down the proper testin the following words : "It seems to me that the real test fordetermining this question ought to be this : Does the judgment ororder, as made, finally dispose of the rights of the parties ? If it does,then I think it ought to be treated as a final order, but if it does not. it isthen, in my opinion an interlocutory order". The Earl of Halsbury alsotook the view that the order appealed from was a final order. SwinfenEady L.J., in Isaac & Sons v. Salbstein (3) reviewed all the earlierauthorities and approved the test of finality stated by Lord AlverstoneC J.. as putting the matter on the true foundation that what must belooked at is the order under appeal and whether it finally disposes ofthe rights of the parties.
In the case ot Abdul Rahman and others v. Cassim & Sons (4} thePrivy Council made a clear pronouncement on these conflicting views,by adopting the test set down in Bozson's case. In this case it wouldappear that the suit was dismissed by the trial court on a preliminarypoint. The High Court reversed the decision of the trial court andpassed an order remanding the suit for trial on the other issues. TheHigh Court thereafter granted the necessary certificate under section109 of the Indian C.P.C. Before the Privy Council however apreliminary objection was taken on behalf of the respondent that acertificate was wrongly granted and, as the order appealed from wasan interlocutory order, the appeal was incompetent. Their Lordships ofthe Privy Council held that the order of remand would no doubt decidean important and even vital issue in the case. But, in spite of it, it couldnot be treated to be a final order, as it left the suit alive and provided
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for its trial in the ordinary way. The preliminary objection wasaccordingly allowed by Their Lordships of the Privy Council and theappeal dismissed. With regard to the test for determining the finality ofthe order, in this case the Privy Council after referring to the judgmentof^Lord Cave in the case of Ramchand Manjimal v. GoverdhandasVishandas Ratanchand and others (5) clearly accepted the test laiddown in Bozson's case mentioned above.
The relevant portion of Their Lordships judgment is as follows :
"Lord Cave in delivering the judgment of the Board laid down, as aresult of an examination of certain cases decided in the EnglishCourts, that the test of finality is whether the order ‘finally disposesof the rights of the parties', and he held ‘that the order then underappeal did not finally dispose of their rights, but left them to bedetermined by the courts in the ordinary way. It should be noted thatthe appellate Court in India was of opinion that the order it had madewent to the root of the suit, namely, the jurisdiction of the court toentertain it, and it was for this reason that the order was thought tobe final and the certificate granted. But this was not sufficient. Thefinality must be a finality in relation to the suit. If after the order, thesuit is still a live suit in which the rights of the parties have still to bedetermined, no appeal lies against it under s. 109 (a) of the Code(India)."
To put the matter beyond the pale of doubt Their Lordships againclarified the position by applying the same test to the facts of the casebefore them
'The effect of the Order from which it is here sought to appealwas hot to dispose finally the rights of the parties. It no doubtdecided an important and even a vital issue in the case, but it leavesthe suit alive and provided for its trial in the ordinary way."
In the case of Ramchand Manjimal v. Goverdhandas VishandasRatanchand (supra) an application was made to the trial court for astay of proceedings with a view to the issue being referred to anArbitrator.. The first court granted stay, but on appeal this wasreversed by the High Court. The court however granted the necessarycertificate to appeal to the Privy Council on the ground that the orderrefusing the stay was a final order. On a preliminary objection beingtaken on behalf of the respondent, the Privy Council held that the orderwas not a final order and the appeal therefore was incompetent.
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Viscount Cave, in his judgment, referred both to the test in Sataman'scase (supra), as well as to the test laid down in Bozson's case (supra)and observed as follows :
"The effect of those and other judgments is that an order is final ifit finally disposes of the rights of the parties. The orders now underappeal do not finally dispose of those rights, but leave them to bedetermined by the courts in the ordinary way."
It will thus appear that the Privy Council finally laid down in AbdulRahman's case (supra) the test formulated in Bozson's case as thetest to be adopted by the court to distinguish an interlocutory orderfrom a final order.
As recently as 1982, in Haron v. Central Securities (6) the PrivyCouncil approved the practice of the Federal Court of Malaysiaapplying Lord Alverston. C.J.'s test in Bozson's case, in determiningwhether an order is final or interlocutory and observed that TheirLordships were unable to find any error in this reasoning and that, onthe contrary, they felt entitled to say that the test was both sound andconvenient.
The test laid down in Bozson's case has been applied by our courtsin order to determine whether an order is final or interlocutory.Following Bozson's case it was held in Settlement Officer v. VanderPoorten (7)
" The test of finality is whether the order 'finally disposes of therights of the parties.’ Where the order does not finally dispose ofthose rights, but leaves them 'to be determined by the courts in theordinary way', the order is not final,’
This view of the law was reiterated in Fernando v. ChittamparamChettiar, (8). In this case where the Supreme Court vacated the orderof abatement entered by the District Court under section 402 of theCivil Procedure Code and sent the case back for trial, it was held thatthe order of the Supreme Court was not a final order for the purpose ofright of appeal under Rule 1 (A) of the schedule to the Appeals (P C )Ordinance. The court held that the order of the Supreme Court did notfinally dispose of the rights of the parties.
"It left them ‘to be determined by the court in the ordinary way'.The finality was not a finality in relation to the^uit which was still alive one in which the rights of the parties have still to bedetermined."
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Following the judgment of the Privy Council in Krishna Pershad Singhv. Mori Chand, (9) it was held in the case of Usoof v. The NationalBank of India Ltd. (10) that there can be a final order or judgment evenin execution proceedings, whether those proceedings are between theparties to the action or not. The court held that the judgment of theSupreme Court dismissing an appeal from the order of the DistrictCourt, refusing to set aside the sale of a property in execution of amortgage decree is a 'final judgment' within the meaning of Rule 1Aof the schedule to the Appeals (Privy Council) Ordinance. The courtheld that “so far as the judgment debtors in this case are concerned,they have, by the judgment of this court, finally lost their rights in themortgaged property, and the execution proceedings are no longer liveproceedings,"
In the judgment of the Privy Council in Krishna Pershad Singh v. MotiChand (supra) which has been followed in Subramaniam v. Soysa (11)and m Usoof v. The National Bank of India Ltd. (supra),Lord Moultonheld that the order of the High Court refusing to set aside the sale,where the property sold in execution of the decree was purchased bythe judgment creditor, was a final order which dealt finally with therights of the parties. Referring to the decision of the Privy Council.Sansom. J. observed in the Usoof v. The National Bank of India Ltd.(supra)
"I regard that decision as authority for the view that there can be afinal order or judgment even in execution proceedings between theparties to the action. It seems to me to dispose of the argument thatwhen the mortgage decree was entered in this action, it had beenfinally determined, and that there should be no further finaljudgment as between the parties. While it is'true that the judgmentis not final unless it finally disposes of the rights of the parties. I donot see why there cannot be a final judgment in executionproceedings, whether these proceedings are between the parties tcthe action or not. and so far as the judgment debtors in this caseare concerned, they have, by the judgment of this court, finally losttheir rights in the mortgaged property, and the executionproceedings are no longer live proceedings.'
In my judgment in Mohamed Haniffa Rasheed v. MohamedAh (12),agreed with this statement of the law.
What is a final judgment ? A final judgment has been defined to be a'judgment obtained in an action by which a previously existing liability
SCSiriwardena v. Air Ceylon Limited (Sharvananda. J.)297
of the defendant to the plaintiff is ascertained or established, – unlessthere is something to show an intention to use the words in a moreextended sense"-Per Cotton, L. J., in Ex parte Chinery{ 13),
This definition was adopted by Lord Esher in Onslow vsCommissioners of Inland Revenue (14). In Ex parte Moore (15) theEarl of Selborne, L.C., expounded the meaning of a final judgment inthe following words :
" To constitute an order a final judgment nothing more is
necessary than that there should be a proper litis contestatio, and a
final adjudication between the parties to it on the merits."
Black in his book on Judgments defined "judgment" as thedetermination or sentence of the law, pronounced by a competentjudge, or court as a result of an action or proceedings instituted insuch court affirming that upon the matters submitted for decision, alegal duty or liability does or does not exist. An interlocutory'judgment is one which determines some preliminary or subordinatepoint or plea or settles some step, question of default arising in theprogress of the cause, but does not adjudicate the ultimate rights ofthe parties or finally put the case out of the court."
It would appear from the above authorities, for an 'order' to havethe effect of a final judgment and to qualify to be a 'judgment' undersection 754 (5) of the C.P.C.-
j 1) It must be an order finely disposing of the rights of the parties.
The order cannot be treated to be a final order if the suit oraction is still left a live suit or action for the purpose ofdetermining the rights and liabilities of the parties in the ordinaryway.
The finality of the order must be determined in relation to thesuit.
The mere fact that a cardinal point in the suit has been decidedor even a vital and important issue determined in the case, isnot enough to make an order, a final one.
The order that is referred to in Section 754 (2) and defined in754 (5) is an interlocutory order in contradistinction to an order whichfinally disposes of the rights of the parties. An interlocutory order does
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not have the effect of a final judgment, as it does not finally dispose ofthe rights of the parties, but leaves the suit alive for the purpose ofdetermining the rights of parties in the ordinary way.
If my view the word "judgment" in 754 (1) and 754 (5) of theC P C has been used in the sense of a final determination of the rightsof the parties in the proceedings, and comprises final orders besidesthe final declaration or determination of the rights of parties whichculminates m the entering of a decree in terms of Section 188 of theC P C. It is not restricted to the judgment referred to in section 184 ofthe C P C It is much wider.
I cannot, in view of the special definition of "judgment" in section754 (b| of the C.P.C., accept the restricted construction sought to beplaced by counsel for the plaintiff-appellant that there can be only onejudgment and that is the judgment referred to in section 184 of theC.P.C. A court may in the course of an action pronounce judgment interms of section 184 of the C.P.C., and also make orders having theeffect of a final judgment. Against such orders the proper remedy is adirect appeal to the Court of Appeal. It may also make interlocutoryorders which do not finally dispose of the lights and liabilities of theparties ; against such orders the remedy is an application for leave toappeal under section 754 (2) of the C.P.C.
In the instant case, the District Judge, in the exercise of the court’spower under section 189 of the C.P.C. amended the earlier decreeentered in this case by his order dated 10.5.82. The amended decreesupersedes the earlier decree and finally disposes of the rights of theparties, leaving nothing to be done for the purpose of determining therights and liabilities of the parties. Though the rights of the parties hadbeen determined by the original judgment dated 13.5.1980, yet assection 189 of the C.P.C. provides for the amendment of suchjudgment and decree, the amended judgment and decree dated
gets substituted for the original judgment and it is theamended judgment and decree which, unless revised in appeal, finallydecides the rights of the parties and binds them. The order which issought to be appealed against is the order that has to be looked at fordeciding whether it Is a "judgment" or “order" within the meaning ofsection 754 (5) of the C.P.C.
CA
Appuhamy v Prematal
299
For the reasons stated above, the order dated 10.5.82, amendingthe earlier judgment and decree, is a "judgment" within the meaning ofsection 754 (1) and 754 (5) of the C.P.C. Since an appeal lay directto the Court of Appeal from the order dated 10.5.82, under section754 (1) of the C.P.C., the application for leave to appeal to the Cowtof Appeal, made by the plaintiff-appellant from the said order ismisconceived.
The appeal is dismissed with costs. In terms of the order of thiscourt dated 13 5.84, the plaintiff-appellant shall pay thedefendant-respondent the costs of the application for special leave toappeal also.
COUN-THOME, J.-l agreeRANASINGHE, J.-l agreeAppeal dismissed.