M. A. RAZAK & CO. LTD v. LANKA WALLTILES LTD

001-SLLR-SLLR-2000-V-1-M.-A.-RAZAK-CO.-LTD-v.-LANKA-WALLTILES-LTD.pdf


M. A. RAZAK & CO. LTD
v.LANKA WALLTILES LTD
SUPREME COURTDHEERARATNE, J.WADUGODAPITIYA. J. ANDBANDARANAYAKE. J.
S.C. APPEAL NO. 39/99CA NO. 316/88 (F)
DC COLOMBO NO. 82984 M4lh NOVEMBER. 1999
Admiralty jurisdiction ■ Applicable law during the period 2.7.79 (cominginto force of the Judicature Act of 1978) and 31.10.83 (coming into force ofthe Admiralty Jurisdiction Act of1983) – Claim relating to carriage of goodsin a ship – Jurisdiction of the District Court – Section 19 of the JudicatureAct. No. 2 of 1978.
The plaintiff – respondent (the plaintiff) was a manufacturer and exporterof ceramic tiles and the defendant – appellant (the defendant) was thelicensed shipping agent of the vessel MV Falak. The defendant obtainedfrom the Central Freight Bureau shipping space for the plaintiff on thesaid vessel sailing in July 1979 for approximately 340 metric tons ofceramic tiles. Thereafter, on the invitation of the defendant, 333 – 31metric tons of ceramic tiles belonging to the plaintiff were loaded in MVFalak. Soon thereafter the plaintiff became aware that the vessel wasincapable of moving on its own steam and was under arrest in conse-quence of an order made by the Admiralty High Court of Colombo. Theplaintiff promptly moved the High Court and in consequence of an order,obtained from court, managed to get the cargo offloaded from the vessel.The plaintiff claimed that the operation of off loading cost himRs. 333,310/= . The plaintiff alleged that at the time accepted for loadingthe defendants were aware that the ship was under seizure on a courtorder and that its agents and servants fraudulently or negligently failedto notice that fact to the plaintiff. The plaintiff filed an action in theDistrict Court and obtained judgement for the recovery of the sum ofRs. 333,310/=. The action was filed on the 13th July 1979 after theJudicature Act. No. 2 of 1978 came into force on 2.7.79 and before theAdmiralty Jurisdiction Act, No. 40 of 1983 was brought into operation on1.11.83.
2
Sri ixinka Law Reports
120001 l Sri LR.
Held :
The High Court sitting in the Judicial Zone of Colombo had admiraltyjurisdiction during the period between 2.7.79 and 31.10.83 in termsof section 13 (1) of the Judicature Act read with section 3 (2) ofthe Administration of Justice Law No. 44 of 1973 which had notbeen repealed by the AJL and which kept in force the Admiralty Rules of1883.
Section 13(1) of the Judicature Act does not confer exclusivejurisdiction on the High Court in Admiralty matters. In England anaggrieved party may institute proceedings in the Queens Bench Divisionin respect of certain matters within admiralty jurisdiction. Similarly, theDistrict Court had concurrent jurisdiction to hear and determine theplaintiff s action which entailed consideration of a contract, of carriage ofgoods in a ship. This view is supported by the wording of section 19 ofthe Judicature Act.
Cases referred to :
Antonis P Lemos (HL) 1985 (1) All E R 695
Mohamed Saleh Bawzir u. MV Ayesha EX Pardesi and another (C.A)(1986) 1 Sri LR314
P. B. Umbichy Lid. u. MV Shantha Rohan SC No. 32/91A SC minutes27th July 1993.
_ The Government of United States oj America v. Vie ship "Valiant
Enterprise4' (1961)63 NLR 337
Snia Viscosa Societa Nazionale Indastria Applicazioni Viscosa u. VieShip Yuri Maru 1927 AC 906
Hendrik Appuhamy u. John Appuhamy (1966) 69 NLR 29
APPEAL from the judgement of the Court of Appeal
Sanjeewa Jayawardena for defendant – appellant.
Bimal Rajapaksa with G.S.K. Hirimuthugoda and Ajith Anawatta forplaintiff – respondent.
Cur. adv. uult.
sc
M. A. Razak & Co. Ltd. u. Lanka Walltiles Ltd. (Dheeraratne. J.)
3
December 8, 1999DHEERARATNE, J.
At the time material to this action the plaintiff – respond-ent (plaintiff) was a manufacturer and ah exporter of ceramictiles and the defendant appellant (defendant) was the licensedshipping agent of the vessel MV Falak. The plaintiff requestedthe Central Freight Bureau (CFB) for allocation of shippingspace on a vessel calling on the ports of Doha and Quatar forapproximately 340 metric tons of ceramic tiles. On thestrength of representations made by the defendant to the CFB,the CFB informed the plaintiff that shipping space was avail-able on MV Falak sailing in July 1979. The defendant throughits servants or agents, too informed the plaintiff that the saidvessel was ready to accept cargo for shipping and to makeavailable the cargo for loading. Accordingly, 333-31 metrictons of ceramic tiles belonging to the plaintiff were loaded onmv Falak. Soon thereafter, the plaintiff became aware that thevessel MV Falak was incapable of moving on its own steam andwas under arrest pursuant to an order made by the AdmiraltyHigh Court of Colombo. The plaintiff promptly moved the HighCourt and in consequence of an order obtained from Court,managed to get the cargo offloaded from the vessel. Accordingto the plaintiff, the operation of off loading cost him a sum ofRs. 333,310/=. The plaintiff alleged that at the time the cargowas accepted for loading, the defendant was fully aware thatthe ship was under seizure by order of Court and that itsservants and agents fraudulently or negligently failed to notifythat fact to the plaintiff. The plaintiff thereafter filed this actionagainst the defendant in the District Court of Colombo seekinginter alia the recovery of the said sum of Rs. 333,310/=. TheDistrict Court gave judgment in favour of the plaintiff and onappeal by the defendant, the Court of Appeal affirmed thatjudgment. The defendant has now appealed to this Court. Ifone were to look at the nature of the plaintiff s cause of action,it is a claim arising out of an agreement relating to carriage ofgoods in a ship or to the use or hire of a ship, which attractsadmiralty law. An action founded on the law of delict could fallwithin such a claim. See Antonis P Lemos (HL)111-
4
Sri Lanka Law Reports
1200011 Sri LR.
The only matter, argued before us. quite rightly too. wasthe interesting question as to whether the District Court hadjurisdiction to hear and determine the action of the plaintiffas an action based on delict or whether the High Court ofAdmiralty had exclusive jurisdiction as an action relatingto admiralty law. It is material to observe in this connection,that the action was filed on 13,h July 1979. before the Admi-ralty Jurisdiction Act of 1983. currently in force, came intooperation. It is unnecessary for the decision of this caseto trace the history of the Admiralty jurisdiction of thisIsland: that has been admirably done by the Court of Appealin the case of Mohamed Saleh Bawazir Vs. MV Ayesha ExPardesi and another12'- In order to examine the state ofadmiralty law that was applicable to Sri Lanka, at the time thepresent action was filed, namely on 13"’ July 1979, somereference to the legislation on the subject enacted earlier,becomes necessary.
Rules were made by the Order in Council dated 23.8.1883under the Vice Admiralty Courts Act 1863 of the UK and weremade applicable to this Island by Government Gazette of7.12.1883. Subsequently, the local Ceylon courts of Admi-ralty Ordinance No. 2 of 1891 was enacted and by virtue ofsection 23 of that Ordinance, the admiralty rules alreadypromulgated were kept alive. (These rules were later repro-duced in Volume 1 of the 1956 Subsidiary Legislation). TheAdministration of Justice Law No. 44 of 1973 (AJL). by itssubsection 3 (1). repealed among several enactments, theCeylon Courts of Admiralty Ordinance, but by its subsection3 (2). all rules in force relating to the exercise of jurisdiction ofCourts established under the several enactments repealed bythat Law, were kept in force. Section 54 of the AJL defined"admiralty jurisdiction” to mean “unless otherwise providedfor by written law the admiralty jurisdiction for the time beingof the High Court of England." This provision attracted theapplication to Sri Lanka of the Administration of Justice Act of1956 of the United Kingdom (later substituted by the Supreme
sc
M. A. Raza/c & Co. Ltd. v. Lanka Walltiles Ltd. (Dheeraratrle. J.j
5
Court Act of 1981). The Judicature Act No. 2 of 1978 of SriLanka, by its section 62 repealed Chapter 1 of the AJL whichcontained section 54 but not subsection 3 (2.) thus theadmiralty rules of 1883 were kept in force. See the case ofMohamed Saleh Bawazir (supra).
The Judicature Act No. 2 of 1978 is the source of thejurisdictions of the several Courts of First Instance. Subsec-tion 13 (1) reads "Admiralty jurisdiction is hereby vested in theHigh Court and shall be ordinarily exercised by a judge of theHigh Court sitting in the judicial zone of Colombo" (Proviso isomitted). Subsection 13 (2) reads "The admiralty jurisdictionvested in the High Court shall be as provided for by the law forthe time being in force". By the repeal of section 54 of the AJL,the Judicature Act of 1956 of the United kingdom whichspecified "the admiralty jurisdiction for the time being of theHigh Court of England", ceased to be applicable to Sri Lanka;and until the Admiralty Act No. 40 of 1983 came into forcethere was no law as "provided for by the law for the time beingin force" in terms of subsection 13 (2) of the Judicature Act of1978. Was there any admiralty law in operation in Sri Lankabetween the period 2.7.79 (coming into force of the JudicatureAct of 1978) and 31.10.83 (coming into force of the AdmiraltyJurisdiction Act No. 40 of 1983)?. This question was consid-ered by this Court in the case of P.B. Umbichy Ltd., Vs. MVShantha Rohan! " which reversed the decision of the Court ofAppeal reported in 1994 (3) SLR 54, the latter of which heldthat there was no admiralty law applicable to Sri Lanka duringthat period.
In that case Mark Fernando J. stated “section 13(1) vestedadmiralty jurisdiction’ in the High Court. That section, takenas a whole, is capable of 2 constructions. The first view is thatadmiralty jurisdiction is exhaustively defined by sub section
, ie. as being such jurisdiction and only such jurisdiction, asis provided for by law for the time being in force; there being nosuch law in force on 31.8.83, the High Court had no jurisdic-tion. However, section 13(2) seems somewhat wider than the
6
Sri Lanka Law Reports
120001 ISriLR.
usual (exhaustive) definition clause, which would have pro-vided that admiralty jurisdiction in section 13(1) means suchjurisdiction as is conferred on [or provided for] by the law of thetime being in force.' Had there been a statute which providedfor admiralty jurisdiction, such statute would have applied,even if section 13(2) had been omitted; to that extent section13(2) is superfluous. In any event, even if it be regarded as adefinition clause, it is more in the nature of an inclusive, ratherthan an exhaustive definition.
The 2nd interpretation is that ‘admiralty jurisdiction’ insection 13(1) did have a meaning, independently of subsection(2); namely, the ordinary meaning of the phrase considered inthe context of the preceding one hundred years; the specialcharacteristic of admiralty jurisdiction, as commonly under-stood, was that it recognised an action in rem wherein a vesselcould be arrested, or seized, as security for the satisfaction ofthe claim if successful; and the nature and extent of thatjurisdiction could also be ascertained by a consideration of thepowers conferred or recognized by the Admiralty Rules. Thatinterpretation, however, renders section 13(2) superfluous, aseven without it Parliament could later have amended or addedto the admiralty jurisdiction of the High Court.
1 have therefore to choose between an interpretationwhich renders section 13(1) a futility, and another whichrenders section 13(2) superfluous. Considered in isolation,the first interpretation seems more logical. But consideringthe history of admiralty jurisdiction and the purpose of theJudicature Act, one cannot discover a legislative intent to takeaway a jurisdiction recognised for almonst a century; and thefact that Admiralty Rules were kept in force contradicts anysuch intention. The Judicature Act was intended to ensure orregulate the smooth working of the judicial system, and thealternative interpretation which will introduce uncertainty,friction or confusion into the working of the system must berejected (Shannon Realties Ltd.., Vs. Ville de St. Michel 1924AC 185 192-3). Had section 13(1) stood alone, admiralty
sc
M. A. Razak & Co. Ltd. v. Lanka Wattttles Ltd. (Dheeraratne. J.)
7
jurisdiction’ would have had to be given a meaning, andthere is no doubt that it would have included a claim forloss of or damage to the goods carried in a ship or a claimarising out of any agreement relating to the carriage of goodsin a ship.”
I am in respectful agreement with the abovementioneddicta of Mark Fernando J. However, I am inclined to think thatthe substantive English admiralty law was applicable duringthe period in question also for a different reason. Theadmiralty rules, as observed earlier were kept alive, whichwere mainly procedural in nature. Section 2 of the Civil LawOrdinance No. 5 of 1852 (as amended) reads ‘The law to behereafter administered in Sri Lanka in respect of all contractsof questions arising within the same relating to ships and tothe property therein, and to the owners thereof, the behaviourof the master and mariners their respective rights, duties, andliabilities, relating to the carriage of passengers and goods byship, to stoppage in transitu, to freight, demurrage, insurance,salvage, average, collision between ships, to bills of lading, andgenerally to all maritime matters, shall be the same in respectof the said matters as would be administered in England in thelike case at the corresponding period, if the contract had beenentered into or if the act in respect of which any such questionshall have arisen had been done in England, unless in any caseother provision is or shall be made by any enactment now inforce in Sri Lanka or hereafter to be enacted.”
I see no reason why, during this period where there was nosubstantive enactment with regard to admiralty law, that onthe application of the Civil Law Ordinance, the correspondingEnglish Law did not apply to Sri Lanka. 1 find support for thisview from the illuminatingjudgmentofH.N.G. Fernando J. (ashe then was) in the case of The Government of United States ofAmerica Vs. The ship “Valiant Enterprise”141 Rejecting theargument, that section 2 of the Civil Law Ordinance, which Ihave cited above, rendered inapplicable to this Island, the
8
Sri Lanka Law Reports
120001 I Sri LR.
decision of the Privy Council in Snia Viscosa Societa NazionaleIndustriaApplicazioniViscosaVs. The Ship Yuri Maru[5K H.N.G.Fernando J. at page 343 stated "That provision only means inmy opinion that this Court must administer the substantivelaw which would at the given time be administered in themaritime matters by the High Court, provided of course thatthis Court has aliunde the jurisdiction to entertain a suit inrespect of the particular matter involved." So much as regardsthe substantive law of admiralty applicable during the periodin question.
The relevent part of section 19 of the Judicature Act whichconfers the jurisdiction of the District Court states “EveryDistrict Court shall be a court of record and shall within itsdistrict have unlimited original jurisdiction in all civil, rev-enue, trust, insolvency and testamentary matters except suchof the aforesaid matters as are by this Act or any other writtenlaw exclusively assigned by way of original jurisdiction to any
other court or vested in any other authority" (emphasis
added) It could be observed that section 13 does not seem toconfer exclusive jurisdiction to the High Court. Learnedcounsel for the defendant, quite forcefully contended, that weshould apply the ratio in the case of Hendrick Appuhamy V.John Appuhamy161 He submitted that where the legislaturehas provided for special machinery to which a party shouldresort to in order to obtain relief, he cannot resort to any otherforum. In the instant case, one cannot contend that any newrights have been created by admiralty law. As Sansoni CJ.observed in that case “it seems clear that special rights havebeen conferred by the Act [Paddy Lands Act] upon tenantcultivators and special liabilities have been imposed on land-lords, quite distinct from their common law rights and liabili-ties. The Act make special provision for what is to happen incase of any breach of the provisions. Most significant, for thepurpose of this appeal are the special rights conferred uponthe tenant cultivators with regard to the quiet and undisturbedpossession of their extents of paddy land and their restoration
sc
M. A. Razaic & Co. Ltd. v. Lanka Walltiles Ltd. (Dheeraratne. J.)
9
to possession if evicted. It is clear that since the Act waspassed, the landowner of a paddy land no longer has thefreedom he previously enjoyed in regard to the use andoccupation of that land or the manner of dealing with it. Hiscommon law rights have been considarably curtailed, nodoubt in the interest of good paddy cultivation and thecountry’s food supply." There is no creation of such new rightsand liabilities in the instant case and the .case of HendrickAppuhamy has no application.
It would appear that even in the United Kingdom, unlessa party desires to gain advantage of the procedure by way ofobtaining an admiralty writ, he is free to invoke the jurisdictionof the Queen’s Bench Division to obtain relief. British Ship-ping Laws – Admiralty Practise by Hewson, Colinvaux and MeGuffieVol. 1 (1964) page 43 states, "In cases where the plaintiffwishes to sue the English defendant, the main question to beconsidered is whether, assuming that the cause of action iswithin the list set out in section 1(1) of the Administration ofJustice Act, 1956, any advantage is obtainable by issuing anAdmiralty writ.”
I shall pause here to mention that section 1(1) enumer-ates the several admiralty matters over which the Court hasjurisdiction, one being “any claim arising out of any agreementrelating to the carriage of goods in a ship or to the use or hireof a ship.”
The aforesaid authority continues “There are, of course,certain matters within Admiralty jurisdiction of the High Courtwhich must be assigned to the Admiralty Division, thesenormally being (a) the actions which come under the headingof “collision” and (b) limitation actions under section 504 of theMerchant Shipping Act, 1894. The majority, however, ofthe various actions are within the Admiralty jurisdiction inpersonam of the High Court could be tried in the QueensBench Division.
10
Sri Lanka Law Reports
120001 1 Sri LR.
As will be observed later, there is no proceedure in anAdmiralty action in rem equivalent to that under Order 13, rule1 et seq: for obtaining judgment in default of appearance, orthat under Order 19 rule 2 et seq: for obtaining judgment indefault of defence (nor it is possible in Admiralty to apply forsummary judgment under Order 14. and this applies whetherthe action is in rem or in personam). The equivalent in anAdmiralty action in rem is an application by motion forjudgment in default under Order 75, rule 20. which mustnecessarily take longer. Consequently if urgency is important,it may be better to institute the proceedings in the Queen'sBench Division, provided that service of the writ can be effectedand effected quickly, in order to take advantage of the quickerdefault procedure where it is known that the defendant has nodefence and is unlikely to employ delaying tactics. On theother hand, if the cause of action is one which could be takenin either division and the defendant has a ship or otherproperty (usually cargo or freight) in this country which couldbe arrested, the plaintiff by suing in rem has the advantage ofbeing able to effect service of his writ without any difficulity ordelay and to obtain security for his claim at the very beginningof the action. This, however, is subject to other considerationswhich will be mentioned later.
If the intended plaintiffs claim is one which will involvea consideration of technicalities of the navigation of shipsor the ownership or the mortgage of ships, then quite clearlythe plaintiffs choice would be the Admiralty Division. If.however, the case is one involving a claim for loss of or damageto cargo, or entails consideration of contracts of carriage ofgoods in a ship, or concerns a claim to recover a generalaverage contribution, then the choice may be to instituteproceedings in the Queen’s Bench Division and transfer to theCommercial List.”
I hold that the District Court had concurrent jurisdictionto hear and determine the plaintiffs action. For the above
sc
M. A. Razak & Co. Ltd. v. Lanka Watttiles Ltd. (Dheeraratne. J.)
11
reasons I affirm the judgment of the District Court and dismissthe Appeal. The appellant will pay the respondent a sum ofRs. 25,000/= as costs of this Court.
WADUGODAPITIYA, J.1 agree.BANDARANAYAKE, J.1 agree.
Appeal dismissed.