001-SLLR-SLLR-2003-V-3-ORETRA-ENTERPRISES-OTHERS-v.-WIJEKOON.pdf
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Oretra Enterprises & Others v Wijekoon
(Somawansa.J.)
1
ORETRA ENTERPRISES & OTHERSv
WIJEKOONCOURT OF APPEALDISSANAYAKE J.,
SOMAWANSAJ.,'
D.C. MT. LAVINIA 2950/MC.A. 691/93 (F)
FEBRUARY 21, 2002MARCH 25, 2002MAY 21, 2002JULY 9, 2002
Accident – Negligent driving – Misjoinder of parties – Can a partnership besued? – Applicability of the Law of England – Introduction of Law of EnglandOrdinance, 5 of 1951, Section 3 – Code of Civil Procedure – Procedural mat-ters – Partnership – is it a juristic person ?
Held :
Partnerships are not juristic persons and are not recognised by our lawas separate entities.
In Sri Lanka all procedural matters are dealt with exhaustively and com-prehensively in the Code of Civil Procedure. In matters relating to pro-cedure no Court would have recourse to the laws of England eitherthrough the Introduction of the Laws of England Ordinance or by anyother enactment.
Under and in terms of Section 3 of the above Ordinace though the Lawsof England are applicable in respect of partnerships, it is certainly notapplicable in respect of procedural matters such as the status of a partyinstituting action in a Court of Law. In Sri Lanka if a partnership has to besued, the action should be brought against all its members.
APPEAL from the Judgment of the District Court of Mt. Lavinia.
Cases referred to :
Meina Mohamed v Shahul Hameed – Vol.xi CLW 61
Letchemanan v Shanmugam 8 NLR 121 –
Suppiah v Paliahpillai – 14 NLR 392 .
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Peter Jayasekera with Gamini Pieris for Defendant Appellants.
Jayatissa Herath for Plaintiff Respondent.
Cur.adv.vutt
November 22, 2002SOMAWANSA, J.
The plaintiff-respondent instituted action in the District Court of oiMt. Lavinia against the 2nd, 3rd, 4th and 5th defendants-appellantsand two other defendants claiming damages in a sum of Rs.800,000/- jointly and severally on account of injuries sustained byher in consequence of an accident that occurred on 02.08.1982 asa result of negligent driving of the petrol bowser bearing registrationNo. 27 Sri 6773 by the 6th defendant in the course of his employ-ment under and or under the control and management of the 1stdefendant and 3rd to 5th defendants-appellants. It was the positionof the plaintiff-respondent that the 1 st defendant was the registered 10owner of the said petrol bowser and the 2nd to 5th defendants-appellants who were transporters of petroleum products from thePetroleum Corporation Kolonnawa terminal to various filling sta-tions had taken on lease the said petrol bowser from the former andthat on 02.08.1982 she was knocked down by the said petrol bows-er bearing registration No. 27 Sri 6773 while being driven negli-gently by the 6th defendant causing multiple injuries to her. Neitherthe 1st defendant nor the 2nd to 5th defendants-appellants deniedthe occurrence of the said accident on 02.08.1982 or that the saidpetrol bowser was driven by the 6th defendant at the time of the 20accident.
The 1st defendant while admitting that he was the registeredowner of the said petrol bowser denied any liability. The position ofthe 2nd to 5th defendants-appellants was that the 3rd defendant-appellant was not a partner of the 2nd defendant-appellant part-nership, that the said petrol bowser bearing No. 27 Sri 6773 wasleased to Overseas Recruitment and Travels Ltd., together with thedriver by the 1st defendant at-the time the accident occurred andwas engaged in the work of the said company. Therefore the 2ndto 5th defendants-appellants denied any liability to pay damages to 30
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Oretra Enterprises & Others v Wijekoon
(Somawansa.J.)
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the plaintiff-respondent as they bore no legal liability for the negli-gence of the driver the 6th defendant. They also averred that therewas a misjoinder of parties and causes of action and prayed for adismissal of the plaintiff-respondent's action.
At the commencement of the trial 6 admissions were recorded viz :
that at. the time relevent to this action the 1st defendant wasthe registered owner of vehicle No 27 Sri 6773.
as stated in paragraph 6 of the answer of 2nd to 5th defen-dants-appellants the 4th and 5th defendants-appellants areshareholders of the 2nd defendant-appellant partnership. 40
as stated in paragraph 7 of the answer of the 2nd to 5thdefendants-appellants that at the time the accident occurredM/S. Overseas Recruitment and Travels Ltd., had hired thesaid vehicle with its driver for its work or business activities.
By 4th to 6th admissions parties admitted that on 02.08.1982 thesaid vehicle 27 Sri 6773 met with an accident and as a result theplaintiff-respondent received physical injuries as stated in para-graph 10 of the answer of the 2nd to 5th defendants-appellants.
Five issues were raised on behalf of the plaintiff-respondentwhile 05 issues were raised on behalf of the 1st defendant and 04 soissues were raised on behalf of the 2nd to 5th defendants-appel-lants. Issue No. 08 raised by the 1st defendant was taken up forhearing as a preliminary issue and parties were directed to file writ-ten submissions. The learned District Judge by his order dated
held that in view of the said admission No.3, no causeof action has been disclosed against the 1st defendant and thatthere is a misjoinder of parties. Accordingly he discharged the 1stdefendant from the proceedings and proceeded with the trial. At theconclusion of the trial the learned District Judge by his judgmentdated 18.11.1993 held with the plaintiff-respondent. It is from the 60said judgment that the 2nd to 5th defendants-appellants have pre-ferred this appeal.
At the hearing of this appeal it was contended on behalf of the2nd to 5th defendants-appellants that the learned District Judgehad erred in holding that the 3rd defendant-appellant was a partnerof the 2nd defendant-appellant partnership and therefore was liable
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in damages. Issue No. 11 has been raised by the 2nd to 5th defen-dants-appellants on this basis that if the 3rd defendant-appellant isnot a shareholder of the 2nd defendant-appellant partnership, canthis action be maintained against him? The learned District Judgehas answered this issue in the affirmative holding that it is provedthat the 3rd defendant-appellant is a shareholder of the said part-nership.
However on a examination of the evidence led in this case, I amunable to find any evidence which would support this finding. In theabsence of any such evidence to establish the fact that the 3rddefendant-appellant is a shareholder of the 2nd defendant-appel-lant partnership, I am of the view that the learned District Judge haserred in coming to a finding that the 3rd defendant-appellant is ashareholder and that the action'could be maintained against him.This fact is conceded by the 2nd to 5th defendants-appellants inparagraph 06 of their written submissions dated 09.07.2002 whereit is stated that "at this stage it is conceded that at the time of theaccident the 3rd defendant has not been proved to be a partner ofthe 2nd defendant company". Accordingly the answer to issueNo. 11 has to be in the negative and the said answer has to be cor-rected to read as "3rd defendant-appellant is not a shareholder andtherefore this action cannot be maintained against him".Consequently the appeal of the 3rd defendant-appellant has to suc-ceed.
Another matter that was argued by the counsel for the 2nd to 5thdefendants-appellants is that the learned District Judge erred inholding that the 2nd defendant-appellant being a partnership couldbe sued in the partnership name. In support of this averment thecounsel quoted Weeramantry on Contract Vol. (01) page 542 –
"Partnerships are not juristic persons and are not recognised byour law as separate entities. It follows that partnership cannothold property in the partnership name nor can they sue or besued in the partnership name. The partnership is no more thana collection of separate individuals and these separate individu-als would be the owners of the property of the partnership.These separate individuals must be the plaintiffs or the defen-dants in any action by or against the partnership".
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Oretra Enterprises & Others v Wijekoon
(Somawansa.J.)
5
In Sri Lanka all procedural matters are dealt with exhaustivelyand comprehensively in the Code of Civil Procedure. In the cir-cumstances, in matters relating to procedure no Court would haverecourse to the laws of England either through the Introduction ofthe Law of England Ordinace No.5 of 1852 or by any other enact-ment. Therefore while it is possible that under and in terms ofSection 3 of the aforesaid law, the laws of England are applicablein respect of partnerships, it is certainly not applicable in respect ofprocedural matters such as the status of a party.instituting action ina court of law. So while it may be possible that an action could beinstituted in the name of a partnership in England the same will not. be possible in Sri Lanka in view of the procedural laws prevailing inSri Lanka. No where in the Civil Procedure Code does it state thatan action could be instituted in the name of the firm thereby alto-gether precluding the institution of such action. In drawing this dis-tinction Lyndley on Partnership (17th Edition 1995 at page 437)states that "Civil actions brought by partners against a third party orvice versa are governed by the same rules of procedure as otheractions, save that the partners may sue or be sued in the firmname. However this procedural nicety should not be permitted toobscure the importance of identifying the correct parties to such anaction particularly where the composition of the firm has notremained static".
The matter was put beyond any doubt by the judgment ofWijeyawardene CJ in Meina Mohamed v Shahul Hameed(1) wherehe stated that "rules of procedure are not binding on us though indeciding questions with respect to the law of partnership the law tobe administered is the same as would be administered in England".
The fact that the question of whether action should be institutedin the name of a firm is a procedural and not a substantive matteris clearly borne out by fact that the relevant English law is stated inthe Judicature Acts of England and is not a part of the substantivelaw relating to partnerships. This is further strengthened by the factthat the single only instance when an action could be instituted inthe name of a firm in Sri Lanka was during the existence of theAdministration of Justice Law No. 25 of 1974. However since therepeal of the said law, the Civil Procedure Code which has replacedthe said Law has not made any provision for an action by or against
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a firm in its own name. In the circumstances it has become an.inveterate practice to have an action instituted by or against a firmin the name of all its individual partners".
Drawing the aforesaid difference in the laws prevailing in SriLanka and the law of England H.W. Thambiah, Q.C. in thePrinciples of Ceylon Law at page 546 states "in England, in viewof the statutory provisions an action can be brought in the firm'sname, but in Cevlon if a partnership has to be sued, the actionshould be brought against all its members".150
Professor Weeramantry in his Law of Contracts states at page531:
“Our Code of Civil Procedure contains no provision similar. to the provision in the English rules made under theJudicature Act by which two or more persons who are co-part-ners may be authorized to sue in the name of the firm"
In the case of Letchemanan v Sanmugam <2> Layard CJ statedthat "there is no provision in our Procedure Code, such as there isin the English rules, made under the Judicature Act, which autho-rize any two or more persons claiming as co-partners and carrying 160on business within the jurisdiction of the High Court in England tosue in the name of the firm of which such partners were membersat the time of the accruing of the cause of action".
In the light of the above reasoning I am inclined to take the viewthat this action cannot be maintained as against the 2nd defendant-appellant which is a partnership and not a legal person in the eyeof the law.
It is to be noted that in the instant case the partnership has beenindependently sued and the names of the 4th and 5th defendants-appellants have not been identified as partners of the partnership, 170though it is so averred in the pleadings in the plaint. It is also to benoted that in the course of the evidence of the 3rd defendant-appel-lant it revealed that the said partnership consist of 3 partners andonly two of them have been made parties to this- action whileSumathipala Alahakoon the 3rd partner was not made a party tothis action. This I think is an error in the procedure which would ren-der the plaint to be dismissed.
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Orelra Enterprises & Others v Wijekoon
(Somawansa.J.)
7
In the case of Suppiah v Paliahpillai (3> it was held that all thepartners of the firm should have joined in the action. This is sobecause the plaintiff-respondent has no right to pick to sue from the isopartnership.
It appears that from the time the 1st defendant who was theowner and the insured was discharged from the proceedings theplaintiff-respondent, the Court and the defendants-appellants havegone on a voyage of discovery. It appears to me that the ordermade by the learned District Judge to discharge the 1 st defendantwho was the owner and the insured of the vehicle and the legallyliable employer of the driver, purely on written submissions was anerror. Be that as it may the fact that the accident did occur and thefact that the plaintiff-respondent was its victim and the fact that she 190did suffer injuries has been admitted and also has been proved.However the person or persons legally liable to compensate theplaintiff-respondent for the injuries sustained by her has not beenproved. In the circumstances it is my view that in fairness to the vic-tim of the accident I would set aside the judgment of the learnedDistrict Judge and send the case back to the District Court for a trialde novo with the right to amend the plaint if the plaintiff-respondentso desires.
I direct the Registrar of this Court to return the case record to theappropriate District Court forthwith and also direct the learned 200District Judge to hear and conclude the case expeditiously as hecan. Accordingly the appeal is allowed. However I award no costs.
DISSANAYAKE. J. – I agree.
Appeal allowed.
Case sent back for trial de novo with the right to amend the plaint.