039-SLLR-SLLR-2005-V-3-RATNAPALA-vs.-METRO-HOUSING-CONSTRUCTIONS-PVT-LTD.pdf
CA
Ratnapala vs
Metro Housing Constructions (Pvt) Ltd
217
RATNAPALAVSMETRO HOUSING CONSTRUCTIONS (PVT) LTDCOURT OF APPEAL.
SOMAWANSA, J. (P/CA).
WIMALACHANDRA, J.
CALA 115/2005.
DC MT LAVINIA1974/05/01.
April 25, 2005.
May 13, 2005.
Civil Procedure Code, sections 664 (1), 664(2) and 756(4) – Enjoining ordersought – Interim injuction refused – Validity? – Application for leave to appeal-interim order obtained exparte? -Validity? – Should the same registeredAttorney-at- Law file the leave to appeal application? Misstatement of the truefacts – Does it warrant dissolution of an interim order without going into itsmerits? – Damages quantified – No injunction/interim order should be granted?- Court of Appeal Rules 1990, Rule 2(1) – Interim Orders?
The plaintiff -petitioner sought an enjoining order with notice to the defendant-respondent. Court after an interpartes inquiry dismissed the plaintiff’sapplication for an interim injunction.
On leave being sought it was contended by the defendant-respondent that –
The petition for leave to appeal was signed by a different Attorney-at- Law and not by the registered Attorney – at – Law who filedproxy in the lower court, thus the application is bad in law.
The interim order granted ex-parte by the Court of Appeal is badin law as no plausible explanation was given as to why it wassupported exparte.
As the plaintiff has quantified damages no injunction/interimorder should be granted.
HELD:
A leave to Appeal application is a step in the proceedings of the originalcourt but according to section 756 (4) it originates in the Court of Appeal.Hence the proxy in an application for leave to appeal can be filed eitherby the registered Attorney who filed proxy in the lower Court or by another Attorney.
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When the inquiry is held inter partes there is no necessity to support foran enjoining order. The court is free to make an order based on thematerial placed before it with regard to the application for an interiminjunction.
The plaintiff petitioner supported for an interim stay order in the Court ofAppeal fifteen days after the delivery of the impugned order withoutnotice to the defendants. The plaintiff-petitioner had sufficient time togive notice to the defendant before supporting for an interim stay order.
The Rules make it compulsory to give notice to the party concerned beforesuch an application is supported unless the petitioner comes with a plausibleexplanation that the matter is of such urgency that it is not possible to give suchnotice.
A misstatement of the true facts by the plaintiff which put an entirelydifferent complexion on the case as presented by him when the interimstay order was applied exparte would amount to a misrepresentation orsuppression of material facts warranting its dissolution without goinginto its merits. The description of the building in the premises of theplaintiff as a residential house when it was not amounts to amisrepresentation of the true facts which give a different picture to hiscase as presented by him.
If the damage caused to the plaintiff has been quantified then noinjunction or interim order will usually be granted.
APPLICATION for leave to appeal from an order of the District Court of Mt. Lavinia.Cases referred to:
Saravanapavan vs. Kandasamydurai 1984 1 Sri LR 268
Gilinona vs. Minister of Land Development and Mahaweli Developmentand two others 1978 – 79 1 Sri. L. R. 10 at 13
Duwearachchi and Another vs. Vincent Perera and Others 1984 2 SriLR 94
Hotel Galaxy (Pvt) Ltd and Others vs. Mercantile Hotel Management1987 1 Sri LR 5 at 36
Jinadasa vs. Weerasinghe 31 NLR 33, 35
American Cyanamid Co vs. Ethicon Lfcf(1975)1 ALL ER at 510
CA
Ratnapala vs
Metro Housing Constructions (Pvt) Ltd (Wimalachandra, J.)
219
Ikram Mohamed, PC with M. Lankatilaka for plaintiff-petitioner.
L. C. Seneviratne, PC with Anil Selvaratnam (or defendant-respondent.
Cur. adv. vult.
May 25,2005.
WIMALACHANDRA, J.
This is an application for leave to appeal from the order of the learnedAdditional District Judge of Mount Lavinia dated 16.03.2005. By that orderthe learned judge refused to grant the interim injunction prayed for by theplaintiff-petitioner (plaintiff) in paragraph ‘V’of the prayer to the plaint.Briefly, the facts relevant to this application as set out in the petition areas follows:
The plaintiff is the owner of the premises bearing No.11, PennyquickRoad, Wellawatte, Colombo 6. The premises bearing assessment Nos.49 and 51,37th Lane, Colombo 6 are adjoining the aforesaid property ofthe plaintiff. The defendant-respondent (defendant) commenced constructionof a multi storied building in the said premises and for that purposeexcavation had been done to lay the foundation. The plaintiff states thatthe operation of the heavy machinery had caused heavy damage to hisproperty. The plaintiff orginally instituted action No. 1962/4/L on 16.12.2004in the District Court of Mount-Lavinia and sought inter-alia an interiminjunction restraining a company called Metro Contruction Ltd. fromexcavating and/or doing any construction work in the premises Nos. 49and 51 and obtained an enjoining order ex-parte. The said company filed apetition and affidavit dated 04.01.2005 pleading that the construction workwas not done by that company but by a company called “Metro HousingConstruction (Pvt.) Ltd, a B. O. I. approved company. The Court after aninquiry, held that the construction work in the said premises had beencarried out by Metro Housing Construction (Pvt.) Ltd. and not by MetroConstruction (Pvt.) Ltd. Accordingly, the Court set aside the enjoiningorder and refused to grant interim injunction on 25.03.2005.
The plaintiff thereafter instituted the present action No. 1974/095 on
against Metro Housing Construction (Pvt.) Ltd. seeking thesame relief. The plaintiff supported for an interim relief with notice to the
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defendant. The Learned Additional District Judge after an inter – partesinquiry made order on 16.03.2005 dismissing the plaintiffs application foran interim injunction. It is against this order that the plaintiff has filed thisleave to appeal application.
The plaintiff filed this application for leave to appeal on 31.03.2005 whichwas supported on 01.04.2005 without notice to the defendant • respondent(defendant) and obtained an interim order restraining the defendant, itsagents and servants from carrying out any construction and/or excavationwork in premises Nos: 49 and 51,37th Lane, Colombo 06.
When the matter came up before this Court on 25.04.2005, both counselmade submissions with regard to the extension of the interim order grantedby this Court on 01.04.2005 and on the question whether this is a fit caseto grant leave to appeal against the aforesaid order of the learned AdditionalDistrict Judge dated 16.03.2005.
The Learned President’s Counsel for the defendant in his writtensubmissions raised a preliminary question of law relating to the procedure.The learned President’s Counsel submitted that the proxy in this applicationbefore this Court has been filed by Mr. S.B. Dissanayake, Attorney-at-Law. However the proxy granted to Mrs. Subashini De Costa still remainsand the journal entries in the District Court record show that it has notbeen revoked. The learned counsel for the defendant contended that, petitionfor leave to appeal signed by another Attorney -at – Law is not valid andtherefore the petition is bad in law for want of proper authority. Thispreliminary question of law has no merit in view of the decision in the caseof Saravanapavart vs. Kandasamydura^where it was held that,
“A leave to appeal application is a step in the proceedingsof the original court but according to section 756(4) itoriginates in the Court of Appeal. Hence the proxy in anapplication for leave to appeal can be filed either by theregistered attorney who filed proxy in the lower court orby any other attorney. Further, there is a long standingpractice for an attorney not necessarily the registeredattorney in the lower court to file proxy in the Court ofAppeal.
There is a long standing and reasonable practice whichhas grown up since 1974 when the Administration of
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Ratnapala vs
Metro Housing Constructions (Pvt) Ltd (Wimalachandra, J.)
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Justice Law, No. 44 of 1973, came into force, in theinterests of the diligent and expeditious conduct ofproceedings. The practice causes no prejudice andinvolves no breach of the provisions of the Civil ProcedureCode and it has now become a cursus curiae.”
I shall first deal with the main ground of objection raised by the learned
resident’s Counsel for the plantiff with regard to the procedure adopted
i the learned District judge at the inquiry into the plaintiff’s application forthe enjoining order. The learned counsel submitted that the inquiry washeld on the application made for an enjoining order and not on the applicationfor an interim injunction but that the learned judge has made an order onthe application for the interim injunction and not on the application madefor the enjoining order, and further submitted that the learned judge hasfailed to realize that the inquiry was limited to the issue of the enjoiningorder sought by the plaintiff.
The Learned Judge in his order has stated that on 22.02.2005 both partieswere represented by President’s Counsel and made submissions with regardto an interim injunction, and the order relates to the interim injunction.
The provisions relevant to the granting of enjoining orders and interiminjunctions are found in section 664(1) and 664(2) of the Civil ProcedureCode. It reads as follows :
664(1). The court shall before granting an injunction cause thepetition of application for the same together with theaccompanying affidavit to be served on the opposite party.
664(2) Where it appears to court that the object of granting an injunctionwould be defeated by delay, it may until the hearing and decision of theapplication for an injunction, enjoin the defendant for a period not exceedingfourteen days in the first instance, and the court may for good and sufficientreasons, which shall be recorded, extend for periods not exceeding fourteendays at a time, the operation of such order. An enjoining order made underthese provisions, shall lapse upon the hearing and decision of the applicationfor the grant of an injunction.
It appears from section 664 (2) that, where the object of granting aninjunction will be defeated by delay, the Court may grant an enjoining oder,until the hearing and decision of the application for an injunction, valid
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fora period of not exceeding fourteen days, in the first instance. Accordingly,enjoining orders are granted after an ex-parte hearing, but when the matteris fully argued and exhaustive submissions are made by counsel appearingfor both parties the Court need not consider granting an enjoining order.After notice to the opposite party, and the opposite party had filed objectionswith affidavits and after a full inquiry, as in the present case, the Court isfree to make an order based on the material placed before it by the partieswith regard to the application for an interim injunction. When the inquiry isheld inter-partes, there is no necessity to support for an enjoining order. Inthe circumstances I am of the view that there is no merit in the submissionsmade by the learned President’s Counsel for the plaintiff with regard to theobjection that the impugned order should have been confined to the grantingof the enjoining order.
The Learned President’s Counsel for the plaintiff also contended thatthe said order of the learned Judge is erroneous and is based on theproposition that since the plaintiff has quantified the damage an injunctionwill not lie, without examining the plaintiff’s averments in the plaint thatfurther excavation would cause further damage which cannot be ascertainedat the time of filing the plaint. The Learned Judge has come to the findingon the material placed before Court that the excavation work in the site wascompleted and the building has now reached the stage of the ground floor.The Learned Trial Judqe in his order at page four has stated as follows:
The Learned Judge has referred to the document marked “D3”. It is anaffidavit filed by the Chief Engineer, Department of Buildings, According to“D3”, the excavation work has been completed, four retention walls havebeen constructed on all four sides and they cover the common boundarybetween the two premises. Accordingly, the possibility of any damage
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being caused to the plaintiff’s property and the building standing thereonis unlikely.
The possibility of further excavation and the use of heavy machineryare the main grounds upon which the plaintiff sought to restrain thedefendant from further construction of the building. In this regard theconsultant civil engineer Mr. Ernest has filed an affidavit, wherein, inter-alia, he has observed that since the construction of retaining walls on allsides are now being completed in premises Nos. 49 and 51, 37th Lane,Wellawatta, there is no possibility of any damage being caused to thewall and the building in premises No. 11, Pennyquick Lane, Colombo 06.
The Learned Counsel for the plaintiff submitted that even though thelearned trial judge has relied on the report marked “D3” (also marked as”E25”) of Mr. Jayachandran, Chief Engineer of the Buildings Department,produced by the defendant, it makes no reference to the damage causedto the plaintiff’s building or steps taken by the defendant to prevent furtherdamage. In the report marked “D3” it is clearly stated that excavation workhas been completed and adequate precautionary measures have beentaken by the defendant.
The Learned Judge has therefore observed that the excavation workhas now been completed and that there is no possibility of causing furtherdamage to the plaintiffs building. The affidavit filed by the Resident Engineerof the defendant, Mr. Atputhananthan dated 19.04.2005 marked as “X14”annexed to the statement of objections reveals that the construction ofthe foundation and the retaining walls up to ground level have beencompleted by the date of filing the affidavit marked “X14”. The said ResidentEngineer has also sworn the affidavit dated 19.04.2005 marked “X4” whereinhe states that the following items of work have commenced and beencompleted:-
Laying of foundation
Construction and completion of a retention wall right around thebuilding site.
Construction and completion of the ground – floor slab after erectingthe necessary pillars
Construction of 1/4 th of the floor.
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The averments in the affidavits marked “X4" and “X14" are confirmed bythe affidavit of T. A. Ernest, a chartered Civil Engineer, marked “X2” annexedto the statement of objections which describes the experience andqualifications of Mr. Ernest.
The Plaintiff produced an inspection report (marked “A(e)” annexed tothe petition) prepared by the Chartered Engineer M. K. A. N. B. Alwis inrespect of the premises No. 11, Pennyquick Road, Wellawatte, whichbelongs to the plaintiff. It speaks of the damage that has been caused asa result of the excavation work. However, from the affidavits of the ChiefEngineer of the Buildings Department (vide- document marked ‘D3’) andfrom the affidavit of the Resident Engineer (vide document marked ‘D2b’),it can be seen that the excavation work was completed before the date ofpetition. This is confirmed by the photographs marked “X3” annexed to thestatement of objection. The learned trial judge in his order at page four hasobserved that the photographs marked ‘D1 (a)’to‘Dl (b)’ show no furtherdamage would be caused to the plaintiff’s building and the defendant hastaken all possible steps to prevent any further damage to the building.This has been confirmed by the Chief Engineer, Department of Buildingsin his affidavit marked ‘D3’.
In these circumstances, the question that arises is whether the petitionerin entitled to the extension of the interim order granted in terms of paragraph
of the prayer to the petition, and to an interim injunction.
As regard to the issue of an interim order, the Court must take intoaccount certain principles. In the case of Billimoria l/s. Minister of LandDevelopment and Mahaweli Development and Two Others at 13Samarakoon, C. J. observed :
“In considering this question we must bear in mind thata stay order is an incidental order made in the exerciseof inherent or implied powers of Court.”
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Metro Housing Constructions (Pvt) Ltd (Wimalachandra, J.)
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In the case of Duwearachchi and Another Vs. Vincent Perera and OthersSeneviratne, J. laid down the following guidelines in granting a stay order:
Will the final order be rendered nugatory if the petitioner issuccessful?
Where does the balance of convenience lie?
Will irreparable and irremediable mischief or injury be caused toeither party ?
Before I proceed to discuss the applicability of the aforesaid principlesto the facts of the present case, I consider it pertinent to consider theequitable considerations. The conduct and the dealings of the parties mustbe taken into account.
It is to be observed that the impugned order was delivered on 16.03.2005and this application for leave to appeal was filed on 31.03.2005 and wassupported on 01.04.2005 for an interim stay order on the last day beforethe commencement of the Court vacation, without notice to the defendant.The plaintiff obtained an interim stay order restraining the defendant, itsservants and agents from effecting any construction and/or excavationoperations in premises bearing assessment Nos.: 49 and 51,37th Lane,Colombo 06. Thus it will be seen that the plaintiff supported for an interimstay order, 15 days after the delivery of the impugned order without noticeto the defendant. It shows that the plaintiff had sufficient time to give noticeto the defendant before supporting for an interim stay order.
Moreover the Rules of the Appellate Procedure make it compulsory togive notice to the party concerned before such an application is supported,unless the petitioner comes with a plausible explanation, that the matteris of such urgency that it was not possible to give such notice.
The Rule 2(1) of the Court of Appeal Rules 1990, reads as follows :
2(1) Every application for a stay order, interim injunctionor other interim relief (hereinafter referred to as “interimrelief”) shall be made with notice to the adverse partiesor respondents (hereinafter in this rule referred to as ‘the
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respondents1) that the applicant intends to apply for suchinterim relief; such notice shall set out the date on whichthe applicant intends to support such applications, andshall be accompanied by a copy of the application andthe documents annexed thereto :
Provided that –
interim relief may be granted although such noticehas not been given to some or all of the respondentsif the Court is satisfied that there has been nounreasonable delay on the part of the applicant andthat the matter is of such urgency that the applicantcould not reasonably have given such notices ; and
in such event the order for interim relief shall be fora limited period not exceeding two weeks sufficientto enable such respondents to be given notice ofthe applications and to be heard in opposition thereto on a date to be then fixed.
In these circumstances, the interim order is liable to be set aside. Inthe plaint, the plaintiff describes the premises which he sought to protectas his residential house (vide – paragraphs 3, 9,13 and 16 of the plaint).In the petition filed in this Court, in paragraph one the Petitioner describedthe said premises as a residential premises. However, the assessmentextracts, marked “X5” annexed to the statement of objection, show thatthe said building in the premises No. 11, Pennyquick Road, Wellawatte isa store house. This is confirmed by the Certificate issued by the GramaNiladari of Pamankada West Marked ‘XT annexed to the statement ofobjections filed by the defendant. The plaintiff has described the buildingin his premises as a residential house when in fact it is a store house. Ingranting interim injunctions and interim relief it is settled law that a personwho makes an ex-parte application to court is under an obligation to makethe fullest possible disclosure of all material facts within his knowledgeand if he does not do so, then he cannot obtain any advantage which mayhave already been obtained by him. That is perfectly plain and requires
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no authority to justify it. (Row's Law of Injunctions, 6th edition, Volume Ipage 123). In the instant case, the description of the building in the premisesof the plaintiff as a residential house amounts to a misstatement of thetrue facts, which gives a different picture to his case as presented by him.When the plaintiff gave the impression in the plaint that a residentialhouse has been damaged the Court’s sympathy would have definitelytilted in his favour.
In the case of Hotel Galaxy (Pvt.) Ltd. and Others Vs. Mercantile HotelManagement Ltd:(4)? said at 36,
“Thus a misstatement of the true facts by the plaintiffwhich put an entirely different complexion on the caseas presented by him when the injunction was applied ex-parte would amount to a misrepresentation or suppressionof material facts warranting its dissolution without goinginto its merits”.
In the circumstances, on this ground as well, the interim stay order andinjunctive relief should be set aside.
One of the grounds that the Court should address its mind to is thequestion, in whose favour does the balance of convenience lie? It is theduty of the Court to consider the inconvenience and damage that willresult to the defendants as well as the benefit that will accrue to theplaintiff by granting an interim stay order. The burden lies upon the plaintiff,as the person applying for the interim order, and injunctive relief, of showingthat his inconvenience exceeds that of the defendant.
The plaintiff has estimated the damage caused to his building in a sumofRs. 10 million as a result of the excavation work of the defendant. For thereasons stated above it appears the excavation work has been completedand the construction of the building has now come up to the ground floorat the time of filing the plaint. The possibility of excavation and the use ofheavy machinery are the grounds upon which the plaintiff sought to restrainthe defendant from carrying out further construction. It is the defendant’sposition that the plaintiff is not entitled to the extension of the interim stayorder and interim injunction as there is no danger to the plaintiff s property
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as the defendant has completed the excavation work and already laid thefoundation. The construction and completion of the ground floor slab aftererecting necessary pillars has been completed and a retaining wall hasalready been constructed right around the building site.
If the damage caused to the plaintiff is quantifiable, then no injunctionor interim order will usually be granted (vide – Jinadasa vs. Weerasinghe*)Where the injury is capable of being estimated in money, generally aninjunction may not be granted. This principle of law has been stated asfollows in Snell’s Principles of Equity, 38th edition , at page 640 :
“The ’governing principle’ is that if the plaintiff would be adequatelycompensated by an award of damages if he succeeds at the trial, and thedefendant would be able to pay them, no injunction should be granted,however strong the plaintiffs case"
The above principle was applied in the America Cyananamid Co. vs.Ethicom Ltd.5 at 510, where Lord Diplock said ;
"If damages in the measure recoverable at common law would beadequate remedy and the defendant would be in a financial position topay them, no interlocutory injunction should normally be granted, however,strong the plaintiffs claim appeared to be at that stage."
In the instant case the plaintiff has estimated damages in a sum of Rs.10 million. Since the plaintiff has quantified the damages he is not entitledto an interim stay order or interim injunction. Moreover, the defendant hasproduced an Insurance Policy from Eagle Insurance Co. Ltd., which coversthird party loss upto a sum of Rs.10 million, (vide document marked D2 (b)annexed to the defendant’s statement of objections). Thus, the defendantshas shown its financial capacity to pay such damages. Moreover, themischief complained of can be fully and adequately compensated by apecuniary sum. In these circumstances the plaintiff is not entitled to anyinterim slay order nor an interim injunction.
If the granting of an interim injunction or issue of an interim stay orderwould have the effect of inflicting serious damage upon the defendant, andespecially when the mischief complained of can be adequately
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Ratnapata vs
Metro Housing Constructions (Pvt) Ltd (Wimalachandra, J.)
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compensated by a pecuniary sum, an injunction will not lie. In the instantcase the defendant has established by documentary evidence that if aninterim stay order or an interim injunction is granted, immense loss anddamage would be caused to the defendant. The defendant states thatmany prospective buyers of the apartments that are to be constructedhave made advance bookings in the proposed multi storey residentialcomplex to be constructed by the defendant. Advance payments havealready been made by the prospective buyers (vide ‘X15’ annexed to thestatement of objections of the defendant). The defendant has already madepayments for building materials worth millions of rupees as evident bydocument marked ‘X16' annexed to the statement of objections. Thedefendant has spent large sums of money for excavation work, laying thefoundation, building a retaining wall to protect the neighbouring properties,and already constructed the ground floor, apart from spending an equallylarge amount of money on architects, civil engineers, workers etc. If thestay order or interim injunction is granted a large quantity of buildingmaterials already at the work site will go waste and finally will be of no useto the defendant. If the stay order is extended or the interim injunction isgranted, apart from the harm, loss, and damage that would be caused tothe defendant, it’s reputation as a construction company will be affected.In the circumstances if the stay order is extended or an interim injunctionis granted irremediable injury would be caused to the defendant.
It seems to me that the learned judge has correctly applied the relevantprinciples of law to the facts of this case in making his order. The learnedjudge has correctly held that at the time the plaintiff made the applicationfor injunctive relief, the excavation work had been completed and therewas no possibility of causing further damage to the plaintiff s building asalleged by the plaintiff. The documents produced before Court show thatthe excavation work has been completed. As regards the balance ofconvenience, the learned judge has correctly assessed the situation. Thelearned Judge has also held that the plaintiff has quantified the damagecaused to him and that it could be open to the plaintiff to lead evidence toprove the damage caused to him at the trial. In any event as the defendanthas already taken a policy of insurance for Rs.10 million in respect ofdamages to third parties, the plaintiff could recover damages in the eventhe establishes at the trial of any damage being caused to his property.The Court has compared the damage that will be caused to the parties and
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upon the evidentiary material placed before Court, the Court has held thata greater damage would be caused to the defendant than to the plaintiff ifthe interim injunction is granted.
For these reasons, we affirm the order of the learned District judgedated 16.03.2005 and dismiss the plaintiffs application for leave to appealwith costs. The question of the extension of the interim stay order will notarise as the Court has refused the plaintiffs application for leave to appeal.
SOMAWANSA, J. – / agree.
Application dismissed.