052-SLLR-SLLR-2005-V-3-BARR-KUMARAKULASINGHE-AND-OTHERS-vs.-OLLEGASEGARAM.pdf
CA
Barr Kumarakalusinghe and Others Vs. Ollegasegaram
(Gamini Amaratunga, J.)
323
BARR KUMARAKULASINGHE AND OTHERSVSOLLEGASEGARAMAMARATUNGAJ.
WIMALACHANDRAJ.
CALA NO. 396/2001.
D.C. MT. LAVINIA NO.762/03/RE.NOVEMBER 2, 2004.
Civil Procedure Code-Sections 214,416-Plaintiff abroad-Security for costs-Judicial discretion – Can such an order be made exparte?
The Plaintiff Petitioner sought to recover a sum of Rs.680,000 as damagesand to recover further damages at Rs.20,000 per mensem until thePlaintiffs are restored to possession. The Plaintiffs action was filed throughtheir attorney. After the Defendant’s answer and the Plaintiffs replicationwere filed the Defendant Respondent moved court for an order underSection 416 directing the Plaintiffs to deposit a sum of Rs.10,10,000 assecurity for costs exparte. The Court ordered the Plaintiff to deposit thesaid sum.
HELD.
Section 46 provides that at any stage of the action, if it appearsto court that the Plaintiffs are residing out of Sri Lanka, theCourt may in its discretion either of its own motion or on theapplication of any defendant order the Plaintiff to givesecurity-for the payment of all costs incurred and likely to beincurred ;
An order calling upon a Plaintiff under sections 416, 417,should be made as a matter of course, and should not bemade exparte ;
The Court in the exercise of its discretion should be satisfiedthat the aid of either section 416 and 417 is not beingoppressively used by the party moving for security ;
Court has also failed to address its mind to thereasonableness of the amount of security moved by theDefendants.
2-CM7226
324
Sri Lanka Law Reports
(2005) 3 Sri L. R.
APPLICATION for leave to Appeal from an Order of the the District Courtof Mt. Lavinia.
Cases referred to
Alahakoon vs Tampoe – 2002 3 Sri LR 299
Scott vs Mohamadu – 19 NLR 219
Samarasinghe v. Atchy
C. E. De Silva with Mrs Pushpa Narertdran for Petitioner.
A. R. Surendran with Arul Selvaratnam for the Respondent.
Cur.adv. vult.
January 18,2005.
GAMINIAMARATUNGA, J.
This is an appeal with leave granted by this Court against the orderof the learned Additional District Judge of Mt. Lavinia dated 07.10.2004,directing the plaintiff, in terms of section 416 of the Civil ProcedureCode, to deposit a sum of Rs.One million and ten thousand as securityfor costs. The facts relevant to this appeal are as follows
The plaintiffs, through their attorney filed action against the defendantto eject the defendant from premises No. 203, Sri Saranankara Road,Kalubowila, to recover a sum of Rs.680,000 as damages and to recoverfurther damages at Rs.20,000 per mensum from 1.11.2003 until theplaintiffs are restored to possession. After the defendant’s answer andthe plaintiffs replication, the trial was fixed for 15.12.2004. On13.09:2004, the defendant filed a motion and affidavit seeking an orderfrom court under section 416 of the Civil Procedure Code directing theplaintiffs to deposit a sum of Rupees one million and ten thousand assecurity for costs. The defendant moves to support his motion on
and on that date the matter was postponed to 07.10.2004.
On 07.10.2004 an attorney at law made an application on behalf ofthe plaintiffs registered attorney for a postponement on the registeredattorney’s personal grounds. The power of attorney holder of theplaintiffs was also not present in court on that day. No order was made
CA
Barr Kumarakalusinghe and Others Vs. Ollegasegaram(Gamini Amaratunga, J.)
325
by court with regard to the postponement sought on behalf of theregistered attorney for the plainfiffs. Instead the court proceeded tohear the submission of the learned President’s Counsel for thedefendant in support of the application for an order directing the plaintiffsto furnish security for costs.
The learned President’s Counsel submitted that since all of theplaintiffs lived abroad, the defendant had a right to make an applicationfor an order directing the plaintiffs to furnish security for costs. Thelearned counsel submitted that there was no provision for filingobjections to such an application. The learned judge thereupon madeorder directing the plaintiffs to deposit a sum or Rs. One Million andten thousand (Rs.10,10,000) in Court one month before the trial datei.e. 15.12.2004. This appeal is againt that order.
Section 416 provides that at any stage of the action, if it appears toCourt that the plaintiffs are residing outside Sri Lanka, the Court mayin its discretion and either of its own motion or on the application ofany defendant order the plaintiff to give security for the payment of allcosts incurred and likely to be incurred by the defendant.
According to the section itself the Court has a discretion in thematter. The Court has to exercise its discretion judicially. In exercisingthe discretion vested in Court under section 416, the Court has to takeinto account several matters. The Court has to consider the validity ofthe cause of action in the sense whether there is a case to be tried onthe pleadings. The Court has also to see whether the proceedingswere being protracted by the plaintiff, either wilifully or due to lack ofdiligence, incurred costs under this section means costs which thecourt may finally award, regardless of what the party may actuallyspend. Alahakorie vs Tampoel' In deciding the amount of security tobe deposited the court must have regard to the total costs that can beordered in an action of that category at the rates prescribed for thepurpose of Section 214. The Court also has to bear in mind that if thesecurity ordered by Court is not furnished the Court has the power todismiss the action. Therefore the Court has to ensure that the provisionsof section 416 are not used oppressively to keep the plaintiff out ofCourt.
326
Sri Lanka Law Reports
(2005) 3 Sri L. R.
An order calling upon a plaintiff under sections 416 and 417 of theCode should not be made as a matter of course. The Court in theexercise of its discretion should be satisfied that the aid of eithersection is not being oppressively used by the party moving for security.Scott vs Mohamadu<Z| Samarasinghe vs. Atchy (3,and Order to a plaintiffliving outside the jurisdiction of Court to give security for costs shouldnot be made ex-parte. Samarasinghe vs Atchy (Supra)
In this case the defendant has failed to explain to Court why thedefendant wanted the plaintiffs to deposit such an enormous sum whenthe plaintiffs' action was valued at Rs.700,000 and the defendantscounterclaim at Rs.400,000.
The learned judge has also failed to address her mind to thereasonableness of the amount of security moved by the defendants.The order of the learned judge does not contain the reasons why theCourt ordered the plaintiffs to deposit Rs.10,10,000 as security andthe basis upon which the said amount was computed. The learnedjudge’s order does not contain the reasons for the order. There is atotal failure to judicially exercise the discretion vested in court undersection 416. The learned judge, has also failed to consider whetherthe plaintiffs demand for such an unusually large amount as securityis an attempt to use section 416 oppressively. Further the order hasbeen made exrparte without making any order with regard to theapplication for postponement made on behalf of the registered attorneyfor the plaintiffs.
For the foregoing reasons this appeal must be allowed. AccordinglyI set aside the order dated 07.10.2004 and direct the learned judge tohear both sides on the defendant's application for security for costsand make an appropriate order upon a proper exercise of the discretionavailable to Court. The parties shall bear their own costs.
WIMALACHANDRA, J. -1 agree.
Appeal allowed.
District Court directed to hear both sides and make an appropriateorder.