SIVAYANAMA AND ANOTHER vs PEOPLES BANK AND 7 OTHERS

024-SLLR-SLLR-2009-V-1-SIVAYANAMA-AND-ANOTHER-vs-PEOPLES-BANK-AND-7-OTHERS.pdf


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[2009] 1 SRILR.
SIVAYANAMA AND ANOTHER
vsPEOPLE’S BANK AND 7 OTHERS
SUPREME COURTDR. SHIRANI BANDARANAYAKE, J.N. G. AMARATUNGA, J. ANDSALEEM MARSOOF, J.
S.C. APPEAL NO. 71/2007S. C. (SPL) L. A. NO. 218/2006
A. NO. 592/2001
C. MATALE NO. 4349/LMAY 16™, 2008
Fair hearing – A Court ought not to make an order without hearing anddetermination of the matter before Court – Auti alteram partem Rule.
The PlaLntiff-Appellants-Appellants appealed against the order of theAdditional District Judge of Matale dated 26.06.2001. By that orderthe learned Judge upheld the preliminary objections relating tojurisdiction raised by the 1“ Respondent Bank and dismissed theaction. The Plaintiffs-Appellants appealed against the aforesaidorder of the Additional District Judge.
When the appeal came up for hearing in the Court of Appeal, the l8'Respondent Bank raised a preliminary objection on the ground that theimpugned order of the Additional District Judge was not an appealableorder.
The Court of Appeal having heard the submission only on the preliminaryobjection raised by the 1st Respondent-Bank dismissed same butwent on to dismiss the appeal on its merits without hearing theAppellants on the main question raised in the petition of appeal. Noopportunity had been given to either party to make their submissionson the merits of the appeal.
Held:
(1) A decision of a Court of Law should be based on a fair hearingof the matters before Court and cannot contain orders of issueswhere parties were not given an opportunity to be heard.
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Sivayanama and another vs People's Bank and 7 others
(Dr. Shirani Bandaranayake, J.)
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Per Dr. Shirani Bandaranayake, J.
“The decision of the Court of Appeal, which had decided on themerits of the appeal cannot be accepted, as it had not observed therudimentary norms, which are applicable in hearing an appeal".
Cases referred to:-
Ranasinghe vs. Ceylon State Mortgage Bank 1981 1 S.L.R. 121.
Siriwardena vs. Air Ceylon Limited 1984 1 Sri L.R. 286.
White vs. Brunton (1984) 2 All E.R. 606.
Ridge vs. Baldwin (1964) A.C. 40
Anisminic Ltd. vs. Foreign Compensation Commission (1969)2 A.C. 147
A.G vs. Ryan [1980] A.C. 143
State Graphite Corporation vs. Fernando 1982 2 Sri L.R. 590.
Board of Education vs. Rice (1911) A.C. 179.
APPEAL from judgment of the Court of Appeal.
A. R. Surendran, PC with K. V. S. Ganeshamjan, Nadamjah Kandeepanand Ms. Dharshini for Plaintiffs-Appellants-AppeUants.
Manohara de Silva, PC with D. Weeraratne for 1** Defendant-Respondent- Respondent.
Cur. adv.vult
May 13, 2009
DR. SHIRANI BANDARANAYAKE, J.
This is an appeal from the judgment of the Court ofAppeal dated 31.07.2006. By that judgment, the Court ofAppeal had held that the order made by the learned DistrictJudge dated 20.06.2001 is a final order as it had disposed ofthe rights of the parties, and had dismissed the appeal filedby the plaintiffs-appellants-appellants (hereinafter referred toas “the appellants”). The appellants filed a special leave toappeal application before this Court against the order madeby the Court of Appeal for which special leave to appeal wasgranted by this Court on the following question:
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“Is the judgment of the Court of Appeal which proceededto decide the appeal on its merits having directed theparties to file written submissions only on thepreliminary objection raised by the 1st respondent Bankwithout giving the appellants an opportunity of beingheard on the merits of their appeal, in violation of theprinciples of natural justice?"
The facts of this appeal, as submitted by the appellants,albeit brief, are as follows:
The 1st and 2nd appellants are two brothers, who are theowners of the land and premises, which is the subject matterof this appeal. The 1st defendant-respondent-respondent(hereinafter referred to as the 1st respondent) is the People’sBank and the 2nd defendant-respondent-respondent (hereinaf-ter referred to as the 2nd respondent) had been the Authorizedofficer of the 1“ respondent Bank. The 3rd to 8th defendants-respondents-respondents (hereinafter referred to as the 3rdto 8th respondents) were the 3rd to 8th defendants of the D. C.Matale case No. 4349/L.
The appellants’ father had been the owner of the landand premises bearing No. 300, Main Street, Matale for over30 years and had been in possession and occupation of theplace in question during that period. By Deed of Gift No.3397, dated 02.05.1990 attested by S. M. Haleemdeen, theappellants became the owners of the said land and premisesand they have been in possession and occupation of the saidland and premises for well over 25 years.
In February 1991, The appellants received undatednotices from the 1st respondent Bank, issued in terms ofSection 72(5) of the Finance Act, No. 11 of 1963, as amended,with a copy to one Suppammal, which stated inter alia, thatpursuant to a decision made by the Board of Directors ofthe 1st respondent Bank acting under the Finance Act, No.
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11 of 1963 as amended, the land and premises in suit wasvested in the 1st respondent Bank on the publication of sinorder in the Government Gazette of 11.07.1979. The saidnotices requested the appellants to hand over the land in suiton 15.03.1991 to the 2nd respondent.
The appellants thereafter instituted action bearing No.4349/L in the District Court of Matale, praying inter alia,
For a declaration against the 1st respondent Bank thatthe property in suit is not liable to be acquired under theprovisions of the Finance Act, No. 11 of 1963;
For an order declaring that the appellants have a rightto possession and ownership of the land and premises insuit;
For an injunction restraining the 1st respondent Bankfrom evicting the appellants from the said land andpremises.
In the said plaint, the appellants averred thecircumstances under which they and their predecessorsin title became entitled to the said land and premises andproduced their documents of title along with the plaint. The1st respondent Bank had filed its statement of objectionsand answered stating, inter alia, that pursuant to a vestingorder being published in the Gazette dated 11.07.1979, thesaid land and premises had vested in the 1st respondent Bank.Accordingly the 1st respondent Bank had pleaded that it wasentitled to serve the said notice in terms of Section 72(5) ofthe Finance Act and evict the appellants from the said landand premises.
When the said case came up for inquiry before the learnedAdditional District Judge, Matale on 20.06.2001 learned
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Counsel for the 1*' respondent Bank had raised a preliminaryissue pertaining to the jurisdiction of the District Court tohear and determine the said action. The said preliminaryissue was based on the provisions of Section 70(B)5 of theState Mortgage and Investment Bank Act, which purportsto oust the jurisdiction of Courts in respect of certain stepstaken by the People’s Bank under the provisions of the saidAct.
Both parties had thereafter made submissions on the saidpreliminary issue. The learned Additional District Judge ofMatale, by his order dated 20.06.2001, upheld the preliminaryobjection relating to jurisdiction raised by the 1st respondentBank and dismissed the said action No. 4349/L stating, interalia, that in view of the finality clause contained in the statute,the Court did not have jurisdiction to hear and determine thesaid action.
Thereafter, the appellants came before the Court ofAppeal against the said order of the learned Additional DistrictJudge of Matale dated 20.06.2001, inter alia, on the groundthat the failure of the learned Additional District Judge tofollow the judgment of the Supreme Court in the case ofRanasinghe v. Ceylon State Mortgage Bank}l) was erroneousinasmuch as the learned Additional District Judge was notentitled to ignore a binding judgment of the Supreme Courtmerely on the basis that the facts of the instant case were dif-ferent from the facts of Ranasinghe v. Ceylon State MortgageBank (supra).
When this appeal came up before the Court of Appealfor hearing on 23.08.2004, Counsel for the 1st respondentBank raised a preliminary objection on the basis that theappellants could not maintain the said appeal as theimpugned order of the District Court of Matale was not anappealable order.
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The Court of Appeal had reserved order on the preliminaryobjection. Thereafter by its order dated 31.07.2006, the Courtof Appeal had dismissed the 1st respondent Bank’s preliminaryobjection and had held that the appellants were entitled toa right of appeal from the order of the Court of Appeal andhaving heard submissions only on the preliminary objec-tion and after having reserved its order only on the prelim-inary objection had proceeded to adjudicate on the meritsof the case as well, and had dismissed the appeal withouthearing the appellants on the main question raised in theapplication.
Having set out the facts, let me now turn to consider thisappeal.
The contention of the learned President’s Counsel for theappellants was that when the appeal came up for hearingbefore the Court of Appeal on 23.08.2004, learned President’sCounsel for the 1st and 2nd respondents had raised apreliminary objection that the order against which the appealhad been lodged was not a final order, but only an interlocutoryorder and therefore the appellants could not have lodged anappeal against the said order. However, irrespective of the fact. that both Counsel had been heard only on the preliminaryobjections raised by the learned President’s Counsel for therespondents, the Court of Appeal had dismissed the appealon its merits.
Learned President’s Counsel for the 1st and 2ndrespondents had not disputed the contention of the learnedPresident’s Counsel for the appellants.
In fact the judgment of the Court of Appeal dated31.07.2006 clearly supports the contention of the learnedPresident’s Counsel for the appellants, as it had stated thus:
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“When Hie Appeal came up for hearing before thisCourt on 23.08.2004, Counsel for the Respondent raiseda preliminary objection that the order against which thisAppeal has been lodged is not a Final Order, but only anInterlocutory Order. He further submitted that thus theAppellants could not have lodged this Appeal against theaforesaid Order. This Court directed the parties to tenderWritten Submissions on the aforesaid PreliminaryObjections” (emphasis added).
Thereafter the Court of Appeal had considered theprovisions in Section 754(5) of the Civil Procedure Code,Section 71(3) of the Finance Act and Section 22 of theInterpretation Ordinance and the principle laid down in thedecision in Siriwardena v. Air Ceylon Ltd.,2> White v Bruntonand Ranasinghe v. Ceylon State Mortgage Bank (supra). Thus acareful reading of the judgment of the Court of Appeal clearlyindicates that it was not restricted to the preliminary objectionraised by the learned President’s Counsel for the 1st and 2ndrespondents. The final paragraph of the judgment, whichreads as follows, clearly indicates this position,
“In Ranasinghe v. State Mortgage Bank the Courtheld that notwithstanding the provisions of the In-terpretation Ordinance, Declaratory relief is availableagainst the Bank where there is a total lack of jurisdic-tion. Hence the learned District Judge’s decision is cor-rect in law. It is my view that the order made by thelearned District Judge on 20.06.2001 is a Final Orderas it finally disposed of the rights of parties. Althoughon a Preliminary issue there exists a right of appeal, anAppeal would be futile for the aforesaid reasons. Hence forthe aforesaid reasons I see no reason to interfere with theOrder of the learned District Judge dated 20.06.2001,
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and hence I dismiss the appeal filed by the Appellantswithout costs.”
It is therefore quite evident that although both partieswere heard only on the preliminary objections and bothparties had filed their written submissions only on thepreliminary objections raised by the learned President’sCounsel for the 1st and 2nd respondents, the Court of Appealhad decided the matter not on the basis of the preliminaryobjection so raised, but on the merits of the appeal.
It is an accepted fact that ‘a man’s defence must al-ways be fairly heard’ (Prof. H. W. R. Wade, AdministrativeLaw, 9th edition, p. 440). A fair hearing, which is regardedas ‘a rule of universal application’ (Ridge v Baldwinm hasbeen referred to by Lord Lorebum in his oft -repeated words,as ‘a duty lying upon every one who decides anything’(Anisminic Ltd. v Foreign Compensation Commission ,5) A. G.v. Ryan (6>.
The said need to give a proper hearing prior to thedetermination of the matter in issue was considered in StateGraphite Corporation v Fernando(7) where it was stated that,
“The Court of Appeal can dispense with a hearing ongranting leave ex mero motu. In other cases it seemsto me where a party wishes to be heard, or the issuesinvolved are such that the Court ought not to makean order without hearing and determination of theapplication, would generally require a hearing, howeversummary or brief that hearing may be.”
Considering the facts and circumstances of this appeal,it is quite clear that both parties had made their submissionsonly on the preliminary objection raised by the learned
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President’s Counsel for the 1st and 2nd respondents. Noopportunity had been given to either party to make theirsubmissions on the merits of the appeal. It is not disputedthat the arguments were confined only to the said preliminaryobjections. It is also not disputed that the judgment of theCourt of Appeal dated 31.07.2006, whilst as stated earlier,referring to the preliminary objections so raised had not ruledon the said preliminary objections, but had considered themerits of the appeal and had dismissed it.
The Court of Appeal was correct in its approach when itdecided to first consider the preliminary objection taken by thelearned President’s Counsel for the 1st and 2nd respondents.However, what it should have done thereafter was toconsider the said objections and make order on the saidpreliminary objection. Therefore the decision of the Court ofAppeal, which had decided on the merits of the appeal cannotbe accepted, as it had not observed the rudimentary norms,which are applicable in hearing an appeal. A decision of aCourt of law should be based on a fair hearing of the mattersbefore the Court and cannot contain orders of issues, whereparties were not given an opportunity to be heard.
The generality of the application of the maxim audialteram partem, commonly known as the rule that noman is to be condemned unheard, and its flexibility in itsoperations were succinctly pronounced by Lord LorebumL. C. in the well known decision of Board of Education v.Ricef81, where it was stated that it applied to ‘everyone whodecides anything’. As stated by Lorebum L. C. in Rice(supra)
“I need not add that in doing (deciding) either, they mustact in good faith and fairly listen to both sides, for that isa duty lying upon everyone who decides anything.”
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On a consideration of all the aforementioned material ofthe appeal and for the aforementioned reasons, the questionon which special leave to appeal was granted is answered inthe affirmative.
This appeal is accordingly allowed and the judgment ofthe Court of Appeal dated 31.07.2006 is set aside. The Courtof Appeal is directed to hear this case de novo. Since theappeal against the order of the District Court was dismissedon the merits after considering the preliminary objections,respondents, if they so desire, could raise the said preliminaryobjection to the appeal in the Court of Appeal.
There will be no order as to costs.
AMARATUNGA, J – I agreeMARSOOF, J. -1 agree.
Appeal allowed.
Court of Appeal directed to hear case de novo.