CEYLON INSURANCE COMPANY LTD., Defendant- Appellant and DIESEL AND MOTOR ENGI

002-NLR-NLR-V-79-2-CEYLON-INSURANCE-COMPANY-LTD.-Defendant-Appellant-and-DIESEL-AND-MOTOR-ENGI.pdf


W1MALARATKE, .T.— Mnnuvctjhltai v. Sivnsodiilinyrim
3978 Present: Samerawickrema, J., Udalagama, J. and
Vythialingam, J.
CEYLON INSURANCE COMPANY LTD., Defendant-Appellant
and
DIESEL AND MOTOR ENGINEERING COMPANY LTD.,Plaintiff-Respondent
S.C. 700/69 (F)—D. C. Colombo 67797/M
Contract—Work and labour and materials supplied—Plea of prescrip-tion—Period of prescription when such contract in writing—Interpretation of Statutes—General and particular enactments in ■same statute—Whether Inter prevails—Prescription Ordinance,section 6, 7. 8.
!•*—A 42060 (79/07)
<s
Qeyton Insurance, Co. Ltd. v. Diesel and Motor Engineering Co. Lid.
The plaintiff-respondent firm sued the defendant, in insurancecompany, in respect of repairs carried out by it at the requestof the defendant to three motor vehicles. The plea of prescriptionwas taken and the sole issue for determination was whether theclaims of the plaintiff on these three causes of action wereprescribed. The relevant sections of the Prescription Ordinance weresection 6 (claims on a written contract or promise), section 7(claims on an unwritten contract or promise) and section 8 (claimsfor work and labour and for goods sold and delivered). The trialjudge held with the plaintiff and entered judgment against thedefendant. Although in the present case the claim was one undoub-ledly for work and labour done as well as materials supplied, suchwork could be done and materials supplied in terms of a contractwritten or unwritten between the parties, and the question aroseas to what particular section of the Preeripti'on Ordinance wouldapply, and in the case of each section the period of prescriptionwas different. It was found by the trial judge that the debts on allthree causes of action atfose more than one year prior to the dateon which action was instituted, so that if section 8 of the Prescrip-tion Ordinance were to apply,, in terms of that section, all threecauses of action would be prescribed.
In regard to the first two causes of action, the plaintiff produceddocuments PI and P4 being an estimate of the repairs and theacceptance of the defendant by letters P2 and P5. There was alsooral evidence that on the receipt of letters P2 and P5 the plaintiffcarried out the repairs and informed the defendant whose represen-tative inspected the vehicles and approved the job done. The finalbills P3 and P6 were also sent to the defendant thereafter. ' Inrespect of the third vehicle no estimate or acceptance thereof wasproduced by the plaintiff but a supplementary estimate marked P7and a letter from the defendant marked P8 were produced. In P8the defendant company stated with reference to document P7 thatthe sum of Rs. 1,545 would be paid by them.
It was argued on behalf of the defendant appellant that even ifthere was a written or unwritten contract, nevertheless, section 8of the Prescription Ordinance must prevail and apply to the factsof this case as it provided for the prescriptive period applicablein respect of this particular class of contract. It was submitted,therefore, that in the case of any conflict Section 8 must prevailover both sections 6. and 7.
Held :
That the plaintiff’s first two causes of action were on the
evidence based on written contracts and the third cause ofaction on a written promise to pay and therefore came withinsection 6.
That in the case of written promises or contracts section 6
being the particular enactment must in keeping with therules of interpretation prevail over section 8 of the Prescrip-tion Ordinance which is the general section. In -the presentcase, therefore, the plaintiff’s three causes of action fell withinthe prescriptive period of six years applicable and were notprescribed.
Held further : That, however, in the case of unwritten contracts.
section 8 of the Prescription Ordinance would be the particular
enactment to which the general section 7 must give way.
7
VYTHIALING AM, J.—Ceylon Insurance Co. Ltd. v. Diesel and
Motor Engineering Co. Ltd.
Cases referred to :
Walker Sons & Co. Ltd. v. Kandyah, 21 N.L.R. 317.
Urban District Council, Matale v. Sellaiyah, 33 N.L.R. 14.
Adamjee Lukmanjee Si Sons Ltd. v. Abdul Careem Hallaje, 63.N.L.R. 407.
Pretty v. Solly, (1859) 26 Bec.v. 606; 53 E.R. 1032.
Amerasinghe v. De Alwis, 48 N.L.R. 529.
Markar v. Hassen, 2 N.L.R. 218.
Horsfall v. Martin, 4 N.L.R. 70.
Dawbarn v. Ryall, 17 N.L.R. 372.
Assen Cutty v. Brooke Bond Ltd., 36 N.L.R. 169.
Municipal Council, Kandy v. Abeyesekera,- 31 N.L.R. 366.Municipal Council, Negombo v. Fernando, 60 N.L.R. 157.
Louis de Silva v. Don Lewis, 4 S.C.C. 89.
Campbell & Co. v. Wijesekera, 21 N.L.R. 431.
Wijesuriya v. Ceylon Mineral Waters Ltd., S. C. 48/70 (F) —D. C. Colombo 67339/M—S. C. Mts. of 4.10.74.
^/^PPEAL from a judgment of the District Court of Colombo.
H. W. Jayewardene, Q.C., with Sam P. C. 'Fernando and Miss
Walles for the defendant-appellant.
P.R. Wickremanayake. for the plaintiff-respondent. •
Cur. adv. vult.
March 28, 1978. Vythialingam, J.
The defendant-appellant, an insurance company was sued bythe plaintiff-respondent, a motor repair and engineering firmon three causes of action, in respect of repairs carried out by it,at the request of the defendant to three motor vehicles. Thedefendant denied liability and the sole issue to be decided inthis appeal, as at the trial, is whether the claims on all threecauses of action were prescribed or not. The trial Judge heldwith the plaintiff and entered judgment against the defendantin a sum of Rs. 20,270.12 cents. The defendant has appealedagainst that judgment and decree.
The sections of the Prescription Ordinance (Cap. 68) whichhave a bearing on the case are section 6 which applies to claimson a written contract or promise, section 7 which governs claimson an unwritten contract or promise and section 8 which is inrespect of claims for work and labour and for goods sold anddelivered. In the instant case the claim undoubtedly is for workand labour done as well as for materials supplied. But such workmay be executed and the materials supplied in terms of a contractbetween the parties and in such an event both sections 6 and 8or 7 and 8 may apply depending or whether the contract was inwriting or unwritten. In each case the period of prescription isdifferent.
The debt on all three claims, as the trial Judge has found,arose more than a year prior to the date on which the action wasinstituted and if secion 8 were tn govern the case then all three
s
VYTIlIAI.l XGAM, .1.— Ceylon Insurance Co. Lt<1, v. Diesel ami
Motor Unilinear'..xy Co. Ltd.
claims are prescribed as the period of prescription under thatsection is one year. The trial Judge however, held that the plain-tiff’s claims were not prescribed on the basis of an unwrittenpromise or contract and tjjtat even if the correspondence producedcannot be regarded as amounting to a written contract or promisethey can be regarded as supporting the unwritten promise to paythe bills.
Mr. Jayewardene submitted that this finding was not correctboth on the facts and in law. In regard to the facts he submittedthat the plaintiff’s claims were not based on any unwritten pro-mise or contract. In regard to the first two causes of action theplaintiff’s claim was that it submitted an estimate of the repairsPI and P4 to the defendants who by the letters P2 and P5 acceptedthem subject to the deletion of certain items and the payment bythe insured of certain preportions of the cost of certain otheritems. In the letters P2 and P5 there is an implied promise topay the cost of all the other items of repairs. The uncontradicteclevidence of the plaintiff’s works manager was that on the receiptof these letters they carried out the repairs and that when therepairs were completed they informed the defendants whoserepresentative inspected the vehicles and approved the job done.Thereafter the defendants were sent the final bills P3 and P6.
For the purpose of constituting a written promise, contract,bargain or agreement no special form of writing is required.However there must be some degree of formality and a mereexchange of letters may not be enough. In the case of WalkerSons and Co. Ltd. v. Kandych, 21 N.L.R. 317, the parties hadexchanged letters in regard to the repairs to a motor car. Thiswas held to be insufficient to constitute a written contract. Aspointed out by Lyall Grant, J. in Urban District Council Mat-alev. Sellayahj 33 N.L.R. 14 at 15, “ These letters however containedno promise to pay a fixed sum. They were merely evidence thata contract to do work and deliver goods existed In that casethe plaintiff wrote to the defendant to contribute Rs. 120.83towards the cost of construction of a drain and the defendantwrote back saying that the amount was excessive but agreed tocontribute Rs. 60. It was held that the letter constituted awritten promise to pay within the meaning of section 7 (nowsection 6).
In the instant case all the necessary elements of a contractare evidenced in the correspondence produced. In the estimatesPI and P4 there is an offer to carry out the repairs, the detailsand the cost of which item is set out. The letters P2 and P5 arean acceptance of the offer subject to the modifications set outtherein and a promise to pay and on this faith the work wascarried out. All the terms and conditions on which the*
0
WTII JALIXG AM, J.—Ceylon Insurance Co. Ll'J. v. Diesel and
Motor Jinyinccring Co. Ltd.
parties were agreed are set out in the correspondence. The firsttwo causes of action are therefore based on written contracts.
In its plaint the plaintiff claimed ?? sum of Rs. li,340.50 inrespect of repairs to vehicle No. 22 Sri 726. There is reference toan estimate dated 3rd November, 1964, which was said to havebeen accepted by the defendant. Neither this estimate nor thedefendant’s acceptance of it was produced.' The only documentsproduced in respect of this claim are a supplementary estimatedated 10.2.1968 (P7) for Rs. 2,275- and a letter from the defendantdated 8th April, 1965 (P8). There was therefore no written con-tract in respect of this cause of action. But in P3 the defendantstates “ We refer you to your supplementary estimate of 10.2.1965and have to inform you that a sum of Rs. .1,545 will be paid byus ”. There is therefore an unconditional and unqualified promisein writing by the defendant to pay that sum.
Although it is a written promise to pay a debt due in respect ofwork and labour and for materials supplied it is not a mereacknowledgement in writing, within the meaning of section 12 ofthe Ordinance. In the case Adamjee Lukmanjee and Sons Ltd. v.Abdul Careem Hallaje, 63 N.L.R, 407 at 408, the plaintiff Companysold to the defendant on credit 500 bags -of cement. In an actionfor the recovery of the balance amount due on this transaction thedefendant averred that as it was debt due for goods sold anddelivered the action was prescribed as it had been filed morethan an year after the debt became due. The plaintiff relied onthe letter P 3 by which the defendant had acknowledged the debtdue to the plaintiff and stated that “ we shall definitely pay thisbill by the end of this month. ”
Counsel for the defendant argued that this letter amountedmerely to an acknowledgement contemplated by section 12 of thePrescription Ordinance. In rejecting this argument K. D. deSilva, J. said “ If that view is correct the plaintiff’s claim is clearlyprescribed. In my view section 12 contemplates merely anacknowledgment of the debt. In the letter P3 there is not onlyan acknowledgment that the amount is due but also a cleatpromise to pay this amount within a month. I would thereforeconstrue the letter as a written promise to pay the amount.Accordingly section 6 and not section 8 of the PrescriptionOrdinance applies to the facts of the case. ”
The plaintiff’s three causes of action are based on writtencontracts and a written promise to pay and come within section
They are also in respect of work and labour and for goods soldand delivered and fall within the ambit of section 8. They provide
10VYTHTALINGAM, J.—Ceylon Insurance Co. Ltd. v. Diesel and
Motor Engineering Co. Ltd.
for different periods of prescription and in that sense are in con-flict with each other. The question is which is to be applied indetermining whether the action is prescribed or not. The rule ofconstruction in such cases is clear. It was stated by Romilly, M.R.in an English case Pretty v. Solly (1859) 26 Beav. 606 at 610, asfollows : “ The rule is that whenever there is a particular enact-ment and a general enactment in the same statute and the lattertaken in its most comprehensive sense, would overrule theformer, the particular enactment must be operative and thegeneral enactment must be taken to .affect only the other partsof the statute to which it may properly apply See also Craieson Statute Law, 7th Edition, p. 222. The rule of interpretationhas been accepted in this country as well.
a
Mr. Jayewardene for the defendant-appellant submitted thatfor this purpose, while sections 6 and 7 set out the prescriptiveperiod generally for written and unwritten contracts and promisesrespectively, section 8 provides for the prescriptive period inrespect of the particular classes of contracts enumerated therein.He argued therefore that in the case of any conflict section 8 mustprevail over both sections'^ and 7. However the former SupremeCourt as well as this Court has rejected this argument. The formerSupreme Court has consistently held that in the case of writtencontracts section 6 is the particular enactment and section 8 thegeneral section while in the case of unwritten contracts section8 prevails over section 7.
The two cases on which Mr. Jayewardene placed strong reliancewere both cases in which the cause of action was based on un-written contracts and it was there held that section 8 appliedand not section 7. The first of these cases was that of Walker, Sons& Co. Ltd. v. Karidyah (supra). In that case it was held thatthere was no written contract, and de Sampaye, J. said at page319 : “ If the correspondence does not constitute a written contractit must be conceded that there was an unwritten contract. Bucthen comes section 9, which appears to provide specially foractions in certain classes of unwritten contracts, and I think thatactions for work and labour done and goods sold and delivered,though these are unwritten contracts, come within section 9. ”
The other case relied on by Mr. Jayewardene was the case ofAmarasinghe v. De Alwis, 48 N.L.R. 519, which was also a case ofa claim for money due in respect of repairs to a car, and Howard,
J. sitting alone sa'd that he was bound by the decision inWalker Sons & Co. Ltd v. Kanc.yah (supra) as ’’The facts inregard to the nature of the claim are exactly the same as in this
11
VSTHIALUn GA1J, — Ccylo.i Insurance Co. Ltd. v. Diesel and
Moicr J-'r.ci.-uering Co. Ltd.
caseThe facts are not set out ill the judgment but the
judgment makes it quite clcai that the contract was an unwrittenone.
There are however obsei v atio-is made by certain Judges whichseem to support Mr. Jayewardena’s contention. But all of themare obiter and in view of criticism of these observations in laterjudgements they cannot be regarded as being satisfactory. Thusin the case of Marker v. Hessen, 2 N.L.R. 218, which was in res-pect of a claim for the price of a steamer sold and deliveredLawrie, J. said at page 220, “ The section (i.e. the present section8) applied to the sale of such moveables, whether the sale hasbeen affected by word, or by letter or other writing, for thequestion how a sale can legally be effected is separate from thequestion within what time must an action for the price of amoveable sold and delivered be brought.”
But Bonser, C.J. pointed out at page 219, “ There is no necessaryinconsistency between section 8 and 9 of the Ordinance. An action“for or in respect of goods sold. ” and “ delivered ” may be, as inthe present case an action upon ‘ an unwritten contract. ’ I readsection 8 as providing that the period of prescription applying tothe actio venditi in general is to be three years and section 9 asproviding that in the particular case of a sale of moveables wherethere has been a delivery tc the buyer of the thing is to be reducedto one year”.
Then again Horsfall v. Marti.-., 4 N.L.R. 70, Moncrieff, J. said atpage 72 and 73 “ If the contention, is 'just we must be prepared tohold not only that the claims mentioned in section 9 (newsection 8) are excluded from the operation of section 8 (newsection 7) but that those same claims are excluded from theoperation of section 7 (new section 6) although they may befounded on written contracts. Having gone carefully through theterms of the three sections 7 think that such was the intention ofthe Legislature ”. In that, case the money was due on an unwritt-en promise.
In the case of Daiubarn v. Ryall, 17 N.L.R. 372, which is a deci-sion of the Full Court, Lascelles, C.J. with whom the other twoJudges “ entirely agreed ” pointed out referring to this case atpage 375 : “ But the reasoning of this decision is not easilyreconciled with the decision of the Full Court in Kalahe PareneVitanege Louis de Suva v. Akmimene Pclliagurugey DonLouis''1. In Amarasinghe’s case (supra) Howard, C.J. said atpage 521 “ It would appear that the judgment of Moncrieff, J. wentfurther than the law warranted as far. as written contracts areconcerned ” and in Assen Cutty v. Brooke Bond Ltd., 38 N.L.R.169 at 189, Garvin, S.P.J. pointed out that “ The decision inHorsfall v. Martin (supra) can no longer be regarded as authority
12
VYTIliAi-'iXGAM, J.—Ceylon Insurance Co. l.td. v. Diesel and
Motor Engineering Co. Ltd.
for the proposition that an action for or in respect of goods soldand delivered based upon a written contract comes within theoperation of section 9 (new^section 8) to the exclusion of section7 (new section 6).”
Lastly there is the observation of Dalton, J. in MunicipalCouncil, Kandy v. Abeyasekera, 31 N.L.R. 366, where he said“ Whether or not such a contract as we have under considerationwas a written or unwritten contract within the meaning ofeither section 7 or section 8 there is no doubt that section 9provides specially for actions in certain classes of contracts. AsMoncrieff, J. pointed out in Horsfall v. Martin certain claimsreferred to in section 9 must be prosecuted within one year fromthe date at which they become due whether they are based uponwritten promises or not. It will not therefore be sufficient heremerely to ascertain whether the agreement was in writing ornot.” That was a case arising out of the supply of electricity ona written request made by the defendant and accepted in writingby the plaintiff Council. The question which arose for decisionin the appeal was whether section 9 applied as the defendanthad pleaded or whether section 8. or section 11 applied as wasurged by the plaintiff. It was held that as it was a book debtsection 9 applied. Here again the question as to a claim basedupon a written contract or promise did not arise for decision.
In the case of the Municipal Council of Negombo v. BenedictFernando, 60 N.L.R. 157. which was also a claim for electricitysupplied Sansoni, J. with Sinnethamby, J. agreeing, expressedhis respectful disagreement with that part of Dalton, J.’s judg-ment quoted above. In this case the electricity was supplied onthe application of the defendant containing the conditions underwhich the electricity was supplied and an undertaking by thedefendant to pay the monthly charges for the consumption ofelectricity at rates prescribed in the relevant tariff. Sansoni, J.said at page 159 “ I do not see how it can be regarded as anythingshort of a written promise, though no definite sum is mentioned.The promise was at the stage -it was made, only an offer inwriting, but it became a binding promise when the Councilaccepted the offer and supplied electricity on the faith of thepromise”. It was held that the claim fell under section 6 as therewas a written promise on which it was based and not undersection 8.
All divisions of the former Supreme Court other than a FullCourt were of course bound by the decision of the Full Court inthe case Louis de Silva v. Don Louis, 4 S.C.C. 89. In that case therewas a claim for rent due op a written lease. It was argued that as
V YTILIAL1XGA-M, J.— Ceylon Insurance Co. Ltd. v. Diesel and
Motor engineering Co. Ltd.
1J
section 8 (new section 7) expressly speaks of rent, section 7 (newsection 6) must apply to agreements other than agreement to pay-rent under a lease. Cayley, C. J. with whom Dias, J. agreed, saidat page 90 “ We think, however, that the converse is the case,and that the word rent in the 8th section means rent payableunder obligations other than such as are mentioned in section
Grenier, J. in a separate judgment also agreed.
The decision in this case has been accepted and consistentlyfollowed ever since. In the case of Campbell and Co. v. Wijesekera21 N.L.R. 31, the plaintiff’s claim was for the breach of certaincontracts to ship copra and coconut oil. The defendant counterclaimed in respect of shipments already made. The contentionfor the plaintiff was that this claim in reconvention was prescribedunder section 9 (new section 8) as it was for goods sold anddelivered. The contracts were in writing. It was held that thiswas not a case of goods sold for which an action lies owing tothe fact of delivery but rather a case where the action is broughton the written contract. Citing the passage from Pretty v. Solly(supra) Ennis, J. said “ The Full Court case of .Silva v. Lewisheld that section 7 (new section 6) was such a particular enact-ment as compared to section 8 (new section 7) while the case ofMarker v. Hassan decided that as between section 8 and 9 (newsections 7 and 8) section 9 was the particular enactment ”.
Mr. Jayewardene submitted that if section 6 applied to contractsor promises in writing for work and labour and for goods soldand delivered, then on the same reasoning section 7 wouldapply t'o all unwritten contracts in such cases and this would ex-haust the entire field of such contracts and section 8 would berendered completely nugatory. That this is not so is shown bythe case of Assen Cutty v. Brooke Bond Ltd. (supra). Theplaintiff’s claim arose on three contracts for the sale and pur-chase of tea. The defendants resisted on the ground that therewas breach of warranty as the sale was not up to sample andit counter claimed for a portion of the purchase price it hadpaid on one of the contracts. It was argued that defendant’sclaim was prescribed in terms of section 8.
In dealing with this submission Garvin, S. P. J. said (36 N.L.R.189) “ The principle of K. P. Louis de Silva v. A. P. C. Don Louis(supra) which is that actions when based on written contractscome within the operation of section 7 (new section 6) cannot berelied on to exclude from the operation of section 9 (new section8) all actions for or in respect of goods sold and delivered basedon unwritten contracts or agreements. To do so would be to giveno effect whatever to section 9 since all such actions must bebased either upon a written or unwritten contract, whether
u
VYTH IAX.INOAM, J.—Ceylon Insurance Co. Ltd. v. Diesel and
Motor Engineering Co. Ltd.
express or implied. The action for goods sold and deliveredcontemplated by section 9 in so far as they are not basedon written contracts are embraced by the general words of sec-tion 8—‘ or upon any unwritten promise, contract, bargain oragreement’. But’ if we read these two sections as I think wemust, so as to give a distinct interpretation to each of thesesections we are driven to the conclusion that the object of thelegislature was to exclude from section 8 the actions 'for whichspecial provision is made by section 9. Thus, it only remains toascertain what actions, though they may be actions on unwrittencontracts, are by section 9 excluded from the operation ofsection 8
It was accordingly held in that case that a claim for damagesfor breach of warranty of goods delivered upon an unwrittencontract of sale is not an action “ for or in respect of goodssold and delivered ” within the meaining of section 9 (new sec-tion 8) but one under section 8 (new section 7).a
These principles- have now been followed by this Court inthe case of Mrs. C. Wijesuriya v. Ceylon Mineral Waters Ltd.(S.C. 48/70 (F)—D. C. Colombo 67339 delivered on 4/10/74) inwhich the claim was for balance amount due in respectof the sale of mineral waters on a written agreement.The trial Judge had held that since the action was brought withinone year from the date of the last payment in respect of these salesthe action was not prescribed. This Court uphold the judgmentbut went on to say that since the action was inrespect of awritten agreement' the action was not prescribed as section 6would apply. The judgments referred to by me above were allconsidered and the line of authorities in respect of written con-tracts and promises were approved and followed.
It is therefore abundantly clear and well established that inthe case of written promises, contracts, bargains or agreementssection 6 is the particular enactment to which the general sec-tion 8 has to give way but that in the case of unwritten con-tracts, promises, bargains, or agreements section 8 is the parti-cular enactment to which the general section 7 has to give way.Since in the instant case the first and second causes of action arebased on written contracts or agreements and the third cause ofaction is in respect of a written promise to pay section 6 appliesand as the action was filed well within the prescriptive period ofsix years the causes of action are not prescribed. The judgmentand decree appealed from are affirmed and the appeal is accor-dingly dismissed with costs.
Samerawickreme, J.—I agree.
Udalagama, J.-—I agree.
Appeal dismissed.