J. E. SENANAYAKE, Appellant, and V. H. L. ANTHONISZ and another, Respondents

050-NLR-NLR-V-69-J.-E.-SENANAYAKE-Appellant-and-V.-H.-L.-ANTHONISZ-and-another-Respondents.pdf


TAMjBIAH, J.—Senanayake v. Anthonisz
225
1965 Present : Tambiah, J., and Sirimane, J.J. E. SENANAYAKE, Appellant, and V. H. L. ANTHONISZand. another, Respondents
S. C. 131/64 (Inly.)—D. C. Kandy, 9054/MR
Pleadings—Amendment o] plaint—Rides applicable—Suit between partners—Plaintfiled alleging repudiation oj partnership obligations—Subsequent amendmentof plaint claiming dissolution oj partnership—Permissibility—PartnershipAct, a. 35—Civil Procedure Code, s. 46.
An amendment of the plaint should be allowed if such amendment dealswith the real issues between the parties and does not convert the action ofone character into an action of a different and inconsistent character.
The plaintiff, in his amended plaint of 12th September 1963, based his twocauses of action on an alleged breach by the defendants of the obligationsarising out of a partnership agreement entered into between the plaintiff andthe defendants. He claimed the refund of Rs. 100,000 which he had paid aapremium and a further sum of Rs. 100,000 aa damages for the wrongful termi- .nation of his services. Subsequently, in order to bring the plaint into conformitywith an issue raised at the trial, the plaintiff filed motion on 27th January 1964seeking to amend his plaint by adding two more reliefs, namely, that the partner-ship should be dissolved and/or the deed of partnership should be rescinded.
Held, that the amendment should be allowed.
Appeal from an order of the District Court, Kandy.
H. W. Jayeivardene, Q.G., with N. R. M. Daluivatte and B. Eliyatambyrfor plaintiff-appellant.
H. V. Perera, Q.C., with C. Ranganathan and Vernon Jonklaas, fordefendants-respondents.
Cur. adv. wit.
April 9, 1965. Tambiah, J.—
This is an appeal from an order of refusal by the learned DistrictJudge to allow an amendment sought for by the plaintiff. The termsof the amendment are embodied in the motion filed dated 27th January1964. The learned District Judge refused the amendment on the groundthat if it was allowed the character of the action would be changed.By this motion the plaintiff merely sought to amend his prayer by addingtwo reliefs, namely, the dissolution of the partnership created by deedPI and/or the rescission of the said deed.
The plaintiff, in his amended plaint dated 12th September 1963,which was accepted by court, based his two causes of action on an allegedbreach on the part of the defendants of the obligations arising out ofthe partnership agreement entered into between the plaintiff and thedefendants by deed No. 720, marked “A”.
226
TAMBIAH, J.—Senanayake v. Anlhonuz
According to the terms and conditions of this deed the plaintiff and thedefendants, who are doctors, agreed to become partners and the plaintiffpaid the sum of Rs. 100,000 as premium to join the partnership. Clause17 of the deed of partnei ship provided that in the event of the shareof any partner being seized in execution under a decree of court, if theother partners so decide, the partner whose share is seized should ceaseto be a partner. Purporting to act under this clause the defendants, byletter dated 28.3.61, informed the plaintiff that since in March, 1961 aprohibitory notice in D. C. Kandy Case No. 3137/MR was served by theFiscal on the plaintiff and the defendants, the plaintiff’s share had beenseized and therefore the plaintiff had ceased to be a partner.
The plaintiff’s action is based on two causes of action; On the firstcause he averred that the defendants wrongfully repudiated their obli-gations by purporting to act under clause 17 of the said deed of partner-ship and he claimed the refund of Rs. 100,000 which he paid as premium.On the second cause of action he averred that as a result of the defendant’sconduct in wrongfully terminating his services he had suffered damageswhich he assessed at Rs. 100,000. In his prayer he asked for judgmentagainst the defendant in a sum of Rs. 200,000 with legal interest thereon.
After the trial commenced certain issues were framed and while theplaintiff was giving evidence it transpired that he had started privatepractice on his own since 21st June 1961. Then the counsel for thedefendant suggested certain issues arising out of this evidence whichare as follows :—
Has the plaintiff been practising his profession from about the
28th March 1961, within a radius of 5 miles of the Municipality
of Kandy ?
If issue 16 is answered in the affirmative—
(а)can the plaintiff have and maintain this action for damages
and, if so, in what sum ;
(б)is the plaintiff entitled to claim a refund of the premium
or any part thereof ?
On a subsequent date Counsel for the plaintiff framed the followingadditional issues :
24. If issue No. 5 is answered in the affirmative—
are the defendants entitled to credit against the plaintiff
in the sum of Rs. 15,297-79 if paid to the Commissioner
of Inland Revenue.
is the plaintiff entitled to practice his profession within
a radius of 5 miles from the Municipality of Kandy ; and
is the plaintiff entitled to have the agreement marked PI
rescinded and/or the partnership dissolved ?
TAMBIAH, J.—Stnanayake v. Anthonin
227
In order to bring the plaint into conformity with the issue 24 (c) theplaintiff filed motion amending his plaint by adding two more reliefs,namely, that the partnership should be dissolved and/or in the alternativethe deed of partnership should be rescinded.
The principles governing the amendment of a plaint have been clearlyset out by my Lord the Chief Justice who, after an exhaustive reviewof all the authorities, laid down the following propositions (vide Daryananiv. Eastern Silk Emporium Ltd.1)
“ Two main rules which have emerged from the decided cases are :—
the amendment should be allowed if it is necessary for the purpose
of raising the real question between the parties ; and
an amendment which works an injustice to the other side should
not be allowed.”
The first rule is based on the principle that a multiplicity of actionsshould be avoided. The second rule is based on the ground that whereinjustice would be caused to the other side by allowing an amendmentit should be refused. It is also a cardinal rule that an amendmentshould not be allowed if the effect of it would be to convert the actionof one character into an action of an inconsistent character. Thisprinciple is deducible not only from the proviso to section 46 of the CivilProcedure Code but is also axiomatic in view of the fact that the function,of pleadings is to clarify the issues so that the real issues between theparties may be tried and not to allow parties to side track the real issuesby bringing a new action which is inconsistent with the one that hasalready been brought. This principle has been recognised in a numberof cases in Ceylon (vide Thirumala v. Kulandavelu2 ; Daryanani v.Eastern Silk Emporium3 ; Wijewardena v. Lenora*).
The Counsel for the respondent contended that if the amendmentsought is allowed the action would be changed into an action of a differentand inconsistent character. In support of his contention he statedthat the plaintiff in his plaint elected to accept the alleged repudiationbut the plaintiff by his amendment is now trying to set up an inconsistentcase by asking the court to hold that the partnership was still subsisting.He also urged that the plaint sought to be amended is based on twocauses of action arising out of the alleged breach of contract and theprayer for dissolution of partnership changes this action into an actionof an inconsistent character. He also submitted that the reliefs claimedin the amendment are inconsistent with the reliefs claimed in the plaintand the causes of action set out in the plaint are recognised by CommonLaw but the causes of action for dissolution are found in section 35 ofthe Partnership Act.
1 (1963) 64 N. L. R. 529 at 531.* (1964) 66 N. L. R. 285.
(1963) 64 N. L. R. at 531.(1958) 60 N. L. R. 457
228
TAMBIAH, J.—Senanayake v. Anthonisz
The cardinal ruled governing the amendment of pleadings have alreadybeen stated. There is clear authority for the proposition that a plaintiffmay even rely upon several different rights or claims in the alternative,although they may be inconsistent (vide Philipps v. Philipps1). InDaryanani v. Eastern Silk Emporium (supra) my Lord the Chief Justicesaid (vide 64 N. L. R. 533) :
“ If then, a plaintiff can set up inconsistent claims in the alternativein the plaint to start with, it is difficult to see why, on principle, hecannot be allowed to amend the plaint by pleading an inconsistentclaim in the alternative at a later stage. Whether such an amendmentshould be allowed or not depends upon the circumstances of the caseand various other considerations. ”
Subject to the restriction stated, a wide discretion is given to a judgeto amend pleadings. In support of his contention counsel for the respond-ent cited the dictum of Lord Normand in Heyman v. Darwins, Ltd.2In that case the respondent contracted with an American firm wherebythe latter were to act as their selling agent over a wide area. The agree-ment contained an arbitration clause under which if any disputes arosebetween the parties they had to refer the matter for arbitration. Theappellant in that case brought an action on the footing that the respondenthad repudiated the agreement and asked for a writ against them claiminga declaration to that effect and also claimed damages under differentheads. The appellant contended that the respondent having acceptedthe repudiation, the contract ceased to exist for all purposes and therespondent could not therefore rely on the arbitration clause. TheHouse of Lords held that even where there had been a total breach of acontract by one party so as to relieve the other party of the obligationsunder the contract, still the arbitration clause, if its terms are wide enough,would remain. Lord Simon in the course of his speech said : “Thefresh head of claim in the writ appears to be advanced on the view thatan agreement is automatically terminated if one party repudiates it.That is not so.” He cited with approval the dictum of Scrutton L.J. in.Bolding v. London Edinburgh Insurance Co. Ltd.3 which is as follows :
“ If one party so acts or so expresses himself, as to show that he doesnot mean to accept and discharge the obligations of a contract anyfurther, the other party has an option as to the attitude he may take up.He may, notwithstanding the so-called repudiation, insist on holdinghis co-contractor to the bargain and continue to tender due performanceon his part. In that event, the co-contractor has the opportunityof withdrawing from his false position, and, even if he does notmay escape ultimate liability because of some supervening event not',due to his own fault which excuses or puts an end to furtherperformance. ”
This dictum which refers to executory contracts does not support thecontention that where one party elects to accept the repudiation of acontract by another party the contract is db initio invalid.
1 (1878) 4 Q. B. D. 127.* (1942) 1 A. E. B. 337.
•* (1932) Lloyds Law Reports 487.
TAMBIAH, J.—Senanayake v. Anthonisz
229
In the instant case, the plaintiff has not taken up the position that the•contract of partnership contained in deed PI had come to an end. Theplaintiff had taken up the stand that the defendants purporting to actunder clause 17 of the said partnership deed had wrongfully taken up theposition that the plaintiff was not a partner and by the wrongful repudia-tion of the defendants’ obligation under the said deed the plaintiff wasentitled to the reliefs claimed in his amended plaint. The dictum reliedon by Mr. H. V. Perera which has been referred to, therefore has noapplication to the facts of this case.
In the instant case, the plaintiff has not sought to amend the body ofhis plaint. The reliefs that the plaintiff is now seeking for are consequenton the issues raised by the counsel for the defendant which suggest thatit was the plaintiff who had repudiated his terms and obligations underthe deed of partnership by practising on his own. Even if one partyaccepts the repudiation of the other party the contract itself is notabrogated (vide Chitty on Contracts, Vol. 1, 22nd Edition, p. 323).Lord Normand said (vide 1942) 1 A. E. R. at 34: “ However, repudiationby one party alone does not terminate the contract. It takes two to endit ; by repudiation on one side and acceptance of the repudiation on theother. ”
In Ohettyar Firm v. Maung Min Maung and others1 Baguley J., afterstating the proposition that amendments should not be allowed whichchange the nature of a suit into one of an inconsistent character said (vide1933 A. I. R. Rangoon, at 249) :
“It will be seen therefore that the one thing which must not bealtered by an amendment is the fundamental character of the suit;and I understand that the fundamental character of a suit must referto the foundation on which a suit is based. It is the foundation on whicha suit is based and not the prayer in the plaint that determines itsfundamental character.”
The same view was taken in Kasinath Das v. Sadasiv Patnaik 2.
Examples of amendments which alter the nature of the suit into one ofan inconsistent character are found in the decisions of our courts andother countries. It has been held that a person cannot alter a cause ofaction based on a lease into one for a declaration of title (vide Pathirana v.Jayasundara s). A plaint based on a written agreement cannot be allowedor be amended by the substitution of another written contract (videMa Shwe Mya v. Maung Mo Hnaung*). A plaint based on a cause ofaction based on contract cannot be amended in such a way so as tosubstitute a cause of action to one based on tort (vide 1933 A. I. R.Rangoon 247). When the plaintiff comes to court basing his claim on acontract of partnership he would not be allowed to amend his plaint onthe basis of a breach of trust (vide Thirumalay v. Kttlandavelu *). 1
1 (1933) A. I. B. Rangoon p. 247.» (1893) I. L. B. 20 Cal. 805 at 809.
» (1955) 58 N. L. R. 169.* (1922) A. I. R. P. C. 249.
5 (1964) 66 N. L. R. 285.
230
Muttiahpxllai v. Robert de Silva
In the instant case the foundation of the plaintiff’s case is to be foundin the body of the plaint. The plaintiff is not asking for amendmentof any averments in the body of the plaint but is merely asking foradditional reliefs. By the amendment sought he is not altering thenature of his action.
In view of the position taken up by the defendant at the trial it will be adenial of justice if the plaintiff is not allowed to amend his plaint interms of the motion filed by him. For these reasons, I am of the viewthat the learned Judge misdirected himself by holding that the amend-ment would alter the nature of the action. I set aside the order of thelearned District Judge refusing the amendment and allow the amendmentasked for in the plaintiff’s motion dated 27th January 1964.
The appellant is entitled to costs of appeal as well as the costs ofinquiry in the District Court.
Sibimane, J.—I agree.
Appeal allowed.