Abdoo v Leo and Another (Civil Appeal No. 29 of 1955) [1950] EACA 42 (1 January 1950)

# H. M. COURT OF APPEAL FOR EASTERN AFRICA

Before Sir Newnham Worley (President), BACON, Justice of Appeal and CORRIE, J. (Kenya)

### SALEM ALI ABDOO, Appellant (Original Defendant)

#### ν

## (1) RUBEI LEO and (2) RUBEI MARCO, Respondents (Original Plaintiffs)

## Civil Appeal No. 29 of 1955

(Appeal from the decision of H. M. Supreme Court of Aden, Campbell, J.)

Jurisdiction-Defendant resident in Aden-Contract made in Italy for payment of money in Yemen-Aden Colony Order in Council, 1936, clauses 15 (1) and (2) and 16—Supreme Court Ordinance of Aden (Cap. 127)—Indian Civil Procedure Code, 1908, section 20—Civil Courts Ordinance of Aden (Cap. 22), section 18 (1)—Eastern African Court of Appeal Rules, 1954, rule 74 (4) and $(5)$ .

The Supreme Court had issued a decree in favour of the respondents ordering payment of a sum of money by the appellant "in Hodeidah (Yemen)" ... "within thirty days". The debt was incurred in Italy and the appellant had promised to make payment in Yemen.

On appeal it was submitted that the Court had no jurisdiction to deal with a case in which the claim was based on a contract to effect a payment outside the Colony.

Held (9-12-55).—(1) As the appellant was a permanent resident of Aden carrying on his business there and was personally subject to the jurisdiction of the Supreme Court, the Court had jurisdiction to deal with the case.

(2) The decree should not have provided for payment in Yemen or for payment in thirty days.

Appeal dismissed. Decree amended by striking out the words "in Hodeidah (Yemen)" and "within thirty days".

Cases referred to: Manners v. Pearson & Son. (1898) 1 Ch. 581; Société des Hotels<br>le Touquet Paris-Plage v. Cummings, (1922) 1 K. B. 451; Madeleine Vionnet et Cie<br>v. Wills. (1940) 1 K. B. 72; Cornelius v. Banque Franco-Serbe

## Chanan Singh for appellant.

No appearance for respondents.

JUDGMENT (prepared by Bacon, J. A.).—This is an appeal against judgment given in the Supreme Court of Aden in favour of the plaintiffs (respondents) jointly for Sh. 6,711 together with Sh. 547 costs.

At the hearing of the appeal, on which the appellant was represented by Mr. Chanan Singh but the respondents did not appear and were not represented, this Court made an Order that the appeal be dismissed, that the decree of the Court below be amended by striking out the words "in Hodeidah (Yemen)" and the words "within thirty days", and that the respondents pay two-thirds of the appellant's taxed costs of the appeal, such two-thirds to be set off against the sum adjudged due to the respondents. We now give our reasons for that Order, together with a modification of the provision as to costs which we make on reconsideration, the Order not having yet been drawn up.

The claim was brought by two brothers. At all material times the first respondent was in Milan and the second respondent was in Hodeidah (Yemen). The claim was founded on an alleged loan made by the first respondent to the appellant, repayable by the latter to the second respondent and evidenced by a promissory note signed by the appellant in the sum of £335 11s. sterling. The terms of the promissory note (as translated into English for the purpose of the trial, the original note having been written in Italian) were as follows: "Mr. Rubei Leo of Rome had advanced to me during my staying in Italy the sum of sterling £335 11s., which amount I promise to reimburse to his brother Rubei Marco in Hodeidah (Yemen) on my return in Aden".

The transaction in question took place while the appellant, a permanent resident of Aden, was on a visit to Milan. The first respondent paid the appellant's hotel bills and other expenses in Milan and at the termination of the appellant's visit it was apparently agreed between those parties that the sum total of the moneys advanced for various purposes by the first respondent was the equivalent in lire of £335 11s.

In his written statement of defence the appellant admitted signing the promissory note but averred that all the expenses in question were incurred for the account of a partnership consisting of himself and the second respondent. The appellant's case on the merits was that, the expenses having been incurred for that purpose, the amount should by agreement have been incorporated in the partnership account and that that was in fact ultimately done. Thus the appellant contended that nothing was due or owing by him, the whole having been dealt with in the accounts said to have been kept by the partnership at Hodeidah.

Evidence was given at the trial by three persons as follows. First, the appeliant, who after stating that he was in partnership with the plaintiffs (respondents) in Hodeidah and that the partnership had a contract to build a powerhouse there for which electrical machinery was required, averred that he had gone to Milan and stayed there sixteen days. He did not specifically state that he had gone to Milan for the express purposes of the partnership, but it is to be inferred from his evidence that that is what he was clearly intending to convey. He then said: "The intention was that I should reimburse the first plaintiff in Hodeidah. I understood that the account would be debited by him to the partnership account. It was not just a private advance." The second witness was one Kamil Ahmed, who said that he was a friend of the appellant and that when the appellant returned to Aden from Italy he accompanied him to Hodeidah at the end of 1950. He further said that the appellant was in partnership with the second respondent in relation to "an electrical contract in Hodeidah". Finally, this witness stated that he knew that the appellant and the second respondent settled up their accounts in Hodeidah, and said that nothing more was owed by either of them to the other, and that he had heard them doing this. Thirdly, the second respondent's evidence, taken in November, 1952, on commission, was read. He gave what was apparently hearsay evidence as to what had happened in Italy, and referred to letters from the appellant to himself which were not produced and which he said he "had not got". He agreed that there was a partnership between himself and the appellant at the time when the appellant went off to Milan, but denied that the appellant had gone there in connexion with the partnership business. He also denied that the advance of £335 11s. formed part of the partnership account. He said that the appellant went to Italy of his own accord, and that it was not true that he had been deputed to go to Italy to make purchases of and to inspect goods for the partnership business.

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Two matters were raised by the appellant in the Court below: first, that the Court did not have jurisdiction to try the case, and secondly, even if it had such jurisdiction, the merits were in the appellant's favour.

The learned trial Judge held that the Court had jurisdiction, but could not "vary the stipulation that the payment shall be made in Hodeidah". The judgment on this point was expressed as follows: "There may have been good reasons why this was stipulated, owing to currency restrictions or something similar, and payment must be made there in default of any further agreement by the parties.... If the defendant insists on his right to pay the money in Hodeidah, arrangements can easily be made by the plaintiff to receive it". On the merits the learned Judge stated that he believed the second respondent's evidence and found that the promissory note remained unpaid. He added that he was satisfied that the money was owed by the appellant as a private loan.

Both those matters—the question of jurisdiction and the effect of the factual evidence—were raised on appeal.

As to the question of jurisdiction, the relevant provisions are the following. The Aden Colony Order in Council, 1936, by sub-clause (1) of clause 15 provides that: "There shall be in and for the Colony a Court of unlimited criminal and civil jurisdiction to be called the Supreme Court" and by sub-clause (2) "The constitution and powers of the Supreme Court may, subject to the provisions of this Order, be prescribed by laws made by the Legislature of the Colony. Clause 16 of that Order provides in effect that Indian Acts which applied to Aden before it became a Colony shall continue to apply except in so far as they may, in their application to the Colony be repealed, amended or otherwise affected by any further Order in Council or by any local legislation of the Colony.

The Supreme Court Ordinance of Aden (Cap. 127) provides by section 8 that "subject to the provisions of any other enactment for the time being in force in the Colony the Supreme Court shall have original civil jurisdiction to hear and determine all cases of whatever nature".

Section 20 of the Indian Civil Procedure Code, 1908, provides that "subject. to the limitations aforesaid every suit shall be instituted in a Court within the local limits of whose jurisdiction—(a) the defendant $\ldots$ at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain". This section of the Code was still in force in Aden at the time of the trial of this suit.

The Civil Courts Ordinance of Aden (Cap. 22) provides by sub-section (1) of section 18 that: "The Courts shall (subject to the provisions contained in this Ordinance) have jurisdiction to try all suits of a civil nature except suits of which their cognizance is either expressly or impliedly barred".

Finally, there are the Rules of the Supreme Court, Aden, 1937, made pursuant to section 126 of the Civil Courts Ordinance, but it was not contended before us that any particular rule was material in the sense that it could affect this question of jurisdiction.

It was common ground that the appellant at the material time was a permanent resident of Aden and conducted his business there. But his counsel argued on the appeal that section 8 of the Supreme Court Ordinance is the paramount provision as regards the jurisdiction of the Courts of Aden and is not sufficiently wide to embrace a case in which the claim is based upon a contract to effect a payment outside that Colony. We are unable to accede to that argument. Section 8 of the Ordinance places no express limitation on the jurisdiction as regards the subject-matter of the action, nor can any implied limitation be read into it. In our opinion, any contract which is binding on the parties thereto according to the law applicable thereto is enforceable in the Supreme Court of

Aden, provided that the defendant or defendants is or are personally subject to the jurisdiction. In our view the principle which has for many years been adopted by the English Courts applies equally to Aden. In England a binding contract to pay money in a foreign currency at a place outside the jurisdiction is enforceable, though judgment is invariably given in terms of sterling which thereby becomes payable by the judgment debtor in England. The following cases are instances of the application of that principle: Manners v. Pearson and Son. (1898) 1 Ch. 581; Société des Hotels Le Touquet Paris-Plage v. Cummings, (1922) 1 K. B. 451; Madeleine Vionnet et Cie v. Wills, (1940) 1 K. B. 72; and the case cited by counsel for the appellant, Cornelius v. Banque Franco-Serbe, (1941) 2 A. E. R. 728. In our opinion the learned Judge was right in applying that same principle to Aden. Accordingly we hold that the Court of first instance had jurisdiction to try this case.

We think, however, that the learned Judge was wrong in two respects. Having referred in his judgement to the terms of sub-section (1) of section 20 of the Indian Civil Procedure Code, 1908, he said that he did not think its provisions were of importance to the plaintiffs inasmuch as the section deals with the matter of which particular Court in one country has jurisdiction, but not with the question of jurisdiction over "matters or persons in a foreign country". In our view the question of voluntary residence, or of the carrying on of business, or of the working for gain on the part of the defendant in Aden is an important factor in any case in which jurisdiction is in issue. If, in the instant case, the defendant (appellant) had, generally speaking, been a stranger to Aden, the result might have been very different: see the decision of this Court in Ahmed Yousuf Shariff v. Sheikh Ahmed Mansoor, Civil Appeal No. 3 of 1955 (unreported).

The second error was in adjudging the sum in question to be payable in Yemen. The English practice of giving judgment in the currency which is legal tender within the jurisdiction and in the normal form which makes the judgment-debt payable therein should always be adopted in Aden. A decree in the form used in the instant case either involves a purported assumption of extraterritorial jurisdiction as regards the execution of the decree or alternatively is one to which the Court is powerless to give effect. It may, indeed, also be that a judgment-debtor could not lawfully comply with such a decree as was passed by the Court below without first obtaining Government sanction for the export of currency, in which case he might be faced with an insoluble dilemma.

Accordingly, acting under sub-rules (4) and (5) of rule 74 of the Eastern African Court of Appeal Rules, 1954, which empower this Court to give any judgment and to make any order which ought to have been given or made in the Court below, and so to do notwithstanding that the notice of appeal relates only to part of the decision, and which further provide that the power may also be exercised in favour of all or any of the respondents or parties who have not appealed from or complained of the decision, we strike out from the decree the words "in Hodeidah (Yemen)", and we also strike out the words "within thirty days" since there is no reason of which we are aware for giving the appellant time in which to liquidate the judgment-debt.

As regards the merits, it is contended in the Memorandum of Appeal and was argued that the learned trial Judge ought, on the evidence before him, to have found that the transaction was by agreement between the parties a partnership matter and that they treated and settled it as such. In our view, there was evidence on which it was open to the learned Judge to find, as he did, that there was no such consensus but that the advances made by the first respondent in Milan were by way of a purely personal loan which had not been repaid. There is a direct conflict of evidence between the appellant and the second respondent as to whether the former went to Milan on partnership business and we cannot hold that the learned Judge was wrong in accepting the second respondent's version, or in treating (as he evidently did) the evidence of Kamil Ahmed as of no real assistance to the appellant. It was, as the learned Judge observed, noteworthy that no partnership books or accounts were produced to substantiate the appellant's story. It is, we think, also significant that the total amount advanced to the appellant was equivalent to £335 11s. in respect of expenses incurred in Milan in only 16 days—an average expenditure of £21 per day. It seems improbable that living expenses were incurred at such a rate by the appellant on behalf of the partnership. It is much more likely that, as the second respondent contended in the witness-box, the expediture included private purchases by the appellant and was all for his personal account.

As to the costs of this appeal, we think that we should give effect to the somewhat curious position which has arisen inasmuch as the respondents, who have not appeared and have not been represented in this Court, have nevertheless not only succeeded on the appeal but also reaped the additional benefit of now having a decree in proper form and clearly enforceable by execution on the appellant's assets in Aden. The respondents must pay one-half of the appellant's taxed costs of this appeal, to be set off against the sum payable to them by the appellant.