George and Company v Pritam's Auto Service (Civil Appeal No. 74 of 1954) [1955] EACA 293 (1 January 1955)

## COURT OF APPEAL FOR EASTERN AFRICA

Before SIR BARCLAY NIHILL (President), SIR NEWNHAM WORLEY (Vice-President) and Sir Enoch Jenkins, Justice of Appeal

GEORGE AND COMPANY (M. P. GEORGE T/A GEORGE & CO. IN: AMENDED PLAINT), Appellant (Original Plaintiff)

## $\mathbf{v}$ PRITAM'S AUTO SERVICE, Respondent (Original Defendant)

## Civil Appeal No. 74 of 1954

(Appeal from the decision of H. M. Supreme Court of Kenya, Cram, Ag. J.)

Plaint—Amendment—Plaintiff suing in firm name and amending into own name -Whether change of parties-When appeal court will interfere with the trial Judge's discretion as to allowing amendment to pleadings-Civil Procedure (Revised) Rules, Order 1 rule 10, Order 6 rules 17, 19 and 21, and Order 29 rule 1.

The appellant sued the respondent under his (appellant's) trade name. Within the time for so doing, however, he filed an amended plaint under Order 6 rule 19 of the aforesaid Rules, in his own name. It was contended for the respondent that this constituted a charge of parties which could not, under the said rule bedone without leave, and that the appellant should have sought the leave of the court under Order 1 rule 10 of the said Rules. Upholding this submission, the trial Judge disallowed the amendment under Order 6 rule 21 of the Rules.

The trial Judge also found that the plaint had otherwise been amended in: manner affording the defence the protection of Order 6 rule 17. He did not, in. his ruling, address his mind that under Order 6 rule 21 the court's discretionary power to disallow an amendment should not be exercised unless it is satisfied that: the justice of the case requires disallowance.

Order 6 rules 17, 19 and 21 are set forth in the judgment of Sir Enoch. Jenkins, J. A.

Held (7-4-55).—(1) Following Phakey v. World Wide Agencies Ltd., the change in description: of the plaintiff did not amount to a substitution of parties.

(2) While a Court of Appeal will not normally interfere, except on grounds of law, with the exercise of a Judge's discretion as to whether an amendment should be allowed, it has the power and duty to interfere if, on other grounds the trial Judge's discretion will result in an injustice, and as in the instant case the issue of justice between the parties told in favour of the plaintiff, it was right for the Court of Appeal to interfere with the discretion exercised by the trial Judge.

Appeal allowed. $\Box$

Raghavies 1. S. A. C. A. 19; Evans v. World Wide Agencies Ltd. 15 E. A. C. A. 1; Karsan v. Raghaviee 10 E. A. C. A. 10; Evans v. Bartlam (1937) A. C. 473; Devji Goa and others v. Tricumji Jiwandas and o

## De Souza for appellant.

D. V. Kapila for respondent.

[Editorial Note.—The appellant having applied for, and obtained, leave of the Court to appeal and to appeal out of time, the Court refused to entertain the appeal until the appellant $(a)$ drew up the order giving leave and $(b)$ filed an amended memorandum of appeal which by reference to such order, showed that: the appeal was competent:]

SIR BARCLAY NIHILL (President).—This is an appeal by leave of this Court against a ruling of Cram Acting J., in the Supreme Court of Kenya which came to be given under the following circumstances. The appellant M. P. George filed a plaint against the present respondent described at Pritam's Auto Service claiming recovery of the sum of Sh. 8,000 alleged to be due on three dishonoured promissory notes. In the alternative it was pleaded that the sum of Sh. 8,000 was due for goods sold and delivered. In this plaint the appellant sued under<br>the trade name "George & Company". The plaint was filed on 17th November, 1953. A written statement of defence was filed on 17th February, 1954, in which the respondent pleaded inter alia, that M. P. George was carrying on his business under the assumed name of "George & Company" which firm was not a legal entity and could not sue in law in its own name. On 19th January, 1954, the appellent filed a notice for summary judgment under Order 36 rules $2-3$ and this came on for hearing before a Judge of the Supreme Court on 3rd February, 1954. The notice was rejected on the ground that the suit was not properly instituted, in that since M. P. George was carrying on business by himself he must sue in his own name and not under his trade name (Order 29 rule 1). The appellant was told by the Judge that if he so desired he could file a fresh application for leave to amend. What the appellant in fact did was to file an amended plaint under Order 6 rule 19 on 3rd February, 1954, and he was in time in so doing. The respondent then took out a chamber summons under Order 6 rules 17 and 21 praying the Court to disallow and strike out. This application came on for hearing before Cram, Acting J., on 2nd March, 1954, and resulted in the ruling now appealed against.

In the amended plaint the appellant sued under his own name M. P. George, and the first ground of objection taken by the respondent was that this constituted a change of parties which could not be done without leave under Order 6 rule 19. The appellant should, it was argued, have sought the leave of the Court under Order 1 rule 10. The learned Judge upheld this submission and accordingly disallowed the amendment under Order 6 rule 21. In doing so it would seem that he could not have been aware of the decision of this Court in *Phakey* $v$ . World Wide Agencies Ltd. (Trading as Traders) reported in XV E. A. C. A. 1. Mr. de Souza has confessed to us that although he knew of the case and mentioned it in the course of his argument he did not have the case by him and was unable to give the learned Judge a correct reference. This was unfortunate because, I feel sure that had the Judge had the opportunity of reading this decision, he would not have disallowed this particular amendment. In Phakey's case in the original plaint, the name of the plaintiff had been given as "Traders" Ltd.", a misdescription because in fact no such company existed. In an amended plaint put in under Order 6 rule 19 the plaintiff was described as "World Wide Agencies Ltd. trading as Traders". On a motion that the amended plaint be disallowed defendant's counsel argued that the change of name constituted in effect the creation of a new plaintiff, and that the action should be dismissed because it had been instituted in the name of a non-existent persona unknown to the law. On appeal this argument was rejected by this Court, it being held that the change in the description of the plaintiff did not amount to a substitution of parties and could therefore be effected without leave under Order 6 rule 19. The instant case seems to me completely in line. In both cases in the original plaint the plaintiff's trade name had been given and on discovery that this would not allow the plaintiff to sue, the plaint was amended under Order 6 rule 19 so as to introduce the plaintiff's real name. The only difference is, and it is no true difference in law, that in Phakey's case the plaintiff was a limited company whereas in the present case he is a single individual. So far as this part of the ruling is concerned therefore I have no hesitation in holding that the learned Judge exercised his discretion wrongly in disallowing the amendment. This however does not conclude the matter, because the learned Judge also found that the plaint had been otherwise amended in a manner which afforded the defendant the protection of Order 6 rule 17. Accordingly he struck out the plaint on the ground that as amended the cause of action was ambiguous, and introduced an embarrassment which might tend to delay the fair trial of the action. I must confess that this aspect of the appeal has given me some difficulty because the learned Judge had a discretion under Order 6 rule 17, and unless it can be shown clearly that he has acted on some wrong principle this Court is not entitled to interfere. It must be conceded that the amended plaint differs considerably from its predecessor. It will be remembered that in the original plaint, the plaintiff first took his stand on three promissory notes which he said had been dishonoured, it was in the alternative only that he claimed the sum due on the notes as a sum due for goods sold and delivered. In the amended plaint he reverses his claim and goes on to allege, that as regards the promissory notes, one only to date of plaint had been dishonoured, but that there was an agreement that if any one of the notes were dishonoured the whole amount of the Sh. 8,000 would become due and payable immediately. It would appear from a passage in the ruling that the learned Judge thought that this amendment had been made to meet an averment in the defence that not all the notes had been dishonoured at the time when the suit was instituted. If he did, this was a misdirection because the amended plaint was filed on 3rd February, 1954, and the defence on 17th February. Mr. de Souza has submitted that there is no ambiguity in the amended plaint, that it shows that his primary cause of action is for goods sold and delivered, but that to anticipate the defence that promissory notes had been given and accepted, he had to plead that they were given as conditional payment, and were subject to an agreement that if any one of the notes were dishonoured, then the whole amount of the debt due on the goods would become due and payable immediately. The learned Judge went into all this very thoroughly in his ruling but I am not convinced by his reasoning that the ambiguity he felt existed, is really there. He appreciated that the notes were taken in conditional payment but thought it difficult to see how, in the absence of a special agreement, the notes could be sued on before all had been dishonoured. I think he overlooked that the answer to the difficulty was that the plaintiff in paragraph 2 of his amended plaint pleaded a special agreement.

In Karsan v. Raghavjee 10 E. A. C. A. 10 Whitley, C. J., in considering the principles which should govern an appellate court in matters of discretion, referred to the House of Lords case of Evans v. Bartlam 1937 A. C. 473 and pointed out on the authority of that case that although a court of appeal will not normally interfere except on grounds of law with the exercise of a Judge's discretion as to whether an amendment should be allowed, the Court has the power and the duty to remedy it if it is seen on other grounds that the Judge's decision will result in injustice being done. Under Order 6 rule 21 the Court's permissive power to disallow an amendment should not be exercised unless the Court is satisfied that the justice of the case requires disallowance. The learned Judge in his ruling does not seem to have addressed his mind specifically to this aspect of the matter, but to be fair to him, I think it must be assumed that he thought the ambiguity in the amended plaint was so grave that it would be unjust to take the defendant to trial on it. If in fact, as I think, there is no real ambiguity which could mislead or embarrass the defendant the basis on which the Judge exercised his discretion to disallow becomes untenable. Furthermore on the issue of justice as between the parties, it seems to me that the balance tells strongly in favour of the plaintiff-appellant. The defendant-respondent has at no time denied owing this money, what he has done has been to raise technical<br>objections in order to put off the evil day. If, as I think, the amended plaint is sufficiently clear to allow a proper trial of the issues it would be unjust to the appellant to force him to take further steps to have his plaint amended.

I would therefore allow this appeal, reverse the ruling of Cram, Acting J., and dismiss the chamber summons taken out by the respondent under Order 6. rules 17 and 21. The appellant should have the costs of this appeal and the costs. of the summons.

SIR ENOCH JENKINS, J. A.—This is an appeal from an order of the Supreme Court of Kenya disallowing under Order 6 rules 17 and 21 of the Civil Procedure (Revised) Rules, 1948, amendments made without leave by the appellant under Order 6 rule 19 to his plaint. The said rules are as follows:-

O. VI, r. 19. Plaintiff may amend without leave.

19. A plaintiff may without leave amend his plaint once at any time within 21 days from the date specified in the summons for the appearance of or the entering of an appearance by the defendant; or, where a written statement of defence is filed, then within 14 days from the filing of the written statement of defence or the last of such written statements.

O. VI, r. 17. Striking out pleadings.

O. VI, r. 21. Disallowance of amendment.

17. The Court may at any stage of the proceedings order to be struck out or amended any matter in any endorsement or pleading which may be unnecessary or scandalous or which may tend to prejudice, embarrass, or delay the fair trial of the action; and may in any such case, if it shall think fit, order the costs of the application to be paid as between advocate and client.

21. Where a party has amended his pleading under either of the last two preceding rules, the opposite party may within 15 days from the date of service upon or delivery to him of the duplicate of the amended document apply to the Court to disallow the amendment or any part thereof, and the Court may, if satisfied that the justice of the case require it, dissallow the same or allow it subject to terms as to costs or otherwise as may be just.

The first amendment disallowed concerns the name of the plaintiff. In the original plaint filed this is shown as "George and Company"; in the amended plaint filed within the prescribed time it is shown as "M. P. George trading as. George and Company". The alteration is a necessary one because of misnomer. Order 29 enables two or more persons claiming or being liable as partners to sue or be sued in the name of the firm of which they are partners, and also enables one person carrying on business in a name or style other than his own name to be sued in such name or style as if it were a firm name, but there is no provision which enables one person to sue in a name or style other than his own name. In the instant case the plaintiff M. P. George trades in the name "George and Company", and he is so registered under the Registration of Business Names Ordinance, 1951. The learned Judge in the court below found however that the appellant could not cure the misnomer by amendment without leave under Order 6 rule 19, but must apply for leave to substitute under Order 1 rule 10. It is unfortunate that at the hearing in the court below the learned Judge's attention was not drawn to the decision of this Court in Phakey v. World Wide Agencies Ltd. (Trading at Traders) (1948) 15 E. A. C. A. 1, a case which is on all fours with the instant one. In that case the name of the plaintiff was originally shown as "Traders Ltd." and on discovery that there was no such company but that the name of the plaintiff was "World Wide Agencies Ltd. (Trading as Traders)" the mistake was rectified within the prescribed time under Order 6 rule 19. Application was made under Order 6 rule 21 to disallow the amendment, and the dismissal of that application was affirmed on appeal. As in the instant case a mistake was made in giving the trading name of the plaintiff instead of the real name, and the trading name did not constitute a legal persona. Further,

although in the instant case the trial Judge did not deal with the point, it is clear from the defence filed, as in Phakey's case, that the defendant well knew by whom he was being sued, and that it could not be said that the justice of the case did not require the amendment. Mr. Kapila, for the respondent, faced with the formidable obstacle of Phakey's case, submitted that Phakey's case is distinguishable from the instant case. He argued that the instant case is not a question of misnomer but a failure to comply with Order 29. He cited, in support of his argument that the plaintiff should have applied to amend under Order 1 rule 10, various English cases and one Privy Council case from India. In the latter case, Devji Goa and others v. Tricumji Jiwandas and others (1945) 32 All India Reporter 71, the Privy Council on its own motion directed that a co-plaintiff should be added under Order 1 rule 10 (India) which is the same as Order 1 rule 10 (Kenya). This direction was made, as stated in the judgment at p. 74, to enable the plaintiff firm to be properly represented to carry on the suit. The important question in the case was whether Order 30 rule 1 (India), which corresponds to Order 29 rule 1 (Kenya) had been complied with by the plaintiff firm. There is no plaintiff firm in the instant case, and there is nothing in the Devji Goa case which has any application to the instant case.

In Noble Lowndes and Partners (a Firm) v. Hadfields Ltd. (1939) Ch. 596. one N. F. Lowndes entered into a contract with the defendants in the name of Noble Lowndes and Partners. He thought that there was a partnership between himself and five other persons, and an action was brought on the contract, the plaintiffs being named as Noble Lowndes and Partners (a Firm). The defendants discovered that there was no such firm. N. F. Lowndes took out a summons to amend by substituting his name for the name of the non-existent firm, and the defendants took out a summons to strike out the statement of claim. The plaintiff's application, which was made under Order 16 rule 2 (England), which is the same as Order 1 rule 10 (Kenya), was allowed. Mr. Kapila submitted that this case is on all fours with the instant case, for the plaintiff in the Lowndes' case infringed Order 68A (England) just as the plaintiff has infringed the corresponding Order 29 (Kenya) in the instant case. Up to that point Mr. Kapila's argument can be followed, but he proceeds to ask us to infer that only Order 16 rule 2 (England), (Order 1 rule 10 Kenya), can apply to such circumstances. There is nothing however in the Lowndes' case to show that the plaintiff tried first to amend without leave under Order 28 rule 2 (England), which corresponds with Order 6 rule 19 (Kenya), and a perusal of the report of the case indicates that he would probably have been out of time. For that reason the Lowndes' case is of no authority in the instant case, and it is also of no authority for the more pressing reason that this Court is bound by the decision in Phakey's case. Similarly as regards the other English cases cited by Mr. Kapila, in not one of them is Order 28 rule 2 (England) considered and they consequently throw no light on the instant case.

To sum up as regards the first amendment disallowed. The learned Judge in the court below was of opinion, contrary to the decision in Phakey's case, that the appelllant could not cure the misnomer by amendment without leave under Order 6 rule 19. His ruling must be reversed. It is axiomatic that the Court of Appeal will seldom interfere with the exercise of a Judge's discretion in such matters: (Annual Practice (England) 1955, p. 368, note: "Appeal from Order") but this is a matter of principle and not subject to such limitation.

The next amendment disallowed concerns the subject matter of the plaint. In his original plaint the appellant claimed in paragraph 1 the sum of Sh. 8,000, being the amount due on three dishonoured promissory notes, and in paragraph 2, in the alternative, the said sum of Sh. 8,000 as being the sum due for goods sold and delivered. In his amended plaint the appellant claims in paragraph 1 the sum of Sh. 8,000, being the sum due for goods sold and delivered, and in paragraph 2, in the alternative, the said sum of Sh. 8,000 as being due on three promissory notes only one of which has been dishonoured but that by an agreement between the parties the whole amount of Sh. 8,000 became due and payable immediately the one note was dishonoured. Paragraph 2 of the amended plaint reads in full as follows: -

"2. In the alternative the plaintiff claims the said sum of Sh. 8,000 as being due on three promissory notes drawn by the defendant in favour of the plaintiff and payable at Barclays Bank D. C. O., Nairobi. It was agreed between the parties, when the said promissory notes were given to the plaintiff that they were conditional payments of the sum of Sh. 8,000. and that if any one of the said promissory notes was dishonoured by nonpayment the whole amount of Sh. 8,000 would become due and payable immediately. The first promissory note dated 20th September, 1953, and payable after 30 days became due on the 23rd October, 1953, and was presented at the said Barclays Bank D. C. O., Nairobi, and was dishonoured by non-payment and notice of dishonour was given in writing to the defendant."

The learned Judge in the court below rejected the respondent's contention that the appellant in his pleading of the alleged agreement was introducing a new cause of action not available when the case was filed, but disallowed paragraph 2 of the amended plaint on the ground that it is ambiguous and likely to embarrass the fair trial of the suit. The learned Judge says (pp. 17 and 18 of $Record) :-$

"I am quite prepared to accept as a relevant case that the three notes were the subject of an agreement that on the dishonour of one the original debt would become immediately due and payable. But the plaintiff goes on to aver an alternative and it is this alternative which I find ambiguous and likely to embarrass the fair trial of the suit. He claims Sh. 8,000 on three promissory notes which he alleges were subject to an agreement that if one were dishonoured the whole amount of Sh. 8,000 would become due immediately. Promissory notes ordinarily cannot be made the subject of a suit unless and until all are dishonoured and notice has been given. I am not clear if the agreement was to the effect that if one were dishonoured then all would be payable immediately although not due. They were taken in conditional payment and, of course, as I mentioned already, it is logical that there might be an agreement that on the dishonour of one the original debt could be sued upon, but in the absence of a special agreement it is difficult to see how the notes could be sued upon. If that is the nature of the agreement then it ought to be stated clearly. I am unwilling to let the case go forward to proof until the issues are plain. As it stands the amendment to the plaint introduces an embarrassment which may affect the trial. In my view the amendment will have to be struck out. The plaintiff of course may apply for leave to amend. The notes could be used as evidence to prove the original debt but the plaintiff must make clear if he sues on the original debt only, the condition not having been fulfilled or sues both upon the price of the goods and upon the three notes subject to a special agreement."

With due respect to the learned Judge it is difficult to see where the alleged ambiguity arises. The appellant alleges an agreement between the parties concerning the promissory notes which of course he will have to prove by evidence. On such proof and on proof that one of the promissory notes has been dishonoured then the whole of the amount of Sh. 8,000 becomes due and payable.

That is the alleged agreement. There is no question of the three promissory notes becoming due and payable. The learned Judge correctly states that "promissory notes ordinarily cannot be made the subject of a suit unless and until all are dishonoured and notice has been given", but he goes on to say, "I am not clear if the agreement was to the effect that if one were dishonoured then all would be payable immediately although not due". If the respondent was in any doubt on that point he could have applied for particulars. There is nothing novel in the appellant's pleading. It is well settled that a claim for alternative relief is not embarrassing (Bagot v. Easton 7 Ch. D. 8), so that paragraph 2 of the amended plaint, a claim in the alternative to the claim in paragraph 1, cannot on that score give cause for complaint. Paragraph 2 itself which makes the whole amount of Sh. 8,000 due and payable immediately if any one of the three promissory notes is dishonoured is a common form of commercial practice. A pleading on the same lines is set out in Atkin's Encyclopædia of Court Forms and Precedents Vol. 3, p. 261, Form 33, in which on a promissory note for £500 payable by instalments of £50 if default is made in the payment of any one of the instalments the whole amount remaining unpaid becomes immediately payable. (See also cases cited in the English and Empire Digest, Vol. 6, pp. 23 and 26.) The learned Judge thus seems to have misdirected himself in thinking as he did that paragraph 2 contains an alternative within itself. In addition it does not seem that the learned Judge directed his mind sufficiently to the words "if satisfied that the justice of the case require" in Order 6 rule 21. The defence filed by the respondent attacks the technical defect in the title of the plaint and pleads that the cause of action is premature because all the promissory notes had not become due for payment, but the basis of the action, i.e. a sum due for goods sold and delivered, is not directly attacked. The learned Judge appears again to have misdirected himself in not considering this aspect of the matter.

I would therefore allow this appeal, reverse the ruling of the Judge below and dismiss the summons taken out by the respondent under Order 6 rules 17 and 21. The appellant should have the costs of this appeal and of the hearing below.

SIR NEWNHAM WORLEY (Vice-President).—I agree with the judgments which have just been delivered and with the order proposed. I have nothing to add.