McCoy v Allibhai (Civ. App. No. 3/38.) [1938] EACA 70 (1 January 1938)

### COURT OF APPEAL FOR EASTERN AFRICA

## Before SIR JOSEPH SHERIDAN, C. J. (Kenya); WHITLEY, C. J. (Uganda); and HAYDEN, J. (Kenya).

#### J. J. McCOY Executor of the Estate of P. A. Van Breda, Appellant (Original Defendant) v.

# ESMAIL ALLIBHAI Administrator of the Estate of Allibhai Noormohamed, Respondent (Original Plaintiff)

#### Civ. App. No. 3/38.

#### Appeal from decision of Webb, J. (Kenya).

Pleading-Limitation-Acknowledgment-Mutual open and current account—Amendment of defence in Court of Appeal—Limitation Ordinance (Kenya), secs. 38, 40 and 41-Indian Limitation Act, 1877, sec. 20 and Art. 85—Costs.

The respondent during the years 1925 to 1929 sold certain goods and advanced money on loan to one, V. B., who made repayments on account, of which the last was made in 1932. There was nothing in the handwriting of V. B. to prove the fact of any of these payments on account as was required by section 30 of the Indian Limitation. Act, 1877. On 20-8-38 the respondent brought suit against the appellant as the executor of V. B. then deceased to recover the unpaid balance of this account.

The appellant pleaded that "even if plaintiff could prove the said. payments or any of them, defendant denies that any acknowledgment of debt as alleged would thus be established and in particular he denies that this suit is within time and he will submit on a preliminary point of law that even if plaintiff could otherwise establish his claim. or any part thereof his suit is barred by limitation."

In the lower Court, judgment was passed in favour of the respondent on the ground that the defence of limitation was not properly pleaded according to the provisions of section 40 of the Limitation Ordinance, 1934, and the Court refused to make any order as to costs. in view of all the circumstances. Appellant appealed and subject to the decision on the point of the pleading of limitation being upheld applied to the Court of Appeal for leave to amend his defence so as to plead specifically the statutory provisions under which he claimed that the suit was barred.

- Held $(16-8-38)$ .—That the suit was governed as to pleading by section 40 of the Limitation Ordinance, 1934, and that the appellant had not sufficiently<br>pleaded the point of limitation in that he had not specifically pleaded the provisions of law on which he claimed that the suit was barred. - Held further $(23-8-38)$ .—(1) That notwithstanding the fact that he had not applied to the lower court for such leave nevertheless since the appellant had not acted mala fide nor committed a blunder which caused an injury to the other side which could not be compensated by payment of costs or otherwise he was entitled to leave to amend his defence in the Court of Appeal on terms that he pays the costs of the appeal.

(2) That an acknowledgment that interest up to date has been paid, presumably on a mortgage, written by a debtor in the ledger of his creditor at the foot of certain figures showing the debtor's indebtedness for goods sold and delivered, is not an acknowledgment of debt in respect of the goods alleged to have been sold and delivered.

(3) That an account which shows that goods and cash were supplied from time to time on the one side and on the other that cheques were paid in reduction of that account, is not a mutual open and current account as contemplated by Article 85 of the Schedule to the Indian Limitation Act. 1877.

(Appeal allowed. Respondent's costs of the appeal to be paid out of the estate of Van Breda. The order as to costs in the Court below to stand.)

# Shaw for the appellant.

### Gautama for the respondent.

Sir Joseph Sheridan. C. J.-I find the answer to the question of limitation which has been argued before us to be obtained from a consideration of section $7$ (2) of the Interpretation Ordinance which has been referred to by Mr. Shaw. It provides that "where any Ordinance repeals any other enactment then unless the contrary intention appears the repeal shall not $(a)$ revive anything not in force or existing at the time at which the repeal takes effect." The meaning of this provision is I am satisfied that if Ordinance C repeals Ordinance B which had repealed Ordinance A, on the repeal of Ordinance B, Ordinance A is not revived unless the contrary intention appears. In the case before us this would mean that the Limitation Ordinance by repealing the Indian Limitation Act does not revive the Acts repealed by the Limitation Act. From this I deduce that at the time at which the Limitation Ordinance repealed the Indian Limitation Act, the Indian Limitation Act was the law in force and existing.

In section 40 of the Limitation Ordinance it is provided that limitation must be pleaded and that "no" suit, application or proceedings shall be rejected or dismissed on the grounds that such suit, application or proceeding is barred by the provisions of "this Ordinance or by the provisions of any other law or Ordinance now or hereafter in force in the Colony." Reasoning from the provision of the Interpretation Ordinance which I have discussed I come to the conclusion that the word "now" means nothing more nor less than "at the time of the repeal" and the law in force at the time of the repeal was the Indian Limitation Act. As to the argument that the word "now" should be given the same meaning in section 41 and taken as referring to the Indian Limitation Act, the mention of the Indian Limitation Act in that section connotes that the word refers to any other Ordinance or law besides the Indian Limitation Act, that may have been in force at the time of the repeal.

One might put the argument in this way. If there were no such provisions as section 38 (1) (d) which provides that "Nothing in this Ordinance shall in a suit where the period of limitation prescribed by this Ordinance is longer than the period of limitation prescribed by the Indian Limitation Act, 1877, as applied to the Colony, revive a suit which, on the date of the coming into force of this Ordinance, would have been barred under the said Indian Limitation Act", and the Indian Limitation Act were simply repealed by section 41 then limitation would have to be pleaded as provided in section 40 in every case to defeat a suit for which the period prescribed for bringing such suit had expired. In the absence of such pleading the suit could not be rejected on the ground that it was barred by limitation. What difference then does section 38 (1) (d) make? None in my opinion for the reason that section 40 opens with the word "Notwithstanding". I am quite satisfied that the learned trial Judge correctly decided the point of limitation. The appeal will proceed on the merits.

Whitley, C. J.-I concur in the judgment of the learned President and as this preliminary point raises a question of considerable difficulty and importance and it has been so fully and ably argued before us. and I have arrived at my conclusion independently it may be useful if I deliver a separate judgment.

Section 41 repeals (save as to prescription) from 1st December, 1934 inclusive, the old Indian Limitation Act with that one exception and the whole of the Indian Limitation Act is thenceforward dead and has no longer any effect of law. The proviso does not keep alive any part of the Indian Limitation Act. It merely provides for any unforeseen contingencies which may have been overlooked. It provides that if in the new Ordinance (which is now the law) no period is laid down for such cases, then the period shall be the same as were laid down in the now extinct Indian Limitation Act. It is the new Ordinance which makes such period, the periods prescribed by law for the future just as they had been prescribed by the Indian Limitation Act in the past.

It is this section of the new Ordinance which became the law on the 1st December, 1934, and which by this proviso fixes what shall be the period under the new existing law. It does not say that the Indian Limitation Act is not repealed as regards such cases. If it had meant that it would have been worded something like this, "The Indian Limitation Act is hereby repealed save in so far as it relates $to :=$

(a) prescription;

$(b)$ such cases as those contemplated by the proviso."

Section 38 (1) (d) similarly provides that in the case of a suit which on 1st December, 1934 (when the new Ordinance superseded and took the place of the repealed Indian Limitation Act) would have been (not "was") barred under the Indian Limitation Act, if it had been still in force, which it is not, such suit shall not be revived, i.e. become enforceable, even though it would not be barred under the period prescribed by the new law.

It does not say that the otherwise extinct Indian Limitation Act shall continue to be in force as law as regards such cases. It merely says that under the new law in such cases the period shall be the same as it used to be formerly under the old Indian Limitation Act.

The present suit would on the 1st December, 1938, have been barred under the old Indian Limitation Act, if it had been still in Therefore, it is still barred by reason of the provisions of force. section 38 (1) (d) but the barring from 1st December, 1934, onwards is under this section of the new Ordinance, which lays down the law as from that date.

Supposing that section 38 created or re-enacted some offence punishable by fine and the repealed Indian Limitation Act had contained a similar provision punishable by a lesser fine it would seem that any prosecution would be for an offence against section 38 of the new Ordinance which provided that in such a case the punishment should be not the increased maximum fixed under the new Ordinance but the same lesser maximum which had been provided by the repealed Act. There could hardly be a prosecution for an offence under an Act which had been repealed.

I, therefore, think that section 40 applies. It says in effect "Now that we are having a new Ordinance we will prescribe a stricter rule of pleading which seems most salutary and which experience has shown to be desirable." This rule of pleading must be observed in any suit instituted on or after 1st December, 1934, which "is barred by the provisions of this Ordinance or by the provisions of any-other law or Ordinance now or hereafter in force". The present suit is barred by section 7 of this Ordinance as qualified by section 38 (1) $(d)$ . and consequently this new rule of pleading applies to it. The appellant has not complied with it so he cannot claim the benefit of the Limitation Ordinance.

That this should be so, seems only reasonable and logical. The old period is retained because it would not be fair to impose a new period upon persons whose transactions had taken place under the previous law and who were entitled to regard the former period as the one they had to bear in mind when keeping watch on the risk of limitation. It is an entirely different matter when the question of pleading comes in. The parties have full notice that as from 1st December, 1934, they must plead specifically the provisions upon which they rely and it is no hardship upon them to insist that if litigation arises subsequent to that date they should comply with the new rule of pleading.

I, therefore, agree with the learned President that the preliminary point as to limitation fails and that the case must proceed on its merits.

Hayden, $J-1$ concur with judgment of President and have nothing to add.

Sir Joseph Sheridan, C. J.—With regard to the application made by Mr. Shaw that he should be allowed in this Court to amend his pleadings by pleading that the claim is barred by limitation in the manner prescribed by section 40 of the Limitation Ordinance, 1934, it has not been contended that this Court does not possess the power to allow the amendment in a proper case. The circumstances of the case are unusual. The appellant in his written statement of defence pleaded in paragraph 4 that "Even if the plaintiff could prove the said payments or any of them defendant denies that any acknowledgment of debt as alleged would thus be established, and in particular he denies that this suit is within time as alleged and will submit on a preliminary point of law that even if plaintiff could otherwise establish his claim or any part thereof his suit is barred by limitation." And in para. 6 he pleaded "Defendant denies that there is any cause of action as alleged against him in favour of plaintiff...". Had the provisions of the Indian Limitation Act applied to the case this pleading would have been more than sufficient. Indeed prior to the passing of the Limitation Ordinance it was not necessary to plead limitation for the Courts were bound to take notice of limitation. But with the passing of the Ordinance, it became necessary specifically to plead limitation. The learned trial Judge held that the appellant had failed to plead as required by the Ordinance and we have upheld his decision. We did not however come to the decision on the point until we had heard much argument and given much consideration to the point. It was not in our view an easy matter to decide. Mr. Shaw therefore thinking that section 40 of the Ordinance did not

apply made in our view of the matter a mistake which can be readily understood. During the course of the argument, I was at one time inclined to think that his view was right. In the case of Tildesley $v$ . Harper (10 Ch. D. 393) in giving judgment that leave to amend the statement of the defence should have been given, Bramwell, L. J. expressed himself "As a general rule leave to amend ought not to be refused unless the Court is satisfied that the party applying is acting mala fide, or that his blunder has caused some injury to the other side which cannot be compensated by payment of costs or otherwise". In passing I would state my opinion that Mr. Shaw neither acted mala fide nor can his omission to plead as prescribed be regarded as a blunder. Had he made application to the trial Judge, I certainly think that his application should have been granted. Because he did not do so, can he now be heard? I consider that the principle enunciated by Bramwell, L. J., applies and I am prepared to allow the amendment on terms. It is stated in the Annual Practice (1938) at p. 467, that where leave to amend was not asked for in the Court below, it will rarely be granted in the Court above. This reference is to the case of Hipgrave v. Case (28 Ch. D.362), inter alia and the reason for the Court of Appeal refusing to allow the amendment to be made was that the whole nature of the action would have been changed had it been allowed. No such consequence follows on the amendment asked for in this case being allowed.

As to the terms that should be imposed, I am not satisfied that apart from limitation Mr. Shaw could have resisted the claim. In fixing terms, it also has to be remembered that Mr. Gautama succeeded on the difficult question of limitation argued before us and in any event would have been entitled to costs in this Court on that issue. The terms, I would impose in allowing the amendment are that the appellant should pay the costs of the appeal. The next question is whether the plea that the claim is barred can be resisted. It has been ärgued and an acknowledgment in the hand of Van Breda whose executor the appellant is, in the respondents' ledger has the effect of giving a new period of limitation. That acknowledgment refers to all interest up to date having been paid, presumably the interest on a mortgage between the parties. It appears at the foot of certain figures showing Van Breda's indebtedness for goods sold and delivered. This acknowledgment of interest paid cannot be construed as an acknowledgment of debt. Then it is argued that there was a mutual open and current account under Article 85 of the Indian Limitation Act. The Article provides, "for the balance due on a mutual open and current account, where there have been reciprocal demands between the parties", that limitation will run "three years from the close of the year in which the last item admitted or proved is entered in the account; such year to be computed as in the account". The account in this case bears no resemblance to such an account as is contemplated by Article 85. It shows that goods and cash were supplied from time to time and on the other side that cheques in reduction of the account were paid. I would allow the appeal, and direct for the reasons that I have stated that the respondent should have the costs of the appeal to be paid out of Van Breda's estate. The order as to costs in the Court below will stand.

Whitley, $C. J.-I$ concur.

Hayden, $J.-I$ concur.