HATTON NATIONAL BANK LTD.,V. M.S.HEBTULABHOY LIMITED AND OTHERS

HATTON NATIONAL BANK LTD.,V. M.S.HEBTULABHOY & CO.
LIMITED AND OTHERS

SUPREME COURT
AMARATUNGA J.
IMAM, J. AND
SURESH CHANDRA, J.
S.C.APPEAL NO. 134 A/2009
C.H.C. CASE NO. 281/2001 (1)
SEPTEMBER, 17TH, 2010

Validity of a proxy - objections raised belatedly after five years, at the very end of the proceedings - Failure to take jurisdictional objections.

The plaintiff filed action against the defendant on 19.11.2001 praying for the recovery of a sum of Rs. 89.3 million together with interest thereon. The case has proceeded up to the stage of filing of the answer and thereafter much time has been spent on technical objections in connection with the filing of proxies by the plaintiff.

The substituted Plaintiff filed a petition and affidavit dated 10th January 2008 along with a fresh proxy dated 9.1.2008 of the original plaintiff signed by the Power of Attorney holder of the Plaintiff - bank and prayed that the said proxy dated 9.1.2008 be accepted. The defendant filed objections to the said application, the learned Judge of the Commercial High Court delivered his order dated 8th July 2009 refusing to accept the said proxy dated 9.1.2008 on the ground that the original Plaintiff was no longer a party in the case. Against order substituted Plaintiff filed an application for leave to appeal to the Supreme Court and the Supreme Court granted leave on the following questions.

1. Has the learned High Court Judge erred in holding that the substitution of the substituted Plaintiff Bank raised a legal bar to the subsequent curing of any defect which may have existed in the proxy filed by the original plaintiff bank;

2. Has the learned High Court Judge erred in failing to realize that the substituted Plaintiff was entitled in law to tender the proxy marked X17 of the original Plaintiff bank for the purpose of regularizing the record if any defect had existed in the original proxy marked X2;

3. Has the learned High Court Judge erred in failing to correctly apply the principle of law that, a defect in a proxy can be cured provided it is evident that the person executing the proxy intended to grant the authority of that proxy to the Attorney-at-law in whose favour the proxy has been executed.

4. Where the party whose proxy is sought to be rectified is not before Court, can a party substituted in his place rectify an error in the original proxy and tender a new proxy for the original party.

Held:

(1) Once substitution had taken place and was affirmed by the Supreme Court on being challenged by the Defendant, the application of the Defendant regarding the validity of the proxy raised after about five years from the time of filing of the action should not have been allowed.

(2) Jurisdictional objections are required to be taken at the first opportunity, the failure of which would constitute acquiescence to jurisdiction of the Court".

per Suresh Chandra, J.-

"The objections regarding the proxy was raised only after the substitution of the Plaintiff had taken place, and after the said substitution was challenged in the Supreme Court, which objection was taken by the defendant almost five years after entering an appearance in the case. Once the substituted plaintiff was in place the case should have proceeded from that point."

APPEAL from the order dated 8th July 2009 of the Commercial High Court.

Cases referred to:

(1) Udeshi V. Mather - (1988) 1 SLR 12

(2) Paul Coir (Pvt.) Ltd. V.Waas - (2002)1 SLR 13

(3) Pinto V. Trelleborq Lanka - (Put)Ltd. (2003) 3 SLR 214

(4) S.P.Gunathilaka V. Sunil Ekanayake - S.C. 26/2009 decided on 15.12.2010

Prasanna Jayawardena for substituted - Plaintiff - Appellant

C.J. Fernando for Defendant - Respondent

Cur.adv.vult

June 28th 2011

SURESH CHANDRA J.

    This is an appeal from the order dated 8th July 2009 of the Commercial High Court.

    The Plaintiff Bank filed action on 19th November 2001

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