De Silva, T.A.K. V. Hirdramani, Ltd.

[PRIVY COUNCIL]

1955 Present: Lord Oaksey, Lord Tucker, Lord Keith

of Avonholm, Lord Somervell of Harrow and Mr. L. M. D.
de Silva

T. A. K. DE SILVA, Appellant, and HIRDRAMANI LTD., Respondent

PRIVY COUNCIL APPEAL NO. 39 or 1954

S. C. 94-D. C. Colombo, 21,772 M
 

Contract--Novation-Delegation.

The names given to different kinds of novation in Roman-Dutch law introduce no principle which would not equally operate in similar circumstances under the law of contract in England.

S (the plaintiff appellant) had for several years been employed as leadin jeweller in a business owned by P. There was also employed in the business S's brother-in-law, W, whom S had earlier introduced into the business. In 1944, S decided to retire from his employment and an agreement was entered into on January 29, 1944, between P, S and W the effect of which was to give S a conditional annuity of Rs. 150 a month during his life and to put W into his place as leading jewellery maker also on certain conditions. The agreement which was duly signed by all the contracting parties expressly provided, inter alia, that (1) towards the payment of the aforesaid monthly sum of Rs. 150 by P to S, W should cortribute a sum of Rs. 75 monthly from his remuneration, (2) in the event of W dying or being dismissed from service the payment to S of the " said sum of Rs. 150 shall immediately cease anything herein contained to the contrary notwithstanding ". S thereafter received the sum of Rs. 150 monthly in terms of the agreement.

On June 27, 1946, a private limited company (the defendant respondent) was formed, with P as managing director and chairman of the Board of Directors. It was not in dispute that this company took over the business that had been owned by P. When the company took over the business; W ceased to be is P's employment and became an employee of the company. In July, 1946, soon after the Company was formed, S spoke to P, who then, as managing director of the Company, undertook to make the payments due to S under the agreement. Following on this undertaking, S continued to receive his monthly payments of Rs. 150 which were made by Company cheques, occasionally sent to him under covering letters from the Company.

P died on March 23, 1948. The Company then took the view that there was no longer any liability on it to make payments to S under the agreement of January 29, 1944. S thereupon instituted the present action claiming from the Company payment of Rs. 150 per month. '

Held, that, irrespective of any condition with regard to W's employment, a completely new form of contract was made between the Company and the appellant (S) when the Company undertook to pay the appellant for his life an annuity of Rs. 150 per month. Such a contract might be regarded as a mixture of novation and delegation.

APPEAL from a judgment of the Supreme Court reported in 55 N.L.R.294.

L. G. Weeramantry, with Biden Ashbrooke, for the plaintiff appellant.

Stephen Chapman, for the defendant respondent.

Cur. adv. vult.

May 9, 1955. [Delivered by LORD KEITH OF AVONHOLM]-

This is an appeal front a judgment of the Supreme Court of Ceylon reversing a judgment of the District Court of Colombo in favour of the appellant and dismissing his action.

The facts of the case can be briefly stated.

The appellant had for some 11 years been employed as leading jeweller in a business known as Hirdramani which in 1944 was owned by one Parmanand Tourmal. There was also employed in the business the appellant's brother-in-law, Wijeratne, whom the appellant had earlier introduced into the business.

In 1944 the appellant decided to retire from his employment and an agreement was entered into between Parmanand, the appellant and Wijeratne the effect of which was to give the appellant a conditional annuity of Rs. 150 a month during his life and to put Wijeratne into his place as leading jewellery ma

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