The Judicial Committee of the Privy Council Decisions

Sunnassee v. Ardill (Mauritius) [2001] UKPC 24 (21 May 2001)

ADVANCE COPY

Privy Council Appeal No. 50 of 1999

Samy Sunnassee Appellant

v.

David Ardill Respondent

FROM

THE SUPREME COURT OF MAURITIUS

JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL,

Delivered the 21st May 2001

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Present at the hearing:-

Lord Bingham of Cornhill

Lord Nicholls of Birkenhead

Lord Hoffmann

Lord Millett

Sir Philip Otton

[Delivered by Lord Hoffmann]

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1. This is an appeal against an order for specific performance of a contract for the sale of land. The contract is alleged to have been constituted by the grant of an option dated 22nd February 1980, exercisable by 30th June 1980, and its exercise by a letter dated 24th June 1980. Two defences were raised at the trial. The first was that the letter exercising the option had not been sent. The second was that the land claimed by the plaintiff was not the land in respect of which the option had been granted.

2. The judge (P. Lam Shang Leen J) heard the action towards the end of 1996. He found on a balance of probability that the option had been duly exercised. He also found that the option had always been intended to relate to the land in dispute. The Court of Civil Appeal (Pillay CJ and Matadeen J) affirmed the judge on both points.

3. In presenting this appeal, Mr Ollivry QC was therefore faced with the difficulty that both issues appear to involve questions of fact on which there have been concurrent findings by the courts below. It is not the practice of the Board to re-examine the facts in such a case and although the practice is not immutable, the Board has made it clear that criticisms of the evaluation of evidence by the lower courts are not a ground for making an exception: see Devi v Roy [1946] AC 508, 521. Their Lordships consider that Mr Ollivry has failed to surmount this formidable hurdle but in deference to his attractive submissions they will examine the facts in more detail than might otherwise be thought necessary.

4. The background to the grant of the option was as follows. Compagnie Sucrière de Rich Fund Ltd ("CSRF") was a family company which owned a country property called Mesnil aux Roses. The plaintiff and his mother were members of the family; the plaintiff was a director of CSRF and the family house, in which the plaintiff had been born and in which his mother lived, stood on a part of the property. In 1976, after various parts had been sold, the company owned a piece of land which measured 10 acres 71 perches. Mr Descroizilles, a land surveyor, was asked to make a valuation and advise on a sale. He produced a written valuation dated 17 May 1976 in which he described the property as divided into eight plots. Appended to his valuation was a neat hand-drawn plan, described as a "plan figuratif", which showed the eight plots. The land on which the plaintiff's mother lived was indicated and marked as measuring 1 acre 39 perches. Mr Descroizilles advised on a sale of the land as a single lot and valued it at Rs 1.071m.

5. It appears that for some time no suitable offers were forthcoming and the board of CSRF decided upon an alternative strategy of distributing the plots to members at a valuation to be set off against the amounts owing to them on loan account. For this purpose another surveyor, Mr Nahaboo, was instructed to prepare a detailed survey. He drew up a plan dated 25th April 1979 showing the same eight plots as on Mr Descroizilles's plan. The plaintiff's mother's plot was in the same position and had substantially the same measurements. Mr Nhaboo's plan, being more detailed, showed the positions of her house and garage.

6. Before the scheme of distribution could be implemented, the defendant came upon the scene and indicated his interest in buying the land for Rs 1.9m. As a result, the Board of CSRF agreed that the company would give him an option to purchase at that price. It was at all times contemplated that the defendant would obtain consent to subdivide the property for resale. The plaintiff, who works abroad, was not present at the board meeting but had apparently said that he wished to acquire the land occupied by his mother so that she could continue to live there. This was reflected in the terms of the option dated 22nd February 1980, which CSRF granted to the defendant. After providing that the option should be exercisable up to 12 noon on 15th May 1980, it referred to a possible purchase by the plaintiff in the following terms:

"Without the contents of the present paragraph causing any prejudice in any manner whatsoever to the intended sale by [CSRF] and in the eventuality of [the plaintiff] desiring to retain a portion of land from the said estate 'Mesnil aux Roses', he should so inform [the defendant] indicating to the latter the plot of land he would be reserving.

As for the regularisation of the plot of land chosen by [the plaintiff], it should be done in such a way in the best interests of all parties concerned (that is [CSRF], [the plaintiff] and [the defendant]) the price to be paid and the mode of payment should be agreed upon between [the plaintiff and the defendant]."

7. It appears that the negotiations between the plaintiff and the defendant proceeded in parallel with those between CSRF and the defendant, because on the same day as CSRF granted the option to the defendant, he granted the plaintiff an option to buy:

"a portion of land of about one acre and thirty nine perches, which was originally intended to be the lot attributed to Mrs Robert Henry Ardill according to the plans forwarded to the Bank of Mauritius and this if there was a division of the said campagne between the creditors of [CSRF]."

8. The purchase price was Rs 235,000 and the option was exercisable up to 30 June 1980.

9. The defendant exercised his option on the last appointed day and appears to have gone into possession of part of the land shortly thereafter. He did not at first take steps to perfect his title by the execution of an authentic deed. On 17th October 1980 CSRF served him with a mise en demeure calling upon him to attend upon a notary for this purpose but he did not appear, saying that he was ill. Meanwhile the plaintiff (by his mother and later by tenants) retained possession of her house and the surrounding plot. The plaintiff commenced these proceedings on 17th May 1985. In his statement of claim he alleged the grant of the option (which was admitted), the precise measurements and boundaries of the plot (to which the defendant pleaded "not aware"), the letter of 24th June 1980 exercising the option (denied) and the service of a mise en demeure on 15th June 1981, calling upon the defendant to appear before a notary and execute an authentic deed. This last allegation was not admitted and the plaintiff put to proof. The defendant then pleaded:

"In any event, the defendant has communicated to the plaintiff that the whole land purchased by defendant was presently subject to litigation between defendant and [CSRF] and the matter is pending determination before the Supreme Court and that the matter would be settled after determination of the said case."

10. The defendant also alleged that the plaintiff had been occupying "the said premises" since 1980 and was suffering no prejudice by reason of his lack of an authentic deed.

11. The evidence does not disclose what litigation between the defendant and CSRF was pending when he delivered his defence in the present action in 1986. In 1990, however, he delivered a statement of claim in an action for specific performance which he had brought against CSRF in respect of the whole land. He said that he had paid the whole purchase price upon the exercise of the option in 1980, gone into possession and carried out infrastructure works with a view to subdivision and the sale of plots. He had caused portions of the land to be subdivided "among various persons or eventual purchasers." He had served a mise en demeure in 1986 but CSRF had not complied and he was now suffering prejudice because CSRF refused to perfect his title. Among the items of prejudice was the fact that:

"the eventual purchasers are pressing upon plaintiff and are instituting legal action against him to have their respective authentic deed regularised."

12. Asked for further and better particulars of the "eventual purchasers", the defendant gave four names including "Mr D. Ardill claiming Rs. 1m".

13. Against this background their Lordships can examine the evidence and findings at the trial before P. Lam Sheng Leen J. on the two disputed issues. First, the question of whether the option had been exercised.

14. The plaintiff produced a copy of his letter dated 24th June 1980, exercising the option, which he said had been drafted by Mr Lagesse, his attorney . Mr Lagesse gave evidence to the same effect. The plaintiff said that he had sent the letter to the defendant by registered post but was unable, on account of the lapse of time, to produce the registration slip or obtain the counterfoil from the Post Office.

15. Mr Lagesse also gave evidence that in June 1981 he had prepared a mise en demeure summoning the defendant to attend upon a notary, Mr J. Didier Baissac, to execute an authentic deed of sale. He said that service had been effected by the huissier and that he had deposited the document with the notary. The original document could not be found.

16. The judge said that "from the evidence before me", he found on a balance of probability that the option had been exercised within the stipulated time. In coming to this conclusion, he said that he "based" himself upon the defendant's allegations in the CSRF action, claiming that the plaintiff was an "eventual purchaser" who was pressing upon him to have his authentic deed regularised. This he regarded as an aveu extrajudiciare. He also found confirmation in the defendant's pleading in the action itself, in which he said that he had told the plaintiff that "the matter would be settled" after he had obtained an authentic deed from CSRF.

17. The Court of Civil Appeal said that the judge, who had seen the witnesses, was entitled to reach the conclusion which he did. Mr Ollivry said that the Court of Civil Appeal was wrong in principle in treating the judge's findings as simply a choice made on grounds of credibility between the conflicting evidence of plaintiff and defendant. He had not relied upon the oral evidence but had based himself solely upon the aveu extrajudiciare. That was by no means an unequivocal admission that the plaintiff had a binding contract to purchase the land. The reference to "eventual purchasers" was probably derived from a mistranslation of the French "éventuel" and should be read to mean "possible purchasers". In any case, the alleged aveu in 1992 had to be read with the pleaded denial six years earlier that the option had been exercised.

18. Their Lordships do not think that the judge's statement that he based himself upon the aveu can be read to mean that he regarded it as the sole evidential support for a finding that the option had been exercised. The most that can be said is that, as between the plaintiff who said that he had sent the letter and the defendant who said that he had not received it, the judge regarded the aveu as tipping the balance. Their Lordships consider that it was an item of evidence which the judge was entitled to take into account. One may speculate about exactly what the pleader meant by "eventual purchasers" but the fact that they were described as pressing to have their authentic deeds "regularised" suggests that matters had gone further than mere negotiation. The fact that the defendant was saying that he was being prejudiced because CSRF's failure to execute an authentic deed prevented him from regularising the position of, among others, the plaintiff is, in their Lordships' view, material from which it had be inferred that the defendant regarded the plaintiff as entitled to the execution of an authentic deed.

19. Similarly, the statement in the defence that matters would be settled after the defendant had obtained his own authentic deed can be construed as evidence to the same effect. The weight which should be given to such a statement was a matter for the judge.

20. Their Lordships turn next to the second issue, concerning the identity of the land. It appears clear that until shortly before the commencement of the trial in 1996, neither side had any doubt about the land to which the option related. The defendant in his defence described it as land in the occupation of the plaintiff or his tenants. But the option agreement referred to plans "forwarded to the Bank of Mauritius" in connection with the still-born proposal for distribution among the shareholders. These had apparently been sent in connection with an application for exchange control consent which was necessary at the time because some of the shareholders were not resident in Mauritius. When an official of the Bank produced the deposited plan, it was found to universal astonishment to be materially different from the plan originally prepared by Mr Nahaboo. The land allocated to the plaintiff's mother, instead of being the plot on which her house stood, was a barren strip along the dry river bed which formed one boundary of the land sold to the defendant. No one was able to explain who prepared this plan or how it came to be sent to the Bank. Mr Nahaboo gave evidence and disavowed having anything to do with it.

21. Mr Ollivry submitted that the plan submitted to the Bank was the plan by reference to which the parties had chosen to contract. The option therefore related to the land by the river. Such a contract might be vitiated for common mistake. But it could not be construed as a contract for the sale of the plot which the plaintiff claimed.

22. The judge had to decide what the parties had meant to be the land subject to the option. This involved the interpretation of the language used in the option document, construing the words against their background in order to discover what the parties would reasonably have been understood to mean. Ordinarily it would be sufficient to examine the plan submitted to the Bank and see which plot it described as allocated to Mrs Ardill. But there are occasions when the background shows that the parties have made a mistake in their description and that they clearly meant something different. It may be that they have used an incorrect name; saying "Blackacre" when the context shows that they must have meant "Whiteacre". Or they may, as in this case, have contracted by reference to a plan which was obviously not what they thought it to be. In such cases, if the real intentions of the parties as they would have appeared to a reasonable man can be clearly ascertained, it is the duty of the court to give effect to them.

23. Their Lordships consider that there was ample evidence upon which the courts below were entitled to find that both parties assumed that the plan submitted to the Bank would be in substantially the same form as the plan prepared by Mr Nahaboo in April 1979 and that in referring to the land allocated to Mrs Ardill on the plan submitted to the Bank, they intended to refer to the land of which she was in occupation at the time. The only alternatives are that either they intended to refer to the land by the river or, as Mr Ollivry suggested, they had no specific intentions but intended to buy and sell whatever land might turn out to be allocated to Mrs Ardill by the Bank's plan. Neither appears to their Lordships to be in the least plausible. No reasonable person with knowledge of the background would have thought that, however they had expressed themselves, the parties meant anything other than the Ardill family property. The notion that a plan of unknown content was regarded as a kind of lucky dip which might require the defendant to sell and the plaintiff to buy whatever might have been wrongly designated as Mrs Ardill's land is too irrational to be attributed to the parties.

24. Their Lordships will therefore dismiss the appeal. The appellant must pay the costs before their Lordships' Board.