Fon Teen Kission v The Commissioner of Income Tax

Fon Teen Kission

Appellant

v.

The Commissioner of Income Tax

Respondent

Appeal from the Supreme Court of Mauritius

Composition of the Board:

Lord Templeman

Lord Havers

Lord Ackner

Sir John Stephenson

Sir Robert Megarry

Majority Judgment delivered on the 29th November 1988

by Lord Templeman

Dissenting Judgment by Lord Ackner

______________________________________________________________

(1) Income Tax - Evidence - Burden of proof

(2) Rules of Natural Justice - Opportunity to dispute a finding of fact by a Tribunal

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Cases referred to in judgment

Fox and P.G. Wellfair Limited [1981] 2 Lloyds L.R. 514

Mahon v. Air New Zealand Limited [1984] A.C. 808

R. V. Mental Health Review Tribunal ex parte Clatworthy [1985] 3 All E.R. 699.

Sabey & Co. Ltd. v. Secretary of State for the Environment and Others [1978] 3 All E.R. 586

Legislation referred to in judgment

Tax Appeal Tribunal Act 1984, sections 3, 10

The following majority judgment was delivered by the Board:

The appellant taxpayer, Fon Teen Kission, submitted to the respondent, the Commissioner of Income Tax, income tax returns to which were attached accounts of the taxpayer’s trading activities. The Commissioner rejected the accounts as unreliable and made the following assessments:-

“YEAR OF ASSESSMENT	CHARGEABLE INCOME	TAX
1976/1997 1977/1978 1978/1979 1979/1980 1980/1981 1981/1982	Rs 114,986 Rs 117,069 Rs 123,194 Rs 126,353 Rs 124,046 Rs 135,537	Rs 46,970 Rs 39,932 Rs 51,707 Rs 58,141 Rs 52,047 Rs 66,371”

The aggregate chargeable income upon which tax was levied by the assessments amounted to Rs. 741,185. The taxpayer appealed to the Tax Appeal Tribunal against the assessments. There were effectively only two grounds of appeal put forward by the taxpayer. The first ground of appeal was that the Commissioner had “failed to give proper consideration” to the taxpayer’s lottery winnings which he alleged were:-

YEAR OF ASSESSMENT	DATE	ACCOUNT WON	LOTTERY
1977/1978 1978/1979 1978/1980 1980/1981 1981/1982	September 1976 8.11.76 26.7.77 12.6.78 11.9.78 17.10.78 16.10.79 5.8.80	Rs 10,731.25 Rs 10,500.50 Rs 3,040.25 Rs 17,340.25 Rs 15, 378.25 Rs 99,398.41 Rs 3,349.50 Rs 177,206.87	Poupard Merven Poupard Poupard Poupard Mauritius Lotteries Mauritius Lotteries Mauritius Lotteries

The alleged lottery winnings total Rs 336,945.28. The taxpayer contended that an increase in his assets was attributable to lottery winnings. The Commissioner disbelieved this explanation and alleged that the taxpayer has purchased winning lottery tickets from the owners and then proceeded to collect the winnings with the object of camouflaging the amount of his business profits.

The second ground of appeal was that the Commissioners “ignored without appropriate reasons” the accounts submitted by the taxpayer. The taxpayer was thus asserting that his accounts were reliable.

By section 10 of the Tax Appeal Tribunal Act 1984:-

“Notwithstanding any other enactment, the burden of proof that any tax has been paid or any assessment is incorrect or what the amount of any tax payable should be shall lie on the person-

(a) liable to pay the tax; or

(b) claiming that the tax has been paid.”

The taxpayer’s appeal raised a simple issue of credibility and the onus lay on the taxpayer. Was the taxpayer telling the truth? The taxpayer could prove his veracity by evidence that his accounts were full and accurate or by evidence that the relevant lottery tickets were purchased by him before the winners were drawn. The Tribunal consisted of three members. The Chairman and the Vice-Chairman were members of the Tribunal. Both the Chairman and the Vice-Chairman must by section 3 of the Act be Barristers-at-Law of not less that ten years’ standing appointed by the Public Service Commission. There can be no doubt therefore of the qualification or experience of the Tribunal which assembled to determine the issue involved.

The taxpayer gave oral evidence and produced photocopies of certificates to the effect that the lottery organisers had remitted the respective lottery prizes to him. The authenticity of the certificates was not challenged by the Commissioner but the certificates themselves were not evidence of the dates when the taxpayer purchased the lottery tickets. No other evidence was adduced to the Tribunal.

The Tribunal concluded that the taxpayer could not be believed and “must have purchased winning tickets after the respective draws from bona fide winners in order to camouflage his taxpayable business profits”. The Tribunal accordingly upheld the assessments. The taxpayer appealed by way of Case Stated and his appeal was dismissed by the Supreme Court of Mauritius (Sir C.I. Moollan Chief Justice and V.J.P. Glover Acting Chief Justice). The taxpayer appeals to Her Majesty in Council with leave of the Supreme Court.

On behalf of the taxpayer Mr. Ollivry submitted that the taxpayer was not given a sufficient opportunity to deal with an allegation which amounted to a charge of fraud. Miss Montgomery, who also appeared for the taxpayer, submitted that the Tribunal should have hesitated long before reaching a decision which involved a finding of fraud. But it must have been plain to the taxpayer from the moment that the Commissioner rejected the taxpayer’s explanation for the increase in his assets that the taxpayer was accused, in the current jargon, of laundering his business profits by purchasing lottery tickets which had already become entitled to prizes. The Tribunal could not shrink form the responsibility of deciding whether the taxpayer was telling the truth and the Tribunal came to a firm conclusion adverse to the taxpayer.

Mr. Ollivry submitted that the Tribunal misdirected themselves when they commented that the taxpayer:-

“... had made no attempt to prove that his accounts genuinely reflected his business transactions, with the result that the only issue which had to be determined was whether the Appellant should be believed when he stated that he had won at the lotteries. If he had established the veracity of these accounts, it would have provided support for his contention that the increase in his assets was attributable to lottery winnings.”

Mr. Ollivry pointed out that the Case Stated recorded that:-

“At the hearing the parties agreed that the only issue which the Tribunal should determine was a factual one i.e. whether the appellant should be believed when he stated that the won at the lotteries...”.

On behalf of the taxpayer it was contended that this agreement prevented the validity of the taxpayer’s accounts from being in issue, and made it unjust for the Tribunal to take them into account. That argument cannot be accepted. Where the issue is whether the taxpayer is to be believed in asserting that increases in his assets were due to winnings on lotteries, there are many matters that are or may be relevant in determining the truth of his assertion. Among these there is evidence of his receipts from other sources. If these are small, that will tend to support his assertion; if they are great, they will tend to refute it. The taxpayer’s accounts may thus be an important matter for consideration, not as constituting an issue in their own right, but as being relevant to the agreed issue, namely, the credibility of the taxpayer’s assertion of lottery winnings. The taxpayer, carrying the burden of proof before the Tribunal, will thus have to consider whether or not to produce and support his account, and what effect of this will be, and the Tribunal must consider it in reaching a decision. It was the taxpayer acting under legal and no doubt prudent advice who alone decided not to produce any evidence that his business transactions were conducted and recorded in a manner which might give a touch of verisimilitude to a bald and unconvincing narrative of his lottery transactions. The Commissioner of Inland Revenue adhered to his view that the taxpayer’s accounts were unreliable. The Tribunal commented truly that had the taxpayer established the veracity of his accounts it would have provided support for his contention that the increase in his assets was attributable to lottery winnings. This comment does not cast any doubt on the decisive finding that the Tribunal did not believe the taxpayer’s evidence. It is hard to see how the Tribunal could have reached a conclusion in favour of the taxpayer who asserted without any supporting evidence that the admitted increase in his assets was not due to his trading activities but was due to eight separate lottery wins in four years whereby the goddess of fortune showered him with Rs 336,945.28 in return for a trifling expenditure of only Rs 20 to Rs 40 every time he bought lottery tickets.

Their Lordships will humbly advise Her Majesty that this appeal should be dismissed. The Appellant must pay the Respondent’s costs.

Dissenting Judgment by Lord Ackner

I have the misfortune to find myself reaching a different conclusion from that reached by the Supreme Court and by the majority of their Lordships.

The appellant, Fon Teen Kission, appealed against assessments to income tax for the years of assessments 1976/1977 to 1981/1982 made by the respondent, the Commissioner for Income Tax of Port-Louis. Being dissatisfied with the decision of the Tax Appeal Tribunal he required the Tribunal to state and sign a Case so that he might appeal to the Supreme Court. That Case Stated dated 6th May 1985 records, that the appellant put forward four grounds of appeal, two of which have particular relevance:-

“(1) Because the respondent [the Commissioner of Income Tax of Port-Louis] failed to give proper consideration to all receipts regarding capital gains i.e. from lotteries and remittances from abroad which had been submitted to him.

...

(4) Because the accounting records kept by the Appellant appeared to have been ignored without appropriate reason thus causing prejudice to him; it has always been the requirement of the respondent’s department for accounting records to be maintained to show the results of the business activities of a taxpayer. Ignorance of [? ignoring] the accounting records is in contradiction with the principle that a taxpayer should be encouraged to maintain accounting records”.

Thus so far as is relevant to this appeal, the appellant was complaining of two quite distinct matters namely:-

(a) that the respondent was not accepting that he had won money on lotteries;

(b) that the respondent was not accepting that his accounts genuinely reflected his business transactions.

At the hearing the parties agreed to limit the issues. I quote from the Case Stated, paragraph 2 (c):-

“At the hearing the parties agreed that the only issue which the Tribunal should determine was a factual one i.e. whether the Appellant should be believed when he stated that he won at the lotteries on the following occasions -”

There is then set out in respect of the years 1977/78 to 1981/82 various sums alleged to have been won on different dates at different lotteries. The total of these sums varies form year to year from Rs. 3,040.25 up Rs. 177,206.87.

It seems to me abundantly clear that the parties, as a result of thus limiting the issue for the Tribunal to determine, focused their attentions solely upon whether or not the appellant bought his lottery tickets before the lotteries, thus achieving genuine wins or bought his tickets after the results of the lotteries had been successful in the lotteries. I base this conclusion upon the following material derived form the Case Stated:-

1. Under the heading “Fact proved or admitted before the Tribunal” it is stated:-

“(a) Appellant produced photocopies of certificates to the effect that the lottery organisers had remitted the respective lottery prizes to him. The authenticity of the certificates was not challenged by the respondent.

(b) Appellant spent only Rs. 20 to Rs. 40 each time he purchased lottery tickets. Appellant had ceased to buy lottery tickets for the last two or three years despite his luck because the Income Tax authorities said that “he was lying when he said he had won at these lotteries” [I have set out the substance of the quotation in Creole].

From the above quotation from the Case it will be seen that although the appellant in his fourth ground of appeal had complained that the respondent ought to have accepted the genuineness of his accounts and no doubt was in a position to put forward facts and matters to justify that complaint, he had limited his oral and written evidence to the genuineness of his wins on the lotteries.

Under the heading “Submission of the Parties” it was recorded as follows:-

“(a) It was submitted on behalf of the Appellant that he had discharged the burden on proof incumbent upon him on a balance of probabilities because-

(i) his evidence had not been rebutted;

(ii) no evidence was adduced by the Respondent to show from whom Appellant purchased the winning tickets;

(iii) the Respondent without adducing any evidence put in issue a genuine transaction which had been proved by sworn and documentary evidence viz. the certificates of payment by organisers of lotteries”.

The above summary of the appellant’s submissions again makes it clear that all the appellant was seeking to do and, doubtless thought he was obliged to do, was to establish not only that he received the lottery prizes, but that he had genuinely won them.

The submission of the respondent was recorded in the following terms:-

“It was the contention of the Respondent that certain taxpayers try to explain the increase in their assets over a certain period of time by claiming that the increase is not on account of profit in business but because they have been lucky at gambling or betting and consequently their winnings should not be taxed as trade profits. Respondent contended that the Appellant bought the winning tickets form the owners of those tickets and then proceeded to collect the winnings with the object of camouflaging the amount of his business profits. Respondent had rejected as unreliable the accounts which the Appellant had attached to his income tax returns”.

Again it seem to me to be abundantly clear that the respondent was urging the Tribunal to reject the appellant’s evidence that he had won money from the lotteries. He contended that the appellant had purchased winning tickets in order to collect their proceeds and thereby committed a fraud on the Revenue. There is no hint of a submission to the Tribunal that the appellant should have not only have directed his evidence to the lottery winnings and how they had been achieved, but should in addition, have gone through his accounts and sought to establish that they genuinely reflected his business transactions. The final sentence in the summary of the respondent’s submissions set out above does no more than record the fact that the appellant had attached accounts to his income tax returns, which had been rejected by the respondent.

The Case set out the decision of the Tribunal under four paragraphs as follows:-

“(a) The Appellant had made no attempt to prove that his accounts genuinely reflected his business transactions, with the results that the only issued which had to be determined was whether the Appellant should be believed when he stated that the had won at the lotteries. If he had established the veracity of these accounts, it would have provided support for this contention that the increase in his assets was attributable to lottery winnings.

(b) The Appellant could not be believed especially as he stated that he had stopped buying lotteries for the last two or three years because Respondent was not prepared to accept that he won at the lotteries and that his alleged winnings did not represent business profits. Appellant spent very little money on the purchase of lottery tickets. According to him he was a consistent winner. He stood to lose very little and had everything to gain by continuing to buy lottery tickets whether or not Respondent accepted his claim. Accordingly, the Tribunal did not accept his explanation as to why he stopped buying lottery tickets and came to the conclusion that he was not a reliable witness.

(c) The Appellant must have purchased winning tickets after the respective draws form bona fide winners in order to camouflage his taxable business profits.

(d) The Tribunal concluded that the moneys claimed by Appellant to have been won at the lotteries were not so won but came from his business and formed part of his taxable business profits”.

The first sentence of paragraph (a), it is common ground, does not make sense. The limiting of the issues which had to be determined, to whether or not the appellant should be believed when he stated that he had won at lotteries, was the result of the agreement made between the parties at the hearing, as recorded in the Case and quoted earlier in this judgment. It was not the result of the appellant making no attempt to prove that his accounts genuinely reflected his business transactions. The second sentence in paragraph (a) clearly records that one of the reasons why the Tribunal had refused to believe the appellant, was his failure to establish “the veracity of these accounts”. However, as is apparent from the quotations which I have made from the case, and in particular:-

(a) from the grounds of appeal;

(b) as to the one issue which the parties agreed at the hearing to leave to the Tribunal;

(c) from the evidence adduced by the appellant;

(d) from the submissions made the parties;

the veracity of the accounts was never in issue, save if and in so far as they recorded money alleged to have been won from lotteries.

When the appeal was heard in the Supreme Court in November 1986 the minute of submission of counsel clearly records:-

(1) That Sir Hamid Moollan Q.C. on behalf of the appellant clearly took the point that the genuineness of the accounts was not an issue before the Tribunal. The issue before the Tribunal, as he submitted, had been limited in the terms set out in paragraph 2(c) of the Case, as quoted above.

(2) Mr. Boolell, on behalf of the respondent, not only did not joint issue with Sir Hamid on this submission, but is recorded twice as contending that there were only two factors which led the Tribunal to its conclusion, namely the frequency of the alleged winning by the appellant and his reason for stopping buying tickets in spite of his good luck. Mr. Boolell did not seek to rely upon any failure by the appellant to establish the genuineness of the accounts which he had provided to the respondent.

The Supreme Court (Moollan C.J. and Glover Attorney General. C.J.) in its judgment given on 2nd February 1987, while failing to deal with Sir Hamid’s submission referred to above, strongly emphasised that it was the failure of the appellant to justify his accounts which essentially was the cause of his downfall. I quote from the final paragraphs of the judgments:-

“It seems to us that the Appellant’s contention, based as it is on the sole line of argument that a taxpayer, who adduces evidence which prima facie shows that he has won at lotteries and which is not contradicted, should be believed, overlooks the first part of the Tribunal’s reasoning as set out above. This is to the effect that a taxpayer who makes no attempt to show that his accounts genuinely reflect his business transactions cannot expect to be blindly believed if he seeks to cover up the unexplained transactions by producing receipts of winnings at lotteries.

...

So that while we agree that where an apparently honourable person whose trading or other accounts are otherwise unimpeachable establishes that he has a receipt for a win at a lottery should not be lightly disbelieved, we are unable to find fault with the Tribunal’s decision in the present case”.

It cannot be, and it has not been, disputed that the Tax Appeal Tribunal, in reaching its conclusion that the appellant must have purchased winning tickets after the respective draws from bona fide winners, in order to camouflage his taxable business profits, relied substantially upon his failure to establish that his accounts genuinely reflected his business transactions. But the issue of the validity of those accounts, for reasons which I have endeavoured to set out, was not comprised in the agreed issue in paragraph 2(c) of the Case. Thus the appellant has been found to have committed a serious fraud upon a basis which he never had an opportunity of disputing. That that is a breach of natural justice is self-evident, but if authority is requires, it will be found in Mahon v. Air New Zealand Limited [1984] A.C. 808, Sabey & Co. Ltd. v. Secretary of State for the Environment and Others [1978] 3 All E.R. 586, Fox and P.G. Wellfair Limited [1981] 2 Lloyds L.R. 514 and R. V. Mental Health Review Tribunal ex parte Clatworthy [1985] 3 All E.R. 699.

I would accordingly have advised allowing this appeal, setting aside the decision of the Tax Appeal Tribunal and ordering that the appeal be reheard so as to allow the appellant opportunity to establish the genuineness of his accounts.

*

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Pandit Jayram Seetohul v Mauritius Arya Ved Pracharini Sabha

Pandit Jayram Seetohul

Appellant

v.

Mauritius Arya Ravi Ved Pracharini Sabha

Respondent

Appeal from the Supreme Court of Mauritius

Composition of the Board:

LordTempleman

Lord Havers

Lord Ackner

Sir John Stephenson

Sir Robert Megarry

Judgment delivered on the 21st November 1988

by Lord Templeman

______________________________________________________________

(1) Contract - Expressions of intention - Whether contract

(2) Right to a fair trial in civil proceedings - Fundamental duty of a judge

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Cases referred to in judgment

Ng (alias Wong) v. the Queen (1977-87) I M.P.C.R. 110, [1987] 1 W.L.R. 1356

M. Ramkalowon v. The Private Secondary Schools Authority (unreported)

The following judgment was delivered by the Board:

The appellant Pandit Seetohul (“the Pandit”) was employed by the respondent association as a full-time priest. The association is an incorporated religious society of Hindus. The affairs of the association fell into disorder and in 1975 there was constituted by Ministerial Order a Caretaker Committee charged with the management of the association. The Caretaker Committee consisted of twelve members including the Pandit who was designated first Vice-President. On 16th March 1979 the association was informed that the Government subsidy for the financial year 1978 to 1979 amounted to Rs. 119,913.48 and that 80 per cent of this should strictly be used to meet the salaries of priests. On 20th February 1980 the Minister of Labour and Industrial Relations extended the term of office of the Caretaker Committee to 31st May 1980, directed the quorum of the Caretaker Committee to be six and ordered the election of a Management Committee to take over the management of the association from the Caretaker Committee. On 20th May 1980 at a meeting of the Caretaker Committee attended by six members, including the Pandit, the following relevant decisions were taken:-

“(iv) Taking into consideration that full-time priests and part-time priests were paid form the Sabha A/C N° 2, i.e. the Religious Subsidy Account, the amount of which depended upon the membership of the Sabha and which membership varied every ten years, i.e. according to latest Govt. Population census the Caretaker Committee decided that, subject to the continued availability of fund the only acting full-time priest J. Seetohul of the Sabha because of his long years of service to the Sabha, be placed at par salary wise with the clerk, i.e. Rs. 775 a month, plus extra remunerations as required by Government, and with retroactive effect from the date on which increase in Government subsidy was paid to Sabha. It was further decided that, that priest would have to shoulder the additional responsibility of supervising the work of part-time priests of the Sabha all over the island regarding which, he would have to enter into a new agreement with the Sabha.

The text of the agreement would first have to be cleared with legal adviser of the Sabha, the twenty part-time priests, as per list annexed to these minutes, would receive Rs. 150/- instead Rs. 100/- a month as missionary duty and that decision too, would have the same retroactive effect as the one for the full-time priest”.

It is common ground that retroactive effect would have made the increased salary payable from 1st July 1978.

“7. Finally at the request of the General Secretary it was decided to seek legal advice on the main decisions taken at that meeting, before implementation of any decision taken”.

It is also common ground that among the “main decisions” was the decision to increase the salary of the Pandit.

On 31st May 1980 at a meeting of the Caretaker Committee the members present, including the Pandit, but not constituting a quorum, approved the minutes of the meeting held on 20th May 1980 and:-

“The President announced on matters arising out of minutes that legal clearance (advice) had been received on files of the respective persons to the effect that action be stayed on the decisions regarding Pandit J. Seetohul, the twenty other Pandits because of the fact that when that particular matter was discussed there could not have been a quorum for the fact that Pandit Seetohul was himself the party concerned in the decision; ...”

The new Management Committed duly took over form the Caretaker Committee and decided to take no action on the decisions reached by the Caretaker Committee on 20th May 1980. At that date the basic salary of the Pandit was Rs. 240. In 1981 his basic salary was increased to Rs. 450. On 18th November 1982 the Pandit issued a writ in the Industrial Court of Mauritius claiming Rs. 48,486.04 on the basis that the association has agreed to raise his salary from 1st July 1978 to Rs. 775 per month.

The proceedings came before Mr. Magistrate R. Proag on 22nd April 1983 and 20th June 1983 when certain witnesses were heard. The proceedings resumed on 4th June 1984, 26th June 1984 and 19th September 1984 before Mr. Magistrate V. Boolell who delivered judgment in favour of the Pandit on 19th October 1984. On 11th June 1986 the Supreme Court of Mauritius (Appellate Court), (V.J.P. Glover Senior Puisne Judge and A.M.G. Ahmed J.) allowed an appeal from the decision of the Magistrate and dismissed the Pandit’s claim.

The Magistrate was of the view that the decision reached by the Caretaker Committee on 20th May 1980 to increase the salary of the Pandit to Rs. 775 a month was valid and created a contract binding on the association. The Supreme Court held that the increase in salary was conditional on clearance being obtained from the legal adviser and that no such clearance was obtained. In the alternative the Supreme Court held that the decision of the Caretaker Committee on 20th May 1980 did not suffice to create a contract between the association and the Pandit.

Mr. Platts-Mills, who said all that was possible to be said on behalf of the Pandit, urged that the resolution of the Committee on 20th May 1980, passed in the presence of the Pandit, albeit in his capacity as a member of the Committee, sufficed to complete a contract between the association and the Pandit. The reference to the legal adviser was either an unlawful delegation of the powers of the Committee or alternatively the advice which was received was bad in law and should therefore have been ignored. On behalf of the association Mr. Hurnam fairly pointed out that the Committee only sought advice and did not delegate any power of decision.

Their Lordships agree with the decision reached by the Supreme Court. The resolution or decision of the Caretaker Committee were only expressions of intention and could not give rise to a contract with the Pandit simply because he happened to be present in his capacity as a member of the Committee. The decision of the Caretaker Committee was in any event expressed to be conditional on clearance being obtained form the legal adviser and such clearance was never forthcoming. In their Lordships’ opinion the appeal must therefore fail.

In these circumstance the fact that the proceedings before the Magistrates were defective is immaterial; but their Lordships confirm the views expressed by the Supreme Court on 27th April 1988 in M. Ramkalowon v. The Private Secondary Schools Authority (unreported) that the decision of the Board in Ng (alias Wong) v. the Queen (1977-87) I M.P.C.R. 110, [1987] 1 W.L.R. 1356 applies to civil as well to criminal proceedings. A judge who has heard only part of a case is not in a position to pronounce judgment. In the present case the Magistrate who delivered judgment only heard some of the witnesses and the closing addresses. The proceedings were therefore defective, but even if they had been properly heard and determined the decision must have gone against the Pandit for the reasons which the Board have now expressed.

Their Lordships will accordingly humbly advise Her Majesty that the appeal ought to be dismissed. The appellant must pay the respondent’s costs.

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Simon Ah Tong v The Mauritius Sugar Terminal Corporation

Simon Ah Tong and 62 Others

Appellants

v.

The Mauritius Sugar Terminal Corporation

Respondent

Appeal from the Supreme Court of Mauritius

Composition of the Board:

Lord Keith of Kinkel

Lord Fraser of Tullybelton

Lord Templeman

Lord Ackner

Lord Jauncey of Tullichettle

Judgment delivered on the 20th October 1988

by Lord Keith of Kinkel

______________________________________________________________

Constitutional law - Industrial relations - Revised and consolidated laws of Mauritius - Transitional provisions - Interpretation of labour laws.

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Legislations referred to in judgment

Labour Act 1975, section 39

Mauritius Sugar Terminal Corporation Act 1979, section 19

Revised Edition of the Laws of Mauritius 1981

Revision of Laws Act 1974, sections 1, 4, 5, 6

The following judgment was delivered by the Board:

This appeal from a judgment dated 9th April 1986 of the Supreme Court of Mauritius (C.I. Moolan, C.J., and A.M.G. Ahmed, J.) raises a short point upon the proper construction of section 19(1)(f) of the Mauritius Sugar Terminal Corporation Act 1979 ("the Act of 1979"), incorporating certain agreements dated 7th and 8th June 1979 between the Government of Mauritius and a number of trades unions.

The Act of 1979 was passed to provide for the management of a bulk sugar terminal at the time under construction at Port-Louis. The Act was assented on 9th June 1979 and came into force on the 30th of that month. The terminal was expected to make a substantial contribution towards the economy of Mauritius, principally through reducing the time spent in harbour by ships loading sugar. However, it was also foreseen that it would have an adverse effect on the traditional stevedoring activities of the port, and that persons employed in those activities and in allied trades would perforce become redundant.

In these circumstances the Government entered into agreements with a number of trades unions whose members were likely to be so affected. The agreement relevant for present purposes is that between the Government and the Mauritius Workshop Workers' Union dated 8th June 1979. Clause 1 provided:-

"Redundancy Pension

1.

(i) Workers of Taylor Smith & Co. Ltd. who have completed fifteen years of continuous service and have become redundant because of the coming into operation of the Bulk Sugar Terminal shall be entitled to a full annual pension equivalent to two-thirds of -

(a) 26 x 12 daily basic wage for daily paid workers; or

(b) 52 x weekly basic wage for weekly paid workers; or

(c) 12 x monthly basic salary for monthly paid workers

(ii) Workers who have not completed fifteen years of continuous service and who have become redundant because of the coming into operation of the Bulk Sugar Terminal shall be entitled to a pension on a pro-rata basis i.e

(and then a formula is set out)

(iii) Such redundancy pension shall be paid by the Bulk Sugar Corporation."

Section 19 of the Act of 1979 made provision for the manner of application of the revenue of the Corporation in the course of its management of the bulk sugar terminal. Sub-section (1), in a series of numbered paragraphs, specified various matters, mainly of an ordinary administrative character, towards which the revenue might be applied. Paragraph (f) specified:-

"(f) any compensation payable to employees of the United Docks, the stevedoring companies, Société Noël Frères, Mauritius Jute and Textile Ltd., Central Aloe Fibre Factory and Taylor-Smith Co. Ltd. or their widows as per agreements signed by the Minister of Labour and Industrial Relations on behalf of the Government of Mauritius with the Port-Louis Harbour and Docks Workers' Union, the Docks and Wharves Staff Employees Association, the Aloe Industry Workers' Union and the Mauritius Workshop Workers' Union on the 7th and 8th of June 1979."

The bulk sugar terminal came into operation on 30th June 1980. It appears that Taylor Smith Co. Ltd. whose business comprised stevedoring and associated activities, then or shortly afterwards laid off 39 employees, with the consent of the Termination of Contracts of Service Board given under section 39 of The Labour Acts 1975. These employees were granted pensions by the Corporation in pursuance of section 19(1)(f) of the Act of 1979 and the agreement of 8th June 1979. Further batches of employees were laid off by the company as redundant, with similar consent, on various dates up to 31st December 1983. These employees also were granted pensions by the Corporation. Correspondence produced indicates that this was done in pursuance of instructions given to the Corporation by the Government. Finally, on 31st May 1984, the company gave notice of termination of their employment on grounds of redundancy to the 63 employees who are the appellants and the plaintiffs in the present proceedings. The laying off of these employees was approved by the Termination of Contracts of Service Board on 27th June 1984 and took effect on 31st August 1984. The Corporation refused to pay a pension to any of the plaintiffs, and the present proceedings, which were started by a statement of claim entered on 31st July 1985, have been brought to establish that the refusal is unwarranted.

The Corporation tabled a preliminary plea in limine litis in these terms:-

"The statement of claim discloses no cause of action, inasmuch as section 19(f) of the Mauritius Sugar Terminal Corporation Act 1979 is now spent."

The plea arises out of the circumstance that Volume 3 of the Revised Edition of the Laws of Mauritius, which came into force on 1st July 1982, reproduced the Act of 1979 with the omission of section 19(1)(f). The Revised Edition was prepared by the Law Revision Unit acting under section 1 of the Revision of Laws Act 1974 as amended in 1981. By virtue of section 4(4) a revised edition is to come into force on such day as the Attorney-General may prescribe. From the day after it is to be the sole official text of the enactments included in it and to be taken to be the law of Mauritius. Section 5(1)(a) provides:-

"5. (1) The Law Revision Unit may, in the preparation of a revised edition -

(a) omit any enactment or part of an enactment which has been expressly or impliedly repealed or had become spent or obsolete by reason of its being in the nature of a transitional provision or otherwise."

Under section 6(1) the Attorney-General may authorise the Law Revision Unit to make a change in the substance of an enactment for the purpose of a revised edition, and if such a change is made the enactment shall be laid before the Assembly under sub-section (2) and shall have effect as part of the revised edition only from such day as is fixed by the Assembly. It is not suggested that the omission of section 19(1)(f) of the Act of 1979 was brought about under these provisions. The omission can only have been on the understanding that the enactment omitted was spent. The question on the preliminary plea is whether or not that understanding was correct. If it was not correct the Law Revision Unit had no authority to omit the enactment in question and its action in purporting to do so cannot have any such effect upon the law, with the result that the Act of 1979 must still be read in its original form. The Supreme Court of Mauritius decided that section 19(1)(f) was indeed spent. It held:-

"(i) the present state of the law has not catered for pensions to be disbursed by the defendant corporation in favour of the plaintiffs in the circumstances recited in the statement of claim;

(ii) it was perfectly within the powers of the Law Revision Unit to omit, in the light of the agreements which had been entered into, the substance of the former Section 19(1) (f) which could only have transient effect and had been phrased out and therefore spent.

(iii) the omission referred to at (ii) above did not constitute an amendment of substance such as to require compliance under the provisions of section 6 of the Revision of Law Act;

(iv) the plaintiffs did not become redundant because of the coming into operation of the bulk sugar terminal within the meaning of Section 19(1)(f) and the agreement referred to."

The Supreme Court accordingly sustained the Corporation's plea in limine litis and dismissed the statement of claim. The plaintiffs now appeal to Her Majesty in Council.

By virtue of section 19(1)(f) of the Act of 1979 the Corporation became statutorily bound to pay pensions to certain workers of Taylor Smith & Co. Ltd. in accordance with the agreement of 8th June 1979. Paragraph (f) can properly be regarded as having been spent on 1st July 1982, the date when the revised edition came into operation, only if there were then no employees of the company who might in future become entitled to pensions as provided for in the agreement. The argument for the Corporation, accepted by the Supreme Court, is that on a proper construction of the agreement the workers entitled to a pension thereunder were those, and only those, who became redundant because of, and contemporaneously with, the coming into operation of the bulk sugar terminal. Clause 1 of the agreement does not, however, contain any provision of a temporal character apart from the requirement about length of service. The agreement was entered into, and the Act of 1979 was passed, over a year before the bulk sugar terminal came into operation. If the agreement and the Act had followed and not preceded the coming into operation of the terminal then the references to workers who "have completed" certain service and "have become" redundant could clearly cover only those who had already done so. But, as it is, those words are looking to the future, and so must be read as "shall have completed" and "shall have become redundant". In the circumstances it is not open to extract from the words used any indication of an intention that the workers who are to qualify for a pension are to be those who become redundant not only because of but also at the same time as the coming into operation of the terminal. If that had been the intention it could very easily have been evinced by the insertion of the words "and upon" between "because of" and "coming into operation". As it is, there are no good grounds for excluding from eligibility for a pension those workers who become redundant some time after the coming into operation of the terminal but who are able to establish that their redundancy was caused by that event.

For these reasons their Lordships are of opinion that the Corporation's plea in limine litis is ill founded, that section 19(1)(f) is not spent, and that provided the plaintiffs can establish that the fact of their redundancy was brought about the coming into operation of the bulk sugar terminal they will be entitled to payment of pensions by the Corporation. It is hardly necessary to say that the decision dated 27th June 1984 of the Termination of Contracts of Service Board, in so far as expressed to proceed on the ground that the plaintiffs' redundancy was brought about by the coming into operation of the terminal, is not binding on the Corporation, who were not party to the proceedings before the Board, and is irrelevant to the present action.

Their Lordships will accordingly humbly advise Her Majesty that the appeal should be allowed, and that the cause be remitted to the Supreme Court of Mauritius to proceed as accords. The respondent Corporation must pay the appellants' costs before the Board and the hearing in the Supreme Court on the plea in limine litis.

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Sattar Buxoo v The Queen

Sattar Buxoo and Another

Appellants

v.

The Queen

Respondent

Appeal from the Supreme Court of Mauritius

Composition of the Board:

Lord Keith of Kinkel

Lord Brandon of Oakbrook

Lord Griffiths

Judgment delivered on the 19th May 1988

by Lord Keith of Kinkel

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(1) Constitutional law - Power of Mauritius Parliament to legislate on Privy Council jurisdiction

(2) Criminal law - Privy Council jurisdiction in criminal matters - Not a court of fact - Important point of law has to be raised in appeal

(3) Mauritian law - Interpretation of Act of Parliament - French tradition - Travaux préparatoires

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Cases referred to in judgment

Attorney-General of Hong Kong v. Sham Chuen [1986] A.C. 887

Attorney-General of Hong Kong v. Tse Hung Lit [1986] A.C. 876

Attorney-General of Hong Kong v. Wong Muk Ping [1987] A.C. 501

Badry v. Director of Public Prosecutions [1983] 2 A.C. 297

Ex parte Deeming [1892] A.C. 422

Holder v. The Queen [1980] A.C. 115

Ibrahim v. The King [1914] A.C. 599

Oteri v. The Queen [1976] 1 W.L.R. 1272

Re Dillet (1887) 12 App.Cas. 459

Regina v. Bertrand (1867) L.R. 1 P.C. 520

Reil v. The Queen (1885) 10 App.Cas. 675

Legislations referred to in judgment

Constitution of Mauritius, section 81

Courts (Amendment) Act 1980, section 7

Courts Act 1945, section 70A

Criminal Code, section 228

Other authorities referred to in judgment

Fourth Legislative Assembly Debates, Fourth Session, 26 June 1980, Col. 3298

Privy Council Practice Direction by Viscount Dunedin [1932] 48 T.L.R. 300

The following judgment was delivered by the Board:

On the 5th December 1985 the appellants were convicted by the Intermediate Court of Mauritius on a charge of having wilfully and criminally inflicted wounds and blows upon one Fockeena which incapacitated him from personal labour for more than 20 days, contrary to section 228(1) of the Criminal Code. They were each sentenced to 18 months imprisonment with hard labour. An appeal to the Supreme Court of Mauritius was dismissed on 18th August 1986. The appellants now appeal to Her Majesty in Council under section 70A of the Courts Act. That section, which was added to the Act by section 7 of the Courts (Amendment) Act 1980, provides :-

"(1) Notwithstanding any other enactment an appeal shall lie from decisions of the Supreme Court or the Court of Criminal Appeal to Her Majesty in Council as of right in all criminal cases."

It is to be observed that section 81(1) of the Constitution of Mauritius, dealing with appeals as of right to Her Majesty in Council from decisions of the Court of Appeal or the Supreme Court, specifies in paragraphs (a), (b) and(c) certain categories of cases in which such appeal is to lie. The final paragraph, (d), adds "in such other cases as may be prescribed by Parliament".

At the outset of his argument counsel for the appellants raised a question as to the scope of the appeal to Her Majesty in Council in criminal cases now available as of right by virtue of section 70A of the Courts Act. Until that enactment no appeal from any court in any jurisdiction lay to Her Majesty in Council as of right in criminal cases. Such an appeal might be presented only with special leave granted by Her Majesty on the advice of the Board, and that is still the position in respect of all the other courts appeals from which Her Majesty in Council has jurisdiction to entertain. (See Oteri v. The Queen [1976] 1 W.L.R. 1272 and Holder v. The Queen [1980] A.C. 115). Special leave is traditionally granted only in exceptional circumstances, where the Board find room for the view that a really serious miscarriage of justice may have occurred. The question which arises is whether a similar principle is to be applied in the disposal of appeals as of right under section 70A of the Mauritius Courts Act, or whether the Board is to consider on a broad basis whether the conviction appealed against is bad by reason of misdirection or wrongful admission or rejection of evidence, or is unsafe or unsatisfactory in the light of the evidence led.

In the first appeal coming before the Board under section 70A, Badry v. Director of Public Prosecutions [1983] 2 A.C. 297, the traditional principle was held to apply. Lord Hailsham of St. Marylebone L.C. said at p. 302-303:-

"... since this appeal may be the first to be heard under the legislation (Courts (Amendment) Act 1980, section 7) extending the right of appeal to the Judicial Committee in appeals from Mauritius, their Lordships feel it right to reiterate the general principles on which they will continue to feel bound to tender their advice in criminal matters.

The locus classicus in which these principles are stated are the passages in the opinion of the Board given by Lord Sumner in Ibrahim v. The King [1914] A.C. 599, 614-615, where he said:

"Their Lordships' practice has been repeatedly defined. Leave to appeal is not granted 'except where some clear departure from the requirements of justice' exists: Reil v. The Queen (1885) 10 App.Cas. 675, 677: nor unless 'by a disregard of the forms of legal process, or by some violation of the principles of natural justice, or otherwise, substantial and grave injustice has been done': In re Dillet (1887) 12 App.Cas. 459, 467. It is true that these are cases of applications for special leave to appeal, but the Board has repeatedly treated applications for leave to appeal and the hearing of criminal appeals as being upon the same footing: Reil's case, (1885) 10 App.Cas. 675; Ex parte Deeming [1892] A.C. 422. The Board cannot give leave to appeal where the grounds suggested could not sustain the appeal itself; and, conversely, it cannot allow an appeal on grounds that would not have sufficed for the grant of permission to bring it. Misdirection, as such, event irregularity as such, will not suffice: Ex parte Macrea [1893] A.C. 346. There must be something which, in the particular case, deprives the accused of the substance of fair trial and the protection of the law, or which, in general, tends to divert the due and orderly administration of the law into a new course, which may be drawn into an evil precedent in future: Regina v. Bertrand (1867) L.R. 1 P.C. 520."

By these words their Lordships, notwithstanding any new legislation in the territories of the Commonwealth from which appeals may be brought in criminal matters, continue to feel themselves bound and, in the instant appeals, their Lordships consider that they have been guided by them. Their Lordships also desire to repeat the practice direction, issued by Viscount Dunedin [1932] 48 T.L.R. 300:

"'Their Lordships have repeated ad nauseam the statement that they do not sit as a Court of Criminal Appeal. For them to interfere with a criminal sentence there must be something so irregular or so outrageous as to shake the very basis of justice. Such an instance was found in In re Dillet (1887) 12 App.Cas. 459 which has all long along been held to be the leading authority in such matters. In the present case" - an Indian petition for special leave to appeal against a conviction and sentence of death for murder - "the only real point is a point for argument on a section of a statute, and all that the petitioner can say is that it was wrongly decided. That is to ask the Board to sit as a Court of Criminal Appeal and nothing else.'

In all that their Lordships say hereafter in discussing the merits of the instant consolidated appeals, their Lordships believe that they remain bound by, and have stayed within, the confines of these precepts."

Counsel for the appellants pointed out that, in so far as appears from the report of the case, no argument had been directed in Badry v. Director of Public Prosecutions to the scope of the appeal or the principles to be applied in the disposal of it, and he submitted that the matter should be reconsidered. He drew attention to the terms in which the Attorney-General and Minister of Justice had presented the proposed enactment of section 70A to the Mauritian Parliament as indicative of an intention that the scope of the appeal should be as wide as was the case in civil appeals which lay as of right. (Fourth Legislative Assembly Debates, Fourth Session, 26 June 1980 col. 3298). It appears that in Mauritius, where a large part of the law is derived from that of France, travaux préparatoires are readily resorted to as an aid to the true construction of legislation. That is not a practice which their Lordships would readily say anything to discourage. The reference does not, however, indicate any intention on the part of the legislature to dictate to the Board the principles which are to be applied in the disposal of appeals under the enactment. If the enactment had specifically purported to do this, for example by specifying the grounds upon which an appeal might be allowed, then a serious question would have arisen as to whether the Board were bound to give effect to the enactment, in so far as it purported to bring about a departure from the traditional principles. Section 70A of the Courts Act does not purport to do that, and the statement of the Attorney-General and Minister of Justice cannot reasonably be construed as capable of importing such an intention into the section by implication. In the circumstances the question does not arise for decision, but the Board would not easily be persuaded that their function of tendering advice to Her Majesty was capable of being fettered by the legislature of any of the countries where the jurisdiction of Her Majesty in Council is accepted.

The Board will accordingly continue to hold themselves bound, in relation to criminal appeals from Mauritius, by the principles set out in Badry v. Director of Public Prosecutions. It is to be remarked, however, that these principles are not necessarily to be applied with the most extreme rigidity. Where an important point of law of general application is raised by an appeal, and the decision in question is capable, if not reversed, of constituting a precedent not conducive to the public interest in the proper administration of justice, the appeal may be capable of being accommodated within the intendment of the principles. Thus the Board have on occasion granted special leave to an appeal to a prosecutor. Recent instances are Attorney-General of Hong Kong v. Tse Hung Lit [1986] A.C. 876, Attorney-General of Hong Kong v. Sham Chuen [1986] A.C. 887 and Attorney-General of Hong Kong v. Wong Muk Ping [1987] A.C. 501.

In the present case, however, it is plain that the circumstances of the appeal take it far outside any possible application of the principles in question. No point of law is involved. The only issue before the Intermediate Court and the Supreme Court was whether on the evidence led the appellants had been identified as being among the persons who carried out the serious assault which undoubtedly perpetrated on the victim Fockeena. The Intermediate Court found that they had been and the finding was upheld by the Supreme Court. The Board could never consider it right to interfere with a concurrent finding of fact of that nature.

Their Lordships will therefore humbly advise Her Majesty that the appeal should be dismissed.

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