THE COURT OF APPEAL OF
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JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL
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Present at the hearing:-
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The litigation that has led to this appeal arises out of the sale by judicial auction of
The Sale of Immovable Property Act provides procedures whereby the immovable property of a judgment debtor may be seized, sold by auction under judicial authority, and the proceeds of sale applied in or towards discharge of the debt owing to the judgment creditor. Following the issue of a writ of execution on behalf of the judgment creditor, the sale procedures start with a Memorandum of Seizure of the property (see sections 5 and 6 of the Act). Next the execution creditor must deposit at the Master’s Office a Memorandum of Charges (the “cahier des charges”). This memorandum must, among other things, set out the conditions of sale under which the property is to be sold (section 20(1)). The execution debtor is given an opportunity to examine the memorandum (section 21) and can apply to the Master for amendments to it to be made (section 30). The Master fixes the date for the sale (section 20(2)) but the execution debtor can apply for a postponement (section 36). The execution debtor is not entitled to bid at the auction (section 42).
After the sale before the Master has taken place, any person may, within 8 days from the adjudication, on “good cause shown to the Master’s satisfaction” and on providing a deposit, make an “outbidding”. An “outbidding” is a formal offer made at the Master’s Office to acquire the property for a sum that must not be less than one-sixth of the sale price (see section 139). The effect of the outbidding is that the property must be put up for sale by auction a second time. If, at the second auction, the property makes less than it made at the original auction, the outbidder is liable to make up the difference and, as well, may in certain circumstances forfeit his deposit (section 145). An adjudication after this second auction cannot be overridden by a further outbidding (section 146).
Section 207 of the Act provides that:
“(1) No appeal shall lie against a judgment of adjudication which is not objected to at the time of the adjudication.
Where there has been an adjudication in favour of a successful bidder but the adjudicatee fails to complete the purchase, the adjudicatee becomes liable “without prejudice to any other legal remedy against him” to be sued by way of folle-enchèré (sections 44 and 45) and the property must be resold by folle-enchèré (section 148).
The folle-enchèré procedure is dealt with in sections 149 to 152 of the Act. The point to notice for present purposes is that the procedure involves further delay before the judgment creditors, for whose benefit the judicial sale is taking place, can expect to receive their money.
The facts leading up to the sale of
“The purchaser or purchasers of [Stratford College] … shall be bound, if required so to do, by any of the parties to the sale or by any creditors inscribed on the said property/properties … to deposit cash at the time of the adjudication into the hands of the Master and Registrar of the [Master’s Court] one fourth of his or their purchase price …”
No application was made by Mr Bundhoo for any change to be made to any of the Conditions of Sale.
At the re-sale on
“Mr P Balmano [the attorney in charge of the sale on behalf of the execution creditors] moves for deposit and adjudication.
Court so orders
Mr O N Abbasakoor, SA states that the adjudicatee is making a deposit of Rs 5 million and tenders a cheque in that amount.
Mr P Balmano, SA objects to same and insists that the whole of the ¼ deposit be made as per conditions of sale embodied in the Memorandum of Charges.
Mr O N Abbasakoor, SA states the Rs 5 million being tendered is more than sufficient to pay the clients of Mr P Balmano, SA, the seizing creditors [i.e. the 33 teachers].
Mr P Balmano SA maintains his objection, whereupon Mr O N Abbasakoor moves for some time to make the deposit as enunciated in the cahier des charges i.e. up to p.m. (Time being now p.m.)No objection from Mr P Balmano who states that he is ready to wait until
Court maintains the matter up to
Later: - Time is
Case is called anew.
Mr M I Dauhoo replacing Mr O N Abbasakoor, SA, apologises for the delay caused and states that the adjudicatee is on her way to Court from the bank and moves for some more time.
Mr P Balmano, SA objects to above motion and moves that the order of adjudication made earlier be recalled in as much as the adjudicatee has not been able to comply with the conditions of sale and the property be put anew for sale.
Mr Dauhoo remarks that some of the bidders have already left.
Court remarks that the bidders were aware that the matter has been maintained and those who have left have themselves to blame and that it appears that there are sufficient bidders waiting till now.
Court is of opinion that more than ample time has been given to the adjudicatee and latter not having complied with the conditions of sale i.e. to make the ¼ deposit, recalls the order of adjudication and orders that biddings be reopened.
The property is put anew for sale at the outbid price of Rs 11,666,700 and after several biddings, Mrs Moolna makes a bid of Rs 20 million, being the highest bid, in the name of the State of Mauritius represented by Mr Abdool Hamid Soobratty.
Mr P Balmano SA moves for adjudication …
Court so orders.”
The adjudication in favour of the State was formerly entered and recorded by the Master. It appears from p.28 of the Record provided to their Lordships that this was done on
The appeal to the Supreme Court
Mr Bundhoo’s main grounds of appeal were, first, that the Master was wrong to have recalled the order of adjudication he had made in favour of Mrs Sobha Ramphul and, second, that the re-sale procedures for a sale by folle-enchèré should have been followed. It is somewhat of an oddity that Mrs Sobha Ramphul was not made a party to the appeal. Nor, originally, were the execution creditors parties to the appeal. They, however, intervened and became parties to the appeal in order to prosecute the preliminary point, taken in reliance on section 207 of the Act, that since Mr Bundhoo had not objected on the day of the sale,
The Supreme Court (Senior Puisne Judge Y.K.J. Yeung Sik Yuen and Mrs Justice N Matadeen) delivered its judgment on
Mr Bundhoo applied to the Supreme Court in November 2003 for leave to appeal to the Judicial Committee but, on
Completion of the
In the meantime, Mr Bundhoo had, in October 2003, petitioned the Master for a stay of the procedures necessary to complete the sale to the State but, prior to any hearing, the petition was withdrawn. The completion of the sale then proceeded. The balance of the Rs 20 million purchase price, a deposit having already been paid, plus interest was paid into court, the execution creditors were paid and other creditors who held security over
The issues on this appeal
The issues before the Board raised by the parties’ respective written cases are both procedural and substantive. Most of the procedural issues have either been overtaken by events or have not been pressed before their Lordships. Only one remains potentially live, namely, whether the appeal can proceed in the absence of Mrs Sobha Ramphul as a party. The effect of the substantive relief sought by Mr Bundhoo might, arguably, be to restore Mrs Ramphul as an adjudicatee entitled to purchase
The first substantive point for their Lordships to consider is whether the Master had power, on Mrs Ramphul’s failure to produce the requisite deposit, to annul the adjudication that he had pronounced in her favour, or whether, as Mr Hurnam has argued on behalf of Mr Bundhoo, the relatively lengthy procedure by way of folle-enchèré should have been resorted to.
In their Lordships’ opinion, the Master was entitled to take the course he did and annul the adjudication. First, the adjudication, as recorded in the Minutes, was not, in their Lordships’ opinion, an unconditional stand-alone order. It was pronounced by the Master in response to Mr Balmano moving “for deposit and adjudication”. The order was for Mrs Ramphul to pay the deposit and, as their Lordships would construe it, for Mrs Ramphul to be adjudicated the purchaser upon the deposit being paid. When Mr Abbasakoor asked for and was allowed time for her to raise the money necessary to pay the deposit, i.e. ¼ of the Rs 35 million that she had bid, the adjudication was, in their Lordships’ view, held in suspense for the period allowed. If the deposit had been paid, the adjudication would have stood. In the event, however, the basis on which the adjudication had been ordered failed and, in their Lordships’ view, the adjudication failed with it. This conclusion is consistent with the decision of the Supreme Court in Tatayah v. Ramonet and Ramonet v. Poupard (1965) MR 218 where Lalouette J said:
“An essential condition of an outbidding under section 139 of the Ordinance is the deposit provided for under section 141, without which there can be no effective outbidding” (p.224)
and the Court held that the Master was entitled to recall his order when the cheque for the deposit bounced.
Second, there is long-standing jurisprudence in the United Kingdom establishing that a court may, before entry of a judgment or the drawing of an order has been completed, reconsider the matter and amend its order if thought fit to do so (see e.g. Willé v. St John  1 Ch 701, 703 and Shepherd v. Robinson  1 KB 474). Their Lordships see no reason why the same rule should not apply in
Third, their Lordships accept the cogency of the reasoning of the Supreme Court based on an analogy drawn from rule 59 of the District and Intermediate Courts Rules.
Fourth, Mr Hurnam’s reliance on section 45 of the Sale of Immovable Property Act for the proposition that proceeding by way of folle-enchèré provided the only remedy available once Mrs Ramphul had failed to pay the deposit required by the Conditions of Sale is, in their Lordships’ opinion, misplaced. Section 45 is expressed to be “without prejudice to any other legal remedy”, and does not purport to prescribe an exclusive avenue for relief. In any event their Lordships accept the construction placed by the Supreme Court on sections 44 and 45 of the Act.
For all these reasons, their Lordships agree with the Supreme Court that the Master had power to annul the adjudication he had made in favour of Mrs Ramphul and that his decision to do so in the circumstances that had happened cannot be invalidated on the ground of unreasonableness or unfairness.
23. There remains the section 207 point. It is not entirely clear from the Record whether, for section 207 purposes, the judgment of adjudication in favour of the State should be treated as made on
24. Accordingly, their Lordships dismiss this appeal. Mr Bundhoo must pay the respondent’s costs of the appeal. Without prejudice to the rights of the respondent to recover their costs from Mr Bundhoo, their Lordships will direct payment of their costs from the sum in court.