Privy Council Appeal No 26 of 2007
(1) GUY LEBON
(2) CLAUDE BONNENFANT
AQUA SALT CO LIMITED
THE SUPREME COURT 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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1. This appeal arises out of an action for possession of a dwelling house and garage standing on 15 perches of land at Les Salines,
2. Some of the facts are obscure, partly because of the deaths of two important participants in the relevant transactions and the fading of the memories of others and partly because some questions were not explored at the trial. What seems clear enough is that in November 1981
3. Equally clear is that
4. Presumably the lengthy period which
6. It is not altogether clear what the other shareholders knew of
8. It appears that Aqua retaliated by applying in the Supreme Court for a writ of habere facias possessionem in respect of the house, relying upon the title which it had acquired from Black Rocks. The affidavits sworn in these proceedings were produced at the trial but do not appear to have been made part of the record. Their Lordships are therefore obliged to piece together their contents as best they can from fragments which were read in court and went onto the transcript.
9. Rather oddly,
10. The judgment of Espitalier-Noel J in the habere facias possessionem proceedings, delivered on the
“The evidence as it stands sufficiently reveals the following: In 1981,
This being the case, it is common ground that Bonnenfant could only acquire a valid title to the property … from Jingree on the latter perfecting his own purchase from Black Rocks Co Ltd.
This Jingree did not do. He renounced his purchase from Black Rocks Co Ltd on the 16th December 1983, three days after the applicant company (Aqua Salt Co Ltd) was formed of which he (Jingree) was a promoter, one of three (or four) shareholders, and a director and it was the company which, on the 10th February 1984, by notarial deed, purchased the 9A 35 from Black Rocks Co Ltd.
The defence raised by the respondent to the effect that the applicant company was well aware of Jingree’s commitment towards Bonnenfant and would have acted in fraudulent collusion with Jingree in purporting to purchase the property in its own name, seriously, I find, questions the genuineness itself of the applicant company’s title – a matter requiring canvassing in court.
The present application is accordingly refused with costs.”
11. Their Lordships consider that this judgment identifies the issue with economy and precision. Section 5 of the Transcription and Mortgage Act 1863 provides that ―
“…no right in immoveable property under a deed or judgment shall be maintained against a third party whose rights are secured by law over the immoveable property to which the deed or judgment applies, unless the deed or judgment has been transcribed.”
12. Even if they were deeds (which they do not appear to have been), neither the agreement between Black Rocks and Mr Jingree nor the agreement between
13. In English law, that may have been the end of the matter (see Midland Bank Trust Co Ltd v Green  AC 513) but the law of Mauritius, like most systems based on civil law, provides an exception for cases in which the purchaser is in bad faith. The position is clearly explained by
“But that is not the end of the matter…Where the beneficiary of a promesse de vente has failed to transcribe the deed, he can still safeguard his rights if he can prove that the second purchaser knew at the time of his purchase that the land was already the subject matter of a sale agreement to another person. The following excerpt from Encyclopédie Dalloz Droit Civil [Vol VIII Vo Promesse de Vente] clearly explains the position:
171…Si le vendeur aliène l’immeuble au mepris de la promesse non publiée, et si le tiers acquéreur publie son acquisition, le bénéficiare du premier ‘compromis de vente’ se trouvera en principe évincé…
172 Cette dernière solution reçoit, cependant, exception au cas où le bénéficiare parvient à prouver que le deuxième acquéreur connaissait, au moment où il a acheté, l’existence de la vente initiale; il a été jugé en ce sens que l’acquisition d’un immeuble, en connaissance de sa vente antérieure, est constitutive d’une faute ne permettant pas à l’acheteur d’invoquer les règles de la publicité foncière.”
14. Hence the issue identified by Espitalier-Noel J, namely, whether, at the time it bought the salt works, Aqua had knowledge of the previous agreement to sell the house to
15. At the eventual trial of the action before Lam Shang Leen J, the issues on the pleadings were, first, whether Mr Lebon had acquired title to the land and secondly, whether, as alleged in the amended defence and counterclaim, Jingaree, as a director of Aqua, had “mala fide and de connivance” with Aqua renounced his rights to allow Aqua to purchase “irrespective of the defendant’s rights to the 15 perches…” The judge had no difficulty in finding that
16. The more difficult question was whether Aqua had known of the sale to
17. The judge found as a fact that no member of the Board, other than
“I further find that the defence has failed to prove on a balance of probability that there was a conspiracy between Mr Gajadhur Jingree and the plaintiff company to deprive [Mr Bonnenfant] of 15 perches of the land belonging to Black Rocks Ltd. It is insufficient to say that Mr Gajadhur Jingree was a shareholder and founder member of plaintiff company to infer that the plaintiff company was therefore a party to a conspiracy to dispossess [Mr Bonnenfant] of land for which he had effected payment to Mr Gajadhur Jingree.
18. The Supreme Court affirmed these findings.
19. The issue is therefore a very narrow one. The one person who undoubtedly had knowledge of the earlier sale was Jingree. Is his knowledge attributable to Acqa? Was Lam Shang Leen J right in saying that it was “insufficient to say that
20. Their Lordships feel some difficulty about dealing with this question because it does not appear to have been raised in quite this form in any of the courts below, although the way in which Lam Shang Leen J formulated his reasons suggests that it had been submitted on behalf of Mr Lebon that it would be sufficient to say that Mr Jingree was a shareholder and founder member of Aqua. But the point was not argued before the Supreme Court or mentioned in the appellants’ printed case before the Board. In fact their Lordships regrettably feel bound to record that neither they nor the Supreme Court received from the respective counsel representing the appellant the assistance they were entitled to expect. In the appellant’s opening submissions to the Board, no reference was made to the Mauritian law protecting the beneficiary of a promesse de vente against a subsequent purchaser with knowledge of his contract. The authority to which their Lordships have referred was produced by counsel for the respondent. And at no stage has there been any discussion of what, in the case of a corporate purchaser, would count as the knowledge of the company.
21. After careful consideration, however, their Lordships have decided that they should decide the point. It is a point of law arising out of undisputed (or indisputable) evidence. There would be no prejudice to the respondent which cannot be compensated by an appropriate award of costs. On the other hand, to refuse to consider the matter could be an injustice to the appellants.
22. A corporate body can have knowledge only by the attribution of the knowledge of a natural person. The principles upon which one decides whose knowledge should count as the knowledge of a corporate body were discussed by the Privy Council in Meridian Funds Management Asia Ltd v Securities Commission 
“given that [the substantive rule] was intended to apply to a company, how was it intended to apply? Whose act (or knowledge, or state of mind) was for this purpose intended to count as the act etc. of the company? One finds the answer to this question by applying the usual canons of interpretation, taking into account the language of the rule (if it is a statute) and its content and policy… [T]he rule of attribution is a matter of interpretation or construction of the relevant substantive rule...”
23. Thus, in the
“Companies would be able to allow employees to acquire interests on their behalf which made them substantial security holders but would not have to report them until the board or someone else in senior management got to know about it. This would put a premium on the board paying as little attention as possible to what its investment managers were doing.”
24. An earlier example of the application of these principles is
“The question in the present case is whether information which comes to the attention of one director, but which he has not shared with the rest of the board, is to be treated as information in the possession of the company. .. In general…I think that information relevant to the company's affairs that comes into the possession of one director, however that may occur, can properly be regarded as information in the possession of the company itself. In my view that presumption informs the present contract and points to the conclusion that information in the possession of [the director] relating to the bribe is to be regarded as information in the possession of [the company] itself.”
25. The rule that a second purchaser with actual notice of the first purchase cannot rely upon the requirements of public notice by transcription or registration is based, as the
26. Their Lordships consider on the facts of this case, the substantive rule requires the knowledge of
27. Their Lordships will therefore allow the appeal and declare that