Samy Sunnassee v David Ardill

Samy Sunnassee

Appellant

v.

David Ardill

Respondent

FROM

THE SUPREME COURT OF MAURITIUS

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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.

Emtel (Mauritius) Ltd v The Ministry of Telecommunication

Emtel (Mauritius) Limited

Appellant

v.

(1) The Ministry of Telecommunication

(2) The Telecommunication Authority

(3) Cellplus Mobile Communications Ltd. and

(4) Mauritius Telecom Ltd.

Respondents

FROM

THE SUPREME COURT OF MAURITIUS

---------------

JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL,

Delivered the 2nd October 2000

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Present at the hearing:-

Lord Bingham of Cornhill

Lord Nicholls of Birkenhead

Lord Cooke of Thorndon

Lord Hutton

Lord Hobhouse of Woodborough

[Delivered by Lord Bingham of Cornhill]

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On 2 July 1997 the Supreme Court of Mauritius refused an application by Emtel (Mauritius) Limited (“Emtel”) for leave to apply for an order of mandamus against the Telecommunication Authority (“the Authority”). Emtel appeals by special leave against that refusal. It complains in particular that the Supreme Court misconstrued and misapplied the Telecommunication Act 1988.

The history.

The Telephone Act 1938 empowered the Director of Telecommunications on behalf of the Government of Mauritius to establish, maintain and operate telephone services in Mauritius and to authorise persons to operate external services. At the beginning of the 1980s, overseas telecommunication services were operated by Cable and Wireless Limited and internal telecommunication services were operated by the Department of Telecommunications of the Government of Mauritius, which also exercised regulatory functions. In 1984 the Government formed a wholly-owned company, Overseas Telecommunications Services Co. Limited (“OTS”). With effect from 1 January 1985 that company took over the assets and operations of Cable and Wireless in Mauritius. On 1 April 1988 another wholly-owned company was incorporated, Mauritius Telecommunication Services Limited (“MTS”). Under the Telecommunication (Transfer) Act 1988 the undertaking of the Department of Telecommunication of the Mauritius Government (excluding the regulatory functions of the Government) was transferred to that company. By another Act, the Telecommunication Act 1988, the control and regulation of telecommunication services in and from Mauritius were further restructured.

Section 4 of the 1988 Act established the Authority. The functions of the Authority, as provided by section 5 of the Act, were:

“(a) to monitor, control, inspect and regulate … telecommunication services and facilities;

(b) to ensure that no … telecommunication services or facilities are operated or provided except in accordance with this Act;

(c) to issue, modify or revoke licences under this Act;

(d) to sanction any tariff or charge under section 17;

…

(f) to do all such things as may be requisite under this Act.”

These were far-reaching powers, since by section 2 of the Act “telecommunication services” were defined to mean:

“(a) the services between persons and persons, things and things, or persons and things, provided in respect of radio, sounds including speech and music, telephone, telegraph, telex, telefax, actuation or control of machinery or apparatus, images, data, information and other kinds of services that may be provided by means of telecommunication;”.

By section 6 of the Act there was established a Telecommunication Advisory Council, the functions of which were, as provided by section 7, to

“(a) advise the Minister on all matters relating to –

(i) the promotion of the interests of consumers, purchasers and other users in respect of the prices charged for and the quality and variety of telecommunication services provided and telecommunication equipment and facilities supplied; …

(iii) the improvement of telecommunication services in Mauritius generally;

(iv) any other matter which may be referred to it by the Minister.”

Section 9 of the Act empowered the Minister to give to the Authority and the Council

“… such directions as to the performance of their respective duties under this Act as appear to the Minister to be requisite in the public interest and the Authority and the Council, as the case may be, shall comply with such directions.”

Section 10 of the Act provided:

“(1) No person shall establish, maintain or operate a telecommunication installation which is connected in any manner to a telecommunication line outside his business or outside premises or part of premises not exclusively occupied by him for his own business unless he obtains a licence from the Authority.”

By section 11 it was provided that applications for licences should be made in writing and give such information as might be prescribed. The Authority might request an applicant to furnish additional information. In determining whether to grant, renew, modify or revoke a licence, the Authority was required by section 11(3) to have regard, among other matters, to the public interest, any international obligation of Mauritius in the field of telecommunication and any directions of the Minister. By subsection (4) it was provided that every licence should specify

“(e) any terms, conditions or restrictions which the Authority may think fit to impose.”

By section 12 the Authority was empowered to modify a licence

“… if it considers the modification to be necessary in the interests of the users of telecommunication services or the purchasers of telecommunication equipment or for any other reason;”

and to revoke a licence

“where the licensee is in breach of the terms, conditions or restrictions of his licence.”

By section 14 of the Act it was the duty of licensees to

“(d) furnish to the Authority such reports, audited accounts, documents and information concerning his installations and operations as the Authority may request.”

Section 17 of the Act provided:

“(1) Any rates, tariffs or charges proposed by a licensee shall be subject to the approval of the Authority.

(2) The Authority shall not approve any rates, tariffs or charges unless it considers that they are reasonable.

(3) The Authority may call for such information as it thinks fit in determining the reasonableness of any rates, tariffs or charges or any proposed alteration of them.

(4) No licensee shall claim any rates, tariffs or charges which have not been approved by the Authority.”

Section 40 of the Act provided:

“Any person who establishes, maintains or operates a telecommunication installation to provide a telecommunication service in breach of section 10 or in breach of the terms, conditions or restrictions of any licence in respect of that installation shall commit an offence.”

In section 43(8) it was provided:

“Notwithstanding section 10, the telecommunication services provided by the Overseas Telecommunications Services Co Ltd and the Mauritius Telecommunication Services Ltd, shall be deemed to have been validly licensed under this Act.”

In 1992 MTS changed its name to Mauritius Telecom Limited, following a merger of the domestic and international services operated by MTS and OTS respectively.

Before the 1988 legislation took effect, a new market had begun to develop in mobile telephone communications. Emtel, a joint venture company formed by a Mauritian company with foreign partners, prepared to enter the market in Mauritius. On 23 May 1988 it was granted a Cellular Mobile Telephone Operator’s Licence by the Department of Telecommunications of the Government. This licence provided in clause 2(a):

“This licence shall not be construed as granting any exclusive rights to the licensee in the operation of the service except for an initial period of seven years from the date of its coming into service …”

By clause 4 the Telecommunications Department reserved the right:

“(a) Of not renewing the licence after the initial period of 7 years.

(b) Of granting licences to new operators after the initial period …”

By clause 6 of the licence Emtel was required, after a period of grace of three years, to pay terminal charges to the Telecommunications Department, reckoned on the gross proceeds from all calls made by and to the mobile subscribers, the percentage payable rising from 15% to 25% of gross proceeds. It appears that this licence was superseded, with effect from 1 January 1989, by a licence issued by the Authority on 19 May 1989 under section 10 of the 1988 Act. An interconnection agreement was eventually negotiated between Emtel and Mauritius Telecom on 24 July 1995, under which interconnection charges at the specified rate became payable by Emtel to Mauritius Telecom.

Emtel did not at that time wish, or was not in a position, to exploit an alternative form of mobile telephone service dependent on the use of what was known as GSM technology. It appears that an application for a licence to operate a service using that technology was made by another party in December 1993 and approved in principle in March 1994. Emtel was, however, greatly concerned by this proposal, no doubt fearing that the value of its investment in the market would be reduced and its competitive position undermined. The Government took these concerns seriously, and a committee was formed under the chairmanship of the Prime Minister to review the situation. The outcome was communicated to Emtel in a letter from the Authority dated 25 September 1996 which said:

“It is recalled that during the meeting of the Ministerial Committee set up to look into major issues in the telecommunication sector, held on 15 August 1996, the representatives of your company stated that Emtel Ltd did not have any immediate plans to migrate to GSM.

In the light of the above and after considering various other factors, the Authority has decided to grant a licence to Cellplus Mobile Communications Ltd with three (3) years exclusive rights to use GSM technology to operate a cellular mobile telephone service, with effect from 05 September 1996.

The application made by your company for a licence to operate a GSM network and services will be considered in due course.

A copy of the press release issued by the Telecommunication Authority on 05 September 1996 is enclosed herewith, for your information.”

Cellplus was a wholly-owned subsidiary of Mauritius Telecom, which was the monopoly supplier of fixed line services in Mauritius, and accordingly posed a potential competitive threat to Emtel.

In its press release the Authority referred to recent developments in the national telecommunication network and to the Government’s strong commitment to the liberalisation of this sector. The press release stated:

“The Telecommunication Authority has taken note of the various steps already taken by Government in the pursuit of the above objectives: (a) the commitment to the World Trade Organisation to gradually liberalise its telecommunication sector by the year 2004; (b) the reconstitution of the Telecommunication Advisory Council so as to propose a comprehensive policy aimed at –

- reviewing the legal, regulatory and institutional

framework in the sector;

- encouraging fair and healthy competition among all

operators in that sector …”

In the press release the Authority summarised its reasons for deciding to grant a licence to Cellplus to operate a cellular mobile telephone service using the GSM technology with exclusive rights for a period of three years, acknowledging the investment which that company had made in the project and the period before it would become profitable. The press release concluded:

“6. The Authority has given its approval to the tariffs proposed by Cellplus Mobile Communications Ltd in respect of telecommunication services to be provided to the public.

7. The Authority has further decided that the following conditions be met:

(a) the interconnection agreement between Mauritius Telecom and Cellplus should be on the same terms as those offered to Emtel Ltd without, however, any grace period as was previously granted to Emtel Ltd;

(b) the Authority would appoint an independent auditor to certify that Cellplus Mobile Communications Ltd is keeping separate accounts from Mauritius Telecom and that it is not benefiting from any cross subsidisation.”

On 19 December 1996 Emtel issued an application for leave to apply for an order of mandamus against the Authority directing it:

“(i) to appoint an independent auditor to verify and monitor on an ongoing basis and certify that [Cellplus] is keeping separate accounts from [Mauritius Telecom] and that it is not benefiting from any cross subsidisation, and to communicate to the Applicant any report made by the Auditor, and

(ii) to make available to the Applicant a copy of the Interconnection Agreement between [Mauritius Telecom] and [Cellplus] so as to ensure that it is on the same terms as those offered by [Mauritius Telecom] to the Applicant, and

(iii) to ensure that interconnect fees are in fact paid by [Cellplus] to [Mauritius Telecom], and

(iv) further to ensure that such interconnect fees are paid as from 15th March 1996, and that the licence issued to [Cellplus] on 5th September 1996 granting a three year exclusivity period on the use of the GSM technology to [Cellplus] is made to take effect as from 15th March 1996.”

The application was supported by an affirmation of the General Manager of Emtel who stated that Cellplus had operated its mobile telephone service from 15 March 1996, although not licensed to do so until 5 September 1996, that Cellplus had published a tariff which was substantially lower than that of Emtel and which was not commercially sustainable if interconnection charges were paid at the prescribed level, in the absence of cross-subsidy between Mauritius Telecom and Cellplus, that there was evidence of cross-subsidy between Mauritius Telecom and Cellplus and that on the prevailing tariffs offered by Cellplus Emtel was bound to sustain a crippling loss from its operations. Emtel accordingly sought the relief claimed in order to ensure that the conditions summarised in the press release as those upon which Cellplus were to be licensed to enter the mobile telephone market should be enforced.

Although at the outset relief was sought against the Authority alone, notice was given to Mauritius Telecom, the Ministry of Telecommunications and Cellplus, all of whom exercised their right to appear and be heard. At an interlocutory hearing on 5 May 1997 the representative of the Authority informed the court that it had directed Mauritius Telecom to appoint an auditor of its own and that an interconnection agreement between Mauritius Telecom and Cellplus had been signed on 31 March 1997. The Authority indicated that it was under no statutory duty, and did not have the power, to appoint an auditor to look into the accounts of Cellplus. It had, however, directed Cellplus to furnish its own auditor’s report regarding its accounts.

The application for leave to apply was heard by the Supreme Court (A.G. Pillay C.J. and P. Lam Shang Leen J.) and in a judgment given on 2 July 1997 it was dismissed. The Supreme Court concluded that the application was “clearly misconceived” for a number of reasons. It held that no public duty was owed by the Authority to Emtel. It further held that no statutory or public duty was owed by the Authority to Emtel to appoint an independent auditor, to communicate the terms of an agreement between Mauritius Telecom and Cellplus, to enforce contractual obligations between Mauritius Telecom and Cellplus or to modify the date of the licence which it had granted to Cellplus. In the opinion of the court, the relief sought by Emtel would be tantamount to ordering the Authority to act beyond its powers and to do acts which would violate the right of privacy guaranteed by the Constitution to the Authority and Cellplus, and the relief claimed would, if granted, interfere with the exercise of a discretion granted solely to the Authority. The court observed that “the principles of fair trading, transparency and disclosure in the field of telecommunications” were not enshrined in the Act of 1988. Mandamus would not lie to order the doing of anything which was contrary to law. Emtel had no right to complain if, as it claimed, it had been undercut by Cellplus and had as a result suffered crippling losses, since any duty was owed by the Authority to consumers of telecommunication services and not Emtel, and its duty was to approve tariffs which it considered reasonable. Even if the licence issued by the Authority to Cellplus was subject to the condition that there should be no cross-subsidy between Cellplus and Mauritius Telecom it was for the Authority to ensure that this condition was complied with by Cellplus, and there was nothing to suggest that the Authority was shirking its duty. While the Authority had power to obtain information, and had directed Mauritius Telecom to furnish it with audited accounts, the Authority had no duty to communicate such information to Emtel. The Authority had no power under the Act to appoint an independent auditor to look into the accounts of Mauritius Telecom and Cellplus. There was nothing to prevent the Authority changing its position, as it had done in relation to the appointment of an independent auditor.

Emtel sought leave to appeal, relying on a further affirmation of its General Manager, who stated that to his knowledge Cellplus was still benefiting from cross-subsidisation and that the unfair competition of which Emtel complained still persisted. Leave to appeal was refused on 24 July 1998. Special leave was granted by the Board on 24 February 1999.

By this time events had moved on. Following the publication of a Green Paper, the Government had (in December 1997) published a White Paper on the telecommunications sector. This White Paper recognised the rapid pace of change in the sector and announced plans for a new statutory framework which would, among other things, stimulate competition in the market and control unfair or anti-competitive practices by licensees. Of mobile cellular services the White Paper said:

“Competition presently exists in the mobile cellular service market, although each cellular license included an initial exclusivity period. Emtel Limited’s exclusivity in the mobile cellular market expired in December 1995; Cellplus’ exclusivity in the GSM market will continue on through 1999. The extent to which additional competitors may be licensed will be left to the discretion of the Mauritius Telecommunications Authority.”

The White Paper was followed by the Telecommunications Act 1998, which established a new Mauritius Telecommunications Authority, whose objects were expressed to include the promotion of fair competition and efficient market conduct and the prevention of unfair or anti-competitive practices by licensees, such as cross-subsidising.

In June 2000 Emtel issued civil proceedings in the Supreme Court of Mauritius against the Authority, Mauritius Telecom, Cellplus and the Ministry, claiming damages: the facts relied on were essentially those summarised above, which were said to give rise to a cause of action in tort.

The submissions of the parties.

Emtel submitted that the functions conferred on the Authority by section 5 of the Act of 1988 were expressed in very broad terms. In exercising its licensing function the Authority was required to have regard to the public interest and any direction of the Minister. It enjoyed a wide power to impose licence conditions directed to the purposes of the Act. In imposing conditions on Cellplus to protect and stimulate competition between Emtel and Cellplus, by preventing cross-subsidisation and ensuring that Cellplus dealt with Mauritius Telecom on the same terms as Emtel, the Authority was acting within its powers. There was nothing to prevent it granting a licence to Cellplus on the condition that Cellplus should permit an independent auditor appointed by the Authority to inspect and report to the Authority on its books and accounts. The Supreme Court was wrong to interpret the Act as concerned only with consumers and not with competitors to a licensee such as Emtel: given the broad terminology of section 5; there was nothing in the language of the Act to preclude the Authority regulating competition; any system of market regulation must give effect to principles of fair trading, transparency and disclosure. The public interest was not immutably fixed when the Act was passed, and the Authority plainly understood its functions to include the regulation of competition when it announced the conditions on which Cellplus would be permitted to enter the mobile telephone market. Even in 1988 when the Department granted the initial licence to Emtel, the advent of competition was envisaged: it was implicit in the grant of an exclusivity period of seven years that after the expiry of that time the licence might not be exclusive, and the Department expressly reserved the right to license new operators (who might be additional operators) after that period. The terms of the Authority’s letter of 25 September 1996 and its press release of 5 September 1996 entitled Emtel to expect that those conditions would be enforced and it had strong grounds for contending that its expectation should not be defeated. The right to privacy guaranteed by Articles 3 and 9 of the Constitution was not absolute: it was subject to the rights and freedoms of others and the public interest, and licensees could properly be required to furnish to the Authority any relevant information concerning their operations reasonably called for by the Authority. The Authority was a public body exercising public functions and as a party adversely affected by the exercise of those functions Emtel had sufficient interest to seek relief by way of judicial review. It was not a ground for refusing leave to apply that the relief claimed might be inappropriate or call for amendment. The Supreme Court had erred in concluding that Emtel did not show a good arguable case justifying the grant of leave to apply.

On behalf of the Ministry and the Authority it was submitted that the Act of 1988, properly construed, conferred no power or duty on the Authority to regulate competition, as the Supreme Court had rightly concluded. This submission relied heavily on the history of telecommunications services in Mauritius, of which (it was submitted) Emtel’s submissions betrayed a fundamental misunderstanding. In 1988 there had been no competition in the telecommunication industry, and it had not then been the policy of the Government to encourage it. The purpose of the Act was not to provide a framework for competition between multiple providers but to provide an improved structure for the management and operation of a state monopoly. The powers conferred on the Authority to impose licence conditions and approve tariffs were to be understood in that context only. In 1988 there was no local market, and accordingly the Act made no provision for regulation of a market. The Authority did not have the staff, the resources or the expertise to regulate a competitive market. It was not until the later 1990s that steps were taken to liberalise the market and introduce competition, and effect was given to those objectives for the first time in the Act of 1998, which envisaged a gradual transition to a competitive environment. Since the telecommunications industry had now made an important advance and since Emtel had issued civil proceedings canvassing the same issues as were raised by its application for leave to seek judicial review, there was no useful purpose to be served by now granting leave.

Cellplus drew the attention of the Board to an affirmation made by the Chief Executive of Mauritius Telecom, in response to Emtel’s petition for leave to appeal (after the judgment of the Supreme Court and its refusal of leave to appeal) in which it was asserted that Cellplus had never benefited from any subsidy by Mauritius Telecom, that there had never been a situation of unfair competition in favour of Cellplus and that the interconnection agreement between Mauritius Telecom and Cellplus was on the same terms and conditions as those obtaining between Mauritius Telecom and Emtel. The main thrust of Cellplus’ submissions was, however, as urged by the Ministry and the Authority, that the regulation of competition was not within the purposes of the 1988 Act and accordingly the Authority had had no power to impose any condition providing for the appointment of an independent auditor or for preventing cross-subsidisation, and such conditions were accordingly ultra vires and unreasonable. It appeared that the Authority might have wrongly anticipated the changes brought about by the 1998 Act. There could be no legitimate expectation that a public body would act otherwise than in accordance with the lawful scope of its authority, and the Authority had rightly recognised that it had no power to appoint an independent auditor. Cellplus joined with the Ministry and the Authority in submitting that no useful purpose would now be served by granting leave to apply for judicial review.

Mauritius Telecom allied itself with the submissions made by the Ministry, the Authority and Cellplus, relying heavily on the changed situation which had resulted from the passing of the 1998 Act and the launching of a civil action for damages by Emtel. Reliance was also placed on section 43(8) of the 1988 Act: this made plain that the statutory objective was to protect the state monopoly; there was no power to license a competitor with the state monopoly; and there had accordingly been no need to license Cellplus since it was a subsidiary of Mauritius Telecom, which was deemed to have been validly licensed under the Act.

Conclusions.

The Board is very conscious that it lacks the intimate knowledge of conditions in Mauritius which the Supreme Court will have enjoyed and also that, because leave to apply for judicial review was refused, there has been very limited enquiry into the underlying facts. It is not, however, suggested that there are any additional facts, not known to the Board, which bear on the correct construction of the 1988 Act.

It seems plain that in 1988 the internal telephone system in Mauritius, as in many other countries, was operated by a state-owned monopoly and the transfer of the Department’s undertaking to MTS did not in itself affect that. It may readily be accepted that the prime object of the 1988 Act was to regulate that monopoly and not to usher in a new era of competition. Had the regulation of competition featured prominently among the legislators’ intentions, it is reasonable to infer that the 1988 Act would have contained provisions expressly directed to that end. It has not, however, been suggested that the licence granted to Emtel in May 1988, before the Act came into force but after a lengthy period of negotiation and substantial investment by Emtel, was in any way invalid or ultra vires. That licence provided that, after an initial period of exclusivity and a period of grace during which no inter-connection charges would be payable to the Department, other mobile telephone operators might be licensed to enter the field. Thus, even if it was not contemplated that there would be competition with MTS, or Mauritius Telecom as it became, it certainly was contemplated that there might be competition between licensed operators of mobile telephone services.

When Cellplus sought a licence to exploit the new GSM technology in the mobile telephone market, the Authority decided that it should be subject to the conditions specified in the press release. The evidence does not show whether the Minister directed the Authority to impose those conditions under section 9(1) of the Act, nor whether the Authority complied pursuant to section 11(3)(f); but since the decision to grant the licence subject to those conditions followed the deliberations of a ministerial committee it is at least possible that a direction was given. The purpose of the conditions was, plainly, to ensure that Emtel and Cellplus competed on broadly equal terms; in other words, to see that Cellplus as a wholly-owned subsidiary of the monopoly fixed-line operator did not gain an unfair competitive advantage. There was no challenge to the validity of those conditions until Emtel sought to enforce them.

The question nevertheless remains whether the Authority had power under the statute to impose the conditions which it is understood that it did. The Authority’s functions were laid down in section 5 in the most general terms, and “telecommunication services” were very broadly defined. The remit of the Council directed attention to the interests of “purchasers and other users” as well as consumers, referred to “the … variety of telecommunication services provided” and embraced any matter other than those specified which might be referred to it by the Minister. The Minister’s power to give mandatory directions was limited only by the purposes of the Act and the public interest. In deciding what terms or conditions to impose on the grant of a licence the Authority enjoyed a wide discretion, provided it had regard to the public interest and any directions of the Minister. It had power to modify licences. Nowhere in the Act is there any indication that the Authority lacked power to license competing operators of mobile telephone services if it judged it to be in the public interest to do so or if it was directed by the Minister to do so. If it had power to license such competitors, it plainly had power to impose what it considered to be appropriate conditions to regulate competition between licensees. It cannot be thought that the Authority had power to license such competitors but not to control the terms on which they were to compete. It may be (although this must be questionable having regard to the terms of Emtel’s 1988 licence) that it would not have been thought to be in the public interest in 1988 to license such competitors; but perception of the public interest may evolve over time, and even if that were the position in 1988 it would not preclude the Authority from licensing such competitors and imposing appropriate terms in 1996 if it was then judged to be in the public interest to do so or if the Minister (acting within the powers conferred by Parliament) directed it to do so.

The Authority was a public body exercising public functions and its powers and duties must be analysed for judicial review purposes in a public law context, not in terms of private law duties or obligations. Any person or body with a sufficient interest could, if reasonable grounds were shown, challenge the manner in which its functions were exercised. In the judgment of the Board there can be no doubt that Emtel had sufficient interest to seek appropriate relief if (as it claims) Cellplus was permitted to enter the mobile telephone market only upon terms, designed to protect the reasonable commercial interests of Emtel, which the Authority had power but failed to enforce. Whether or not that claim will be made good is a matter on which it would be premature for the Board to express an opinion.

The Act confers no free-standing power on the Authority to appoint an independent auditor to inspect and report on the books and accounts of a licensee, but there is no reason in law why the grant of a licence should not be made subject to a condition that the licensee makes its books and accounts open for inspection by an independent auditor if such a condition is judged by the Authority to be an appropriate means of monitoring the fairness of competition between licensees. The Board has not seen the licence granted by the Authority to Cellplus and has not been referred to the express terms of any conditions imposed. It is therefore unclear at this stage whether an enforceable condition relating to an independent auditor was imposed by the Authority.

Emtel submitted to the Board (but not, it seems, to the Supreme Court) that the effect of the Authority’s conduct had been to defeat an expectation legitimately entertained by Emtel that the conditions upon which Cellplus were to be licensed, as specified in the press release, would be imposed and enforced. The Board cannot rule on the correctness of this submission, but regards it as capable and worthy of argument. The press release recorded the conditions on which the Authority had decided to license Cellplus. Those conditions were of obvious significance to Emtel, which may have made commercial decisions in the expectation that the conditions would be imposed and enforced and was in any event liable to suffer loss if they were not. If it be true that the conditions were not imposed or not enforced, it is at least arguable that Emtel’s expectation, legitimately entertained, was unfairly defeated.

The Board was not pressed with the argument, accepted by the Supreme Court, based on the constitutional guarantee of privacy. It may readily be accepted that the Authority, in the course of performing its regulatory function, will acquire commercially sensitive information which it would not be at liberty to disclose to another licensee. But there is no restriction, under the 1988 Act, on the information which the Authority may request from a licensee, provided such information is required to enable the Authority to perform its regulatory function and is related to the licensed operations of the licensee. Even if an enforceable condition relating to an independent auditor was not imposed, the Authority did not lack powers under the Act to obtain information which would enable it to verify the terms upon which licensees were competing.

The Board cannot accept that there was no need for Cellplus, as a wholly-owned subsidiary of Mauritius Telecom, to be licensed at all: that was not the view taken by any of the parties involved at the time, and the submission ignores the legal distinctness of parent company and subsidiary. Nor can the Board accept that Mauritius Telecom was outside and immune from the regulatory regime established by the 1988 Act. By section 43(8) of that Act the predecessors of Mauritius Telecom were deemed to be validly licensed under the Act, and it is understood that no licence has ever been granted to Mauritius Telecom. It would, however, emasculate the regulatory regime established by the Act if the Authority were held to have had no power to approve the rates, tariffs or charges proposed by Mauritius Telecom as the monopoly fixed-line operator, and the Authority would have had no means of enforcing the requirement that Cellplus make an inter-connection agreement with Mauritius Telecom on the same terms as that between Mauritius Telecom and Emtel unless it could, in the last resort, enforce that obligation on Mauritius Telecom as well as on Cellplus.

In the opinion of the Board, the Supreme Court construed the 1988 Act too narrowly and erred in its analysis of the Authority’s public law powers and duties. Leave to apply for judicial review should have been granted. The Court may well have been right to regard the relief sought by Emtel as inappropriate, and Emtel has now indicated an intention to seek declaratory relief instead of the order of mandamus originally sought. The Court’s reservations about the terms of the relief sought were not, however, a good ground for refusing leave to apply. The form which any relief should take would have been something to consider if and when Emtel had made out a case for some relief.

It remains to consider whether leave to apply should at this stage be granted or whether, having regard to the changed statutory framework and the initiation of civil proceedings by Emtel, leave should be refused as serving no useful purpose. This submission has caused the Board to hesitate. But at present the judgment of the Supreme Court when refusing leave still stands, and so long as it stands it represents a potential obstacle which Emtel must overcome in pursuing its civil claim. On balance, it is right that leave to apply should be granted. How, procedurally, that application should hereafter be handled in relation to the civil claim is a matter on which the Supreme Court is very much better fitted to rule than is the Board.

The Board accordingly allows Emtel’s appeal and grants leave to apply for judicial review. Emtel’s costs on appeal and in the Supreme Court must be paid by the respondents, all four of whom have appeared and resisted the application and the appeal.