COUACAUD H & ANOR v ISLAND MANAGEMENT LTD & ORS

2015 SCJ 429

Record No. Co 58/12 (PWS)
IN THE SUPREME COURT OF MAURITIUS
(COMMERCIAL DIVISION)
In the matter of:
1. Mr. Herbert Couacaud
2. Mr. Roland Doger De Speville
Plaintiffs
v
1.
2.
3.
4.

Island Management Ltd

Island Catch Ltd
Mr. Michel Guy Rivalland
Mr. Arnaud Leclezio
Defendants

In the presence of:

Gladius Lte
Third Party
Interlocutory Judgment
The plaintiffs were equal partners in Gladius Lte (the third party), a private limited
company with a stated capital of Rs 25,000 made up of 2,500 ordinary shares of Rs 10 each,
each plaintiff holding 1,250 shares.

The defendant Nos. 3 and 4 are the directors of the

defendant Nos. 1 and 2. The defendant No. 2 is the alter ego and/or nominee of the defendant
No. 1. The defendant No. 3 is also the CEO of the defendant No. 1.
In July 2008 the plaintiffs decided to dispose of the totality of their shares in Gladius Lte
and started negotiations, for the sale of the company as a going concern. In September 2008
they received an offer from a South African company to buy the business as a whole and as a
going concern. This deal however did not materialise. Subsequently following the defendant
No. 3s expressed interest to invest in the business, the plaintiff No. 1 started negotiations with
the defendant No. 3, according to the plaintiffs, to dispose of the entirety of the business. In
furtherance of such negotiations the plaintiffs retained the services of Mr. Saddul ACCA to carry

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out an evaluation of the business. The latter produced a report which was duly communicated to
the defendant No. 3.
On 30 December 2008 following a meeting between the plaintiffs and the defendant
Nos. 3 and 4 as the representatives of the Island Group of companies to negotiate the deal, the
parties verbally reached an agreement. In view of the special relationship which the plaintiff No.
1 had with the defendant No. 3, the agreement was not reduced in writing. The defendant Nos.
3 and 4 thereafter took over the management of the company.
In October, 2009, the plaintiffs received from the defendant No. 3, a request to sign a
written resolution for Gladius Lte whereby the number of shares of the company was to be
increased to 5,102 ordinary shares by the creation of 2,602 ordinary shares. The plaintiffs have
averred that they had complete trust in the defendant No. 3 and they duly signed the resolution
inasmuch as they had given a completely free hand to the defendant No. 3 regarding the
running of the business.
Subsequently the plaintiffs learnt that these shares had not been allotted to the
defendant No. 1 but to the defendant No. 2 (2,551 ordinary shares) and defendant No. 3 (51
ordinary shares) for a total consideration of Rs 45,000,000, without regard to any pre-emptive
rights. In June 2010 the defendant No. 3 transferred the 51 ordinary shares to the defendant No.
2 for a consideration of Rs 510.
The stand of the plaintiffs is summed up in the statement made by learned counsel for
the plaintiff No. 2 in the following terms:
The case against defendant No. 1 and against defendant No. 2 is a
case based in contract. The case against defendant No. 3 and against
defendant No. 4 is a case based in tort.
The plaintiffs case against the defendant Nos. 1 and 2 therefore is for breach of the
agreement to purchase the totality of the shares and for faute against the defendant Nos. 3 and
4 in that they allegedly used manoeuvres dolosives to perpetrate a scheme to deprive the
plaintiffs of their business by an unlawful issue of shares.

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It is not denied that the parties had reached an agreement with respect to Gladius Lte.
The issue to be decided is the terms and conditions of such agreement.

It is the case for the plaintiffs that under the agreement of the 30 December 2008, the
defendant No. 1 was to acquire the whole enterprise for an agreed price of Rs 92.7 million. The
plaintiffs have averred that it is only during a subsequent meeting on 8 September 2010, that
the plaintiffs were informed that the defendant Nos. 1 and 2 had not purchased the whole
enterprise but only 51% of the business and that the price for the remaining 49% of the
shareholding was yet to be determined.
The defendants on the other hand whilst admitting that an agreement had been reached
between the parties during the meeting of 30 December 2008, deny that such agreement was to
acquire the business in its entirety. Their contention is that the agreement between the parties
was for the acquisition of only 51% of the shares of Gladius Lte at a price of Rs 45M which
sum the defendant No. 1 has duly injected into Gladius Lte.
Given that the agreement between the parties was never reduced in writing, the plaintiffs
have at the very outset of the proceedings, called the defendant Nos. 3 and 4 on personal
answers in an attempt to elicit from them sufficient evidence to constitute a commencement de
preuve par crit so as to open the door to oral evidence purportedly to prove the terms and
conditions of the agreement quoad the defendant Nos. 1 and 2 which I must stress, are the
parties sued for breach of contract.
The issue now before me is whether there is sufficient evidence to constitute a
commencement de preuve par crit to establish the terms of the agreement as alleged by the
plaintiffs.
At this juncture it needs to be observed that whilst the contract was entered between the
plaintiffs and the defendant No. 1, the plaintiffs have chosen not to call either the defendant
Nos. 1 or 2 (its alter ego) to be examined under personal answers but rather the defendant Nos.
3 and 4 who are directors of the defendant Nos. 1 and 2. It needs also to be emphasised that
the defendant Nos. 3 and 4 gave evidence under personal answers not on behalf of the
defendant No. 1 and the defendant No. 2 but rather in their own personal names.

The relevant provisions of the law governing personal answers are Articles 324 and 336
of the Code de Procedure Civile which are here reproduced:
Article 324. Les parties peuvent, en toutes matire et en tout tat de cause,
demander de se faire interroger respectivement sur faits et
articles pertinents concernant seulement la matire dont est
question, sans retard de l'instruction ni du jugement.
Article 336. Seront tenues les administrations dtablissements publics, de
nommer un administrateur ou agent pour rpondre sur les faits et
articles qui leur auront t communiqus; elles donneront, cet
effet, un pouvoir spcial dans lequel les rponses seront
expliques et affirmes vritables, sinon les faits pourront tre
tenus pour avrs, sans prjudice de faire interroger les
administrateurs et agent sur les faits qui leur seront personnels,
pour y avoir, par le tribunal tel gard que de raison.

Further Rule 36 of the Supreme Court Rules 2000 sets out the procedure to be
followed for summoning the adverse party, be it an individual or a corporate body on personal
answers.
There is no legal difficulty for the defendant Nos. 3 and 4 who are directors of the
defendant Nos. 1 and 2 and who are themselves parties to the suit, to be called on personal
answers. This is made explicit at Note 32 Dalloz Supplment au Rpertoire Pratique de
Lgislation de Doctrine et de Jurisprudence Tome Deuxime 1929 Vo. Interrogatoire
sur faits et articles :
Lagent peut aussi tre interrog sur des faits personnels en suivant les rgles
du droit commun ; mais cet interrogatoire ne peut avoir lieu qu la condition quil
soit partie en cause conformment lart. 324 C. proc. ; ses rponses ne sont
opposables ltablissement ou la socit quil reprsente quautant quil a agi,
relativement aux faits sur lesquels il est interrog, dans la limite de ses pouvoirs
(CARR ET CHAUVEAU, quest. 1265 ; GARSONNET, S. 792 ; GARSONNET et
CSAR-BRU, no. 292).

However as already pointed out earlier the defendant Nos. 3 and 4 have been sued in
tort. There are no restrictions as to the mode of proof of an alleged tort, la preuve tant libre

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and there is no legal impediment to adducing oral evidence to establish a claim in tort. There
was as such no need to call the defendant Nos. 3 and 4 on personal answers for the purpose of
opening the door to oral evidence.
The purpose of calling the defendant Nos. 3 and 4 on personal answers is clearly to elicit
from them sufficient evidence so as to constitute a commencement de preuve par crit
regarding the terms and conditions of the contract between the plaintiffs and the defendant Nos.
1 and 2. It is the contention of counsel for the plaintiffs that the defendant Nos. 3 and 4 who are
directors of the defendant companies have been put into cause as defendants in their personal
names and are personally aware of all matters pertaining to the agreement. As such according
to counsel, the answers given by the defendant Nos. 3 and 4 with respect to matters within their
personal knowledge, are binding on the tablissement.
Counsel referred the court to the following from Dalloz Jurisprudence Gnrale, Vo.
Interrogatoire sur faits et articles:
Note 89
En outre, les administrateurs et agents peuvent tre interrogs sur les faits
qui leur sont personnels, sauf au tribunal y avoir tel gard que de droit (mme
art.), c'est--dire que leur rponses sur ces faits ne seront opposables aux
tablissements publics qu'autant qu'ils auront agi, relativement ces mmes
faits, dans les limites des pouvoirs qu'ils tiennent de la loi ou d'un mandat
rgulier. -

Counsel also referred the court to the case of Bouvet v. Mauritius Turf Club [1962 MR
213] where the court held that
any agent ou administrateur of a body corporate may be interrog sur faits et
articles or faits personnels to himself whenever he is a party to the suit either as
judicial representative of the body corporate or in his personal capacity and his
answers shall have such legal effect as the Court shall determine in accordance
with the principles laid down above.

Counsel appearing for the defendant Nos. 1 and 2 as well as the third party with whom
counsel for the defendant Nos. 3 and 4 concurred, on the other hand, submitted that the
answers given by each defendant in the course of questioning under personal answers is
binding upon the individual defendant only inasmuch as the answers given by any party under

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personal answers can only bind that party personally and no one else.

Counsel referred to

Note 154 of Dalloz Rpertoire Pratique and to an arrt of Limoges dated 15 mai 1893 and
submitted that the defendant No. 3s answers binds him only and the defendant No. 4s answers
are binding upon him alone. Neither of the defendants can bind each other and still less the
corporate bodies, defendant Nos. 1 and 2.

I have carefully considered the arguments on both sides. It is necessary at this stage to
consider the legal principles which are applicable in order to determine whether the answers of
the defendant Nos. 3 and 4 may be used quoad the defendant Nos. 1 and 2.
It is undisputed that answers given by a party under personal answers can only be
binding upon that particular party. This is made explicit in the following note:
Note 154
Linterrogatoire ne peut tre oppos qu la partie qui la subi (Limoges, 15 mai
1893, D.P. 95. 2. 28). - Dalloz Rpertoire Pratique (supra) Tome VII Vo
Interrogatoire sur faits et Articles

This principle is further explained in Note 154 (supra):

Note to Limoges 15 mai 1893 D.P. 1895.2.28
Il est de jurisprudence constant que les rponses consignes au procs-verbal
dun interrogatoire sur faits et articles peuvent tre considres comme
constituant un commencement de preuve par crit qui permet dadmettre la
preuve testimoniale, soit que la partie ait consenti signer le procs-verbal, soit
quelle ait refus. Mais il faut videmment que linterrogatoire ait t subi par la
partie mme laquelle on loppose, puisquune des conditions exiges par la loi
pour quun acte puisse constituer un commencement de preuve par crit est quil
soit man de celui contre lequel la demande est forme. (Emphasis added)

An application of this principle is to be found in the case of Ex parte Ismal [1941 MR

17]. The following summary of the case of Ex parte Ismal appears in New Goodwill Co. Ltd
v. Tan Yan [1977] MR at page 333:
In Ex parte Esmal (supra), which was an application to set aside an order of
the District Magistrate calling upon the plaintiff in an action to appear before the

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Court to give her personal answers, the grounds relied upon by the applicant,
who was the plaintiffs proxy, was that his principal knew nothing of her affairs,
and that he was the person who was fully informed of them and was prepared to
be examined on personal answers. One of the reasons stated by the Court for
rejecting the application was that there was no evidence that the plaintiff was
willing to be bound by the applicants answers.

In New Goodwill (supra) itself, the court rejected an application on behalf of the plaintiff
who had sued a company upon a contract and sought to have a commencement de preuve par
crit by calling upon personal answers the past directors of the company who had left the
company and had since had no contact with it. The reasoning of the court was that since the
representative must be empowered to bind the corporate body by his answers, it follows that
past directors of a company who are not themselves parties to the action cannot be subjected to
an examination on personal answers for the purpose inter alia of obtaining from them evidence
amounting to a beginning of proof in writing of a contract allegedly entered into by the company.
Under the provisions of Article 336 the court has to afford to the answers given by an
administrateur called on personal answers tel gard que de raison.

What is meant by this

term is simply that it is for the court to consider how to treat such answers in the light of the
applicable legal principles which are analysed later in this judgment.
Insofar as corporate bodies are concerned, there is no legal impediment for such bodies
to be called on personal answers. However the procedure prescribed under Rule 36 of the
Supreme Court Rules 2000 must be followed. It is up to the corporate body to designate the
representative mandated to represent it
29. Lagent charg de rpondre sur faits et articles doit tre une personne
charge de ladministration - Dalloz Supplment au Rpertoire Pratique
(supra)

A representative nominated by a corporate body can only bind it within the parameters of
his mandate. This is made explicit in the following extract from Dalloz Supplment au
Rpertoire Pratique (supra)
Note 31

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Le pouvoir donn lagent doit tre spcial et renfermer les rponses aux
questions poses. Par drogation au droit commun (infra, no. 128), lagent peut
lire ces rponses ; il ne peut rien y ajouter ; les rponses quil ferait des
questions poses doffice ne lieraient pas ladministration ou la socit qui
laurait commis (CARR ET CHAUVEAU, quest. 1264 et 1265 bis ;
GARSONNET, S. 792, note 3 ; GARSONNET ET CZAR-BRU, no. 292, note 3 ;
GLASSON ET COLMET-DAAGE, no. 842).
The rationale behind this principle is to safeguard the interests of the corporate body as
is explained in Rogron Code de Procdure Civile Annot to art. 336:
Les administrations d'tablissements publics. Il est vident que ces
administrations ne peuvent rpondre en personne; elles doivent donc choisir des
mandataires pour rpondre leur place; mais de peur que le mandataire ne
compromette leurs intrts, ses pouvoirs contiennent les rponses expliques et
affirmes vritables, de telle sorte que le fond de pouvoir peut se contenter de
prsenter au juge son mandat, pour satisfaire au voeu de la loi. (Emphasis
added)

If the administrateur has been duly authorised to represent the corporate body, then any
further answers given by him in the course of his examination on personal answers would not
constitute a commencement de preuve par crit against the corporate body unless he has been
expressly mandated to bind the corporate body by such answer. We thus read at Note 1097 Dalloz, Encyclopdie juridique, 2me dn. Rpertoire de droit civil, vo. Preuve
1097. Les administrateurs dune socit reprsentant celle-ci et leurs crits
peuvent tre retenus titre de commencement de preuve par crit contre la
personne morale. Encore faut-il quils aient cette qualit et agissent dans la limite
des pouvoirs que la loi leur confre. Ainsi on ne saurait opposer une socit
des dclarations faites, au cours dune comparution personnelle, par les
administrateurs dmissionnaires qui navaient ds lors aucune qualit pour la
reprsenter. Civ. 20 juin 1969. (See decision reported in D. 1970. Somm. 13).

The above principles were applied in the case of New Goodwill Co. Ltd v. Tan Yan
[1977] MR and the court made the following observations at page 333:
Article 1356 refers expressly to la partie ou son fond de pouvoir spcial
as the persons capable of making binding admissions. As regards article 1347,
it is only by an extended construction of its terms that the Courts have held but
the principle is settled beyond controversy that certain declarations made and
recorded before court may amount to a beginning of proof in writing; but there
again those declarations must emanate from celui contre lequel la demande est

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forme, ou de celui quil reprsente (which last expression has been held to
include celui par qui il est reprsent. So, unless the person interrogated is
either a party to the suit or one who is authorised to bind that party by his
statements, he should not be allowed, upon objection taken, to give unsworn
evidence in the proceedings.
The court went on to state the following at page 337:
In the particular case where the interrogatory is a means of obtaining an
admission or a beginning of proof in writing, the legal representative must
besides be empowered to bind the corporate body by his answers, as explained
earlier.
It is clear from all the above authorities that the answers given by one party cannot bind
another party to the same case unless the party who is being examined is empowered to do so
by virtue of a fond de pouvoir spcial. There is none in the present case.
The answers obtained from the defendant Nos. 3 and 4 can thus be of no avail to the
plaintiffs in their endeavour to establish that there is a commencement de preuve par crit
quoad the defendant Nos. 1 and 2. Furthermore the action which has been brought by the
plaintiffs against the defendant Nos. 3 and 4 is in tort only and the question whether the
answers provided by the defendant Nos. 3 and 4 would render vraisemblable les faits allgus
with regard to the contract, cannot therefore arise in these circumstances.
For all the above reasons, I find that the examination on personal answers has not given
rise to any commencement de preuve par crit which may be used against the defendant Nos.
1 and 2 such as to enable the plaintiffs to prove the oral contract against them. The case shall
be mentioned before me on 14 January 2016.

R. Mungly-Gulbul
Judge
8 December 2015
--For Plaintiff No. 1:

Mr. M. Sauzier, SC together with Mr. J. G. Basset, of Counsel

Mr. T. Koenig, SA

For Plaintiff No. 2:

Mr. D. Basset, SC together with Mr. D. Dhonjee, of Counsel

Mr. T. Koenig, SA

For Defendants Nos. 1 & 2: Mr. R .Chetty, SC

& Third Party:
Mrs. D. Lagesse, SA

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For Defendants Nos. 3 & 4: Miss K. Teck Yong, of Counsel

Mr. D. Boolauky, Attorney