Civil Remedies

Bibi & Others v The Estate of late Joseph S. Bibi (76 of 2022) [2022] SCCA 80 (16 December 2022);

Mithila Mudalige — Thu, 05 Jan 2023 06:54:57 +0000

Bibi & Others v The Estate of late Joseph S. Bibi (76 of 2022) [2022] SCCA 80 (16 December 2022);

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Appeal against a decision of the Supreme Court – Disguised donation – reserved heirs, reductions to gifts inter-vivos under the Civil Code of Seychelles Act (Cap 33)

Headnote and holding

The Court makes the following Orders:

(i) The atppeal is dismissed and the judgment of the lower court is thus upheld in its entirety; and

(ii) Costs are awarded to the Respondent.

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IN THE COURT OF APPEAL OF SEYCHELLES

______________________________________________________________________________

Reportable

[2022] Civil Appeal SCA 73/2019 SCCA 76 (16 December 2022)

(Appeal from CS 26/2017) SCSC 1052

In the matter between:

EMMANUEL BIBI First Appellant

LINDY BIBI Second Appellant

HELENE MARIE-THERESE ESPARON Third Appellant

nee BIBI

MARIE MADELEINE DOROTHY BIBI Fourth Appellant

PAUL JEFFREY BIBI Fifth Appellant

MARCEL GEORGES BIBI Sixth Appellant

(all rep. by Mr. F. Elizabeth)

and

THE ESTATE OF THE LATE Respondent

JOSEPH SAMUEL BIBI

Rep by the joint executors Marcus Labrosse

And Raneel Achanne Bibi

(rep. by Mr. W. Lucas)

Neutral Citation: Bibi & Others v The Estate of late Joseph S. Bibi (Civil Appeal SCA 73/2019) [2022] SCCA 76 (16^th December 2022) (Appeal from CS 26/2017 SCSC 1052)

Before: Andre, Robinson, Dr. L. Tibatemwa-Ekirikubinza JJA

Summary: Appeal against a decision of the Supreme Court – Disguised donation – reserved heirs, reductions to gifts inter-vivos under the Civil Code of Seychelles Act (Cap 33)

Heard: 2 December 2022

Delivered: 16 December 2022

ORDERS

The Court makes the following Orders:

(i) The atppeal is dismissed and the judgment of the lower court is thus upheld in its entirety; and

(ii) Costs are awarded to the Respondent.

JUDGMENT

ANDRE, JA

INTRODUCTION

This is an appeal arising out of the notice of appeal filed on 26 December 2019 by Emmanuel Bibi, Lindy Bibi, Helene Marie-Therese Bibi, Marie Madeleine Dorothy Bibi, Paul Jeffrey Bibi, and Marcel Georges Bibi (Appellants) against The Estate of late Joseph Samuel Bibi (duly represented by the joint executors Marcus Labrosse and Raneel Achanne Bibi (Respondent), being dissatisfied with the decision of Her ladyship Laura Pillay J given at the Supreme Court on the 27 November 2019 in Civil Side No. 26 of 2017 (impugned judgment).
The Appellants as per cited notice of appeal, appeal against the whole of the decision upon the grounds of appeal set out in paragraph 2 of the notice of appeal and to be considered in detail below. The Appellants further seek the relief set out in paragraph 3 of its notice of appeal namely, the setting aside of the impugned judgment; ordering the land Registrar to rectify the land register and to cancel the registration of register title numbers J1567 subdivided into J3138 and J3139 and title number J1568 subdivided into J3140 and J3141; to register title numbers J1567 subdivided into J3138 and J3139 and title number J1568 subdivided into J3140 and J3141 in the name of the estate of the late Marie Jeanette Valerienne Bibi to be redistributed amongst all the heirs of the estate in accordance with their respective shares provided by law.

BACKGROUND

The Appellants are children of the deceased Mrs. Bibi. The Respondent is the estate of the late Mr. Bibi, who was also the child of the deceased Mrs. Bibi. The Supreme Court case (CS 26/2017) concerned two plots of land, the transfer of which the Appellants, then Plaintiffs, sought to declare as a disguised donation. The Plaintiffs sought the following orders in the Supreme Court:

(1) to declare that the transfer of titles J1567 and J1568 by the deceased to the first Defendant was a disguised donation or an alienation, subject to return;

(2) to order the reduction of the disguised donation by ordering the first Defendant to:

i) Return titles J1567 and J1568 or the excess share to the succession of the deceased; or

ii) Return or transfer the Plaintiffs’ share in titles J1567 and J1568 to the Plaintiffs.

(3) That the first Defendant be directed to account for the fruits of titles J1567 and J1568 and to pay them or the share in excess of his title to the succession of the deceased.

(4) To make any order that the Court deems fit in the circumstances.

Supreme Court delivered the Judgment on the 27^th of November 2019 dismissing the Plaint and the appellants have filed the Appeal against the said Judgment.

GROUNDS OF APPEAL

The Appellants set out three grounds of appeal which in the verbatim state as follows:

Ground 1 – The learned trial Judge erred when she dismissed the Appellants’ case on the basis that the lack of evidence as to the total value of the estate and the properties in question is fatal to the Appellants' case.

Ground 2 – The learned Judge erred when she failed to follow and apply the ratio decidendi in the case of Hall v Parcou & Anor CS No. 353/2009 (2017) to the present case.

Ground 3 – The learned Judge erred when she made a finding at paragraph 32 “. . . that the late Joseph Bibi approached his mother requesting the transfer of the land parcels onto his name in order to secure a loan for his business and the mother accepted with the intention of doing just that and not transferring the property to him outright as the Defence suggests.” Having made this finding the learned Judge erred when she dismissed the Appellants’ case.

The Appellants seek three reliefs as cited in paragraph [2] above. Costs are also prayed for by the Appellants.

SUBMISSIONS OF PARTIES

Appellants’ Submissions

The submissions of the Appellants filed on 17 November 2022 in relation to the three Grounds of Appeal are interlinked. In relation to Ground 1, the Counsel also submits regarding finding in paragraph [32] (relevant to Ground 3) and regarding ratio decidendi in Hall v Parcou (relevant to Ground 2).
With regard to Ground 1, the Appellant submits that in paragraph 37 of the judgment the trial judge found that “the lack of evidence as to the total value of the estate and the properties in question is fatal to the case” and that “this Court is unable to make a declaration as to whether or not the said transfers were over and above his lawful share in the succession without the total value of the estate inclusive of the land, house, and shop”.
The Appellant further submits that due to the finding in paragraph [32] the court ought to have come to a different conclusion. The Appellant submits that the intention of the mother was not to transfer the property outright to deprive the remaining heirs but to assist the Respondent in raising loans for his business. It is submitted that “It is clear from the Court's findings that the transfer of the properties from the mother to the son, was indeed a disguised donation intended to assist the son but the intention was not to permanently deprived the heirs of their rightful inheritance”.
Thereafter, the Appellants submit that “the fact that there was no valuation of the property was not fatal to the case as the appellants in their pleadings had sought an order from the Honourable Court "to make any order it thinks fit". It is submitted that due to that prayer, the trial Judge should have ordered the valuation and such an approach would have been consistent with the decision in Hall v Parcou referred to by the trial judge in paragraph [35] of the judgment.
With regard to Ground 2, the Appellant submits that having cited Hall v Parcou case where, as submitted, the Court disregarded the fact that no evidence had been provided regarding the value of the property and “ordered the return of the alienated property back to the estate” the trial Judge in the present case failed to give reasons for departing from the ratio decidendi in that case.
With regard to Ground 3, the Appellants reiterate what was stated in relation to Ground 1 by submitting that the trial judge erred in not addressing the intention of the mother, being only to help the son, and not permanently deprive the remaining heirs of the inheritance.
It is further submitted that the trial judge erred in not considering that the mother, before her death, sued the Respondent “seeking the return of her property” and concluding with the question of “why would the mother of Joseph Samuel Bibi filed a case against her son if her intention was to make an outright sale of the properties to her son?”.
The Appellants conclude that “the learned trial Judge erred when she dismissed the case of the appellants in the face of overwhelming evidence showing that the transfer of the properties to Joseph Samuel Bibi was indeed a donation deguisee and that it was never the intention of the mother to transfer the properties to Joseph Bibi, as a gift to him”.
It is further concluded that there was no proof before the Court that consideration was paid for the land, which points to the evidence that the mother “did not intend to sell her properties to her son, Joseph Bibi, depriving the rest of her children of their rightful inheritance”.
Finally, based on the above submissions, the Appellants pray to this Court that this appeal should be allowed as prayed for with costs.

Respondent’s Submissions

By way of filed submissions of 22 November 2022, the Respondent in a gist submits as follows.
In reply to Ground 1 of the Appeal, the Respondent relies on Article 918 of the Civil Code; decisions Clothilde v/s Clothilde 1976 SLT 245; Pragassen v/s Vidot 2010 SLR 163; and Reddy and Anor Versus Ramkalawan. It is submitted that there is an irrebuttable presumption that a sale to an heir avec reserve d’usufruit is a donation, which is not void but reducible to the quotite disponible and that there must be a “rapport a la masse” of the value of the land in excess of the “quotite disponible”. It is further submitted that a party who relies on Article 913 must prove the value of the gift and the estate. Respondent further submits relying on Pragassen v/s Vidot that bad faith and fraudulent pretence of the deceased must be proved.
In reply to the Appellant’s argument regarding prayer for any order the Court thinks fit, the Respondent submits that, “It is strict rules of pleading that the court cannot grant a relief not prayed for in particular the pleading of valuation is the most essential element of the claim before the court, therefore, failure to place before the court such evidence as to the value of the property is fatal for the Appellants case which warranted to a dismissal”. The Respondent, therefore, concludes that with regard to the Ground 1 the trial Judge was right to dismiss the Plaint “on the ground that one of the essential element for the calculation of the excess or reserved portion of the donated property is the value of the said property which the Appellants has failed to place as evidence before the court”
In reply to Ground 2 of the Appeal the Respondent submits that the trial Judge has distinguished the case of Hall versus Parcou citing paragraph 35 of the Judgement where the Trial Judge states that in Hall v Parcou there was no other property to distribute, whereas in current case there is also a shop and a house in addition to the alienated property. The Respondent, therefore, submits that the Trial Judge was correct to find that the ratio decidendi in Hall v Parcou was not applicable in the present case.
In reply to Ground 3 of the Appeal, the Respondent submits that “This ground of Appeal does not raise new or different issues as in the first two grounds hence, In response to this ground of appeal, the Respondent relies on its submission under ground 1”.
The Respondent moves for the dismissal of the appeal with costs.

ANALYSIS OF THE GROUNDS OF APPEAL

Since the Grounds of Appeal and submissions in support are interlinked, the following issues can be identified for consideration in this appeal:
1. 1. Value of the property – relevance and whether lack thereof is fatal to the case
  2. Hall v Parcou decidendi
  3. The intention of the mother

Ground 1 and 2 - Value of the property - relevance and whether lack thereof is fatal to the case

Section II - The Reduction of Gifts and Legacies of the Civil Code (before the amendments) relates to the reduction of gifts inter vivos. Article 920 provides that a gift that exceeds the disposable portion “shall be liable to be reduced to the size of that portion at the opening of the succession”; and under Article 921 such reduction can be only demanded by “by those in whose favour the law has provided the reserve, by their heirs or assigns;” Articles 918, 922 and 923 of the Civil Code make it clear that the value of the entire estate and the property gifted is paramount:

“Article 918

The value of full ownership of the property alienated, whether subject to a life annuity or absolutely or subject to a usufruct in favour of one of the persons entitled to take under the succession in the direct line, shall be set against the disposable portion; the excess, if any, shall be returned to the estate. This calculation and return shall not be demanded by other persons entitled to take under the succession in the direct line who have agreed to the alienation, and in no circumstances by those entitled in the collateral line.

Article 922

The reduction shall be made by taking into account the total asset value of all the property existing at the death of the donor or the testator.

After a deduction of the debts, the assets given by way of a gift inter vivos according to their condition when the gift was made and their value at the opening of the succession are added together. If the property has been alienated, its value at the time of the alienation and, if there is subrogation, the value of the converted property is taken into account when the succession opens.

The disposable portion of which the deceased was entitled to dispose shall be calculated on the basis of all these assets having regard to the class of heirs whom the deceased has left.

Article 923

Gifts inter vivos shall only be affected by a reduction if the value of all the property included in the testamentary dispositions is insufficient; if the gifts inter vivos must be reduced, the process of reduction shall start from the last gift following a backward order to the earliest gift.”

(emphasis added)

It was established in Pragassen v Vidot (2010) SLR 163 that, “An inter vivos gift (made by a deceased who is survived by 9 heirs), which is in excess of one-fourth of the value of the estate, is contrary to art 913 of the Civil Code. The party who is relying on art 913 of the Civil Code must prove the value of the gift and the estate in order to successfully rely on art 913” (emphasis added).
The Court further held:

“There is neither any pleading nor any evidence before this Court adduced during the hearing of this suit as to the value of the whole property of the deceased. Neither do we have the value of the gifted property. Hence this Court cannot determine the value of the gifted property in relation to the value of the whole property of the deceased in order to ascertain whether this falls foul of article 918 of the Civil Code of Seychelles. As it is the plaintiff who asserts, the onus is on him to prove that element. I find that the plaintiff has failed to do so.

. . . . . . . In the circumstances, I find and conclude that it is not possible for this Court to adjudicate whether the value of the disposition by way of that gift inter vivos exceeds the value of the disposable portion in terms of article 920 of the Civil Code of Seychelles for such to be reduced to the size of the appropriate portion at the opening of the succession”

(Emphasis added)

In Reddy & Anor. v Ramkalawan (CS 97/2013) [2016] SCSC 31 (26 January 2016) it was emphasised that Article 918 creates irrebutable presumption in favour of disinherited heirs and that it was not possible at the time of the decision to disinherit one’s child under Seychelles law. The Court further emphasised that “it is the value of the donation that matters in actions such as the present one” and that it is the value in excess that must be returned, not the immovable property. The Court also referred to Article 922 and further held that “Article 922 provides that it is the total asset value of all the property existing at the death of the donor or the testator that is taken into account for the reduction. Debts must also be deducted.” (Emphasis added). In Reddy & Anor v Ramkalawan, though, there was a valuation of the property provided in the evidence.
In Adonis v Cedras (CS 44/2020) [2021] SCSC 613 (22 September 2021) the plaintiff has not provided evidence of the value of the whole estate and, among other prayers, actually prayed for the valuation of the property. It was admitted by the defendant that the plaintiff also approached the defendant in order to jointly commission a valuer’s report. The Court stated the following with regard to establishing the value of the estate:

“[12] Indeed as submitted by counsel for the Defendant in order to establish that there has been a donation deguisee the Plaintiff has to show that that there has been a gift to the Defendant over and above the disposable portion. This of course means that the Plaintiff has to establish the value of the estate in order to calculate the reserved and disposable portion in relation to the number of reserved heirs.”(Emphasis added)

It was held that it was not proved and the case was dismissed. Although, in addition, to value not being proved the defendant was not the reserved heir and the court held that, “the right to claim back the value in excess of the disposable portion exists for one reserved heir as against another reserved heir. There is no evidence on record that the Defendant is a child of the deceased which would bring her within the ambit of articles 913 and 918”.
Therefore, in Adonis v Cedras again the importance of valuation was emphasised and even though the plaintiff asked the court to order valuation, the court dismissed the case.
Nevertheless, in the present case, the valuation was not even pleaded. The Appellants stated now in their submissions before the Court of Appeal that because the Plaint included prayer "to make any order it thinks fit", the trial Judge should have ordered valuation and it would have been consistent with the decision in Hall v Parcou & Anor (CS 353/2009) [2017] SCSC 92 (06 February 2017). Firstly, prayer for any order court thinks fit is quite wide and is often included in the plaints. However, in my opinion, while it may be taken to give the court wider discretion in respect to pleadings, it must not be taken to mean that the court needs to make the case for the Counsel and/or correct pleadings’ shortcomings. Furthermore, the court needs to be mindful of the established ultra petita principle and if "to make any order it thinks fit" would be taken to mean anything that the court thinks is more suitable than what the party asked for, it can consequently give other grounds of appeal based on ultra petita.
Secondly, the Appellants neither pleaded valuation nor relied on Hall v Parcou findings. Therefore, the argument that the trial Judge should have ordered valuation as in Hall v Parcou seems like an afterthought. The distinguishing features of this case from Hall v Parcou are discussed below in this judgment.
I also agree with the submissions of the Respondent that “the court cannot grant a relief not prayed for in particular the pleading of valuation is the most essential element of the claim before the court . . .”. Situation could have been different for example if the valuation of the alienated property was not possible and the Appellants asked the court to order such valuation. Furthermore in the present case specifically, considering there are other properties within the estate – the Appellants should have at least provided a valuation of the estate.
In Chetty v Chetty (CS 253/2018 ) [2020] SCSC 366 (02 July 2020) Dodin J considered the issue of “whether the failure on the part of the Plaintiff to lead evidence as to the value of the estate is fatal to the claim” as an academic point. Dodin J referred to Article 922 and Article 926 (testamentary disposition) and stated that the disposable portion needs to be calculated having regard to all the assets of the deceased and that it “is clear that what matters when determining the quotite disponible is the total asset value of all the property as per article 922”. Dodin J further stated that in order for the Court to make any reduction/adjustment orders it would be necessary to ascertain the value of the deceased’s estate.
Dodin J further considered Hall v Parcou (CS 353/2009) [2017] SCSC 92 (07 February 2017); Pragassen v Vidot (CS 360/2005) [2009] SCSC 124 (02 July 2010) and judgment presently being appealed – Bibi & Ors v Estate of Joseph Samuel Bibi (CS 26/2017) [2019] SCSC 1052 (27 November 2019). Dodin J stated:

“Hall v Parcou (CS 353/2009) [2017] SCSC 92 (07 February 2017) highlights that there may be situations where the Court is nevertheless able to make orders for reduction but that appears limited to instances where it is clear what the estate comprises of without further adjudication of its value”

(Emphasis added)

With regard to the Bibi decision, Dodin J stated that he considered the decision in Hall v Parcou but the determination of the court was that it was not possible in this case to make such orders.
In Hall v Parcou the deceased transferred all the property owned. The Court held the following:

“[31] The transfers of property to the Defendant should therefore not have exceeded one quarter of the Deceased's estate. The evidence before the court is that outside of the three properties transferred to the Defendant there is no other property left to distribute among the heirs. Hence, the entire estate has been transferred unlawfully to the Defendant. The three quarters share of the estate transferred in excess has to be brought back into the hotchpot for redistribution into four equal shares. It must be emphasised that Article 918 refers to the value of the property and not the property itself being returned to the hotchpot.”

Pillay J in the present case distinguished circumstances in Hall v Parcou with present case quite clearly:

“[35] In the case of Hall v Parcou & Ano. (CS 353/2009) [2017] SCSC 92 (07 February 2017) in spite of no evidence being led as to the value of the property, the Court ordered that the value of the alienated property had to be return to the estate on the basis of the evidence that there was no other property to distribute amongst the other heirs outside of the three properties alienated.

[36] In the current case, however, it is in evidence that there is a shop on the property, which is being rented, behind which stands the house of the late Jeannette Bibi.

[37] With all that said the lack of evidence as to the total value of the estate and the properties in question is fatal to the case. As much as the evidence shows that about 2500 square metres of land was transferred to the late Joseph Bibi from the late Jeanette Bibi to the exclusion of his siblings this Court is unable to make a declaration as to whether or not the said transfers were over and above his lawful share in the succession without the total value of the estate inclusive of the land, house and shop.”

It is clear that in the present case the property transferred to the Respondent is not the only property forming part of the entire estate of the deceased mother. Moreover, with regard to the shop, when Ms. Madeleine Bibi was asked about the management of the shop and proceeds from renting it out, she stated that rent money was received by “us” when asked who is us, she replied: “I was the one that was receiving the money” (see pages 101-102 of the Court of Appeal Bundle). Without going into a detailed analysis of whether the shop was an incorporated business or not, if it belonged to the deceased mother or if she benefitted from the proceeds of the business, arguably the profits and liabilities, subject to the nature of ownership, should also form part of her estate’s assets and liabilities which needs to be taken into account when ascertaining the full value of the estate in accordance with Article 922. Furthermore, the valuation of a business may potentially be more complex than the valuation of an immovable property and moreover include tax considerations also. Therefore, this could also be a further distinguishing factor in the present case. In my view, the circumstance of Hall v Parcou, namely, that all the property was transferred and all were immovable property is distinguishable from the present case, where there was property left in the estate and one of the assets is a shop potentially generating income, not just immovable property. Therefore, the trial Judge had and indicated sufficient reasons not to apply Hall v Parcou in terms of ordering the valuation of the estate.
In Racombo v Sinon (CS 124/2018) [2020] SCSC 155 (26 February 2020) the plaintiff also had not provided the valuation of the estate but the Court ordered dispositions under the Will to be reduced so that the reserved heirs receive their portion of the inheritance. In that case, two minor children of the deceased were left out of the Will. It was held:

“[24] The Plaintiff has however not provided a valuation of the whole estate to assist the Court to come to a conclusion with regards to whether or not the dispositions fall within the reserved or disposable portions. The rule as per Pragassen v Vidot (2010) SLR 163 is that a party who is relying on Article 913 of the Civil Code must prove the value of the gift and the estate in order to successfully rely on Article 913. However in this matter the fact that the deceased’s two minor children Shannon and Aisha Racombo have not been bequeathed anything in the Will in itself renders the Will dated 19th February 2018 contrary to Article 913, in accordance with the finding in Calixte v Nibourette (2002) SLR 35 that children unaccounted for in wills succeed to all but the disposable portion of the estate. It is worth noting at this juncture that there is no claim that the two minor children have been given any gifts during the deceased’s lifetime which could have been taken into account for the purposes of this case.

. . .

[26] With that said it is the finding of this Court that the deceased could only dispose of ¼ of his estate to the Defendant with the remaining ¾ reserved for distribution amongst his four children.

[27] In the circumstances I declare that the dispositions in the Will dated 19th February 2018 is contrary to law and should be reduced as per paragraph [26] above in order to ensure that all the reserved heirs of Finley Jacques Racombo receive their reserved portion of his estate in Seychelles.”

(emphasis added)

Circumstances in Racombo v Sinon are also different from the present case. Firstly, with regard to findings in relation to the Will. Secondly, there was no evidence that the minor children have received any inheritance from the deceased, either under the Will or otherwise.
The Appellants in the present case did not argue that they presented enough/or any evidence with regard to the value of the estate, instead, it was submitted that in view of Hall v Parcou, absence of evidence of the value of the estate is not fatal to the case. As illustrated above, there is a requirement under the Civil Code that the whole value of the estate needs to be established. Plaintiff not establishing the value is not necessarily fatal to the case as shown in Hall v Parcou and Racombo v Sinon, but other cases in their own circumstances dismissed the case when no evidence was provided.
Therefore, the conclusion that can be made is that not providing evidence of the value of estate and gift is not always fatal to the case; what is fatal is failure to establish that the value of the alienated property exceeds the disposable portion. In cases where the plaintiff proved this element, even though valuation was not provided, the court ordered the excess to be returned to the estate. In other cases, this element was clear as there was nothing else left for the reserved heirs, unlike the present case. Therefore, it was crucial for the Appellants to show that the properties transferred to the Respondent exceeded the disposable value of the estate as it came to light during evidence that the estate had other properties. Since they have not done so, it was fatal to their case in circumstances where estate comprises not just the alienated property.
Based on the above analysis, Grounds 1 and 2 fail.

Ground 3 – the intention of the mother

The Appellants argue that the mother did not intend to transfer the land outright but only “to help him [Joseph Bibi] obtained a loan to invest in his business but not to permanently deprived her other nine children of their rightful inheritance” (emphasis added).
It is submitted that the trial judge was therefore wrong to dismiss the case. Further, at paragraph 4 of the submissions (in relation to Ground 1 but relevant to Ground 3) the Appellants conclude: “It is clear from the Court's findings that the transfer of the properties from the mother to the son, was indeed a disguised donation intended to assist the son but the intention was not to permanently deprived the heirs of their rightful inheritance” (emphasis added).
Firstly, the Appellants' submissions regarding intention are somewhat contradictory because if the mother did not intend to transfer the property outright, there should have been no disguised donation as a disguised donation is a gift presented as a sale, in simple terms. It was held in Botel v Monnaie Ruddenklau (CS 55/1999) [2001] SCSC 20 (28 September 2001) that, “Where it is established that there was a temporary transfer of property subject to the conditions of retransfer, the transaction is not a gift”. The Court addressed the intention of the donor with regard to gifts. The case concerned a plaint alleging that the transfer of property was a gift inter vivos and was opposed on the grounds of prescription and res judicata. The case has been previously brought before the Supreme Court and the Court of Appeal involving two alternative claims that were pleaded: "disguised sale" and alternatively, "disguised gift inter vivos". Without going too much into details of this case, the following remark of this Court regarding intention when making gifts is of value. It was stated:

“In the end result, the trial Court found in favour of the above facts as pleaded, namely that there was an agreement by the Defendant to temporarily hold the property for and on behalf of the Plaintiff and that in spite of the deed of sale, the Plaintiff had retained the "beneficial interest" of the land. Accordingly, the trial Court held that the ostensible sale was rescinded by the operation of a back letter. At that stage, the trial Court could not proceed further, and determine, in the alternative, that the same transaction equally amounted to a gift (whether disguised as a sale or not) since a gift as defined under Article 894 of the Civil Code would constitute "an act whereby the donor irrevocably divests himself of the ownership of the thing in favour of the person who accepts it." The alternative claim that the transaction amounted to a gift, albeit 'disguised', became redundant.

Therefore, if the deceased mother in the present case did not intend to give the land outright, it can be argued that she did not intend to irrevocably divest herself of the ownership in favour of Joseph Bibi. She, therefore, did not intend to absolutely transfer the land and the disguised donation should not even be relevant and a different issue may arise.
Respectfully, it is not entirely clear which particular finding in relation to actual pleadings the trial judge was making in paragraph 32 of the Judgment:

“[32] It is the considered view of this Court that the truth is that the late Joseph Bibi approached his mother requesting the transfer of the land parcels onto his name in order to secure a loan for his businesses and the mother accepted with the intention of doing just that and not transferring the property to him outright as the Defence suggests.”

Basically, it is not clear with certainty whether this paragraph means that the deceased mother expected the property to be transferred back to her at some point once the loan business is concluded; or whether it may mean that there was no actual money transfer or consideration paid was less than the actual value. If the paragraph means the latter, then it can indicate that the finding is that transfer was indeed a disguised donation. If the finding means that the deceased mother expected a transfer back, according to Botel v Monnaie Ruddenklau transfer could not have been a gift.
The Appellants in the Plaint alleged that the transfer was a disguised donation and asked for either return of the property to the estate or the value thereof. Finding that the transfer is a disguised donation alone does not mean that value of the property shall be returned as was pleaded by the Appellants. Basically, even if the sale was indeed a disguised donation, it does not mean that it is automatically void and value must be returned to the estate. The value shall be returned if it exceeds the disposable portion, not just because it is a disguised donation.
In Pragassen v Vidot it was held that the intention of the donor is material to establish a disguised donation. In Reddy & Anor v Ramkalawan however, the court held that Pragassen v Vidot was wrong just in that regard:

“[23] In the circumstances, the submission made by Counsel for the Defendant in respect of proof that must be met to rebut the presumption of validity of a deed in respect of a donation has no application to this case. The fact that a donation is made to an heir in excess of the disposable portion does not amount to fraud, it only amounts to a disinheritance disguised as a donation. That is the meaning of donation deguisée in this case. Hence, the question of fraudulent donation or its proof where it concerns disinherited heirs does not arise and is completely immaterial. To that extent the case of Pragrassen v Vidot (2010) SLR 163 was wrongly decided. This is rightly so since it is not the deed itself that is being attacked but the alienated inheritance.”

It should be borne in mind that disguised donations may be alleged not only in cases of inheritance. Under UK law by way of mere example (emphasis is mine), equivalent to disguised donations can be used to avoid tax in relation to gifts or evade liabilities to creditors. In these kinds of cases, the intention of the donor would of course be important and the courts would look at various factors to ascertain intention such as, among others, consideration paid, time of the sale, etc. In the UK, however, there is no forced heirship. In terms of inheritance and countries with forced heirship, disguised donations or gifts inter vivos can be potentially used as methods to attempt to disinherit the reserved heirs and avoid forced heirship. However, as was stated in Reddy & Anor v Ramkalawan:

“[21] An owner of property is not precluded by law from selling his land or giving it away. A disguised sale is also valid if the sale respects the conditions of form, the rules of contract and public policy (see Article 931, Civil Code of Seychelles). Similarly the de cujus can sell or make a gift to an heir - as long as that sale or the gift does not so diminish the estate that the reserved rights of the heirs are not satisfied.

. . .

[22] Article 918 creates an irrebuttable presumption in favour of disinherited heirs – a donation to one entitled to succeed to the exclusion of others who are also entitled to succeed shall be reduced if it exceeds the disposable portion (quotité disponible). Nothing more, nothing less. It is nigh impossible to disinherit one’s child under Seychellois law.”

Therefore, in Seychelles under the Civil Code prior to the amendment, in cases of inheritance, the intention of the deceased with regard to gifts inter vivos or disguised donations is indeed immaterial. Whether or not a person actually intended to disinherit the legal heirs, if a person disposed of more than the disposable portion of the estate as per Article 913, a person disinherited reserved heirs and the excess shall be returned. Excess should be valued as the actual value of the alienated property according to the provisions of the Civil Code and not as what the deed of transfer states. Here is where the disguised donation can be most relevant as even if the deed of transfer states one consideration if it is a disguised donation, the real value will need to be ascertained to determine the excess.
Therefore, the Appellants’ argument regarding Ground 3 fails as the trial Judge cannot be held to err in finding/observation that the mother did not intend to transfer the property outright and dismiss the case which pleaded disguised donation. The intention of disguised donation is immaterial in inheritance matters. The argument that “It is clear from the Court's findings that the transfer of the properties from the mother to the son, was indeed a disguised donation intended to assist the son but the intention was not to permanently deprived the heirs of their rightful inheritance” is somewhat confusing. Transfer with an intention not to permanently transfer the land is not a disguised donation. The disguised donation, in simple terms, is a gift presented as a sale. Transfer with an intention to receive the property back at some point or reserve interest in the property is something else, which was not pleaded in the Plaint, but it is not a disguised donation.
Therefore, if the Appellant argues that the deceased mother never indented to transfer the property permanently and absolutely, the case should have been based on some other arguments, not disguised donation, and if that was so, Ground 3 of the Appeal should have been made clear. Instead, it puts two together – absolute transfer was not intended but it was done as a disguised donation. In my mind, these arguments contradict each other as if the absolute transfer was not intended it cannot be a gift, but it is argued that it was a gift presented as a sale. In my view, Ground 3 of the Appeal should fail mainly on the basis that intention is immaterial in relation to disguised donations in inheritance matters and the case was dismissed due to a lack of evidence on the value of the estate and alienated property. Further, it is not clear what the Appellants are arguing.

CONCLUSION

As illustrated above, the major factor that needs to be established in cases where a reserved heir asks for the return of the value of the alienated property back is that the transfer exceeded the disposable portion of the assets. It is not always fatal to the case where Plaintiff does not establish the value of the estate and alienated property. The court has ordered valuation or ordered reductions to be made in cases where it was clear that the entire estate was alienated and where the entitled heirs received nothing. As it became apparent during the court proceedings, this was not the situation in the present case as apart from alienated property the estate still comprised the shop and the house. Neither did the Appellants disclose that in the Plaint and presented valuation of that property, nor did they ask the Court to order valuation of the alienated property.
The intention of the donor with regard to disguised donations in inheritance cases is immaterial. The most important factor is that a donation exceeds a disposable portion. Whatever the court’s observations with regard to the intention of transfer were, in my view they were not the deciding factors. The deciding factor was that the court was unable to determine whether the transfer of land to Joseph Bibi was in excess of the disposable portion out of the whole estate, considering the estate also comprised the shop and the house. Therefore, the trial Judge’s observation/finding in relation to the intention of the mother was immaterial for dismissal of the case as was pleaded; it was dismissed based on lack of evidence regarding the value of the estate and transferred property.

DECISION

Having found no merit to each of the grounds of appeal as raised by the Appellants, the appeal is dismissed and the reliefs sought cannot be granted. The judgment of the lower court is thus upheld in its entirety.

ORDER

As a result, this Court orders as follows:

(i) The appeal is dismissed and the judgment of the lower court is thus upheld in its entirety; and

(ii) Costs are awarded to the Respondent.

_______________

S. Andre, JA

I concur _______________

Dr. L. Tibatemwa-Ekirikubinza, JA

ROBINSON JA

[61] I agree with the conclusion arrived at by Andre JA in her judgment that the appeal should be dismissed.

_______________

F. Robinson, JA

Signed, dated, and delivered at Ile du Port on 16 December 2022.

IN THE COURT OF APPEAL OF SEYCHELLES

______________________________________________________________________________

Reportable

[2022] Civil Appeal SCA 73/2019 SCCA 76 (16 December 2022)

(Appeal from CS 26/2017) SCSC 1052

In the matter between:

EMMANUEL BIBI First Appellant

LINDY BIBI Second Appellant

HELENE MARIE-THERESE ESPARON Third Appellant

nee BIBI

MARIE MADELEINE DOROTHY BIBI Fourth Appellant

PAUL JEFFREY BIBI Fifth Appellant

MARCEL GEORGES BIBI Sixth Appellant

(all rep. by Mr. F. Elizabeth)

and

THE ESTATE OF THE LATE Respondent

JOSEPH SAMUEL BIBI

Rep by the joint executors Marcus Labrosse

And Raneel Achanne Bibi

(rep. by Mr. W. Lucas)

Neutral Citation: Bibi & Others v The Estate of late Joseph S. Bibi (Civil Appeal SCA 73/2019) [2022] SCCA 76 (16^th December 2022) (Appeal from CS 26/2017 SCSC 1052)

Before: Andre, Robinson, Dr. L. Tibatemwa-Ekirikubinza JJA

Summary: Appeal against a decision of the Supreme Court – Disguised donation – reserved heirs, reductions to gifts inter-vivos under the Civil Code of Seychelles Act (Cap 33)

Heard: 2 December 2022

Delivered: 16 December 2022

ORDERS

The Court makes the following Orders:

(i) The atppeal is dismissed and the judgment of the lower court is thus upheld in its entirety; and

(ii) Costs are awarded to the Respondent.

JUDGMENT

ANDRE, JA

INTRODUCTION

This is an appeal arising out of the notice of appeal filed on 26 December 2019 by Emmanuel Bibi, Lindy Bibi, Helene Marie-Therese Bibi, Marie Madeleine Dorothy Bibi, Paul Jeffrey Bibi, and Marcel Georges Bibi (Appellants) against The Estate of late Joseph Samuel Bibi (duly represented by the joint executors Marcus Labrosse and Raneel Achanne Bibi (Respondent), being dissatisfied with the decision of Her ladyship Laura Pillay J given at the Supreme Court on the 27 November 2019 in Civil Side No. 26 of 2017 (impugned judgment).
The Appellants as per cited notice of appeal, appeal against the whole of the decision upon the grounds of appeal set out in paragraph 2 of the notice of appeal and to be considered in detail below. The Appellants further seek the relief set out in paragraph 3 of its notice of appeal namely, the setting aside of the impugned judgment; ordering the land Registrar to rectify the land register and to cancel the registration of register title numbers J1567 subdivided into J3138 and J3139 and title number J1568 subdivided into J3140 and J3141; to register title numbers J1567 subdivided into J3138 and J3139 and title number J1568 subdivided into J3140 and J3141 in the name of the estate of the late Marie Jeanette Valerienne Bibi to be redistributed amongst all the heirs of the estate in accordance with their respective shares provided by law.

BACKGROUND

The Appellants are children of the deceased Mrs. Bibi. The Respondent is the estate of the late Mr. Bibi, who was also the child of the deceased Mrs. Bibi. The Supreme Court case (CS 26/2017) concerned two plots of land, the transfer of which the Appellants, then Plaintiffs, sought to declare as a disguised donation. The Plaintiffs sought the following orders in the Supreme Court:

(1) to declare that the transfer of titles J1567 and J1568 by the deceased to the first Defendant was a disguised donation or an alienation, subject to return;

(2) to order the reduction of the disguised donation by ordering the first Defendant to:

i) Return titles J1567 and J1568 or the excess share to the succession of the deceased; or

ii) Return or transfer the Plaintiffs’ share in titles J1567 and J1568 to the Plaintiffs.

(3) That the first Defendant be directed to account for the fruits of titles J1567 and J1568 and to pay them or the share in excess of his title to the succession of the deceased.

(4) To make any order that the Court deems fit in the circumstances.

Supreme Court delivered the Judgment on the 27^th of November 2019 dismissing the Plaint and the appellants have filed the Appeal against the said Judgment.

GROUNDS OF APPEAL

The Appellants set out three grounds of appeal which in the verbatim state as follows:

Ground 2 – The learned Judge erred when she failed to follow and apply the ratio decidendi in the case of Hall v Parcou & Anor CS No. 353/2009 (2017) to the present case.

The Appellants seek three reliefs as cited in paragraph [2] above. Costs are also prayed for by the Appellants.

SUBMISSIONS OF PARTIES

Appellants’ Submissions

The submissions of the Appellants filed on 17 November 2022 in relation to the three Grounds of Appeal are interlinked. In relation to Ground 1, the Counsel also submits regarding finding in paragraph [32] (relevant to Ground 3) and regarding ratio decidendi in Hall v Parcou (relevant to Ground 2).
With regard to Ground 1, the Appellant submits that in paragraph 37 of the judgment the trial judge found that “the lack of evidence as to the total value of the estate and the properties in question is fatal to the case” and that “this Court is unable to make a declaration as to whether or not the said transfers were over and above his lawful share in the succession without the total value of the estate inclusive of the land, house, and shop”.
The Appellant further submits that due to the finding in paragraph [32] the court ought to have come to a different conclusion. The Appellant submits that the intention of the mother was not to transfer the property outright to deprive the remaining heirs but to assist the Respondent in raising loans for his business. It is submitted that “It is clear from the Court's findings that the transfer of the properties from the mother to the son, was indeed a disguised donation intended to assist the son but the intention was not to permanently deprived the heirs of their rightful inheritance”.
Thereafter, the Appellants submit that “the fact that there was no valuation of the property was not fatal to the case as the appellants in their pleadings had sought an order from the Honourable Court "to make any order it thinks fit". It is submitted that due to that prayer, the trial Judge should have ordered the valuation and such an approach would have been consistent with the decision in Hall v Parcou referred to by the trial judge in paragraph [35] of the judgment.
With regard to Ground 2, the Appellant submits that having cited Hall v Parcou case where, as submitted, the Court disregarded the fact that no evidence had been provided regarding the value of the property and “ordered the return of the alienated property back to the estate” the trial Judge in the present case failed to give reasons for departing from the ratio decidendi in that case.
With regard to Ground 3, the Appellants reiterate what was stated in relation to Ground 1 by submitting that the trial judge erred in not addressing the intention of the mother, being only to help the son, and not permanently deprive the remaining heirs of the inheritance.
It is further submitted that the trial judge erred in not considering that the mother, before her death, sued the Respondent “seeking the return of her property” and concluding with the question of “why would the mother of Joseph Samuel Bibi filed a case against her son if her intention was to make an outright sale of the properties to her son?”.
The Appellants conclude that “the learned trial Judge erred when she dismissed the case of the appellants in the face of overwhelming evidence showing that the transfer of the properties to Joseph Samuel Bibi was indeed a donation deguisee and that it was never the intention of the mother to transfer the properties to Joseph Bibi, as a gift to him”.
It is further concluded that there was no proof before the Court that consideration was paid for the land, which points to the evidence that the mother “did not intend to sell her properties to her son, Joseph Bibi, depriving the rest of her children of their rightful inheritance”.
Finally, based on the above submissions, the Appellants pray to this Court that this appeal should be allowed as prayed for with costs.

Respondent’s Submissions

By way of filed submissions of 22 November 2022, the Respondent in a gist submits as follows.
In reply to Ground 1 of the Appeal, the Respondent relies on Article 918 of the Civil Code; decisions Clothilde v/s Clothilde 1976 SLT 245; Pragassen v/s Vidot 2010 SLR 163; and Reddy and Anor Versus Ramkalawan. It is submitted that there is an irrebuttable presumption that a sale to an heir avec reserve d’usufruit is a donation, which is not void but reducible to the quotite disponible and that there must be a “rapport a la masse” of the value of the land in excess of the “quotite disponible”. It is further submitted that a party who relies on Article 913 must prove the value of the gift and the estate. Respondent further submits relying on Pragassen v/s Vidot that bad faith and fraudulent pretence of the deceased must be proved.
In reply to the Appellant’s argument regarding prayer for any order the Court thinks fit, the Respondent submits that, “It is strict rules of pleading that the court cannot grant a relief not prayed for in particular the pleading of valuation is the most essential element of the claim before the court, therefore, failure to place before the court such evidence as to the value of the property is fatal for the Appellants case which warranted to a dismissal”. The Respondent, therefore, concludes that with regard to the Ground 1 the trial Judge was right to dismiss the Plaint “on the ground that one of the essential element for the calculation of the excess or reserved portion of the donated property is the value of the said property which the Appellants has failed to place as evidence before the court”
In reply to Ground 2 of the Appeal the Respondent submits that the trial Judge has distinguished the case of Hall versus Parcou citing paragraph 35 of the Judgement where the Trial Judge states that in Hall v Parcou there was no other property to distribute, whereas in current case there is also a shop and a house in addition to the alienated property. The Respondent, therefore, submits that the Trial Judge was correct to find that the ratio decidendi in Hall v Parcou was not applicable in the present case.
In reply to Ground 3 of the Appeal, the Respondent submits that “This ground of Appeal does not raise new or different issues as in the first two grounds hence, In response to this ground of appeal, the Respondent relies on its submission under ground 1”.
The Respondent moves for the dismissal of the appeal with costs.

ANALYSIS OF THE GROUNDS OF APPEAL

Since the Grounds of Appeal and submissions in support are interlinked, the following issues can be identified for consideration in this appeal:
1. 1. Value of the property – relevance and whether lack thereof is fatal to the case
  2. Hall v Parcou decidendi
  3. The intention of the mother

Ground 1 and 2 - Value of the property - relevance and whether lack thereof is fatal to the case

Section II - The Reduction of Gifts and Legacies of the Civil Code (before the amendments) relates to the reduction of gifts inter vivos. Article 920 provides that a gift that exceeds the disposable portion “shall be liable to be reduced to the size of that portion at the opening of the succession”; and under Article 921 such reduction can be only demanded by “by those in whose favour the law has provided the reserve, by their heirs or assigns;” Articles 918, 922 and 923 of the Civil Code make it clear that the value of the entire estate and the property gifted is paramount:

“Article 918

Article 922

The reduction shall be made by taking into account the total asset value of all the property existing at the death of the donor or the testator.

The disposable portion of which the deceased was entitled to dispose shall be calculated on the basis of all these assets having regard to the class of heirs whom the deceased has left.

Article 923

(emphasis added)

It was established in Pragassen v Vidot (2010) SLR 163 that, “An inter vivos gift (made by a deceased who is survived by 9 heirs), which is in excess of one-fourth of the value of the estate, is contrary to art 913 of the Civil Code. The party who is relying on art 913 of the Civil Code must prove the value of the gift and the estate in order to successfully rely on art 913” (emphasis added).
The Court further held:

(Emphasis added)

In Reddy & Anor. v Ramkalawan (CS 97/2013) [2016] SCSC 31 (26 January 2016) it was emphasised that Article 918 creates irrebutable presumption in favour of disinherited heirs and that it was not possible at the time of the decision to disinherit one’s child under Seychelles law. The Court further emphasised that “it is the value of the donation that matters in actions such as the present one” and that it is the value in excess that must be returned, not the immovable property. The Court also referred to Article 922 and further held that “Article 922 provides that it is the total asset value of all the property existing at the death of the donor or the testator that is taken into account for the reduction. Debts must also be deducted.” (Emphasis added). In Reddy & Anor v Ramkalawan, though, there was a valuation of the property provided in the evidence.
In Adonis v Cedras (CS 44/2020) [2021] SCSC 613 (22 September 2021) the plaintiff has not provided evidence of the value of the whole estate and, among other prayers, actually prayed for the valuation of the property. It was admitted by the defendant that the plaintiff also approached the defendant in order to jointly commission a valuer’s report. The Court stated the following with regard to establishing the value of the estate:

It was held that it was not proved and the case was dismissed. Although, in addition, to value not being proved the defendant was not the reserved heir and the court held that, “the right to claim back the value in excess of the disposable portion exists for one reserved heir as against another reserved heir. There is no evidence on record that the Defendant is a child of the deceased which would bring her within the ambit of articles 913 and 918”.
Therefore, in Adonis v Cedras again the importance of valuation was emphasised and even though the plaintiff asked the court to order valuation, the court dismissed the case.
Nevertheless, in the present case, the valuation was not even pleaded. The Appellants stated now in their submissions before the Court of Appeal that because the Plaint included prayer "to make any order it thinks fit", the trial Judge should have ordered valuation and it would have been consistent with the decision in Hall v Parcou & Anor (CS 353/2009) [2017] SCSC 92 (06 February 2017). Firstly, prayer for any order court thinks fit is quite wide and is often included in the plaints. However, in my opinion, while it may be taken to give the court wider discretion in respect to pleadings, it must not be taken to mean that the court needs to make the case for the Counsel and/or correct pleadings’ shortcomings. Furthermore, the court needs to be mindful of the established ultra petita principle and if "to make any order it thinks fit" would be taken to mean anything that the court thinks is more suitable than what the party asked for, it can consequently give other grounds of appeal based on ultra petita.
Secondly, the Appellants neither pleaded valuation nor relied on Hall v Parcou findings. Therefore, the argument that the trial Judge should have ordered valuation as in Hall v Parcou seems like an afterthought. The distinguishing features of this case from Hall v Parcou are discussed below in this judgment.
I also agree with the submissions of the Respondent that “the court cannot grant a relief not prayed for in particular the pleading of valuation is the most essential element of the claim before the court . . .”. Situation could have been different for example if the valuation of the alienated property was not possible and the Appellants asked the court to order such valuation. Furthermore in the present case specifically, considering there are other properties within the estate – the Appellants should have at least provided a valuation of the estate.
In Chetty v Chetty (CS 253/2018 ) [2020] SCSC 366 (02 July 2020) Dodin J considered the issue of “whether the failure on the part of the Plaintiff to lead evidence as to the value of the estate is fatal to the claim” as an academic point. Dodin J referred to Article 922 and Article 926 (testamentary disposition) and stated that the disposable portion needs to be calculated having regard to all the assets of the deceased and that it “is clear that what matters when determining the quotite disponible is the total asset value of all the property as per article 922”. Dodin J further stated that in order for the Court to make any reduction/adjustment orders it would be necessary to ascertain the value of the deceased’s estate.
Dodin J further considered Hall v Parcou (CS 353/2009) [2017] SCSC 92 (07 February 2017); Pragassen v Vidot (CS 360/2005) [2009] SCSC 124 (02 July 2010) and judgment presently being appealed – Bibi & Ors v Estate of Joseph Samuel Bibi (CS 26/2017) [2019] SCSC 1052 (27 November 2019). Dodin J stated:

(Emphasis added)

With regard to the Bibi decision, Dodin J stated that he considered the decision in Hall v Parcou but the determination of the court was that it was not possible in this case to make such orders.
In Hall v Parcou the deceased transferred all the property owned. The Court held the following:

Pillay J in the present case distinguished circumstances in Hall v Parcou with present case quite clearly:

[36] In the current case, however, it is in evidence that there is a shop on the property, which is being rented, behind which stands the house of the late Jeannette Bibi.

It is clear that in the present case the property transferred to the Respondent is not the only property forming part of the entire estate of the deceased mother. Moreover, with regard to the shop, when Ms. Madeleine Bibi was asked about the management of the shop and proceeds from renting it out, she stated that rent money was received by “us” when asked who is us, she replied: “I was the one that was receiving the money” (see pages 101-102 of the Court of Appeal Bundle). Without going into a detailed analysis of whether the shop was an incorporated business or not, if it belonged to the deceased mother or if she benefitted from the proceeds of the business, arguably the profits and liabilities, subject to the nature of ownership, should also form part of her estate’s assets and liabilities which needs to be taken into account when ascertaining the full value of the estate in accordance with Article 922. Furthermore, the valuation of a business may potentially be more complex than the valuation of an immovable property and moreover include tax considerations also. Therefore, this could also be a further distinguishing factor in the present case. In my view, the circumstance of Hall v Parcou, namely, that all the property was transferred and all were immovable property is distinguishable from the present case, where there was property left in the estate and one of the assets is a shop potentially generating income, not just immovable property. Therefore, the trial Judge had and indicated sufficient reasons not to apply Hall v Parcou in terms of ordering the valuation of the estate.
In Racombo v Sinon (CS 124/2018) [2020] SCSC 155 (26 February 2020) the plaintiff also had not provided the valuation of the estate but the Court ordered dispositions under the Will to be reduced so that the reserved heirs receive their portion of the inheritance. In that case, two minor children of the deceased were left out of the Will. It was held:

. . .

(emphasis added)

Circumstances in Racombo v Sinon are also different from the present case. Firstly, with regard to findings in relation to the Will. Secondly, there was no evidence that the minor children have received any inheritance from the deceased, either under the Will or otherwise.
The Appellants in the present case did not argue that they presented enough/or any evidence with regard to the value of the estate, instead, it was submitted that in view of Hall v Parcou, absence of evidence of the value of the estate is not fatal to the case. As illustrated above, there is a requirement under the Civil Code that the whole value of the estate needs to be established. Plaintiff not establishing the value is not necessarily fatal to the case as shown in Hall v Parcou and Racombo v Sinon, but other cases in their own circumstances dismissed the case when no evidence was provided.
Therefore, the conclusion that can be made is that not providing evidence of the value of estate and gift is not always fatal to the case; what is fatal is failure to establish that the value of the alienated property exceeds the disposable portion. In cases where the plaintiff proved this element, even though valuation was not provided, the court ordered the excess to be returned to the estate. In other cases, this element was clear as there was nothing else left for the reserved heirs, unlike the present case. Therefore, it was crucial for the Appellants to show that the properties transferred to the Respondent exceeded the disposable value of the estate as it came to light during evidence that the estate had other properties. Since they have not done so, it was fatal to their case in circumstances where estate comprises not just the alienated property.
Based on the above analysis, Grounds 1 and 2 fail.

Ground 3 – the intention of the mother

The Appellants argue that the mother did not intend to transfer the land outright but only “to help him [Joseph Bibi] obtained a loan to invest in his business but not to permanently deprived her other nine children of their rightful inheritance” (emphasis added).
It is submitted that the trial judge was therefore wrong to dismiss the case. Further, at paragraph 4 of the submissions (in relation to Ground 1 but relevant to Ground 3) the Appellants conclude: “It is clear from the Court's findings that the transfer of the properties from the mother to the son, was indeed a disguised donation intended to assist the son but the intention was not to permanently deprived the heirs of their rightful inheritance” (emphasis added).
Firstly, the Appellants' submissions regarding intention are somewhat contradictory because if the mother did not intend to transfer the property outright, there should have been no disguised donation as a disguised donation is a gift presented as a sale, in simple terms. It was held in Botel v Monnaie Ruddenklau (CS 55/1999) [2001] SCSC 20 (28 September 2001) that, “Where it is established that there was a temporary transfer of property subject to the conditions of retransfer, the transaction is not a gift”. The Court addressed the intention of the donor with regard to gifts. The case concerned a plaint alleging that the transfer of property was a gift inter vivos and was opposed on the grounds of prescription and res judicata. The case has been previously brought before the Supreme Court and the Court of Appeal involving two alternative claims that were pleaded: "disguised sale" and alternatively, "disguised gift inter vivos". Without going too much into details of this case, the following remark of this Court regarding intention when making gifts is of value. It was stated:

Therefore, if the deceased mother in the present case did not intend to give the land outright, it can be argued that she did not intend to irrevocably divest herself of the ownership in favour of Joseph Bibi. She, therefore, did not intend to absolutely transfer the land and the disguised donation should not even be relevant and a different issue may arise.
Respectfully, it is not entirely clear which particular finding in relation to actual pleadings the trial judge was making in paragraph 32 of the Judgment:

Basically, it is not clear with certainty whether this paragraph means that the deceased mother expected the property to be transferred back to her at some point once the loan business is concluded; or whether it may mean that there was no actual money transfer or consideration paid was less than the actual value. If the paragraph means the latter, then it can indicate that the finding is that transfer was indeed a disguised donation. If the finding means that the deceased mother expected a transfer back, according to Botel v Monnaie Ruddenklau transfer could not have been a gift.
The Appellants in the Plaint alleged that the transfer was a disguised donation and asked for either return of the property to the estate or the value thereof. Finding that the transfer is a disguised donation alone does not mean that value of the property shall be returned as was pleaded by the Appellants. Basically, even if the sale was indeed a disguised donation, it does not mean that it is automatically void and value must be returned to the estate. The value shall be returned if it exceeds the disposable portion, not just because it is a disguised donation.
In Pragassen v Vidot it was held that the intention of the donor is material to establish a disguised donation. In Reddy & Anor v Ramkalawan however, the court held that Pragassen v Vidot was wrong just in that regard:

It should be borne in mind that disguised donations may be alleged not only in cases of inheritance. Under UK law by way of mere example (emphasis is mine), equivalent to disguised donations can be used to avoid tax in relation to gifts or evade liabilities to creditors. In these kinds of cases, the intention of the donor would of course be important and the courts would look at various factors to ascertain intention such as, among others, consideration paid, time of the sale, etc. In the UK, however, there is no forced heirship. In terms of inheritance and countries with forced heirship, disguised donations or gifts inter vivos can be potentially used as methods to attempt to disinherit the reserved heirs and avoid forced heirship. However, as was stated in Reddy & Anor v Ramkalawan:

. . .

Therefore, in Seychelles under the Civil Code prior to the amendment, in cases of inheritance, the intention of the deceased with regard to gifts inter vivos or disguised donations is indeed immaterial. Whether or not a person actually intended to disinherit the legal heirs, if a person disposed of more than the disposable portion of the estate as per Article 913, a person disinherited reserved heirs and the excess shall be returned. Excess should be valued as the actual value of the alienated property according to the provisions of the Civil Code and not as what the deed of transfer states. Here is where the disguised donation can be most relevant as even if the deed of transfer states one consideration if it is a disguised donation, the real value will need to be ascertained to determine the excess.
Therefore, the Appellants’ argument regarding Ground 3 fails as the trial Judge cannot be held to err in finding/observation that the mother did not intend to transfer the property outright and dismiss the case which pleaded disguised donation. The intention of disguised donation is immaterial in inheritance matters. The argument that “It is clear from the Court's findings that the transfer of the properties from the mother to the son, was indeed a disguised donation intended to assist the son but the intention was not to permanently deprived the heirs of their rightful inheritance” is somewhat confusing. Transfer with an intention not to permanently transfer the land is not a disguised donation. The disguised donation, in simple terms, is a gift presented as a sale. Transfer with an intention to receive the property back at some point or reserve interest in the property is something else, which was not pleaded in the Plaint, but it is not a disguised donation.
Therefore, if the Appellant argues that the deceased mother never indented to transfer the property permanently and absolutely, the case should have been based on some other arguments, not disguised donation, and if that was so, Ground 3 of the Appeal should have been made clear. Instead, it puts two together – absolute transfer was not intended but it was done as a disguised donation. In my mind, these arguments contradict each other as if the absolute transfer was not intended it cannot be a gift, but it is argued that it was a gift presented as a sale. In my view, Ground 3 of the Appeal should fail mainly on the basis that intention is immaterial in relation to disguised donations in inheritance matters and the case was dismissed due to a lack of evidence on the value of the estate and alienated property. Further, it is not clear what the Appellants are arguing.

CONCLUSION

As illustrated above, the major factor that needs to be established in cases where a reserved heir asks for the return of the value of the alienated property back is that the transfer exceeded the disposable portion of the assets. It is not always fatal to the case where Plaintiff does not establish the value of the estate and alienated property. The court has ordered valuation or ordered reductions to be made in cases where it was clear that the entire estate was alienated and where the entitled heirs received nothing. As it became apparent during the court proceedings, this was not the situation in the present case as apart from alienated property the estate still comprised the shop and the house. Neither did the Appellants disclose that in the Plaint and presented valuation of that property, nor did they ask the Court to order valuation of the alienated property.
The intention of the donor with regard to disguised donations in inheritance cases is immaterial. The most important factor is that a donation exceeds a disposable portion. Whatever the court’s observations with regard to the intention of transfer were, in my view they were not the deciding factors. The deciding factor was that the court was unable to determine whether the transfer of land to Joseph Bibi was in excess of the disposable portion out of the whole estate, considering the estate also comprised the shop and the house. Therefore, the trial Judge’s observation/finding in relation to the intention of the mother was immaterial for dismissal of the case as was pleaded; it was dismissed based on lack of evidence regarding the value of the estate and transferred property.

DECISION

Having found no merit to each of the grounds of appeal as raised by the Appellants, the appeal is dismissed and the reliefs sought cannot be granted. The judgment of the lower court is thus upheld in its entirety.

ORDER

As a result, this Court orders as follows:

(i) The appeal is dismissed and the judgment of the lower court is thus upheld in its entirety; and

(ii) Costs are awarded to the Respondent.

_______________

S. Andre, JA

I concur _______________

Dr. L. Tibatemwa-Ekirikubinza, JA

ROBINSON JA

[61] I agree with the conclusion arrived at by Andre JA in her judgment that the appeal should be dismissed.

_______________

F. Robinson, JA

Signed, dated, and delivered at Ile du Port on 16 December 2022.

Ex Parte Vijay Construction (XP 130 of 2020) [2020] SCSC 762 (15 October 2020);

Anonymous — Fri, 01 Jul 2022 09:52:17 +0000

Ex Parte Vijay Construction (XP 130 of 2020) [2020] SCSC 762 (15 October 2020);

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SUPREME COURT OF SEYCHELLES

Reportable
[2020] SCSC 762
XP130/2020

In the matter between:

VIJAY CONSTRUCTION (PROPRIETARY) LIMITED Applicant
(rep. by S. Rajasundaram)

Neutral Citation: Ex Parte Vijay Construction Pty Ltd XP130/2020 [2020] SCSC 762
15 October 2020
Before:                   Govinden J
Summary:              Prayers to “hold on” to the reliefs prayed for in the winding petition is refused.
Heard:                    12 October 2020

Delivered: 15 October 2020

ORDER
Application to 'hold on' to the prayers as averred and sought for in the affidavit would amount to an abuse of the process of this Court.

RULING

GOVINDEN J

The Petitioner in this matter has, through its representative, Mr. Vijay Patel, a Director of the Petitioner, filed an affidavit dated the 14th of October 2020, in which he makes a prayer that this Court “hold on” to the relief prayed for in his Petition dated the 5th of October, 2020 applying for winding up for the Petitioner. No reasons are given in the said affidavit for this prayer. The Deponent however goes on and aver that that the Ruling pending in a separate application filed in this matter for stay of all proceedings and actions, filed against the Petitioner, which was fixed to be delivered today, be rendered.
This stay application which was heard on the 12th of October 2020, in MA182/2020, was made and heard under the provisions of Section 102 (1) of the Insolvency Act, herein after referred to as “the Act”, on the basis that the petition in this matter had been presented and was about to be heard.
It is to be noted that another separate ancillary application is still pending in the winding up petition, it is MA191/20 in which the Petitioner is applying for a Provisional Liquidator to be appointed under section 112 of the Act, pending the making of the winding up Order.
I have heard the submissions of the Learned Counsel of for the Petitioner on the affidavit, not to proceed with the prayers or winding up and instead to Rule on the application for stay. Having so heard him, and after considering the law, and the whole circumstances of the case, this Court sees that to grant the prayers sought for would imposed certain difficulties;

It will be granting the prayers, which have not been properly grounded and founded on clear Legal provisions. The Learned Counsel, have been unable to cite the provision of the law, upon which the application to “hold on” is made.
If the prayers in the affidavit were to be granted. It would prove unfair and prejudicial to some to some creditors of the Petitioner, who whilst they will see themselves unable to prosecute their Legal claims or actions, in pending Court cases, against the Petitioner, would also at the same time see themselves unable to lodge their claims in the liquidation of the Petitioner, which by Virtue of filing this Petition, is purportedly, unable to pay its debt. As a result of this of this stalemate, they will be somewhat potentially denied justice.
Fulfilling the prayers in this affidavit would be wholly advantageous and self-serving to the Petitioner, who will see itself sheltered from Civil Suits and claims and executions of valid judgment. This protection would be on an ad infinitum basis and at the behest of the Petitioner. Who would have the final say, as to when the petition would be further prosecuted or the stay, Order would be lifted.

The above findings has led this Court to the irresistible conclusion that granting the prayers, as averred and sought for in the said affidavit would amount to an abuse of the process of this Court. Section 102 (1) of the Act was meant to be an interim order pending a Winding up Order under Section 163 of the Act. It was not meant to be an open ended right of a Judgment debtor to stay Judicial process or claims against it.
Accordingly, the prayer sought for in the said affidavit cannot be granted by this Court.

Signed, dated and delivered at Ile du Port on the 15th October 2020.

____________
Govinden J
Judge

SUPREME COURT OF SEYCHELLES

Reportable
[2020] SCSC 762
XP130/2020

In the matter between:

VIJAY CONSTRUCTION (PROPRIETARY) LIMITED Applicant
(rep. by S. Rajasundaram)

Delivered: 15 October 2020

ORDER
Application to 'hold on' to the prayers as averred and sought for in the affidavit would amount to an abuse of the process of this Court.

RULING

GOVINDEN J

Signed, dated and delivered at Ile du Port on the 15th October 2020.

____________
Govinden J
Judge

Bouchereau v Zoe and Ors (CS 110 of 2018) [2020] SCSC 772 (19 October 2020);

Anonymous — Fri, 01 Jul 2022 09:52:09 +0000

Bouchereau v Zoe and Ors (CS 110 of 2018) [2020] SCSC 772 (19 October 2020);

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Modern Trading (Pty) Limited v Balraj (MC 46 of 2019) [2021] SCSC 347 (24 June 2021);

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Modern Trading (Pty) Limited v Balraj (MC 46 of 2019) [2021] SCSC 347 (24 June 2021);

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IN THE SUPREME COURT OIF SEYCHELLES

Reportable
2021 SCSC 347
MC46/2019
(Appeal from Magistrate Court CS110/2017)

In the matter between:
MODERN TRADING (PTY) LIMITED Appellant
(rep. by Guy Ferley)

and

SETHURAM BALRAJ Respondent
(rep. by Kieran Shah & Asiyath Afif)

Neutral Citation: Modern Trading (Pty) Limited v Balraj (MC46/2019] SCSC 347
Before:                   Dodin J.
Summary:             Prescription – article 2272 of Civil Code – whether learned Magistrate erred in determining amount of outstanding debt
Heard:                    (Written submissions)

Delivered: 24th June 2021

ORDER
On appeal from the judgment of the Magistrate’s Court, this Court finds that prescription started to run from the date of the last payment which this Court determines to be 5th December 2013. The Respondent was therefore not prescribed in filing his claim on the 20th July 2017.
The Learned Magistrate was not patently or plainly wrong in her assessment of the facts considering the defence pleadings and evidence. The Learned Magistrate did not err in determining that the amount owing by the Appellant was US$16,984.19 as claimed by the Respondent (Plaintiff). The judgment of the Learned Magistrate is upheld.
The appeal is dismissed with costs.

JUDGMENT

DODIN J.

The Appellant appealed the judgment of the Learned Magistrate awarding the Respondent the sum of US$ 16984.19 as outstanding debt owed to the Respondent by the Appellant. The Learned Magistrate also determined that the debt became due from the last payment made by the debtor which was from 5th December 2013 and hence the claim is not prescribed as the Plaint was filed on the 20th July 2017, less than the prescribed period of 5 years.
The Appellant raised two grounds of appeal:

The Learned Magistrate erred in her findings at paragraph 8 of the judgment that prescription runs from the last payment in satisfaction of the debt rather than from the last date of the last consignment of the good supplied; and
The learned Magistrate erred manifestly in her assessment of the evidence which led her awarding the Plaintiff the full sum of US$ 16,984.10 as claimed.

Learned counsel for the Appellant submitted on ground 1 of the appeal that the pleadings of the Plaintiff (Respondent) stated that he received payments between 13th May 2012 and 5th December 2013. However the evidence adduced through a bank statement produced by the Respondent (Plaintiff) as exhibit P2 showed that the last payment was made on 13th March 2012. Hence the cut-off date from when prescription started to run was 13th March 2012 which established that the claim was prescribed in excess of 4 months by the time it was filed on the 20th July 2017.
On the second ground of appeal learned counsel submitted that the Learned Magistrate erred manifestly in assessing the evidence of Povannan Ponslevan, defence witness number 2 who testified that his brother made cash payments into the account of the Respondent. Learned counsel further submitted that the Respondent admitted that the son of the Appellant paid money into his bank account but gave lame excuses that he was working for him and buying goods for him.
Learned counsel moved the Court to allow the appeal on ground 1 or to allow the appeal on ground 2 and find that the Appellant is only indebted to the Respondent in the sum of US$ 6,984.19.
Learned counsel for the Respondent submitted on ground 1 that in this case the parties had a running account where goods are supplied at various times and partial payments are made towards partial satisfaction of the debt. Each time payment is made the debtor acknowledges the debt, therefore prescription starts to run from the last date of payment. Hence from exhibit P1, prescription only started to run from 1st February 2016. Learned counsel referred the Court to articles 2272, (2271) 2248 and 2274 of the Civil Code of Seychelles in support of his submission as well as to extract of Dalloz on the Civil Code 102 edition and also to the cases of General Insurance Company of Seychelles Limited v Daniel Bonte No:6 of 1994 and Hughes and Polkinghorne v North Island Company Ltd SLR [1984] 154.
On the 2nd ground of appeal learned counsel submitted that the assessment of whether the learned Magistrate erred could only be considered on the evidence before the Court which came down to two issues: 1st whether or not the matter was prescribed and 2nd whether or not monies were owed to the respondent (Plaintiff) and if so what was the amount owed. The first part would be decided on the issue of prescription whilst the second part would be decided on the basis of the credits supplied by the Respondent to the Appellant which amounted to the sum of US$69,834.67. The Respondent contends that there is an outstanding balance of US$16,984.19 whilst the Appellant contends that the remaining balance is US$6,368/- (or US$6,984.19) based on their respective conversion rate.
Learned counsel submitted that the Learned Magistrate did not err in awarding the sum of US$16,984.19 as it was taken to be admitted that the Appellant owed the Respondent a balance outstanding. The balance is calculated base on the exchange rate which varied between the parties. Learned counsel submitted that the difference of US$10,616,19 which the Appellant claimed was not owed and had been paid was not substantiated by any evidence and nor was it pleaded in defence and therefore there was no error in the Learned Magistrate’s rejection of the contention.
Learned counsel submitted that the contention of the Appellant that a certain amount was paid by a third party in cash to Visaram Impex (Pty) Limited was not supported by evidence before the Court. Hence the Learned Magistrate was correct to conclude on the analysis of the evidence that the evidence was not plausible, not sufficient and not credible in the circumstances.
Learned counsel hence moved the Court to find that the decision of the Learned Magistrate was fair and just and to dismiss the appeal as having no merit.
The relevant articles of the Civil Code of Seychelles Act provide as follows:

Article 2224
A right of prescription may be pleaded at all stages of legal proceedings, even on appeal, unless the party who has not pleaded it can be presumed to have waived it.
Article 2248
The prescription shall also be interrupted by an acknowledgement by a debtor or a possessor of the right of the person against whom the prescription was running.
Article 2271
1. All rights of action shall be subject to prescription after a period of five years except as provided in articles 2262 and 2265 of this Code.
Article 2274
Prescription, as established by the provisions of this Title, shall run even if supplies, deliveries, services and works continue. It shall cease to run only when there is an account stated or a writ of execution or legal proceedings still pending.

Other relevant and unavoidable articles of the Civil Code are articles 2260 and 2261 which contain general provisions in respect of how the period of prescription has to be determined in its general provisions.

Article 2260
Prescription shall be calculated on the basis of days not hours.
Article 2261
Rights by prescription shall be acquired when the last day of the period has ended.

Learned counsel for the Appellant rightly points out that prescription can be pleaded at all stages including on appeal as per Article 2224 of the Civil Code. This provision contains two propositions. Firstly that prescription had not been pleaded at all until appeal in which case the appellate court must consider the issue as a new one; or like in this case, the issue has been raised in the lower court and that lower court has erred in its determination on that issue.
It is not in dispute that prescription in this case is a period of 5 years. The contention is the date prescription started to run. Learned counsel for the Appellant maintains that it started to run at the latest on the 13th March 2012 which is supported by exhibit P2 as the last date money was paid into the Respondent’s account as direct transfer from Seychelles. However this argument defeats the Appellant’s contention that more money was paid in cash by a representative of the Appellant. Furthermore, that contention is not supported by any evidence of the Appellant (Defendant) as to whether the money was paid before or after the 13th March 2012. On the other hand, the evidence of the Respondent (Plaintiff), in exhibit P1, although it seems self-serving but uncontroverted by the Appellant, it appears that two payments were made on the 3rd February 2013 and the 5th December 2013 respectively by the Appellant. It must be noted that exhibit D1 produced by the Appellant (Defendant) can only be given the same weight as exhibit P1. Hence the Learned Magistrate was correct to rely on the credibility of the witnesses.
I have carefully considered the judgment of the Learned Magistrate and the records of proceedings particularly concerning the testimonies of the witnesses in respect of how and when payments were made. I am satisfied that not only there was an outstanding balance owed by the Appellant to the Respondent but that the Learned Magistrate did not err to believe the Respondent’s version and evidence as more plausible on the balance of probabilities than the Appellant’s. I also find that this finding extends to the date of the last payment received, which incidentally, the Appellant’s own evidence supports the contention that some payments were not made by bank transfers but by direct cash payments. The Appellant cannot now rely on the bank transfers as the only evidence of payments.
Although I reject the Respondent’s contention that the prescription period started to run on the 1st February 2016 when the statement of account was drawn up by the Respondent, I find the Learned Magistrate’s conclusion that the last payment was made on the 5th December 2013 which in fact reduced the Appellant’s debt to be reasonable and well grounded.
Having perused the records of proceedings and the exhibits adduced by both the Appellant and the Respondent, I am inclined to believe the Respondent (Plaintiff) for reasons to be included in my determination of the 2nd ground of appeal. The 1st ground of appeal is therefore not sustainable and is dismissed accordingly.
The 2nd ground of appeal concerns facts which have been partly dealt with when considering the 1st ground of appeal. It is obvious that whether it was the Appellant and his witness or the Respondent who were more credible can only be determined by the Learned Magistrate who was tasked with making relevant assessment of the facts before her derived from the testimonies of the witnesses and documents tendered as well as the demeanour of the witnesses. As stated by this very Court in the case of Ronny Georges Fred v Sound and Vision CA 25/2016 (delivered on 22 November 2017) ;

“the Appellate Court although it can review the facts, unless it is satisfied that the conclusion of the Tribunal (in this case the Magistrate’s Court) from the facts is perverse and patently unreasonable, should not substitute its own opinion on the facts only because the Appellate Court could have come to a different conclusion”.
See also the case of McGraddie v McGraddie [2013] UKSC 58; [2013] 1 WLR 2477 in which the appellate court stated;
“It was a long settled principle, stated and restated in domestic and wider common law jurisprudence, that an appellate court should not interfere with the trial judge’s conclusions on primary facts unless satisfied that he was plainly wrong.”

The contention of the Appellant however does not end here. The Appellant urges this Court to find that even if the Respondent is within the prescribed period, the sum owed to the Respondent is not US$16,984.19 but somewhere around US$6,000, (US$6,368/- or US$6,984.19 depending on the exchange rate used). The Appellant’s defence however only consists of the following assertion:

“Save that it is admitted that the defendant made various payments to the plaintiff each and every averment contained in paragraph 3 is denied. By way of further answer the defendant avers that the plaintiff had caused the defendant to pay the balance of the money to another Visaram Impex (Pty) Limited which entity is owned by and was under the direct control of the plaintiff.”
Article 75 of the Seychelles Code of Civil Procedure has the following provision:
“The statement of defence must contain a clear and distinct statement of the material facts on which the defendant relies to meet the claim. A mere general denial of the plaintiff's claim is not sufficient. Material facts alleged in the plaint must be distinctly denied or they will be taken to be admitted”.
Further article 79 in respect to set-off provides that;
“If the defendant relies upon a set off (compensation), his statement of defence must contain particulars of such set off and a statement of the material facts necessary to sustain the same. If the set off depends upon a document, he must annex a copy of such document to his statement of defence”.

It is obvious that the Appellant (Defendant) was seriously lacking in its defence pleadings and hence rendered the defendant much less credible in evidence than the Plaintiff (Respondent) and rightly so. I cannot therefore conclude that the Learned Magistrate was patently or plainly wrong in her assessment of the facts vis-a-vis the defence pleadings or that the Learned Magistrate erred in determining that the amount owing by the Appellant was US$16,984.19 as claimed by the Respondent (Plaintiff). I therefore find no reason to interfere with the assessment of the facts as undertaken by the learned Magistrate.
I therefore find that the second ground of appeal lacks merit and cannot be sustained. I dismiss the second ground of appeal also accordingly.
In final conclusion therefore, this appeal is dismissed in its entirety.
I award costs to the Respondent.

Signed, dated and delivered at Ile du Port on 24th June 2021.

____________
Dodin J

IN THE SUPREME COURT OIF SEYCHELLES

Delivered: 24th June 2021

JUDGMENT

DODIN J.

Article 2260
Prescription shall be calculated on the basis of days not hours.
Article 2261
Rights by prescription shall be acquired when the last day of the period has ended.

Signed, dated and delivered at Ile du Port on 24th June 2021.

____________
Dodin J

Government of Seychelles v Mathiot (MC 66 of 2020) [2021] SCSC 357 (28 June 2021);

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Government of Seychelles v Mathiot (MC 66 of 2020) [2021] SCSC 357 (28 June 2021);

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Morel v Essack (MA 305 of 2019, MA 35 of 2020) [2021] SCSC 358 (28 June 2021);

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Morel v Essack (MA 305 of 2019, MA 35 of 2020) [2021] SCSC 358 (28 June 2021);

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Nicette v Payet (CS 19 of 2014) [2021] SCSC 368 (28 June 2021);

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Nicette v Payet (CS 19 of 2014) [2021] SCSC 368 (28 June 2021);

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                                            SUPREME COURT OF SEYCHELLES
_____________________________________________________________________________

                                                                                             Reportable
[2021] SCSC 368
C/S019/14

In the matter between:

Joan Nicette                                                                         Plaintiff
of Mont Buxton, Mahe
(rep by Mr Chetty)
Vs
Cyril Payet                                                                          Defendant
of Mont Buxton, Mahe
(rep by Ms Domingue)

Neutral Citation: Joan Nicette vs Cyril Payet (SC 19/14) [2020] SCSC 368 (28 June 2021).
Before:                   Govinden CJ
Summary:             Construction partly built on adjoining property; encroachment; application of Article 545 of the Civil Code;
Heard:                   25th October 2020

Delivered: 28th June 2021

JUDGMENT

GOVINDEN CJ
INTRODUCTION

The Plaintiff has filed this suit against the Defendant alleging that he has illegally constructed on two parcels belonging to her and has asked the court to declare the constructions as illegal and to compel him to demolish them. The Plaintiff avers that she is the Fiduciary and part owner of parcels V1184 and v2297 upon which is found a house and that the Defendant is the owner of an adjoining parcel bearing title V1215. She avers further that the latter has illegally and without her consent built or caused to be built part of his dwelling house; a septic tank and a retaining wall on her parcels of land. It is further averred that the Defendant acknowledged the rights of the Plaintiff on and to the encroached parcels in a letter written to him by the Defendant’s Attorney.
The Defendant on the other hand denies the claim and raised a Counterclaim. His defence consist of two preliminary objections, which are that the Plaint is time barred and that the Defendant has acquired part of parcels V1184 and V2297 by way of acquisitive prescription. On the merits, the Defendant does not dispute the Plaintiff’s title to those plots. As to his title, he avers that in 1984 he purchased V1215 from his mother and siblings upon which was found the family home built by his father before 1974. He avers that in 1993 he demolished part of a house found on his land and rebuilt the existing house in the same location and added a wall. He denies building illegally on the Plaintiff’s property and avers that as the original house and septic tank (as he only re-built part of the house and the wall in 1993) were built over twenty years ago, the Plaintiff’s action is time barred and that at any rate he has been in continuous, uninterrupted, peaceful, public and unequivocal occupation of part of parcel V1184 and parcel V2297 for more than twenty years. The Defendant admitted that he did not seek the consent to build the wall however he avers that this was as a result of a genuine mistake on his part. He further accepted to have acknowledged that part of his structures were built unto the Plaintiff’s property, however he avers that that was not an acceptance of liability but was made in the process of an amicable settlement.
In the Counterclaim, the Defendant again raised the Defence of acquisitive prescription of part of parcel V1184 and parcel V2297.
Accordingly, the Defendant request that the court declares him owner based on his plea and to dismiss the Plaint as being time barred.
On her part the Plaintiff denies the Counterclaim and reiterates that the Defendant had acknowledged the rights of the Plaintiff as owner of parcel V1184 and part of the encroached V2297 by way of a letter. At any rate, the Plaintiff avers finally that the acknowledgment on the part of the Defendant has interrupted the flow of prescription.

The evidence

According to the Plaintiff she is part owner and the Fiduciary of parcels V1184 and V2297 of which her neighbour, the Defendant, Cyril Payet has partly built upon. She produced the Official Search Certificates for the two parcels which shows that the said parcels are co-owned by her and her four children, she owns half and the other half are jointly owned between her and her four children upon the passing of her late husband. She testified that the Defendant has encroached on parcel V1184 with his house; a wall and a septic tank. According to her when the Defendant was doing these works her father had spoken to him and informed him of the encroachment and the former had informed him go to sleep and stop worrying as he (the father) was about to die. In 2011 she commissioned a Land Surveyor, Mr Michel Leong, to do a survey of which the Survey Plan, Exh P4, was produced in evidence and the plan shows an encroachment of about one hundred metre squares. She produced a letter that was written by the lawyer of the Defendant in which the latter admitted the Defendant’s encroachment. She wants the Defendant to remove his wall; septic tank and give her back her land. She admitted that there was a house on the exact foundation of the existing house of Mr Payet, however she says that his current house that was built in 1993 is much bigger than the corrugated iron house which caused the encroachment and that at any rate the septic tank and the wall was not there before. The wall was built by the Defendant around 15 years ago. She went away and lived at her in- laws and came back to the family home when her father passed away. The Defendant would then throw dirt over unto her place and trespassed in order to mend his flowers from the encroached area. The Plaintiff denies that her father intentionally refrained to institute a case for the encroachment based on his good relationship with the Defendant and claimed that the Defendant attempted to offer them another plot of land in exchange when the Surveyor spotted the encroachment. Having found out about the true state of affairs, the Defendant in October 2011 wrote to the Plaintiff and her brother a letter and tried to settle the matter. She accepted that she filed the suit in February 2014 and says that this could not have been 20 years out of time. She denies any animosity between her and the Defendant, though they are not on speaking terms.
The 2nd witness called by the Plaintiff was Mr. Michel Leong. He drew a survey plan for verification of boundary beacons between the boundary of parcel V1184 and V 2297 belonging to the Plaintiff and V 1215. Having done so, he found that there was an encroachment on both parcels. He found them to be encroached by part of a dwelling house; a partition wall and a septic tank. The encroached area which is shaded on his plan is 100msq. The witness testified that a site plan submitted by the Defendant to the Planning Authority produced as D2, does not reflect the true locations of structures given the very small scale used. He cannot give the age of the encroachment. He is of the view that the positions of the beacons are correct. Exh P4 shows the Defendant’s boundary wall and septic tank to have been constructed entirely on V1184 and his house to have been partially constructed on the said parcel. A retaining wall which abuts the public road is also built on parcel V229.
The court visited the Locus in quo in the presence of all parties, examined the alleged encroachment and drew up a Report of the Locus in quo.
The Defendant gave evidence. According to him, he has been living at Mont Buxton on parcel V1215 since he was born and he is the neighbour of the Plaintiff who is suing him for allegedly encroaching on parcels V1184 and V 2297. His property formerly belonged to his father, then his mother and siblings before being transferred to him in 1989. The property had an old house on it until he demolished it and built a new one after being granted planning permission. He also built a wall subject to planning permission. Before building the wall on an old foundation of steps that he took to go to the secondary road, he asked for permission from the parents of the Plaintiff who were the owners of the properties. He denies the fact that the Plaintiff’s father had objected to the building of the wall. He also built a Septic Tank, which is now in disuse, close to a previous one according to planning permission. He produced the Planning Permission and it was exhibited as Exh D6, which gave him permission to renovate house and build a security wall. Following the construction of the house; the wall and the septic tank the owner of the adjoining parcels did not complaint of encroachment. He became aware of the encroachment more than 20 years later in 2011 when a survey was effected by the husband of the Plaintiff. After he discovered this, he expressed his apology to the Plaintiff’s husband and he attempted to settle the case outside court but this was in vain. This was followed by the Plaintiff and her family harassing him on a regular basis. He refuted any allegations of illegal encroachment and testified that he had the necessary permission and that at any rate he had been in peaceful occupation of all the areas for more than 20 years. In cross examination Mr Payet accepted that if the court was to find that he had not been in peaceful occupation for 20 years he would prefer that he be made to pay compensation rather than he be ordered to demolish the structures as he would be heavily prejudiced.
Therese Zita Payet, the mother of the Defendant, testified in favour of the latter. Her evidence is similar to that of her son when it comes to the historical ownership of parcel V1215. She is of the view that her son had rebuilt his new house in the exact location as the previous one. The only new structures built by the Defendant were the septic tank and the wall. The witness disputes the location of the common boundary on the Survey Report. She had no boundary disputes with the previous owner of the parcel belonging to the Plaintiff.

The law

The Plaintiff’s case is based on illegal encroachment under the provisions of Article 545 of the Civil Code of Seychelles which is as follows;

Article 545
No one may be forced to part with his property except for a public purpose and in return for fair compensation. The purposes of acquisition and the manner of compensation shall be determined by such laws as may from time to time be enacted.

The application and scope of the application of this Article is now well settled in this jurisdiction, in the case of Mancienne v Ah-Time (2013) the Seychelles Court of Appeal reiterated the principles established in the case of Nanon v Thyroomooldy SCA 41/2009, in which it held:

“We reproduce the position of our law post-Nanon on encroachments, more particularly boundary encroachments as between neighbours:
1)   If one builds on someone else’s property a structure which entirely stands within the boundaries of that property, it will be art 555 of the Civil Code of Seychelles under which the fate of the structure and the indemnity, if any, to be paid will depend.
2)   However if one builds partly on one’s property and the structure goes over the neighbour’s boundary encroaching on his land, art 555 finds no application.
3)   In such a case, the neighbour can insist on demolition of that part of the construction which goes over the boundary and the Court must accede to such request and cannot force the neighbour to accept damages or compensation for the encroachment.
4)   The fact that the encroachment was done in good faith or brought about by mistake as to the correctness of the boundary would have no effect on the Court’s duty to order demolition: see Cour de Cassation, D1970.426 (Civ 3º, 21 no. 1969); “Grands Arrêts de la Jurisprudence Civile” by Henri Capitant for French law; Tulsidas & Cie v Cheekhooree 1976 MR 121; Boodhna v Mrs R R Ramdewar2001 MR 116; Lowtun v Lowtun 2001 Int Court 1; Thumiah Naraindass v Thumiah Avinash Chandra2009 Int Court 82, for Mauritian law; article 992 of the Civil Code of Quebec and Micheline Pinsonnault v Maurice Labrechque [1999] R.D.1 113 (C.S.) cited in Boodhna v Mrs R R Ramdewar[supra] for the law of Quebec.
5)   But where grave injustice may result in certain exceptional cases: for instance, for a small area of land encroached upon, part of a huge building would have to be demolished causing damage out of proportion to the value of the land encroached upon, the justice of the demolition will have to be tempered with mercy.
6)   In such a case, the encroacher would need to show additionally that he acted in good faith, within the rules of construction, did not otherwise break any law and the demolition would cause great hardship.
7)   In such a case, the Court would not order demolition and would allow damages and compensation commensurate with the extent of the encroachment.
8)   Where the owner of the land insists on a demolition order in such a case of grave injustice, the encroacher may plead abus de droit as against the owner and insist on compensating him in compensatory damages for the encroachment.

The Seychelles Court of Appeal went on to rule on what would be the exception to a demolition order upon a finding of a breach of Article 545 in the following manner;

“Post-Nanon, the exception to the rule that demolition should be ordered in all neighbour boundary encroachments may be stated to be as follows:
where the facts reveal that a demolition order would be oppressive in the sense that a grave injustice would occur if the order was made, account taken of the negligible extent of the encroachment compared to the gravity of the hardship to the encroacher, the Court should, as an exception mitigate the consequences by an award of damages instead of a demolition. Nothing short of that would suffice. For the encroacher to escape the guillotine of article 545, he should show that, in refusing a compensation for the negligible encroachment and insisting on a demolition order in all the circumstances of the case, the owner is making an abus de droit.”

On the other hand, the Defendant sets up the defence of acquisitive prescription both in his defence to the Plaint and its counterclaim. The principles relating to acquisitive prescription is also firmly established in our law. The law relating to acquisitive prescription is founded on Article 2262 of the Civil Code of Seychelles and it is stated in the following terms;

Article 2262
All real actions in respect of rights of ownership of land or other interests therein shall be barred by prescription after twenty years whether the party claiming the benefit of such prescription can produce a title or not and whether such party is in good faith or not.

The Civil Code provides in Article 712 that ownership may be acquired by prescription or by accession or incorporation.
Acquisitive prescription is the acquisition of a property right through the effects of possession over time as outlined by Article 2229 which provides that to acquire by prescription, possession must be continuous and uninterrupted, peaceful, public, unequivocal and by a person acting in the capacity of an owner.
Acquisitive possession of land without title, is possible after twenty years, by virtue of Article 2262 of the Civil Code.
In the case of Mancienne, the Seychelles Court of Appeal alluded to the fact that such a defence might be available to a claim of illegal owner against an adjoining owner. Dhoma J in obiter held, “As Hodoul JA, stated in Nanon v Thyroomooldy many land surveys are carried out without reference to established base lines. He repeated the example given by ex-Judge Sauzier: namely, if art 545 were applied in all its rigour, it is not inconceivable that one side of Victoria House may have to be pulled down on account of a few inches of encroachment on the boundary of Temooljee’s complex. The only consolation we may have in this matter is that, after 20 years, any action will be time-barred by acquisitive prescription”. (emphasis is mine).
It is to be noted that prescriptive acquisition may be interrupted. Article 2242 of the Civil Code prescribed that:

Prescription may be interrupted either naturally or by a legal act.

In Review Commissioner v Yangtze Construction Co Pty Ltd [2018] SCSC 545, the Supreme Court addressed the issue of prescription and what constitutes an interruption under the Civil Code. The Court noted:

It is the view of this Court that the defendant agreeing to pay the debt by monthly installments of SR 500,000.00 is an acknowledgment of the debt which occurred in October 2011. This is supported not only by the oral evidence of the prosecution witness Rovette Moustache but also by document, exhibit P2. The defendant had further written seeking a grace period of 6 months and that a waiver of the surcharge is granted as per letter P12 dated 27 May 2012, a letter admitted by the defendant. This is a further indication in writing by the defendant not only acknowledging the debt but seeking further relief by seeking time to settle it. Therefore this court is satisfied that the prescription claimed by the defendant has been interrupted by the acknowledgment of the debt by the defendant. (emphasis mine)
[14] The case of Anglesey v Mussard & Anor (1938) SLR 31 is also relevant. The case concerned a claim for recognition of a water right acquired by prescription. Before bringing the claim, the plaintiff had sent the defendant a letter asking for leave to repair certain pipes and a claim of right. In the last sentence, the letter offered to pay for a ‘prise d’eau’. The issue was whether this constituted an ‘aveu extrajudiciaire’ on which the defendant could rely. In coming to its conclusion, the Court noted at p. 35 that:
The enjoyment must be uninterrupted, i.e. it must fulfill the essentials of acquisitive prescription. Possession must be continuous on the part of the proprietor of the dominant tenement, not interrupted by the proprietor of the servient tenement, peaceful, public and unequivocal, animo domini … There are two sorts of interruption: natural and civil. Natural interruption means deprivation for more than one year. This did not happen here. Civil interruption occurs in various ways, amongst others when the person who is prescribing expressly or tacitly admits the right of the proprietor.
Issues for determination

The only issue to be decided by the Court is whether the Defendant has acquired ownership of part of Parcel V1184 and V 2297 through acquisitive prescription, the encroachment not being denied by the Defendant. This in fact being the defence and plea in limine litis raised by the Defendant – that he had been in occupation of the land for more than 22 years.

Analysis and determination

The encroached area in this case consist of around 100sqm of land as revealed by Exh P4. The Defendant has admitted this encroachment in evidence. However, he claimed to have good title by virtue of prescription. In order to succeed in his claim the possession by the Defendant must be continuous and uninterrupted, peaceful, public, unequivocal and whilst he is acting in the capacity of an owner for 20 years. He built the house that had partly encroached on and lived in the house as owner. He built the wall over several months in the sight of the person having paper title[MK1] . He planted flowers on the encroached portion. He cut the grass that was growing in the encroachment and he would sometime jump over the wall to tender to his flowers and to trim the grass. He was acting at all material time acting as owner in the eyes of the public and the Plaintiff.
However, acting as owner is not sufficient for him to acquire the right by possession. He needed to have done that for a long time. In other words, he needs to prove physical possession for twenty years. In his own evidence, and this is uncontested by the Plaintiff, the Defendant acquired parcel v1215 in 1981. He needed to have had the ownership of this adjacent parcel for him to, in practice, have been able to act qua owner of the adjacent part of the parcels of the Plaintiff formerly the property belonging to his father. After his father died the successors including his mother and siblings transferred it to him. In order to prove the twenty years possession the Defendant adduced evidence of his purchased of the property, the planning permission he was granted in 1992 and the building of his house; the wall and the septic tank without contest by the Plaintiff and her father. According to him he realised his error only in 2013 when following a survey he found out the encroachment. That would put his continuous possession for twenty years. To the extent that nothing had legally stopped or interrupted the flow of the prescription and to the extent that his evidence is true.
The Plaintiff counters this state of fact and argued that the flow of the prescription was never continuous as it had been interrupted by an act of the Defendant. According to her in October 2011, the Defendant wrote to her and her brother a letter and tried to settle the matter after she discovered that her land had been encroached. In fact evidence led shows that two letters were in fact written to the Plaintiff regarding this case. They were produced and exhibited as Exh P3 and Exh P4. I refer to the content of these letters, which were not objected to by the Defendant given its importance to this case.

            Exh P3 is to the following effect:
“Dear Sir,
I act for Mr. Cyril Payette.
My client is the owner of parcel V215 which is adjacent to parcels V1184 and V2297 which belongs to your sister Mrs Joan Nicette and her late husband Mr. Brian Nicette. Following a search done on these 2 parcels of land it appears that you are still the fiduciary for these 2 parcels of land and it is in this capacity that I am instructed to send you this letter.
I am instructed that after the death of your parents, Mrs Joan Nicette and her late husband bought all the shares which belonged to the heirs and they became the sole owners of parcels V1184 and 2297 in May 2011. After the purchase of the properties I am instructed that a survey of the properties was commissioner by Mr. and Mrs Nicette. This survey was conducted in the presence of my client. The conclusion of the survey was that my client had encroached by building a retaining wall, part of his house, septic tank and water tank on Mr and Mrs Nicette’s property.
My client instructs me it was only on the day of the survey that he knew for the first time that he had encroached on Mr and Mrs Nicette’s property. I am instructed that my client made a genuine and bona fide mistake as had he known he would never have taken the risk of building on someone else’s property. In fact my client has obtained planning permission and he has built his house since 1992. My client has never been approached and told that he had encroached on parcels V1184 and V2297.
My clients instructs me that he wishes to find an amicable solution to this matter. Consequently, my client would wish to have a meeting with the owner of the property and yourself, as fiduciary, in order to try to resolve this matter. My client understands fully that there will be a need for compensation and he is ready and willing to discuss this and any other relevant issues.
In the spirit of good neighbourliness I am instructed to request that you and/or Mrs Nicette contact me within fourteen (14) days of the date hereof.
In the event that I do not hear from either of you within this time period I will have no option but to advise my client that you do not wish to settle this matter amicably and I shall advise my client on his other legal remedies.
I trust it will not come to that and I look forward to us being able to settle this matter in an amicable and speedy manner.
Yours faithfully,
Karen Domingue”

             This letter was followed by Exh P4, which is as follow;
            “Dear Sir and Madam,
            I act for Mr. Cyril Payette and I refer to my letter of 4th October 2011, addressed to both of you. For ease of reference I am again attaching herewith the letter referred to.
            As per that letter my client had requested a meeting with both of you with regards to the encroachment issue addressed in my letter of 4th October 2011. I have received no response from either of you and in fact Mr Hoareau has neglected to collect his letter from the post office.
I am again attempting to request a meeting with both of you in an attempt to resolve this issue in an amicable manner. Please contact me within fourteen (14) days of the date of this letter so that we may meet and hopefully settle this matter.
Yours faithfully,
Karen Domingue”

In those letters, the Defendant unequivocally admitted the rights of the Plaintiff to her lands. I find therefore that the possession was interrupted and not continuous. A Civil to legal interruption occurred in this case as the Defendant being the person who is prescribing expressly admitted the right of the proprietor. The two letters of the Defendant’s counsel does precisely this. They admitted the rights of the Plaintiff as the lawful owner to the two encroached portion of land and offer to settle the issue of ownership, if need be by way of compensation. It amounts to an ‘aveu extrajudiciaire’ .The effect of this admission stopped the time running against the Plaintiff as of the 4th of October 2011, leaving him short of the 20 years occupation.
At any rate I find that even if there was no break by interruption from 1993 to 2011 is only 18 years and not twenty years as alleged by the Defendant in his defence and that would not avail to him the defence that he is pressing for.
Further, the Defendant needed to prove the peacefulness of his possession and testified by saying that the former owner of the parcels never contested his occupation. However this is denied by the Plaintiff who stated that earlier on as soon as he started to build the structures, the father of the Plaintiff contested the erections of the structures. In this regard I choose to believe the Plaintiff, I find that her father did relentlessly contest the Defendant’s unlawful constructions on his properties but was rebuked by the latter. This took place shortly following the commencement of his project. The fact that the father was of old age was a state of fact that played in favour of the Defendant as it appeared to have lessen the resistance.
Moreover, the writing of the above letters to the Plaintiff clearly reveals that the peaceful tenure of the properties by the Defendant were disturbed at least by October 2011 when he had to take the extraordinary step of instructing his counsel to protect his occupation and possession of the encroached areas from the Plaintiff’s assertion of her titles and rights as the registered proprietor.
I find that that possession was therefore not peaceful.
The amount of land occupied by the Defendant should have led him to be aware that he was constructing on the neighbouring property. According to him his mistake was that he took Beacon B1 instead of beacon D1 as one of the boundary beacons between the adjoin properties. This is something which is supported by his mother. In order to buttress his evidence in that regards he has produced a Town and Planning Authority Substitute Plan which seems to show D1as the beacon. The expert witness Mr Leong contested the veracity of this plan. He was of the view that it was made in error. I believe the evidence of the Surveyor to disregard this plan as it is erroneous. The true beacon position is reflected by Exh p4. I have carefully examined the evidence of the Defendant in the light of the other evidence on record and I am of the view that he knew that he intentionally constructed the boundary wall; the septic tank and part of his house on V 1184 and the retaining wall on V2297.
The Planning Permission granted to the Defendant in 1992 could not have given him a valid permission to occupy the adjoining parcel belonging to the Plaintiff. The Planning Authority,moreover, appears to have itself been either misled into acting or acted erroneously on the already erroneous substituted plan attached to the permission. In law, the Defendant is not entitled to benefit from an acquisitive prescription based on a third party error.
The next question that I now have to deal with is what would be the just remedy. The Plaintiff prays for the demolition of all illegal structures built by the Defendant. The Defendant on the other hand says that this will cause severe prejudice to him. In coming to my determination I bear in mind the principles established in the case of Nanon to the effect that once encroachment of such a nature as in this case has been proved, the neighbour can insist on demolition of that part of the construction which goes over the boundary and the Court must accede to such request and cannot force the neighbour to accept damages or compensation for the encroachment. I also addressed my mind as to whether the encroachment was done in good faith or brought about by mistake as to the correctness of the boundary would have no effect on the Court’s duty to order demolition. I am also cautious of the fact of where grave injustice may result in certain exceptional cases: for instance, for a small area of land encroached upon, part of a huge building would have to be demolished causing damage out of proportion to the value of the land encroached upon, the justice of the demolition will have to be tempered with mercy. And that in such a case, the encroacher would need to show additionally that he acted in good faith, within the rules of construction, did not otherwise break any law and the demolition would cause great hardship.
The court has gone in locus which has given it an accurate view of the extent of the encroachment. Exh D 8 (C) shows this relevant area when it comes to the wall and part of the boundary wall. The part of the house which is buttressed by the boundary wall consist of a covered patio, the house can exist structurally without this extension. Moreover the septic tank is now in disuse. As to the retaining wall on parcel V2297, it is clearly retaining parcel V1184 rather than parcel V1215, though it is built by the Defendant.
Accordingly, I find that no great injustice would be caused to the Defendant to order him to demolish the boundary wall and part of his house consisting of the patio which encroaches on parcel V1184 which I find were built in bad faith. The de minimis rule will not apply here as the use of his house by the Defendant as a dwelling house will not be affected by this order. As to the retaining wall on parcel V2297, as it is beneficial to V1184, there would be no need to order its removal subject to the Defendant ending his unlawful occupation.
I therefore order mandatory injunction compelling the Defendant to within six months herewith demolish any the boundary wall; the septic tank and part of his house described in this judgment and highlighted on Exh P4, failing which the Plaintiff can have them removed at the Defendant’s cost.
I issue a Prohibitory Injunction against the Defendant, personally and against his agents or any person authorised by him whomsoever from trespassing or encroaching on Parcel V1184 and V2297.

Signed, dated and delivered at Ile du Port on the ……… day of June 2021

____________
Govinden CJ

Delivered: 28th June 2021

JUDGMENT

GOVINDEN CJ
INTRODUCTION

The evidence

The law

The Plaintiff’s case is based on illegal encroachment under the provisions of Article 545 of the Civil Code of Seychelles which is as follows;

The Seychelles Court of Appeal went on to rule on what would be the exception to a demolition order upon a finding of a breach of Article 545 in the following manner;

Prescription may be interrupted either naturally or by a legal act.

Analysis and determination

Signed, dated and delivered at Ile du Port on the ……… day of June 2021

____________
Govinden CJ

Brutus and Ors v Brutus (CS 96 of 2017) [2021] SCSC 388 (30 June 2021);

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Brutus and Ors v Brutus (CS 96 of 2017) [2021] SCSC 388 (30 June 2021);

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Savy v Nourrice and Anor (CS 59 of 2017) [2021] SCSC 389 (30 June 2021);

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Savy v Nourrice and Anor (CS 59 of 2017) [2021] SCSC 389 (30 June 2021);

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Abramova and Ors v ACT Offshore Ltd (MC 91 of 2020) [2021] SCSC 395 (05 July 2021);

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Abramova and Ors v ACT Offshore Ltd (MC 91 of 2020) [2021] SCSC 395 (05 July 2021);

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SUPREME COURT OF SEYCHELLES

Reportable
[2021] SCSC 395
MC91/2020
In the Ex Parte matter:

GALINA ABRAMOVA                                                                   1st Petitioner

SVETLANA ABRAMOVA
(on her own behalf and as legal representative
of Maria Abramova)                                                                           2nd Petitioner

VOLKOVA NATALIA
(as legal representative of Volkova Michel
and Volkov Alexander)                                                                      3rd Petitioner
(Represented by Frank Elizabeth)

VS

ACT OFFSHORE LIMITED                                                          Respondent
(Represented by Mr. Georges)

Neutral Citation: Abramova & Ors vs ACT Offshore Ltd (MC91/2020) [2021] SCSC 395 (5 July 2021)
Before: E. Carolus, Judge
Summary: Conflict of laws - Applicable law for determination of validity of foreign Will and dispositions made thereunder - Law applicable to transfer of shares in IBC incorporated in Seychelles under IBC Act.

Delivered: 5 July 2021

ORDER
The Petition is Dismissed.

ORDER

_____________________________________________________________________________E. Carolus, Judge
Background

This petition concerns the inheritance of shares in two International Business Companies namely Omni Commerce Ltd and Intelligence Development Ltd (“the IBCs”) which are averred to be owned by the late Mr. Mikhail Yuriyevich Abramov (the “deceased”). The petitioners seek the transfer of the shares to the legal heirs of the deceased (his minor children and surviving spouse) and his mother who is allegedly a legatee under his Will. It is not clear whether the children are also legatees under the will.
The petition is brought by Galina Abramova (1st petitioner) who is averred to be the mother of the deceased; Svetlana Abramova (2nd petitioner) in her own capacity as the surviving spouse of the deceased, and as mother and guardian of Maria Abramova the minor daughter of the deceased; and Natalia Volkova (3rd petitioner) in her capacity as mother and guardian of Michel Volkova and Alexander Volkov the minor children of the deceased. The Respondent is ACT Offshore Limited, averred to be the registered agent of the two Companies.
The petition was filed on 29th October 2020. An affidavit in support thereof in the English language, dated 29th January 2021 and sworn by 3rd petitioner Natalia Volkova in Zurich (duly apostilled) was filed on 17th February 2021. A document was filed on 10th March 2021 in the Russian language, duly apostilled, to which was attached an affidavit in the English language stated therein to be made by 2nd petitioner Svetlana Abramova on 22nd January 2021, and which appears to be a translation of the aforementioned document and apostille in Russian, although there is nothing to confirm that this is the case. The translation appears to have been made in Russia from the statement in the Russian language at the end of the document and the stamp thereon, but is not apostilled. It is also not possible to ascertain whether the translation was made by a certified interpreter. Also filed on 10th March 2021 is a bundle of two documents, duly apostilled: the first is in the Russian language and the second is an affidavit in the English language which is stated therein to be made by a Russian lawyer Odyagaylo Vladimir Fedorovich on 23rd October 2020. Again the affidavit appears to be a translation of the first document although there is nothing to confirm the same and it is also not possible to know whether the translation was made by a certified interpreter. Yet another document in the Russian language was filed on 10th March 2021, again duly apostilled, and accompanied by an affidavit in the English language which is stated therein to be made by the 1st petitioner Galina Abramova on 21st January 2021. Again the affidavit appears to be a translation of the first document in Russian but it is not possible to ascertain whether the translation was made by a certified interpreter or not and it is not apostilled. With the exception of the affidavit of the 3rd petitioner, the aforementioned defects affect the admissibility of these documents and the extent to which they may be relied upon by the Court.
Also of note is that although the petition lists 12 documents which the petitioners rely on in support of the petition, only one of those namely “[t]he Affidavit of advocate of Moscow City Bar Odyagaylo Vladimir Fedorovich N.108 dated 27.08.2020” has been filed in these proceedings. As stated at paragraph [4] above the original affidavit in Russian is accompanied by what appears to be an English translation of it but which the court is unsure was made by a certified interpreter. At this stage I also find it appropriate to mention that it is trite that any document to be relied upon in an application/petition and to be used in conjunction with an affidavit in support of such application/petition must be exhibited to such affidavit. Vide Lablache de Charmoy v Lablache de Charmoy SCA MA08/2019 [17 September 2019]; Laurette & Ors v Savy & Ors SCA MA13/2019 [22 October 2019]; Trevor Zialor v R SCA MA16/2017 [17 October 2017]. As Robinson JA stated in Lablache de Charmoy v Lablache de Charmoy (supra) at paragraph 11 of her Order, “Counsel for the applicant should be mindful that the affidavit stands in lieu of the testimony of the applicant”. Just as a person giving oral testimony before a Court would tender documentary evidence as exhibit to the Court, so must these supporting documents which are documentary evidence be exhibited to the affidavit. At the very least these documents should have been attached to the petition.
The respondent having been served with the petition failed to put in an appearance whereupon the court ruled that the matter be decided ex-parte on written submissions of counsel for the applicants, which were duly filed. Ms Aliyah appearing on behalf of Mr. Georges later appeared in court on behalf of the respondent and stated that she was instructed that according to their records the two companies in question do not exist, that the respondent neither represents nor acts for these companies and that the respondent would abide to whatever decision the Court makes.

The Petition

It is averred in the petition that the late Mikhail Yuriyevich Abramov a Russian National who was ordinarily resident of Moscow passed away testate on the 20th August 2019 and that at the time of his death he was sole owner of two companies registered as International Business Companies in Seychelles under the International Business Companies Act 2016 as amended, namely Omni Commerce Ltd and Intelligence Development Ltd. Neither his Birth Certificate or his Death Certificate nor his Will has been exhibited. There are also no documents to show that he owned the two IBCs or even the existence of the IBCs.
It is averred that he left the following “four successors and one surviving spouse entitled to inherit from [his] estate as per his last Will and Testament in Law”, in the follow shares:

Mrs Galina Abramova (1st petitioner), the mother of the deceased – entitled to inherit 11/14 (eleven fourteenth) of 1/2 (one half) share of the deceased’s estate under his Will;
Svetlana Abramova (2nd petitioner) – entitled to 1/2 share of the deceased’s estate as the surviving spouse of the deceased;
Maria Abramova (represented by the 3rd petitioner her mother Svetlana Abramova), the minor daughter of the deceased – entitled to 1/14 share of the deceased’s estate as his successor under the law;
Alexander Volkov (represented by the 3rd petitioner his mother Natalia Volkova), the minor son of the deceased – entitled to 1/14 share of the deceased’s estate as his successor under the law; and
Michel Volkova (represented by the 3rd petitioner his mother Natalia Volkova), the minor daughter of the deceased – entitled to 1/14 share of the deceased’s estate as his successor under the law.

There is no documentary evidence establishing the relationship of the petitioners and their children to the deceased. Further, as stated above, no copy of the Will has been exhibited. This puts in question not only the status of the petitioners to make the present petition as heirs and/or legatees of the deceased, but also the entitlement of such heirs and/or legatees to the succession of the deceased.
It is averred that a Notarial Certificate from Russia has provided for the shares in the two Seychelles registered companies under Russian Law in the proportions mentioned above which certificate has been attached to the petition. No such certificate is attached to the petition. Mention is also made of a Certificate of Title, issued by Russian Federation Notary in the right of spouses to share in common joint property, but again this is not attached to the petition.
It is further averred that the petitioners have been legally advised that the testator’s other heir under the law, his father Mr. Abromov Yury Ivanovich is not entitled to inherit from the deceased’s estate in accordance with Article 1157 of the Russian Civil Code. According to the supporting affidavits this is because he has refused his inheritance. No document attesting to the same is attached. It is also averred that the petitioners have been legally advised that the testator’s son Georgiy Michailovich Abramov has attained the age of majority and in accordance with Article 1149 of the Russian Civil Code does not have the right to an obligatory share of the deceased’s succession because of the existence of the Will.
The petitioners aver that in light of the above, it is just and necessary for the Court to firstly interpret sections 6(3) and 115 of the IBC Act; secondly to pronounce itself on (1) the validity of the Will and (2) the applicable law that should govern the dispositions made under the Will (in regards to the shares in the IBCs) in Seychelles i.e. whether the applicable law is Seychellois or Russian law. If the Will is valid and can be recognised and executed under the laws of Seychelles, the Court should direct whether Russian law or the Laws of Seychelles are applicable, under which legal regime the property should be distributed, and how the shares in the two companies should be distributed among the heirs of the deceased.
In terms of the petition, the petitioners pray this court to:

Declare whether or not the Will authorised and executed by the Russian Notary in accordance with Russian Law can be recognized and executed in in the territory of Seychelles and/or is it possible to enforce it in Seychelles under Russian law or under Seychelles law;
Declare whether Seychelles or Russian law should be the applicable law to determine the validity of the Will and the dispositions made thereunder;
Declare the respective shares of the heirs and the surviving spouse in the two Seychelles registered companies;
Direct the Registered Agent of the two companies, namely ACT Offshore Limited to amend their register of shareholders and register the shares in the two companies in the names of the petitioners in accordance with their respective shares in accordance with the law.

Analysis

In its analysis, the Court will seek to determine the applicable law with regards to the validity of the will and the dispositions made thereunder, as well as address the law applicable to the transfer of shares in the two IBCs to the deceased’s heirs and the actual transfer of such shares to them. These issues will be discussed below in that order, in light of the submissions of counsel for the petitioner, relevant case law and the evidence before the Court.

Applicable law in regards to validity of the Will and the Dispositions made thereunder

It is to be noted that although counsel for the applicants submits at page 4 of his submissions that the applicable law is Russian law, it is not clear whether this is with respect to the validity of the will and the dispositions thereunder or the transfer of shares, or both. He submits that Russian law is the applicable law by reason of the deceased’s domicile, nationality and sufficiency of connection test. With regards to sufficiency of connection he cites several cases which however mostly relate to recognition of Receivership Orders and bear no relevance to inheritance issues in terms of private international law which arise in this case.
It was established in Rose v Mondon (1964) SLR 134 that the formal validity of a will is determined by the place of execution of the will; that the validity of a will as to movable property is determined by the testator's domicile and is to be tested against the requirements of the law of the testator’s domicile (obiter); and that validity of a will in respect of immovable property is determined by the law of the place where the property is situated.
With regards to applicable succession laws, Rose v Mondon (supra) applied the principle from Austin v Bailey (1962) M.R. 115 citing the following passage at page 117 of the report:

The validity of the will of the testatrix regarding the disposal of her estate is governed, in the case of the movable property as well as in the case of immovable property bequeathed by her, by the applicable successoral law. There is no specific text in the Civil Code which lays down what is the applicable law regarding movable property, but it is settled case law that the maxim ‘mobilia sequuntur personam’ applies and that the law applicable is the law of the “lieu d’ouverture” of the succession and consequently the law of the domicile of the testatrix (See Battifol, Traite Elementaire de Droit International Prive, 3rd edn,, para. 651; Niboyet Traite de Droit International Prive Francais 2e. Edn., vol. 4, pages 413, 764; Clunet, Journal du Droit International Prive, 1940-1945, pages 112, 805). The successoral law regarding immovable property is the law of the place where it is situated. This rule derives from the second paragraph of art. 3 of the Civil Code which provides that “les immeubles, meme ceux possedes par des etrangers, sont regis par la loi francaise” (see Battifol, op. cit., para. 652; Niboyet op. cit. pages 198, 758; Clunet, op. cit., 1955, p. 408)”
Emphasis added.

The general rule that testamentary succession of movables is governed by the law of domicile of the deceased at the time of his death is also established under UK and French law. The position in the UK is clearly set out set out at page 560 Cheshire, G. C. 1961, Private International Law, Sixth edn., Oxford University Press, as follows:

“(ii)Testamentary succession
The general rule established in this country and in the U.S.A. is that testamentary succession to movables is governed exclusively by the law of the domicil of the deceased as it existed at the time of his death. When a testator dies domiciled abroad leaving assets in England, it is true that probate must be taken out in England, and it is also true that the assets must be administered in this country according to English law, but nevertheless all questions concerning the beneficial succession must be decided in accordance with the law of the domicil. The duty of the executor is to ascertain who, by the law of the domicil, are entitled under the will, and that being ascertained to distribute the property accordingly”

Emphasis added

In France, it is stated at page 8, Guide de droit international privé des successions that -

“l’art. 3 du Code Napoléon; dans le droit français la succession mobilière est soumise à la loi du dernier domicile du défunt et la dévolution et la transmission de biens immobiles à la loi de chacun des États où ceux-ci se trouvent. Dans cette catégorie des systèmes scissionnistes s’intègrent aussi les pays qui appartiennent à la common law (lex domicilii pour la masse mobilière, lex rei sitae pour les immobiliers). L’art. 78 du Code belge de droit international privé, adopté par la Loi du 16 juillet 2004, prévoit: „§1er. La succession est régie par le droit de l'Etat sur le territoire duquel le défunt avait sa résidence habituelle au moment de son décès. § 2. La succession immobilière est régie par le droit de l'Etat sur le territoire duquel l'immeuble est situé. Toutefois, si le droit étranger conduit à l'application du droit de l'Etat sur le territoire duquel le défunt avait sa résidence habituelle au moment de son décès, le droit de cet Etat est applicable.”

Emphasis added

It is averred in the petition that the deceased was ordinarily resident in Russia and his Will was executed at his place of his residence. If the Will was executed in Russia as averred, in line with the principle established in Rose v Mondon (supra) it should be Russian law that determines the Will’s formal validity. However as previously pointed out, the Will of the deceased is neither attached to the petition nor exhibited in any of the affidavits in support thereof. Consequently this Court is unable to ascertain whether the Will was indeed executed in Russia and consequently to make any finding as to the same.
In regards to the validity of the Will as far as it concerns the shares in the two IBCs, according to the principle in Rose v Mondon (supra) the applicable law is determined by the testator's domicile, as shares are considered to be movable property. In that respect section 42 of the International Business Companies Act, 2016 (the “IBC Act”), provides that, “[a] share in a company is movable property”. It is clear therefore that to determine the applicable successoral law and the validity of the dispositions, both the deceased’s domicile and the ownership of the shares are material.
With regards to his domicile it is averred in the petition that the deceased was ordinarily resident in Russia and that he was a Russian national. If these averments are true and unless further issues arise in relation to his residence and citizenship (e.g. in the event that he is not actually resident in Russia or if there is a change of his domicile Vide Sullivan v Sullivan (1975) SLR 104 on domicile of choice versus domicile of origin; and Rose v Mondon (supra) where a Seychellois citizen who had passed away in Kenya was held not to lose his domicile of origin in Seychelles) his domicile can be considered to be Russia and the applicable law Russian law. However neither official documents in support of such averments nor the Birth and Death certificates of the deceased were attached to the petition. In the circumstances the Court cannot make a finding as to either the domicile of the deceased or consequently the applicable law.
As to ownership of the shares, it is further averred in the petition that at the time of his death the deceased was 100% owner of the two IBCs by the deceased. However no ownership documents (or other documents providing information regarding the shareholder(s) and/or unlimited beneficial owner of the company and the nature of their ownership (direct shareholder or beneficial owner through trust declaration or other instrument)) were attached to the petition or exhibited to any of the supporting affidavits.
The petitioners have also prayed this Court to declare whether or not the Will authorised and executed in accordance with the Russian law can be recognized and executed in in the territory of Seychelles. Their counsel has not expressly addressed this point in his submissions. According to Rose v Mondon (supra) and Article 999 of the Civil Code a foreign Will can be recognised in Seychelles. Article 999 provides that, “[a] person whose domicile is in Seychelles and who finds himself in a foreign country may make his will by a document under private signature as provided by article 970 of this Code, or in accordance with the law of that country”. However both Rose v Mondon (supra) and Article 999 concern a Will made by a person domiciled in Seychelles whereas in the present case, the testator is alleged to be domiciled in Russia. Furthermore as stated at paragraph 18 above, since the Will has not been produced before this Court it is not possible to ascertain whether it was indeed executed in Russia. Consequently this Court considers it futile to address the issue of whether a Will authorised and executed in accordance with foreign law can be recognized and executed in Seychelles.

Applicable law to Transfer of Shares and Direction to Registered Agent to transfer the shares

The Petitioners pray this Court to declare the respective shares of the heirs and the surviving spouse in the two IBCs and direct the registered agent to register the shares in their names. Neither these issues nor the legal provisions relating thereto were addressed in counsel’s written submissions.
The petitioners aver in paragraph 8 of the petition that “. . . it is just and necessary for the Court to interpret Section 6(3) and 115 of the IBC Act”. However there is no subsection (3) in section 6 of the IBC Act, 2016. Section 6 relates to ‘Companies which may be incorporated or continued’ and section 115 relates to ‘Notice of meetings of members’. These provisions clearly do not relate to transfer of shares of a deceased person to his heirs/ legatees.
With regards to the law of movables in private international law, Cheshire, G. C. 1961, Private International Law, Sixth edn., Oxford University Press points out that shares of stock of a company are connected to the place where the issuing company has its residence and states at page 508:

“The rule of private international law is that shares are deemed to be situated in the country where they can be effectively dealt with as between the shareholder and the company. In other words, shares which are transferable only by an entry in the register are deemed to be situated in the country where the register of branch registrar is kept.”

Section 104 of the IBC Act provides that an up-to-date register of members shall be kept at a company’s registered office unless the company is a listed company (section 106). It provides:

(1) Subject to section 106, every company shall keep at its registered office in Seychelles a register to be known as a register of members, and enter in it the following information as appropriate for the company –

the name and address of each person who holds any shares in the company;
the number of each class and series of shares held by each shareholder;
the name and address of each person who is a guarantee member of the company;
the date on which the name of each member was entered in the register of members; and
the date on which any person ceased to be a member.

Section 161 further provides that an IBC shall at all times have a registered office in Seychelles, which is the principal place of business of its registered agent. In view of these provisions, the shares of the two IBCs in question can therefore be deemed to be situated in Seychelles and consequently the transfer of such shares should be done in accordance with the IBC Act.
Transfer of a deceased member's shares are dealt with under section 60 of the IBC Act:

A transfer of the share of a deceased member of a company made by the deceased member’s personal representative, although the personal representative is not a member of the company, is as valid as if the personal representative had been a member at the time of the execution of the instrument of transfer.

Section 2 of the IBC Act defines “personal representative” as “the executor or administrator for the time being of a deceased”.
Under section 61 of the IBC Act shares can also be transferred by operation of law:

Shares in a company may pass by operation of law, notwithstanding anything to the contrary in the memorandum or articles of the company.

The register of members can also be rectified upon application to Court where information that is required to be entered in the register is omitted under section 108:

(1) If –

information that is required to be entered in the register of members under section 104 is omitted from the register or inaccurately entered in the register; or
there is unreasonable delay in entering the information in the register,

a member of the company, or any person who is aggrieved by the omission, inaccuracy or delay, may apply to the Court for an order that the register be rectified.
(2) On an application under subsection (1), the Court may –

either refuse the application, with or without costs to be paid by the applicant, or order the rectification of the register, and may direct the company to pay all costs of the application and any damages the applicant may have sustained;
determine any question relating to the right of a person who is a party to the proceedings to have his name entered in or omitted from the register of members, whether the question arises between –

two or more members or alleged members; or
between one or more members or alleged members and the company; and

otherwise determine any question that may be necessary or expedient to be determined for the rectification of the register of members.

However in the absence of any documentary evidence that the deceased was indeed the owner of shares in the two IBCs the Court cannot order the registered agent to transfer such shares.
Related to the issue of the transfer of the shares are the share of the deceased’s succession to which the heirs are entitled. Before concluding, I find it necessary to say a few words on the subject. It is established by Seychelles courts that foreign law must be pleaded and proved as fact and if that is not done, foreign law is presumed to be the same as Seychelles law. Vide (Dauban v de Failly (1943) SLR 93; Beitsma v Dingjan (No 1) (1974) SLR 292; Teemooljee v Pardiwalla (1975) SLR 39; Biancardi v Tabberer Travel (1975) SLR 91; Sounardin v D’Offay (1976) SLR 236; Privatbanken Aktieselskab v Bantele (1978) SLR 226; Intour v Emerald Cove (2000) SLR 21; La Serenissima v Boldrini (2000-2001) SCAR 225).
The Petitioner submits that Russian law should apply to the dispositions under the Will and the affidavit of Russian lawyer Odyagaylo Vladimir Fedorovich outlines the position of Russian succession laws relevant to the present case. As per the affidavit, under Russian law, the surviving spouse is entitled to 1/2 of the estate of the deceased, unless there is a marriage contract. However the reasons for the share attributed to the mother of the deceased (11/14 of the one half remaining estate) and the deceased’s minor children (1/14) is not entirely clear. Furthermore, the full value of the estate is unknown and the Court does not know the proportion of the deceased’s estate that the shares in the two IBCs make up: it is not known whether the shares in the two IBCs comprise the deceased’s entire estate or constitutes only a portion of it. This could have been clarified by the Certificates of Title listed as documents to be relied upon and the Will if they had been produced.

Decision

In conclusion, relying on the decision in Rose v Mondon (supra) I find that the formal validity of the Will is determined by the place of its execution; the validity of a Will as to movable property is determined by the testator's domicile and is to be tested against the requirements of the law of the testator’s domicile; and where it concerns movable property the applicable successoral law is also the law of the domicile of the deceased. Shares in the IBCs being movable property according to the IBC Act, the validity of the disposition of the Seychelles IBC shares forming part of the deceased’s estate, should be determined in accordance with the successoral law of the deceased’s domicile.
As stated above, the Court is not in a position to make any finding as to the formal validity of the Will and the validity of the dispositions thereunder in the absence of the Will itself and other supporting documents proving the domicile of the deceased. Further, no proof of the ownership of the shares in the two IBCs having been brought by the petitioners, the Court cannot order the transfer of such shares to the heirs and/or legatees. In addition, the value of the whole of the deceased’s estate is unknown and the share of the succession of the deceased to which the heirs and/or legatees are entitled as stated in the petition and affidavits cannot be verified as the Will has not been produced, rendering it difficult to make a determination as to the proportion of the shares to which the heirs and/or legatees are entitled. Also worth noting as stated at paragraph 3 hereof are the defects in the affidavits in support of the petition and their effect on the extent to which reliance may be placed on them by the Court.
In the circumstances, I have no option but to dismiss the petition.

Signed, dated and delivered at Ile du Port on 5 July 2021.

____________
E. Carolus
Judge

SUPREME COURT OF SEYCHELLES

Reportable
[2021] SCSC 395
MC91/2020
In the Ex Parte matter:

Delivered: 5 July 2021

ORDER
The Petition is Dismissed.

ORDER

_____________________________________________________________________________E. Carolus, Judge
Background

The Petition

Analysis

Applicable law in regards to validity of the Will and the Dispositions made thereunder

In France, it is stated at page 8, Guide de droit international privé des successions that -

Applicable law to Transfer of Shares and Direction to Registered Agent to transfer the shares

Section 104 of the IBC Act provides that an up-to-date register of members shall be kept at a company’s registered office unless the company is a listed company (section 106). It provides:

Shares in a company may pass by operation of law, notwithstanding anything to the contrary in the memorandum or articles of the company.

The register of members can also be rectified upon application to Court where information that is required to be entered in the register is omitted under section 108:

(1) If –

two or more members or alleged members; or
between one or more members or alleged members and the company; and

otherwise determine any question that may be necessary or expedient to be determined for the rectification of the register of members.

Decision

Signed, dated and delivered at Ile du Port on 5 July 2021.

____________
E. Carolus
Judge