Doris Raihl v Steiner Products (SCA 11 of 1985) [1986] SCCA 1 (29 August 1986)

I \ i . I IN Till, COURT OF APPEAL OF SI!.'YCHELLE5 CIVIL APPZAL 110. 11 OF 1985 DORIS RAIHL. .. . . . . . • APPELLl.1JT VERSUS STEINER~ODUCTS. • • lU;3POlIDEl'lT JlJJX}NENT OF MUSTAfA! P. The appell~t was.the pla~tiff in the Supreme Court in a suit she had filed against tr~e respondent. The appellant was carrying on 1;\)e buadnoss of hair dres:.ers, called 'I])oris the F.a.irdressers" at the premises she had leased at Pirates A.r!llS Build,ins, Victo~ia. She had entered into r..egotiatiClns .,;ith the respondent, a limited lia.bility companyregistered in the United Y.ine;do:n,and operat:i;'lg, amongother places, a ha1rdre,ssing 'business at Hahe Beach rtt>tel, Vi'ctoria, for the sale of, plaint "the equipmen'.;and f'itting of the Plaintiff in the words of parat1raph 3 on the in her sal.on in situate Victorico.so that the defendallts could operate out of the premises .,eased by the Plaintiff", It is commongz-oundthat the terms of tbe agreement were reduced to writing. The re~pond~nt event~ly refused to complete the lurcha! e and to sign the agreeme~t to lease on ~he ground that the condition, precEdent contained in the agre~mentto lease had not been fulfilled. The appellantha.d. vaca.ted and closed her hairdressing busdnee.son or about 31.,3.64 and had claimed from the respondent damagesfor breach of the Bg'Nementto lease totalling Rs. 140,000, madel,lp of Rs, 60,000 for total loss of business, Rs. 60,000 for loss of goodwill, and Rs. 20,000 f(lr inconvenience. In the SupremeCourt, Proag J. dismissed the appell,nt's . claim and from that juigment the appellant has appealed. Th2 aeree~9nt to lea.se cUter briefly setting out the names of the parties and the te=ms of the lease, contains the following condition, amongothers: "4. The Agreementis subject precedent: to the following'conditions (a) That the lease of the premises occupied by the Vendor is transferred to the Purchaser." ...... /2. - 2 '--t *' '\ It ~s not in dispute that despite attempts the Governmentof Seychelles had r,!fused to g;ive permission to the respond~n~ to operate a hairdrezsing .sakon f~omthk premises at Private Arms. i:.e. thd neceesary sanction by the Governmentfor the transfer of the lease was \dthheld. The.t .•••as the main reason given by the respondent for refusing 10 complete the purchase and sign the lease agreement. The zeepondent, had contended that the lease could not be completed because a condition precedent cculd not be complied .•••ith. The appellant was fully aware of the conditions precedent business on 31.3.134. in the lease agreement before she closed her hairiressing 11r. Georges for the appellant has repeated before us his i '.rgument that an oral agreement that the respondent .•roul.d purchase the equipment and fittings for Rs. 60,000 from the appellant had been reached without any conditicns precedent or subsequent. The agreement to lease was drafted subsequently to the oral agreement and did not apply to the antecedent o~al agreement. He relied on the provisions of Article 158} of the Civil Code of Seychelles which read: o "l. sale is complete between the parties passes as of rie;ht from the seller the price has been agreed upon, even if yet been delivered or the price paid". and the ovner.:hip to the buyer as soon as the thing has not 'l'he tria+ judge dealt .•••ith }l1r. Georges submission in his jll.dgment. He sali: subject '-A) be effective there was an agreeme'ntbet··••een the "I find . Lt established that to conditions pr ecedenc•••••••• parties It is t~te that an oral agreement of sale has been rea:hed by the two parties before the dra~/in:!:of the draft agreeml lOt, but it contained a condition precedent which has clearly boen desc~ibed in paza 3 of the plaint •. to sell .fitt;wgs Privhe obligation to transi"er a valid lease. to dQ owing to lack of Governmentsanction. entertainplaintiffl;s tho thin.g:3and the price have been agreed, owners'hip of the plaintiff's Worse still, and equipment and transfe.b the lease of a salc.n at A,lI.ills the offer cannot be severed". salon passed as of right counsel submisaion that to the defendant •••••••••• for £6,000. Plaint'iff Therefore I oannot th~ momentthat '!'his she was unabf,e .•••as an offer :Building all had the It In II\Y view the trial, judge was right. I am satiafied that the sale of the E::pql equipment and fittings was subject to the "conditIons precedent conta.ined in the agreement to Lease , It 'Wasclear that the partieE' had ••••••••/3. ..j j.'0/ . .i lj, __ ---1' ,. - 3 - .ontz-acted on the basis of the sale of a running business with the tr';"'1sfer .':.: of the lease; not a mere sale of equipment and fittings whicr..obviously was of no use to th3 r~spondent • I would d.csmd.ssthe appeal with costs. DATEDat 1lICTO...'UA this A. NUSTAFA PRESII>ENT. .. ) ,.,...---.~,' ~'~,( .. IN 'fHE EC"'YClir:LL;;;~ COURT OF f. PP';,'l, ",:',vil ..ooeRl :Qo.l1 of 1'185. Bet'ieen - DOrIS RAIHL and :::T". IN;;:R PRODUCTS ,Appellant Respondent >:r. Georges fori the appellant. :.:r. S;?h for th~ r~spoj1dent. JDW"!F:NT OF LA',j J. A.. T:;e appell~ht ozned and 'o!jerated for some15 year-s ~ h~irdrefsing --- ..:....- i:otel at. Victoria.. saIcn i:'1 ore:nises \.hich she leased' from the owner-sof the P:lr;:;tes' 'I'he r-espondent-is a. companyincorporated in the :·.r!'l1S \::-,itee. t<:ingdom\ihere it carries on the business of hairdressin~ undez. "he nane of "5.teiner,,". It ,,1:;0 operates hp-irdressing saLorrs r.t v:;rious ~;l~ces <)utside the United Kingdomincluding one in ~eyche11es, at the >'P.heEeach ::otel. :'teiners wanted to acouire the anpellant's business which she car-rdec on e.t the Pirfltes' ArmsHotel. Negotiati.ons to thi~ ef'f'ec ; took rl:-.ce !:;et'lleenthe appellant end representatives of SteimJrs b,oth 1'1 ~.e:fcne:Llesand in mgland. [ill agreement "';:'~dra"m up early in i·t,.,r,!h,1~84, cut ;,:as never si!rned by the parties. By clause 4 of that agreemenv, the E.r;reemeEt'ir('.s stated to be subject, to certain conditions pr-ecedeni, tHo of which ,:ere that Steiners should receive permission from the ::'eyr:ne11es .. Govern1r.entto lease the Pi.rat es I Armspremises under the provision:; of the I:r>p:ovahJe Proper-ty (TrEnsfer F.estriction) b.ct (cpp. 96) and tn!lt the p.ypell~.r;t snou'Ld transfer a valid Lea se , Governmentapproval, ',[:15 f'.pplied for by Steiners, but w~s refused. fteiners 'lr~e?)e·~, hut th~t -!'_;,r.r:·)l vss re.~ectE·.~. -:teiners £ccordingly informed the appellant that they were unab'l.e co complete tte transaction, and ,,;1.thdrew. On 28th. December, 1984, the appellant filed tne suit in the ~upreme G')\;rt, :'roM,·,:-lich thi<; p.ppee.lstems. Ey her rldnt, she allee:ed tr::~t "-i.;rinc the weeks Leadi.ng up to the ~nth of t'\arch" Steiners .had negotiated '.' ., j T .'7,!/" . .,t: ',.0 pur-chase nor eeUiP:e:t- and fittin" @:y so th,t '·teiner, cou d ~),'er ..te i.'.~~business out of the premises Les sed by her, that the ne::"t- '-irtiOn!; Here reduced by :tein~r~ into a \-:ritten agreement .mich "ms never /" sii::r:ed,"~ld thet it was a cor.::ht i.on of the :mrch9 ~e of t~e ?npell".'1t IS e~ui0!1'ent. and fittings that the appal Iant, would cease to oper-vte ~s , hat r- dr-es ser- ·-·~d',;0uld vacat e the pr-eruse s occupf ed hy her, '-rhich she did by the 3hr.. ;';:;~,;hJ.1984, 3y paragraph 7 of the plaintJ the '1.ppell?nt st9tej that "by resso.i of the matters aroresai.d the pl::tintiff has suf'f'ered loss·!hich tb~ 'iefe:ldant is bound to make good" and she parti~ul<.ri;;ed her- Losr '13 loss of bus:i.ness "Total Loss of goodwill " Inconvdnience R,60,ooO R. 60, 000 R.?O,OOO" -;n::! she -,,,ked for an 0 ~der th~t fteiners be ordered to car-ry out i t~ ob:'i'~atb:1s unde r the )rf.l ag reemenb with her, alterniltively she cl"imed the sum of R.14Q~OOO. Tne jefence ·"/F. S p rLncipa l. Ly that the ag reemerrt between the parties vIa'" subject to conditions precedent, and vas nullified by the Governr ent ' s re::'t:sal tJ allow .5teiners to take a lease of :lre;TJises in the Pi.rat.es ' lu-ms Ho t eL, The Learned trial judge (Proag ,j.) df.smfssed the appellant's se i.t , holding t'1nt the oral ::ontr~ct.f9r the sale of the equipment ,nd fittings was sub,-iect to the con+i tdon precedent, thut ~~ei:1ers "could o;:)er<"te its bu sa.ness 0Ut of the premises Leared by the plaintiff"J -". S stated in the ?lHintJ and tha.t this condition hzs been frustrated by Government's refusel to [rant a lease to allow the business to be carried on in thEt pLad.rtiff's presn ses or in other premises in the Pir!oltes.' ~rm5 Sotelo !f:r. GeorGes for tI:e appellant Limi.t.ed the cLaLm to R.60,OGO being the amount l,"hich Ar. ~;.?,rsh~w(re"'resenting ,·tejners) =1<. ~ c.:;reeci t.o ;:!l.'t for the t : erl".l:kme~;t?r.d fittines, on !:'O:T!edat e tOH'ards the end of F"ebruary, London, Th~t such 'in agreement was ~ane is not denied by Steiners, lS84 J but in its ca s e is thr:.t tr.e 'igree:Ylent was subject to the cond i Uons rrecedent I "'JhQdied in the :''1'itten but unsigned cont.r=ct, dr"1-:n up l';;.rly in ~r~~rch. 'l'he ~f.",'",llar:t in her evidence agreed that l-!hen "lI', O!?,rsh"'1sm.d he .muld buy the ':uipment '.- '/ «.. ~ti'oulated that they should meet Lat.er- "to siGn the ~Gr~el':entl!. Th.t -3- .,Jr~cffl-ent ,["IS in the ev~nt never I,ligned. ", Hr. Georees relie~ on A'rUcle 158'1 of the :eyche11es Civit Code, 'if; Hhicl1 provides as follows :- § T comolete bet-seen th e r.~rties snd the right from the s el Ler to buyer ~s soon 5. S the price has been agreed is !I/. sale o-me rshf o r.as·ses as of be u~onJ even if or the paid. the price II thing has not yet been delivered! /fr. :-;eor~es suhmi 1.5 that there was no sugge st. Lon of conditions .precedent when >ir. t';p..r1.:hal·'and the aope'l l an't agr-eed on the ",)rice, in •. F'ebr-.!ary,.1984, so t.hat; there ~';3:;: then a comnleted sale pure and s i.nr-Le, Tho se "'!or"C'~ "pure and dmplell are t.aken from Article 1584 of the Civ".l Coce, which provides th~t :- u~ sale may be concluded or to a condition subject either purely and si:nply precedent." I h~.'fe no doubt, th(;.t when !·:r. I:iarshaw referred to n La t.er- l'Ieeti!l?, to sifl'! the Ls:ree;llent, he had in !nind the written p.8reement· hnich came :into ex i s cence a fe'.'; days Lat.er , but .!hose contents (includinp; the condi t.tons pr-eccderrt i must have been d.i scu s aed be t.veen the "'''.rti es dur-Lng the "!L;ot- i.'lti·)J';s ')t the preceding five months. Tn ~;::reeing the price, rtr. ';'~·sh:>."" (Ta~ :iOi;'6 so subject to the conditions precedent, the gener=I purport whereof :-n'.st have been known to the app e.l. Lant., C,Ir• i'!~rshf\w ~·;oulclnot, have been like:.y to conrni,t his company to the pu rcha se of a subst.antd a'l rp".nti ty :t of second-hand hairdre!lSing equipment in Seychelles unless he j·ras as sured '.' of a lease. .t . The equip!1ent WOUtdbe useless to him without :oremises in ...:hieh to install-and use it. All this is implicit in the learned jud:e1s fi!1':::i.ne t;·,;,.t. it "!a" a '.;onditic:'l oreeedent to the oral ag reemerrt that Steiners ~.;ould be ab Le to cpe r=t.e the e·~ui:ment out of the premises Le= sed by the appal Lant , :or equivalent premise". I see no res son to diffPr from th(> le~ !''1!,q judee IS ho Lddng that the 01';:1 .<>.greerient for the e·:-ui~'"er'!:'3.no fit-tings !'~S subject to the condition precedent that ~teiners would oe able to '15e them in premise:; in the Pirates I firms Potnl , and tha.t the ag r sement, lapsed by operation of the condition pr-ecedent, when the govern:ment i . r",:!'u~ed to "noli' ."teiners to car-ry on business in the Potel. I have some SY"1pathy for the 8.!-,pellant l1ho has bee!l the victim of circumstances beyond her control. I would d'l.smtss this appeal. t •• ........{j I;Aj;"~. Jr 6 r: ... Dat.e.d at Victoril:. this - 4 - WJ ••• ~f...day of ...~ .. Sir Eric Law) JUSTICE OF APPR~l. ( < .' IN THE SEYCHELLES COURT OF APPEAL Doris Railh V:l. Appellant Steiler Products Respondent Civil Appeal No. 11 of 1985 The appellant is a hairdresser and was, at all material time, the sole proprietor of a hairdnlsser sal.ocn located at the Pirate Arms Hotel, Victoria. The r espondeat is a C0lupany registe.red in the Unitef ~ng<lom and inter alia, car r Le s on the business of hairdresser in Seychelles at the Ma~e Beach Hotel. In an action brought before the Supreme Court, the appellant inter alia averred that - 1. During the w~eks leading up to the month of March 1984 the Def enoant, negotiated with the Plaintiff to purchase the equipment and fittings / of the Plaintiff situate in her salon in Victoria so that the Defendant could operate its business out of the premises leased ty the Pl.iintiff. 2. The said negotiatiolls between the parties were reduced by the Defendant to a draft agreement, which was never signed, a copy of which is attached hereto. 3. It was a condition of the purchase by the Defendant of the Plaint:~ff I s equipm~nt and fittings that the Plaintiff would cease to trade as a hairdresser a~d would vacate the premises in the said Pirates Arms Building. The Plaintiff did this and shortly after .the 31st March, 1984 the Defendant took possession of the Plaintiff I s aa l.oz.• 4. 3y a letter dated 14th June, 1984 the Defendant informed the Plain- tiff t hat; it could n» longer proceed to purchase t ne Plaintiff I s equipment and fittin:~s. 5. By reason of the matters aforesaid the Plaintiff ~.'hich the Def end:~nt is bound to make good. has suffered '.. " loss farticulars Total loss Qf Business 11. 60,000 Loss of Goodwill Inconvenience 60,000 20,000 R 140,000 2/ ••• i.· "V~:'i, ;;, jf / ./ ~~ .' t:requests of the Defendant to make good the Plaintiff's 1oss - 2 - ."'" ! the Defendant has refused or neglected to do so. AND raE APPELLANT PRAYED: (a) chat the Defendant be ordered to carry out its obligations under the oral agreement with the Plaintiff, (b) alternatively to prayer (a), the sum of R 140,000.00 The plea of the respondent was that the contract agreed to by the parties • wa£ subject to certain conditions precedent ·and as these were not fulfilled the coutruc t was nullified. Evidence \Jas heard and the learned trial judge accepted the version of the respor.dent and disll'.issedthe plaint. The appellant is challenging the findings of the learned·trial judge. Both versions were futly investigated before the trial judge. The evidence reveats that the respondent was interested in acq~iring i the business of t he appellant at the Pirate ArIJ1. S Hotel and aft¢r· pro" I tracted negotiations an agreement was reached which was reduced to ~'iting but was never signed. Clause 4 of that unsigned agreement which was , produced stated that it was subject to certain conditions precedent. ,The main conditions precedent being (i) Authoris4tion by the Government to the .>respondent to lease the premises at Pirate Arms under the provisions iof the Immoveable Property (Transfer Restriction) Act (Cap 96) and (2) t ranefer of the Lease of the premises at Pirate Arms Hotel by the appellant ~o the respondent. There is evidence to the effect that the respondent's representative had agreed to buy the equipment and fittings of the appe11ant's sa1oo~ for the SUIll of R 60,000 but there is also evidence which would LndLcace that the agreement was subject to the conditions precedent contained ·in the written but unsigned agreement. The appellClnt herself admitted that when the respondent agreed to buy the equipment he said they should meet later to sign the agreement. There is also evidence to the effect that the appellant received the unsigned agreement and r.adseen all the conditions therein. nO adverse reaction from her regarding the conditions. There wa:l 3/••• r "Iu~sel for the appellant argued,that the agreement to 'buy tions precedent. and fittings was a separate transaction which was not tied to any condi- Therefore, in his view there was a complete sale and -.. I tne equipment the respondent; wQuld be liable in damages to the appellant u~der article 1583 of :he S. C. C. The learned trial judge rejected - rightly in my view - all suggestion that the agreement to buy the equipment and fittings was a separate deal nut subject to any condition precedent. There 1s ampLe evidence 00 recozd to support the version of the respondent that it was subject to the conditions precedent mentioned in the unstgned agreement. I find no reason to differ from the conclusion reached Jy the learned trial judge. The appeal fails and is dismissed with C03tS. Dated at,Victoria this day of /I.... .~'~iti (" ~v!!::: H GOBURDHUN Justice of Appeal -1 ..2 7- ,'" t ,_