Padayachy v Simeon (CS 139/2010) [2017] SCSC 965 (19 November 2017)

IN THE SUPREME COURT OF SEYCHELLES Civil Side: CS 1139/2010 [2017J SCSC (( 05 VincentPadayachy Plaintiff versus Francis Simeon Defendant Heard: 5 May 2012, 9 November 2012,20 March 2013,22 November 2013, 4 July 2014, 30 November 2015, Submissions 14 June 2017 Counsel: Ms. Karen Domingue for plaintiff Mr. Joel Camille for defendant Delivered: 20 November 2017 JUDGMENT M. TWOMEY, CJ [1] This is a claim for breaches of loan agreements between the Plaintiff and the Defendant. [2] The transcript of proceedings show that the matter was set for hearing on several dates namely 9 June 2010, 5 May 2011, 17 June 2011, 18 July 2011,4 November 2011, 4 May 2012,20 June 2012, but all vacated for spurious reasons and adjournments granted. By the time the matter was completed the judge hearing the matter had been suspended from duties and the parties opted to have this court adopt the proceedings and deliver a judgment. Hence, it has taken nine years to complete this case. In the meantime the evidence in chief of the Defendant could not be located nor tapes of the recording of these proceedings. The Parties agreed to have the court adopt the hand written notes of the proceedings by Ms. Domingue, Counsel for the Plaintiff, in this regard. For all this, the Court apologises to the parties. [3] It is noted that it is not disputed in the pleadings and evidence that at all material times the parties were business partners and are therefore regarded by virtue of Article 1 (2) of the Commercial Code of Seychelles as merchants and subject therefore to the rules of commerce. [4] The Plaintiff claims that a total of SR 149,181, Euro 9,000 and US $ 10,862 was advanced to the Defendant which he was to repay him after securing a bank loan and reconciling investments in a company, Eden's Car (Pty) Ltd they jointly owned in Madagascar. [5] The Defendant in his Statement of Defence alleges that only a gift of SR30,000 was made by the Plaintiff to him to construct a ground floor apartment at his property to lodge the Plaintiff s friend, a national of Madagascar. He admits that a further sum of SR20,000 was loaned to him by the Plaintiff but that this was fully repaid. As for other sums advanced to the Defendant by the Plaintiff, the Defendant avers that these were for the benefit of the Plaintiffs friend, one Andoniana Orelia Randrainivo. [6] The Plaintiff testified that the Defendant was a childhood friend of his and that in 2007 after he had sold the hotel business he was informed by the Defendant that there were good investment opportunities in Madagascar. He was asked by the Defendant to borrow SR20,000 to renovate his place at Anse Royale. In this respect the Defendant signed an Acknowledgment of Debt (Exhibit P3). He also borrowed a further total of SR43,400 by cheque and other sums in cash for various aspects of the renovation. Altogether the sum of SR 149,181 was borrowed by the Defendant for the renovation works which he has not repaid. [7] He travelled to Madagascar and met the Defendant with his wife and three children. In 2008, they set up a car business in Madagascar by way of incorporating a company, Eden's Car (Pty) Ltd in which the Plaintiff held 70% of the shares, the Defendant 20% and the Defendant's wife 10%. The objects of the company were to buy imported used vehicles and then to sell them on. [8] Sums were advanced to the Defendant for the car business enterprise in Madagascar totalling Euro 9,000 and another US $10,862 also for the purchase ofland. These were all to be transferred to the company subsequently. The land was never bought and the money never refunded. [9] The Plaintiff also travelled to Mauritius and Madagascar and advanced further sums of money to the Defendant and cars were purchased and left with the Defendant. [10] No money was ever repaid to the Plaintiff. A court case was instituted against the Defendant in Madagascar which the Plaintiff won. [11] The Plaintiff admitted that he was accompanied on a business trip to Madagascar by Cherubin Morin another potential investor. He did not accept that the Acknowledgment of Debt dated 23 July 2007 by the Defendant for the sum of SR20,000 was in respect of air fares for the Defendant to him to accompany him to Madagascar but insisted that he had met the Defendant in Madagascar. [12] He also denied that he had a relationship with Ms. Randrainivo, the mece of the Defendant's wife, but had met her at the Defendant's house. He was given the girl's father's name to facilitate a bank. transfer to Madagascar for the Defendant. He denied that he had arranged for airfares for Ms. Randrainivo to Singapore but admitted that he had met her there with the Defendant and his wife. He insisted that the monies advanced to the Defendant were in furtherance of their business interests and not for the benefit of Ms. Randrainivo. [13] He maintained that he had lent the sums as alleged in his plaint to the Defendant in furtherance of a loan to be repaid and their business interests. [14] The Defendant testified. He admitted that he had known the Plaintiff from childhood. He lived in Madagascar for fourteen years and wanted to settle in Seychelles. On his return to Seychelles he visited the Plaintiff in Port Glaud where he had a hotel. The Plaintiff was also building two apartments close to his house at Anse Royale. He was informed by the Plaintiff that he wanted to invest in Madagascar together with one Cherub in Morin and he ... . J was asked to accompany them. He was given SR20,000 for this airline ticket. When they were there the Plaintiff saw his wife's niece and asked could he be "hooked up" with her. [15] He stated that he agreed with the Plaintiff to set up a business to import cars into Madagascar for resale and he would provide the storage place. 20% of the shares in the business was allocated to him and 10% to his wife. He added that the Plaintiff had given money to his wife's niece and had a relationship with her and his wife had to accompany the niece to meet the Plaintiff on various occasions. [16] The car business in Madagascar floundered because the Plaintiff did not have enough money although six jeeps were imported and three of them sold. He admitted that the Plaintiff had filed a case against him in Madagascar and that he left Madagascar and was unable to return and he was divorced from his wife. [17] He stated that money paid to him by the Plaintiff had been given to his wife's niece on the Plaintiff s instructions on account of the fact that the Plaintiff was having an illicit affair with her. He denied that the Plaintiff had given him money for the extension work on his premises in Seychelles but stated that he only gave him money towards the construction of a road. [18] In summary the sum of SR35,000 paid to him by the Plaintiff was in respect of airfares as he wanted him to accompany him to Madagascar and the sum of SR 20,000 was indeed loaned to him but he had since paid it back. The sum of SR 7,000 was in respect of finishing the house. [19] He stated that he could not read or write. However he was able to refer to the exhibits in court and clarify what they were. I also note that he signed the Acknowledgment of Debt. In cross examination he contradicted himself stating that he did not know if the Plaintiff had any relationship with the girl. He was confused about the two sums of SR20,000 and SR30,000 or even SR35,000, sometimes saying it was a gift, sometimes for a holiday, sometimes for the benefit of Aurelia Randrainivo and other times to finish the house or to construct a road. He put to down to the matter having taken place a long time ago and his inability to recall the events. He also denied obtaining loans from the Development Bank of Seychelles even after the documents were brought to his attention. [20] The Defendant called Mr. Cherubin Morin to support his evidence. The latter's evidence was mostly hearsay and concerned matters that are irrelevant to the issues in this case but the witness maintained that the Plaintiff had had a relationship with Ms. Randrainivo, a girl of 14 or 15 years. He stated that the Plaintiff was a thief and bragged a lot. He also stated that the Plaintiff had given the Defendant various sums of money for rent or to pay for items in the apartment where Ms. Randrainivo and her mother would stay. He stated that the Plaintiff was a criminal and a thief. [21] I did not have the opportunity to observe the witnesses' demeanour in order to gauge their credibility. What is clear however from the transcript of proceedings is that the Defendant's evidence is inconsistent and contains many matters that are totally irrelevant to this case. If it is true that the Plaintiff had an affair with an underage girl that is seriously concerning, but it is a matter for the police and it should be reported by the Defendant. It however has no bearing on the issues with which this court is concerned. [22] The relevant issues in this case are the following: 1. Was there an enforceable agreement between the parties for the loan of money? 2. Was the agreement breached? 3. If so, what remedies are available? 1. Was there an enforceable agreement? [23] The Civil Code provides for two types of loans - a "loan for use" and a "loan for consumption" (see Article 1874). A loan of money falls under the definition of a "loan for consumption". In this respect the Civil Code provides: "The loanfor consumption is a contract whereby one of the parties delivers to the other a certain quantity of things which are consumed by use on condition that the latter shall return to him as much ofthe same in kind and quality. " [24] The question arises as to whether from the evidence adduced it can be inferred that such a contract was concluded between the parties. [25] As regards, the first issue, I have already indicated that I did not hear the testimony of the parties and did not have the benefit of gauging their credibility but have only read the proceedings with attention. I have therefore relied strongly on the documentary evidence. [26] There are in fact alleged three separate agreements between the parties: the first was a loan of money for the renovation and construction of the Defendant's apartments at Sweet Escott, secondly a separate loan for the extension work to the Defendant's house in Madagascar and thirdly an agreement for the purchase of two properties in Madagascar for the use of the car company between the parties. [27] The Plaint does not make out the specific amounts loaned for the two separate agreements nor the amounts to be advanced for the benefit of the company. It only avers that the agreement was to the effect that all the monies advanced would be repaid by the Defendant once "he had reconciled his contribution, expenses and investment in the company in Madagascar." I am unable to discern from the pleadings and evidence what specific sums was advanced for what purpose but ultimately this is not of material significance. Indeed the Defendant does not deny receiving some of the sums of money but claims inconsistently as I have already stated that they were gifts, that they were repaid or that they were for the benefit of their parties. [28] This makes his evidence difficult to believe. It is not credible for example, that an acknowledgement of debt would be signed for monies received for the purchase of airfares when these airfares were for the purpose of accompanying the Plaintiff for a business venture in Madagascar. It is also not credible that the monies were refunded when no such evidence was adduced to support the Defendant's bald statement. [29] From the evidence adduced, I find that the Defendant was indeed constructing apartments at Sweet Escott, Anse Royale at the relevant time and had obtained a loan from the Development Bank for SR250,000 for the same (Exhibit D 1). I also find that the sum of SR 20,000 was lent by the Plaintiff to the Defendant on 23 July 2007 and evidenced by an Acknowledgement of Debt by the Defendant and a cheque made out to the Defendant (Exhibit P 3). I also find that the sum of Euro 2000 was also paid to the Defendant on 22 April 2008 by way of a bank transfer into his account in Madagascar (Exhibit P4). These documents do indicate that there was an agreement between the parties and in furtherance of such an agreement monies paid to the Defendant. [30] The sums of money (SR20,OOO, SR5,000, SR 1661, SRI0,000, SR2,OOOtotalling SR 33,661 and USD 3,500) allegedly given to the Defendant and allegedly proved by the handwritten notes made by the Plaintiff at the back of the acknowledgment of debt are viewed as self-serving by the Defendant and he submits that they are therefore not proof that the monies were received by him. In this respect I note that the sum of USD500 paid on 29 December 2007 seems to have been demanded under both amounts claimed in rupees and those claimed in dollars by the Plaintiff in the Plaint. It is obvious that it cannot be claimed twice. [31] There is further evidence of an agreement for a commercial enterprise between the parties, that is, the car business, Eden Car (Pty) Ltd, Madagascar (Exhibit PI). There is also clearly a transfer made by the Plaintiff to the Defendant in the sum ofEuro 2000 on 24 April 2008 (Exhibit P4). The information on the remittance advice reads "administrative fee for the setting up of a company in Madagascar." [32] There is a handwritten letter to Vikram Ramdaursingh to a bank in Mauritius for the transfer ofEuro 1500 to the Defendant's account which is also not backed up by any further evidence apart from the Plaintiffs oral evidence. [33] There is documentation of other monies paid to the Defendant as confirmed by the oral evidence of the Plaintiff namely a cheque for SR35,000 at the reverse of which is the Defendant's signature and two further cheques for SR3900 and SR5000. [34] There is also no other documentation of the other sums allegedly paid in euros and dollars to the Defendant. However, as this claim is subject to the rules of commerce, oral evidence was admissible. In this regard Article 109 of the Commercial Code of Seychelles provides: "1. A sale may be proved: By an authentic document, By a document under private signature, By the sale note or the account note of a money dealer or broker, duly signed by the parties, By an invoice which has been accepted, By the correspondence, By the accounting books of the parties, By the evidence of witnesses admissible at the discretion of the Court. 2. The rules of proof contained in the first paragraph o[this article shall be equallv applicable to all commercial matters (emphasis mine). [35] These rules are therefore applicable to loans as well. [36] I have alluded to the fact that a reading of the transcript of proceeding reveals inconsistencies in the Defendant's testimony. I do not find his evidence as believable as that of the Plaintiff. In the circumstances based on the combination of the documentary and oral evidence of the Plaintiff I find that there were agreements concluded by the Parties. I am however unable to find supporting evidence for some of the sums claimed by the Plaintiff despite his oral evidence being admissible. Were the agreements breached? [37] I have stated that there were in fact three agreements between the parties. In relation to the first loan agreement in respect to the renovation and building of the apartments at Sweet Escott, I find that that agreement was indeed breached. Similarly for the loan for the extension of the house in Madagascar. There is also ample evidence to support an agreement for a car company but what is not clear is whether the claim for monies should be against the Defendant or the company as the monies were advanced for the company represented by the Defendant. [38] In regard to the third agreement therefore, on a consideration of the evidence, I am of the view that any monies advanced in respect of the objects of the company after it was incorporated on the 7 April 2008 cannot be made against the Defendant in his personal capacity. What remedies arise as a consequence of the breach of agreement? [39] The Civil Code provides for the duties and obligations of the borrower. Articles 1902- 1904 provide: "1902 The borrower shall be bound 10 return things of the same quantity and quality as the things lent and at a time agreed upon... "1904 If the borrower does not return the things lent or their value at the agreed time, he shall be liablefor interest asfrom the day of thefiling of the action. " [40] Generally, therefore all the monies lent and not repaid are recoverable with interest. Under the agreement for the monies lent to the Defendant in relation to Sweet Escott, the following sums were advanced and not repaid: SR20,OOO. SR5000, SR1661, SRIO,OOO, SR2000. I also find that the sums of SR5000, SR35,OOOand SR3,900 as evidenced by the cheques in Exhibit P8 and supported by the Plaintiffs oral evidence are also recoverable. Altogether these sums amount to SR82,561. [41] I do not find any other amounts loaned proven under that head and they are therefore not recoverable. [42] Under the agreement for monies lent for the extension of the house in Madagascar, the sums amounting to Euro 9000 were also not repaid by the Defendant and are due. [43] Insofar as the car business is concerned the sums in USD claimed are for the benefit of the company and are recoverable from the company and not from the Defendant if they were made in respect of the company. The Plaintiff has in any case testified that he filed and won a case in Madagascar in respect of this agreement. He cannot claim twice in respect of the same subject matter albeit in two different jurisdictions. The only sums that would be due would be sums personally advanced to the Defendant. [44] The only sums advanced personally in this respect and supported by evidence are the sums of USD500 paid by the Plaintiff to the Defendant's wife for the Defendant in December 2007 and USD 3,000 in January 2008. These are in the circumstances also recoverable. [45] The Plaintiff has provided no exchange rate for the foreign currency claimed when the loans were made in 2008. From the information available from the Central Bank of Seychelles I take it that in 2008 a Euro was worth about SR12.5 and a US dollar about SR8. These are the exchange rates the cOUIiwill use for the purposes of calculating the sums claimed in foreign currency by the Plaintiff. [46] Early jurisprudence in general seems to indicate that moral damages were not awarded for a breach of contract except where the damage was exclusively of a moral nature. Article 1149 (3) of the Civil Code provides however that these are recoverable in both cases of contract and tort "as appropriate". [47] In Kopel v Attorney-General [1955 SLR 315] the distinction made by the COUliwas that it was the province of the judge to consider whether moral damages had been occasioned in each particular case. In Kopel, the Plaintiff was awarded moral damages arising from the discomfort and inconvenience of staying in hotel accommodation as the government had failed as per the terms of their agreement to provide him with furnished accommodation. Moral damage was similarly awarded in Resort Development Limited vs Allied Builders (Seychelles) Limited [2014] SCCA 27. [48] In the circumstances of the present case, I am of the view that the failure of the Defendant to repay the loan must have had a prejudicial effect on the Plaintiff. He testified as to the considerable distress, stress and anxiety he was put under. In Resort Development Limited (supra) the sum ofSR10,000 was awarded under this head. I am of the view that the sum of SR 10,000 would also be satisfactory for compensation of moral damages in the present circumstances. [49] The Plaintiff has not claimed commercial interest and I therefore only grant interest at the legal rate on the sums to be repaid. [50] r therefore make the following orders: [1] The Defendant is to repay the Plaintiff the sums of SR 82, 561, SR 112,500 (Euro 9000 x 12.5) and SR 28,000 (USD 3,500 x 8) totalling SR223,061. [2] The whole with interests and costs. Signed, dated and delivered at Ile du Port on 20 November 2017. M. TWOMEY Chief Justice Dr. Mathilda Twomey Chief Justice ':' 'nreme Court of Seychelles 11