Monchouguy and Anor v Monchouguy (CS 37/2016) [2020] SCSC 592 (20 August 2020);

search_summary: 

Lesion; Procedural and substantive requirements to be observed where lesion of a sale is claimed

Legislation considered: 

ANDRE J

 

  1. This Ruling considers whether a prima facie case of lesion has been made out by the Plaintiffs. The Ruling arises out of a plaint dated 25 April 2016 and filed on 9 May 2016. The allegation is that the late Mrs Ida Dorothy Monchouguy’s (deceased) sale of title No. C 5724 (the property) for the sum of Seychelles rupees thirty thousand (SCR 30,000/-) should be rescinded on the grounds of lesion as per the provisions of Article 1674 of the Civil Code of Seychelles (Cap 33).
  2. The plaintiffs aver that the instrument of transfer dated 17 April 2013 of the property has been valued in excess of an amount that doubles the purchase price and that the price paid by the defendant for the immovable property is less than half of the value of the immovable property at the time of the said sale and transfer.
  3. Alternatively, the plaintiffs further aver that the price paid by the defendant for the immovable property is less than half the value of the immovable property at the time of the said sale and transfer and that from the circumstances of the  sale, the defendant took some unfair advantage causing loss to the deceased of the difference between the value of the immovable property and the purchase price, which loss the deceased suffered and her successors and/or the plaintiffs continue to suffer.
  4. The plaintiffs prayed that the Court grant:

 “the appointment of three experts to submit a report to the court on the value of the immovable property at the time of the sale or transfer by the deceased to the defendant for the purpose of the lesion claim, declaring that the lesion of more than one half of the value of the immovable property in the case of the sale and transfer of the immovable property at the time of the said sale and transfer, (i.e. 18 April 2013), and rescinding the sale and transfer of the immovable property and ordering the restoration of the deceased (through the plaintiffs as the executors of her succession or as legatees in relation to the immovable property under the deceased's last will and testament in ownership and possession of the immovable property by virtue of judgment in this suit or by ordering the defendant to transfer the immovable property back to the plaintiffs as the executors of the succession of the deceased. And order the plaintiffs to return to the defendant the purchase price for the immovable property in the sum of Seychelles rupees thirty thousand with costs of the action and to other orders that this court deems fit in the circumstances”.

  1. A statement of defence dated 3 April 2017 was filed on the 4 April 2017 wherein the defendant denied the allegation of lesion and put the plaintiff to the strict proof thereof. The defendant further averred that ‘the real intention of the transfer and the deceased was to distribute the estate of the deceased amongst her heirs and further avers that the 2nd plaintiff received parcel C 7115 as part of such distribution of the deceased's estate’.
  2. Defendant further avers that, ‘the transfer of the immovable property to the defendant was as part of his inheritance from the deceased from her estate and at no time did he take any unfair advantage over the deceased, the latter who transferred the immovable property in accordance with the transfer document knowingly and willingly’, hence moving for the dismissal of the plaint with costs’.
  3. On 20 November 2017, the court-appointed three quantity surveyors to do a joint report as is required for the purpose of lesion. A formal letter was sent out to the quantity surveyors on the 15 December 2017 and it was anticipated that the report would be delivered on 31 January 2018. This did not happen on the 31 January 2018, and the court warned the parties about the lack of the report. Mediation talks then followed in June 2018 and on 2 July 2018, the matter was formally referred to mediation. Further to this, the lesion action was consolidated with other matters with respect to the same parties in CS 62/2016; CS 12/2017/MA 09/2017; and CS 22/2018.
  4. On the 23 July 2020, the Court amended its order of the 20 November 2017 upon the consent of parties to substitute a quantity surveyor for the purpose of the expert report and a joint report was submitted to the court on the 3 August 2020 (Exhibit P1).

 

 

Relevant law

[9]       The procedural and substantive requirements to be observed where a lesion of a sale is claimed is  a two-stage process as clearly provided in Article 1679 of the Civil Code which provides that:-

The court shall not admit any claims that a contract is vitiated by lesion unless the plaintiff is able to make out a prima facie case that the circumstances are sufficiently serious to warrant an investigation by the court.

  1. To determine whether there is a prima facie case for lesion, the court needs to be satisfied ‘whether the facts are probable and serious enough for the court to presume lesion. See Marie v Marie (SCA 34/2013) [2016] SCCA (12 August 2016.
  2. The court in the matter of Adrienne v Adrienne (1978) SLR 88, set out the steps to be pursued in terms of the provisions of Article 1679 as follows:-

“Before the plaintiff may be allowed to prove lesion it is necessary that she be granted permission to do so by the court in a preliminary judgment. Such permission, however, will not be granted unless the plaintiff has set out in her pleadings facts which are sufficiently probable (vraisemblables) and serious (graves) to allow the court to presume a prima facie case of lesion. It is not sufficient that those facts should only be alleged in the plaint. To find a prima facie case of lesion the facts alleged must also be supported by evidence….:

  1. In Houareau v Hoareau (2012) SLR 239, the court of Appeal in a majority decision affirmed the Adriene rule establishing that a finding of a prima facie case of lesion exists is an imperative.
  2. It follows that before the hearing of the substantive issues in the plaint, the court first has to make a preliminary judgment on the existence of a prima facie case for lesion. Hence the current ruling.

 

Evidence

  1. In support of the plaintiffs’ claim that a prima facie case of lesion has been established, Jacqueline Einwater (born Monchouguy), Frank Ally, and Jacques Renaud testified as follows.
  2. Mr. Jacques Renaud, one of the appointed quantity surveyors, entered Exhibit P1 into evidence, which is a joint report by him and two other quantity surveyors Alain Jean and Thyra Laporte, all appointed in terms of the abovementioned court orders. ,
  3. In his testimony, Mr Reynaud took the court through the report, highlighting its terms of reference, the documents consulted in drafting it, the site visit conducted, the location and access of the property in issue. He described the land details, the views, limitations and restrictions, the constructions features of the house built on the property, the external works observed and assessed, the house defects observed. He explained the basis of the valuation, and indicated the land value. With respect to the land value, he highlighted some positive attributes which were described in the report at page 5, and also some negative attributes on page 6 of the report. Mr Reynaud expressed that some features were included as part of the construction and that as per normal practice, the calculations were generally done on superficial (square meter) basis.
  4. The methodology used to arrive at the common value has been clearly defined on page 6 of the report, and the valuation of the property as at July 2020 is estimated at SCR 4,292,000. The report also included that the valuation of the property as at April 2013, placing its value at SCR 3,708,000. Photos of the property were attached to the record giving the court a visual idea of its locus and extent. .
  5. Despite very stringent cross-examination, Mr. Jacques Renaud maintained the said valuations set out above, based on the details as illustrated in Exhibit P1.
  6. Mr. Frank Ally on his part testified that his legal services were retained by the late Mrs. Dorothy Ida Monchouguy in the year 2014 with respect to the property. He wrote two letters on behalf of the deceased, entered into evidence as Exhibits P4 and P5 respectively. The  letters were addressed to the Defendant, Cecil Monchouguy and Exhibit P4 stated the following :
  1. By transfer document dated 17 April 2013, and registered in the land registry on 18 April 2013, she purportedly sold and transferred land parcel no. C 5724 to you for the sum of Seychelles rupees thirty thousand (S.R.30,000/-);
  2. My client who at the time of the said transfer was 89 years of age, executed the said transfer document without consent on her part in that you placed her under duress and fear to force her to execute the transfer document and that it is as a result of such that she had no other choice than to execute it and thus, the said transfer is vitiated and is liable to be annulled for lack of consent and’/or duress;
  3. You did not pay any or all of the said purchase  price of S.R. 30,000/0-;
  4. Upon execution of the said transfer document, you took possession of land parcel C 5724 and collected the income that it derives, and thus, depriving her of income from the lease of the house on the said land that she was receiving and relying upon for her maintenance; and
  5. Despite her repeated request to you on the above grounds, to re-transfer the land to her to return possession thereof to her so that she can receive the said income, you have failed or ignored to comply with the said requests.

By reasons of the above, my client instructs me to require you to take all appropriate action to re-transfer land parcel C 5724to her in accordance with the land registration act within three (3) days of receiving this letter, failing which I am under strict instructions to institute legal proceedings before the Supreme Court against you to annul the said purported sale and transfer of the said parcel of land C 5724 on the above grounds and/or to rescind the said purported sale and transfer on the grounds of lesion in that the value of the said land parcel far exceeds one half of the purported purchase price stated in the said transfer document.’

  1. Mr. Ally further testified as to the contents of the second letter, Exhibit P5, dated 3 September 2014 wherein the following is reflected:-

“Dear Sir, I continue to act for Mrs. Dorothy Ida Monchouguy of Au Cap, Mahe, your mother, and refer to my letter of the 28th May 2014, addressed to you (copy thereof is attached herewith for your ease of reference), whereby on my client's instructions you were given notice, and required, to take all appropriate action to re-transfer land parcel C 5724 situated at Au Cap, Mahe, to my client in accordance with Land Registration Act within three (3) days of receiving the said letter, failing which legal proceedings will be instituted against you before the Supreme Court to annul the said purported sale and transfer of the said land parcel C 5724 on the above grounds and/or to rescind the said purported sale and transfer on the grounds of lesion.

Despite service of the said letter on you, you have failed, ignored nor neglected to comply with my client’s requests therein. In view of the fact that you are now out of Seychelles, you are hereby given a final thirty days (30 days to comply with my client’s request, failing which legal proceedings against you as stated above…”.

  1. The registered transfer document of the property was produced as Exhibit P3 and Mr. Ally testified as to the state of mind of the deceased at the time he was instructed to write the above-stated letters of demand. It was made clear that he was very close to the deceased and visited her often upon request or just to check on her on the property and that, “the first time I came across Mrs. Monchouguy she was very distressed, and this is why she called me. And this is why I had to go and visit her, and she kept on- because there was a delay she kept on calling me. And the name of Mrs. Monchouguy became in my office like a household name. She would call the staff to speak to me if she can’t reach me on my mobile phone. She was incessantly calling me. She was distressed. And it is one of the reasons why I did not do the transfer of- at this stage, I believe she did some other transaction, not with regards to Cecil which I did not do. And she kept on giving me instructions with regards to letters and other things.”
  2. Mr. Ally was also made the subject of rigorous cross-examination, and he maintained his stance vis-a-vis the state of mind of Mrs Monchouguy at the time he was instructed and her willingness to proceed with a case as per the instructions given.
  3. Mrs. Jacqueline Einwachter (born Monchouguy) produced her appointment as executrix to the estate of the deceased dated 23 February 2016, entered as Exhibit P2. She testified that this exhibit clearly illustrated the appointment of joint executors, Jacqueline Einwachter and Michelle Janine de Monchouguy to the deceased estate, which was in line with the deceased’s last will and testament of the 12 February, 2014 registered in transcription Volume entry No. B 00153.
  4. Mrs. Einwachter was cross-examined as to the alleged malafides  behind the filing of the current action on lesion and it was put to her that the transfer was part and parcel of the inheritance distributions per the will of the late Mrs. Monchouguy. She denied this.
  5. Mrs. Einwachter maintained the grounds of lesion as prayed for with respect to the property, as per the plaint filed.
  6. The defendant did not call any evidence.

Analysis and findings on evidence

[26]     After a thorough consideration of the evidence adduced on behalf of the plaintiffs, I find that there is an established prima facie case for the cause of action of lesion as alleged for the following reasons.

[27]     As mentioned above, the late Mrs Ida Dorothy Monchouguy purportedly sold the property to the defendant for SCR. 30,000 in April 2013.  

[28]     The joint valuation report, Exhibit P1, clearly illustrates that the estimated value of the property as at April 2013 was in the region of SCR 3,708,000. The purported purchase price of SCR 30,000 is less than half of the value of the property, as valued at the indicated date.

[29]     Following the above analysis, the only reasonable conclusion at this stage of the proceedings is that the plaintiffs have established a prima facie case of lesion as is required by Article 1679 (supra). The circumstances are sufficiently serious to warrant an investigation by the court for the lesion cause of action. I so find it accordingly.

Conclusion

[30]     In the result, the following orders are made:

There is a prima facie case that the circumstances are sufficiently serious to warrant an investigation by the court for the lesion cause of action.

 

 (i)       The matter shall proceed to be heard on the merits on dates already decided by this court.

(ii)       Costs of the suit to be considered by the court upon final determination of the matter.

 

Signed, dated and delivered at Ile du Port on the 20 August 2020.

 

 

____________           

ANDRE J