Commercial Law Index

In this appeal, court determined whether the representations made by the respondents in their letter of 3rd October 2013 constituted promissory estoppels with regard to the auction that took place on 30th September 2013. The court noted that the principle of promissory estoppel relates to representations of future conduct and not past conduct and held that the principle was not applicable to the facts of the case. The court also determined whether the application was made out of time. The court applied the rule in Order 45 rule 10(1) of the High Court (Civil Procedure) Rules, 2004: that such an application should be made 21 days from the date of the sale. The appellant made the application on 8th November 2013 while the auction took place on the 30th September 2013. The court held that the application was incompetent since it was made out of time. Accordingly, the appeal was dismissed and the judgment of the court of appeal was affirmed.

This was a dispute about interpretation of an employment contract. An employee of a church was entitled by virtue of that contract to long service leave, calculated with reference to his ‘basic salary’. The issue was to determine the meaning and scope of the words ‘basic salary’.

The Supreme Court of Justice held that while the lower courts correctly identified this issue, they had incorrectly found that ‘basic salary’ meant the total annual salary that the plaintiff was drawing at the time. The lower courts did not give consideration to the meaning and effect of the term ‘basic salary’ in the ‘conditions of service’ document, which defined ‘basic salary’ as a lower baseline salary amount.

The court held that in dealing with the interpretation of contracts the literal and plain meaning rule must always be applied within the context of the deed being construed and not standing by itself alone. Additionally, the court has a duty to give effect to the intentions of the parties. This being an employment contract, the proper approach of interpretation is to construe the words within the context of the whole document having in mind the scope and object of the document. Interpretations which would ‘render the meaning absurd, incongruous, unreasonable or unintelligible, or that will create hardship or inconvenience’ should be rejected.

The court held that in the context of the document as a whole, and it would be ‘unreasonable and absurd’ to conclude that the intention was to bind the defendant to a meaning of ‘basic salary’ that encompassed the plaintiff’s actual annual salary.

The appeal succeeded in part; the judgments of the High Court and Court of Appeal were set aside.

The appeal arose from the appellant’s contention that the judgment by the Court of Appeal was against the weight of evidence.

The court relied on the rule that the plaintiff in the contest bears the burden of production of evidence and persuasion to ground its assessment of the status of the International Rom (appellant). It reasoned that given the evidence, the true position was that the email which was received from the Chief Compliance Officer of Mauritius was intended to be an official record complying with the Act 772 and was thus relevant and admissible. However, considering the conflicting evidence, the court concluded against placing any probative value to the email and thus dismissed the contention that the company had ceased to exist.

The court also applied the rule in Turquand’s Case, formulated in the case of Royal British Bank v Turquand (1856) 6 EI & BI 327 which has been codified and amended in ss 139-143 of the Companies Act, Act 179 (1963) and common law principles to assess the party the defendants contracted with. It reasoned that since International Rom Mauritius and International Rom Ghana had been regarded as one entity by the first defendants, mistake could not be argued to escape the contract.

Finally, the court assessed the provisioned evidence particularly the cross examination to concluded that the claim of failure to allow for challenge of the evidence lacked merit. In addition, the court also held there was an undertaking to make the payment by the first defendant, a commitment which the first defendant did not honor. It was therefore urged by the court that the defendants pay the outstanding amounts plus interest to the appellant.

The parties entered into a business transaction for the supply and installation of a saw-mill. However, the transaction was not covered by a properly drawn up contract. Furthermore, it became apparent that the plaintiff provided the defendant with a plant which was defective and not fit for the purpose it was intended.

This case considered whether the Court of Appeal had misdirected itself to the defects contained in the machinery, whether there was a breach of a fundamental obligation and whether the goods sold were fit for the purpose which they were intended to be used.

The court considered the Sale of Goods Act, 137 of 1962 (the act) and found that the breach of a promise under the act depends on the category of promise; either a fundamental obligation, condition or a warranty. Breach of a fundamental obligation or a condition entitles the party not in default to repudiate the contract of sale and if it is the seller who is in breach, the buyer can reject the goods. The breach of a warranty cannot lead to a repudiation or rejection of the goods but will entitle the party not in breach to damages. However, a party entitled to repudiation and rejection may waive their right and opt for damages.

The court considered whether the goods were fit for the purpose that they were provided for. The plaintiff sold the machinery in the course of its business on condition that it will be fit for the purpose of saw milling. A machine is fit for purpose if it is able to perform the task for which it was acquired, safely and for a reasonable period, before defects appear. The court found that a saw mill should not break down after 11 days of operation and therefore did not meet the standard of the purpose for which it was intended. The court found that as a result of the defect, the defendant was entitled to general damages as a result of the failure of the saw mill being fit for purpose.

Appeal upheld.