Rooplall Beerjeraz, Société Bergio and another v Moonesh Amrita Dabee (Mauritius)

Under section 5(1) of the Transcription and Mortgage Act 1873, the buyer who first completes and transcribes a purchase ordinarily obtains priority over an earlier untranscribed contract. Mere knowledge of the earlier sale does not, by itself, defeat that priority. The exception is a concert frauduleux: a concerted plan by the seller and second buyer, involving deceitful manoeuvres intended to defeat the first buyer. An artificial or uncommercial transaction, secrecy, lack of opportunity for earlier transcription, an undervalue and the parties’ intended performance may establish the exception. Post-transcription conduct can illuminate the transaction. Fraud by the seller and second buyer is sufficient; notary collusion is unnecessary. Transferees cannot acquire a better position than the second buyer.

The owner of immovable property first contracted to sell it to Mrs Dabee and later contracted to sell it to his son. The son’s contract was transcribed first. Mrs Dabee had registered her earlier contract but had not obtained title by transcription. She later sought completion of her purchase and cancellation of the son’s contract and subsequent transfers to two companies.

Peroo J found that the seller and his son had acted in bad faith, annulled the relevant contracts and transcriptions, declared Mrs Dabee owner, and awarded damages. The Court of Civil Appeal of the Supreme Court of Mauritius dismissed the appeal. The Privy Council considered the scope of the fraud exception, the relevance of conduct after the second transcription, and whether collusion involving the notary was necessary.

1. Appeal and findings. The Board unanimously dismissed the appeal. It would not interfere with the concurrent factual findings below, which were supported by the evidence and had not been shown to justify further re-examination.

2. Priority under the transcription system. Section 5(1) of the Transcription and Mortgage Act 1873 makes transcription necessary for rights under a deed or judgment to be maintained against a third party whose rights are secured over the property. Accordingly, where an owner makes successive contracts of sale, the first buyer to complete the purchase and transcribe it ordinarily acquires title.

3. Fraud exception. Proceeding on the basis accepted by the parties, the Board treated mere simple connaissance of the earlier contract as insufficient. The exception recognised in the French decision of 7 December 1925, reported at Dalloz, Jurisprudence Generale 1926, 185, requires a concert frauduleux characterised by deceitful manoeuvres intended to strip the first buyer of the property. The Board also treated Mahadeo v Ragoobeer (2009) SCJ 29 as a useful Mauritian starting point.

4. Assessment of fraud. The primary focus is the nature, terms and circumstances surrounding the making and transcription of the second contract. Subsequent conduct may reveal those matters. Deceitful manoeuvres need not involve communication with the first buyer at the time of the second contract; deliberate concealment may itself be significant. A transaction is likely fraudulent where it is artificial or uncommercial, connected with a common plan to defeat the first contract, and made without giving the first buyer a prior opportunity to transcribe. Those circumstances require close scrutiny of the transaction and its intended performance.

5. Application. The father and son acted pursuant to a concerted plan. Their conduct included concealment, attempts to induce cancellation of the earlier registration, non-disclosure in the proceedings, evasive evidence and a transfer at a gross and unexplained undervalue. The second contract was not an arm’s-length commercial transaction and amounted to a concert frauduleux.

6. Notary and transferees. The exception applied through the concerted fraud of the seller and second buyer, whether or not the notary was an accomplice. In any event, the Board accepted the lower court’s inference that the notary’s conduct indicated complicity. The companies receiving the property as capital contributions could not be in a better position than the second buyer.

7. The orders annulling the contracts and transcriptions and declaring Mrs Dabee owner therefore stood. Costs followed the event unless good cause was shown within 14 days.

• Privy Council. Appeal dismissed; costs to follow the event unless good cause was shown. [2012] UKPC 22
• Court of Civil Appeal of the Supreme Court of Mauritius. Appeal dismissed on 21 January 2010.
• Supreme Court of Mauritius at first instance. Peroo J, on 9 May 2008, annulled the relevant contracts and transcriptions, declared Mrs Dabee lawful owner and awarded damages.