Marie Joseph Charles Robert Lesage v The Mauritius Commercial Bank Ltd
| Jurisdiction | UK Non-devolved |
| Judge | Lord Kerr |
| Judgment Date | 20 December 2012 |
| Neutral Citation | [2012] UKPC 41 |
| Docket Number | Appeal No 0027 of 2011 |
| Date | 20 December 2012 |
| Court | Privy Council |
[2012] UKPC 41
Privy Council
Lord Walker
Lady Hale
Lord Mance
Lord Kerr
Lord Sumption
Appeal No 0027 of 2011
Appellant
James Guthrie QC
Rowan Pennington-Benton
(Instructed by M A Law (Solicitors) LLP)
Respondent
Eric Ribot SC
P Maxime Sauzier SC
Louis Eric Ribot
(Instructed by Blake Lapthorn Solicitors)
Heard on 9–10 October 2012
On 9 May 2003 the Mauritius Commercial Bank launched legal proceedings against one of its former employees, Robert Lesage. The proceedings alleged fraud on his part which, it was claimed, had resulted in huge losses to the bank. No fewer than 37 other defendants were parties to the action originally. Many of these were dismissed from the suit before the trial of the action. Those who remained as defendants (apart from Mr Lesage) either did not participate in the trial at all or were represented but did not give evidence.
The trial of the action took place before a two-judge court (Lam Shang Leen J and Devat J) appointed for that purpose by the Chief Justice. Judgment was given on 30 June 2010 in favour of the Bank against Mr Lesage jointly and in solido with other defendants for 436,297,598.69 Mauritian rupees (MUR) and for a further sum of MUR 245,406,115.10, on his sole account, including MUR 1,000,000 'moral damages'. The Bank was also awarded interest and costs.
Mr Lesage's defence was that he had not been guilty of fraud. On the contrary, he claimed that at all times in the course of the dealings that had formed the case against him, he had acted on the instructions and under the supervision of the bank's senior management. As well as disputing the bank's claim, he also took proceedings against them for salary and bonuses that he alleged were due to him. The bank denied that these were owing to him. Mr Lesage's claim was consolidated with the bank's claim against him. It was dismissed.
The bank's claim against Mr Lesage was assigned to the commercial division of the Supreme Court of Mauritius. It appears that this division has no statutory underpinning and there is ongoing litigation as to whether its decisions comply with the Constitution of Mauritius but that is not a matter which is in issue on this appeal.
As a matter of practice, cases assigned to the commercial division are tried either by a judge sitting alone or, where it is so ordered by the Chief Justice, by two-judges. The power to make such an order is contained in section 36 of the Courts Act 1945, as amended by the Courts (Amendment) Ordinance 1963 (Ordinance No.9 of 1963), which provides that the Chief Justice may, either proprio motu or on application by any party, direct that any case shall be heard by two or more judges, "having regard to the magnitude of the interests at stake or the importance or intricacy of the questions of fact or law involved". In this instance, neither party had applied for the case to be assigned to a two-judge court. It appears that the Chief Justice, acting on his own initiative, decided in August 2009 that this was the appropriatemode of trial but the appellant did not become aware of that decision until 2 September 2009 when the hearing of the case was due to begin.
Mr Lesage complains that he was not given the opportunity to make representations on whether his trial should have been held before two-judges. This was particularly important, it is claimed, because, in effect, it removed any right of appeal to a domestic Court of Appeal. Under section 3 of the Court of Civil Appeal Act 1963 "any party aggrieved by any judgment or order of a judge sitting alone in the exercise in Court of his original civil jurisdiction may appeal from such judgment or order to the Court of Civil Appeal." There is no provision for appeal from a decision of a two-judge court.
The hearing of Mr Lesage's trial took place between September and November 2009. Evidence was heard over 21 days. Although it had been intimated that the Bank would have a number of witnesses, in the event, only one was called. He was Pierre Guy Noel, who was in 2003, when the fraud alleged against Mr Lesage was uncovered, the general manager of the bank. Mr Noel denied that the bank was aware of Mr Lesage's activities or that any of the allegedly fraudulent dealings in which he had engaged were authorised by the bank. Mr Lesage gave evidence on his own behalf and a number of witnesses were called by his defence team.
Judgment was delivered on 30 June 2010. The bank's case was described in the following passage:
"[The bank alleged] a mega fraud…(the largest) that has allegedly been orchestrated and perpetrated in its history over a span of some 14 years by one of its top personnel, Mr Robert Lesage…The [bank] asserts that a huge amount of funds has been siphoned off and/or misappropriated via complex schemes of financial transactions using shell companies for the benefit of one person, Mr Teeren Appasamy…. Unauthorised loans, discounting of bills of exchange and ploughing into the fixed deposits of some of the [bank's] important customers were allegedly the three methods resorted to by Mr Lesage in order to perpetrate the fraud. An intricate system of splitting/layering/integrating of funds belonging to the [bank] designed to foil its internal and external audit trail was used."
The essence of Mr Lesage's defence was summarised in the judgment in this way:
"[He] has strenuously denied all the allegations of fraudulent transactions made against him by the [bank]. He has maintained that he had been acting under instructions since he first joined the [bank]. He has stated that he had never committed any acts of larceny or fraudulent abstraction of funds and that what he did was at all material times within the knowledge of his superior officers and in particular the General Manager. He has stated that the management of the [bank] from 1989 to 1996 was aware of the transactions which were instituted at their request. He has disagreed with the prayer made against him and he maintained that he is not liable in any amount whatsoever."
The competing cases having been expressed in those terms, it is clear that the court's resolution of the dispute between the parties was bound to turn critically on the question of credibility. And the court duly described its approach to its conclusions in the following passages:
"In the first place, we shall consider the allegation of Mr Lesage that whatever he had been doing at the bank was in the course of his employment and with the authorisation and knowledge of the bank. If we reach the conclusion that the contention of Mr Lesage is correct, then the claim of the [bank] must fail…"
and:
"In considering whether the version of Mr Lesage is correct, it stands to reason that it is really an issue of credibility which calls to be determined. We have to consider the version of Mr Lesage against that of Mr P G Noel, having regard to all the documents which had been put before us by both parties and the lengthy submissions of all learned counsel."
In deciding that Mr Lesage was liable and in rejecting his defence, the court again made clear that this was, if not uniquely at least principally, founded on its assessment of whether he could be believed, and that this was in turn based on its judgment of his performance as a witness. It said this about him:
"After anxious consideration, we have reached the conclusion that the version of Mr Lesage cannot be retained. We say so because we find that he has been fabulating in more than one instances ( sic) losing his poise when cornered and he was not only shutting his eyes to the obvious but he was also glossing over certain events and putting the blame on others, forgetting that he was the person responsible for the department concerned. He has also shown himself to be very selective in his recollection of events. He has come up with answers which are contradictory and demonstrates his gift of painting a different picture thereby distorting facts which are obvious especially when confronted with documents the contents of which are clear and unambiguous. We have certainly not been impressed by his ad nauseam mantra of having done all those acts in the course of his employment under instructions when, admittedly as it was said, being a man of notes, he has been incapable to bring up any instructions in writing from Mr PG Noel or from any other former General Manager during that long period under consideration. We simply do not believe Mr Lesage and we need only to highlight some of the evidence and major contradictions to support our conclusion."
The court then identified what it described as the "most damning piece of evidence" against Mr Lesage's case that he had at all times acted with the full knowledge and consent of the bank's senior management. On that subject the judgment contained the following passage:
"The most damning piece of evidence is in relation to the answer given by Mr Lesage to the pertinent question…under cross-examination as to whether he had ever said that what he had done was not under instructions. In chief, he stated on every possible occasion that everything that he had done was under the instructions of Mr PG Noel and with the knowledge of the Top Management of the bank. Without batting an eyelid and with much assurance, he stated that he acted under instructions. But, when he was confronted with the statement he had given to the ICAC under oath and in the presence of his counsel at the time when he was granted immunity, he had to concede having said in his statement of 9 September 2003 that he had not acted under instructions when he took funds from the NPF/NSF deposit accounts and that he did so on his own initiative. He has agreed...
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