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de Freitas, the director and company secretary of the second-named respondent company, had in 1982 transferred 671 shares she’d held in her own name to the first-named respondent company — Alphonso Modern Record Store Ltd — on the company’s bank account in favour of the appellant.
The transfer had been made pursuant to an agreement between the appellant and her brother, ‘A’, who was the governing director of the first named respondent company.
The agreement recited a consideration of $61,700 for the transfer, and a cheque for that amount was duly drawn on the company’s bank account in favour of the appellant, and was in due course cashed. The appellant’s name was endorsed on the cheque.
Some five-and-a-half years later, the appellant instituted legal proceedings for a declaration that the transfer was void, and that Ursula de Freitas remained the owner of the shares. Her claim was based on (inter alia) a lack of any consideration for the transfer, and undue influence.
At the trial, the appellant admitted endorsing the cheque, but denied depositing it in any bank account. Written evidence was adduced from two banks and a building society to the effect that she had not deposited a cheque for $61,700 with them at the material time.
The evidence of the appellant and that of ‘A’ conflicted on a number of points, and the trial judge indicated that he preferred the evidence of ‘A’. The action was dismissed, but the appellant appealed to the Court of Appeal.
On appeal, the appellant sought to adduce fresh evidence from a handwriting expert (under Section 9 of the Court of Appeal Act, which empowered the court to admit fresh evidence on appeal) which suggested that the appellant’s signature on the endorsement of the cheque had been forged.
Dismissing the appeal by a majority judgment, the Court of Appeal, constituted by Chancellor Kenneth George, and Justices Maurice Churaman and Lennox Perry, held that:
(1) Although Section 8 of the Court of Appeal Act did not circumscribe the power to admit fresh evidence (as did the corresponding English rule of court), it was a fundamental common-law principle that such evidence should only be admitted where there were special grounds. In this case, the evidence of the handwriting expert would not be admitted, as it had not been shown why it could not have been adduced at first instance, and there had in fact been sufficient opportunity for it to have been so adduced.
(2) The evidence of the handwriting expert should also be excluded, as it related to a comparison of the signature of a person at 69 years of age on the cheque with her signature at the age of 76. For the evidence to be helpful, the comparison should have been made with other signatures of the appellant made about the time when she had signed the cheque.
(3) The allegation of undue influence had not been made out, in that (whatever the influence ‘A’ might have had over the appellant) there was no evidence that the transfer of shares at par value had been manifestly disadvantageous to her, as it had not been suggested that the price was inadequate; and the evidence that the appellant had received no consideration at all for the transfer had been equivocal (the proceeds of the cheque having been paid in cash and the appellant not having adduced evidence from all the banks at which she held an account that she had not paid such into her account.
Eight cases were referred to in the judgment. Attorneys-at-law R.S. Stoby, S.C., and R. N. Poonai appeared for the appellant, while Mr. Ashton Chase, S.C., and Mr. Sase Naraine S.C., and Ramlall appeared for the respondents.
Chancellor George, who narrated some of the facts, said:
“This is an appeal by the appellant, the plaintiff in the court below, against a decision which dismissed her claim against the respondent companies for acceleration that the transfer of certain shares which she had owned in the second respondent company to the first respondent company was null and void; and, accordingly, that she is still the owner of those shares.
“The evidence and other occurrences in the High Court can be narrated in fairly short compass.
“The second respondent company is a family company which was incorporated some 53 years ago. In 1981, among its shareholders were the appellant and Norbert and Maximillian de Freitas (who were her nephews).
She owned 771 shares and was a director and the company’s secretary, whilst Norbert was a director.
“On the 23rd June 1981, when the appellant was about 68 years old, she wrote a letter to the directors of the company in which she offered to sell the greater part of her shares. The letter reads as follows.
“I offer to sell 766 shares, part of my 771 shares in [the second respondent company], to such member or members as may desire to purchase same, or such other person or company as the directors may agree on.”
Justice Churaman, who’d dissented, said in his judgment:
“I would therefore allow this appeal, set aside the order of the trial judge, and remit the case for hearing afresh. I would, however, order that each party bears his costs both here and in the court below.”
On the other hand, Justice Perry said:
“I have had the pleasure of reading the judgment of both Chancellor George and Justice of Appeal Churaman. I DO NOT AGREE with the reasons and conclusion arrived at by Churaman JA. I agree with the reasons and conclusion arrived at by Chancellor George, and I am of the view that the appeal must be dismissed.”
