top of page
Search
  • Writer's pictureLorraine Duzer

Cancellation of a horse sale: under what conditions is fraudulent concealment considered?


A Rennes Court of Appeal ruling of 25/01/2023 (RG19/06962) brings important information about the notion of "fraudulent concealment". Comment by Lorraine Duzer, Partner at Adrien & Associés:


Non-fraudulent concealment ? Situations generally evolve in fits and starts. Consent, which is a fundamental concept in French Law that allows the contractual relationship to be questioned, was overhauled when the Civil Code was reformed in 2016. The provisions devoted to it, particularly on misrepresentation, have been amended and enriched.

In this case, the Rennes Court of Appeal relied on the provisions of the former Civil Code which were in force in 2014 at the time of events. Only two articles were then devoted to misrepresentation: articles 1109 and 1116. Although these articles did not provide for the concept of concealment, case law had already resorted to the concept of fraudulent concealment, before this concept was enacted in the Civil Code in 2016.

Today, the concept of misrepresentation is better defined, with a view to protecting the buyer. However, the ruling handed down on 25 January 2023 was in favour of the seller. It merits attention because it contributes to case law on the assessment of misrepresentation as far as active concealment is concerned and moderates the extent of the seller's duties of information.


1. Creation of the concept of active concealment


It soon appeared that fraud could be the omission of a determining information. As early as the 1970s, courts began to use the concept of active concealment when it was found that the information withheld had been decisive in determining the consent of the victim of the misrepresentation.

For example, the Rennes Court of Appeal ruled on 29 January 2010 that the sale of a horse was null and void, after finding that the seller of a young horse suffering from a degenerative disease (intervertebral synovial arthropathy) had failed to pass on the medical records in his possession, even though he knew that the pathology was bound to develop unfavourably over time. The Court held that the seller "deliberately avoided giving this information to the buyer". Indeed, the seller had the information and knew the consequences of the disease. The Court concluded that "the first instance judges (had) rightly held that there was misrepresentation by omission".

Taking over from the case law concept of "fraudulent concealment", the Contracts & Torts Reform Act that was enacted in 2018 specifically inserted the concept of "intentional concealment" into the Civil Code, in paragraph 2 of article 1137.


2. Moderation in the assessment of intentional concealment


Just as the 2016 Contracts & Torts Reform Act had been published, the Court of Appeal of Aix-en-Provence, ruling in the field of horse sales, started by easing the weight of the seller's obligation to provide information and the extreme sanction of misrepresentation, which can lead to the annulment of the sale.

A non-professional seller had sold a 20-year-old horse even though it had been declared to be 14 years old, and that turned out to be lame. In its ruling of 8 December 2016, the Court held that it had not been established that the seller knew the age and pathology of the horse and ruled out misrepresentation. The wrongdoer liable of misrepresentation must indeed have concealed the information with full knowledge of the facts.

The case of the sale of the stallion called King in 2014 occurred before the r Contracts & Torts Reform Act, under the former law, even though it would not be judged by the Court of Appeal of Rennes until some 10 years later.

In its 2023 judgment, the Court carefully examined the details of the facts to determine whether they constituted misrepresentation.

Prior to the sale, King had already bitten an animal behaviourist. Then, the horse was sold by exchange between a buyer, who was an experienced amateur, and a seller non-professional breeder. The latter had witnessed King's first bite, which she attributed to the behaviourist's carelessness. As for the buyer, she had had the horse on trial for a month before acquiring it in July 2014. Two weeks later, the trainer she had hired was bitten by King (2nd bite), which was to lead the buyer to have the stallion castrated five months later. A month after castration, the buyer was bitten on the hand, which subsequently had to be amputated. The horse was euthanised, and the buyer sought compensation for her material and personal injury.

In ruling that there was no fraudulent concealment on the part of the seller, the Court considered the qualities of the two parties: both were amateurs, and the buyer was also an experienced rider and had benefited from a trial period.

The Court also took into account factors specific to the equine sector and, upon the conclusions of the legal expert, it held that "biting is not exceptional for a horse". It considered that such fact must have been known to an experienced rider, and noted that a stallion could, by its very nature, be dangerous.

Although it noted that the seller had withheld information considered important by the buyer (several bites), the Court found that "this information was not necessary since a stallion can bite or, in any case, the absence of this information does not imply (on the part of the seller) a fraudulent purpose or an intention to deceive".

In light of the veterinary expert's report and the knowledge expected from an experienced rider, the Court assessed the importance of the information withheld and found that, in the end, it was not 'necessary' and that withholding it was therefore not fraudulent.

The seller's status as an amateur was undoubtedly taken into account, as was the buyer's status as an experienced rider, albeit an amateur.

From a purely legal point of view, however, the decision appears questionable, as the concealment of information that could be considered decisive was not sufficient to establish the existence of wrongful misrepresentation. The Court did, however, add a further criterion: there also had to be a fraudulent purpose, which was not precisely characterised because the Court considered that the information withheld was not 'necessary'. But doesn't the specific nature of equine matters justify a certain degree of temperament, due to the lively and impetuous nature of Equidae?


Lorraine Duzer,

Partner

[1]Art. 1109 : Il n'y a point de consentement valable si le consentement n'a été donné que par erreur ou s'il a été extorqué par violence ou surpris par dol. [2] Art. 1116 : Le dol est une cause de nullité de la convention lorsque les manœuvres pratiquées par l'une des parties sont telles, qu'il est évident que, sans ces manœuvres, l'autre partie n'aurait pas contracté. Il ne se présume pas et doit être prouvé. [3] Cour d’appel de Rennes, 29 janvier 2010, n°09 : 00563 [4] Ordonnance 2016-131 entrée en vigueur suivant loi 2018-287 du 29 avril 2018 [5] Cour d’appel d’Aix-en-Provence, 8 décembre 2016, n°15/22620



41 views0 comments

Recent Posts

See All
bottom of page