COURT OF APPEAL, ACCRA
Date: 30 JULY 1975
SOWAH ARCHER AND FRANCOIS JJ.A
CASES REFERRED TO
(1) Fisher, Reeves & Co., Ltd. v. Armour & Co., Ltd. [1920] 3 K.B. 614; 90 L.J.K.B. 172; 124 L.T. 122; 36 T.L.R. 800; 64 S.J. 698; 15 Asp.M.L.C. 91; 26 Com.Cas. 46, C.A.
(2) Chao v. British Traders and Shippers [1954] 2 Q.B. 459; [1954] 2 W.L.R. 365; [1954] 1 All E.R. 779; 98 S.J. 163; [1954] 1 Lloyd’s Rep. 16.
(3) Bartlett v. Marcus (Sidney) Ltd. [1965] 1 W.L.R. 1013; [1965] 2 All E.R. 753; 109 S.J. 451, C.A.
(4) Grant v. Australian Knitting Mills Ltd. [1936] A C. 85; [1935] All E.R. Rep. 209; 105 L.J.P.C. 6; 154 L.T. 18; 52 T.L.R. 38; 79 S.J. 815, P.C.
(5) Wallis, Son & Wells v. Pratt and Haynes [1910] 2 K.B. 1003; 79 L.J.K.B. 1013; 103 L.T. 118; 26 T.L.R. 572, C.A.; affirmed [1911] A C. 394; 80 L.J.K.B. 1058; 105 L.T. 146; 27 T.L.R. 431; 55 S.J. 496, H.L.
[p.118] of [1975] 2 GLR 116
(6) Schuler A.G. v. Wickman Machine Tool Sales Ltd. [1974] A C. 235; [1973] 2 W.L.R. 683; [1973] 2 All E.R.39; [1973] 2 Lloyd’s Rep. 53, H.L.
(7) Cehave NV v. Bremer Handelgesellschaft mbh, The London Times, 22 July 1975.
(8) Thornett and Fehr v. Beers & Sons [1911] 1 K.B 486; 88 L.J.K.B. 684; 120 L.T. 570; 24 Com.Cas. 133.
NATURE OF PROCEEDINGS
APPEAL from the judgment of a circuit court dismissing the appellant’s action against the respondent, for the recovery of the balance of the purchase price of his car. The facts are sufficiently stated in the judgment of Francois J.A.
COUNSEL
J. Reindorf for the appellants.
No appearance by or on behalf of the respondent.
JUDGMENT OF FRANCOIS J.A.
The short legal issue in this appeal revolves round the right of a purchaser to repudiate a sale upon the discovery of latent defects. The appellant was the owner of a Mercedes Benz car which he sold to the respondent for 03,200.00. The respondent made cash payments totalling 02,200.00 and remitted two post-dated cheques of 0500.00 each for the balance of the purchase price. Upon delivery, the car betrayed signs of recent involvement in an accident. There were serious defects in the clutch and starter systems and wide-spread damage to the mudguard and a head lamp. Initially the appellant disputed the extent of damage, maintaining that it was a mere graze which had occurred when the car brushed against a garage post. In an idle moment, however, he admitted to the accident; his subsequent revision of the facts, upon realising their probable impingement on his liability, is not credible and was rightly discounted by the trial court.
There is however the mitigating evidence that the appellant accepted responsibility for the defects and agreed to put them right. Messrs. R.T. Briscoe Ltd. were consequently approached to effect the repairs. Unfortunately their estimates for repairs were so staggering that the appellant was compelled to seek a less expensive repair garage. An “instant” repair shop, the local wayside fitter took in the car and completed the repairs within a day. Another repair shop, Tutunji, then undertook the spraying. The respondent thereafter took delivery. At that stage no complaints were articulated. But after using the car for some time the respondent made his bid to repudiate the bargain. He stopped the payment of his final post-dated cheque. His course of conduct received the uncritical endorsement of the learned circuit court judge who heard the matter. The substantial issue for determination in this appeal therefore, is whether the respondent in the circumstances was right in rejecting the contract.
Turning to the facts, it may truly be urged that the election to abide by the agreement of sale depended upon the damaged car being put in as near as possible the condition it was previously and the accommodation
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the respondent gave to have it repaired at moderate cost could not extend to cover cheap, shoddy work. If the car retained the defects which the accident gave rise to, it could be urged that it was inferior and fundamentally different from what had been bargained for and the respondent could not be said to have opted to have it in that state.
But it seems to me that the right to reject is lost by any unreasonable delay in doing so: see Fisher, Reeves & Co., Ltd. v. Armour & Co., Ltd. [1920] 3 K.B. 614, C.A. and Chao v. British Traders and Shippers [1954] 1 All E.R. 779. Where a buyer elects to keep a defective car for an inordinately long time, it is not open to him thereafter to avoid the transaction.
By section 51 of the Sale of Goods Act, 1962 (Act 137), a buyer may not reject goods which he has accepted and by section 52 (b) a buyer is deemed to have accepted if “he does not, within a reasonable time after delivery of the goods, inform the seller that he rejects them.”
It is not denied that the respondent followed the worldly counsel given in Elroy Flecker’s Hassan, albeit in another context, that, “merchandise must be well inspected before it is rejected. It must be seen and must be touched.” Indeed the respondent did all this. He drove the car and tested its performance. The facts compel the conclusion that he was well satisfied with what he got.
Time is a material element for consideration where repudiation of a contract of sale is sought, since it is an element in the determination of the question whether property in the goods has passed. Though the intention of the parties is the vital index in this determination, section 26 (2) of the Sale of Goods Act, 1962 (Act 137), provides that: “Unless a different intention appears the property in the goods passes under a contract of sale when they are delivered to the buyer.” Thus any undue delay in rejection amounts to a positive assumption that the property in the goods has passed. Further as by section 27 (2), risk is the necessary concomitant of the passing of property, indeed her hand maiden, any undue retention necessarily settles the risk in the one who retains. A long period of retention must be equated with acceptance, the transfer of the property in the goods and the assumption of all risks. What is a reasonable time is a question of fact and may vary with the circumstances of a case; but retention for a month has been condemned as unreasonable in relation to a second-hand car: see Bartlett v. Sidney Marcus Ltd. [1965] 2 All E.R. 753, C.A. In that case Lord Denning M.R. had occasion to comment on the right to repudiate a sale of a second-hand car on the grounds of latent defects. Lord Denning M.R. said at p. 755: “on a sale of a secondhand car, it is merchantable if it is in usable condition, even though not perfect . . . A secondhand car is ‘reasonably fit for the purpose’ if it is in a roadworthy condition, fit to be driven along the road in safety, even though not as perfect as a new car.
. . . A buyer should realise that, when he buys a secondhand car, defects may appear sooner or later; and, in the absence of an express warranty, he has no redress.”
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This follows closely the principle enunciated in Grant v. Australian Knitting Mills Ltd. [1936] A.C. 85, P.C. There was no warranty in this case. By section 13 (1) (a) of the Sale of Goods Act, 1962 (Act 137):
“. . . there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale except as follows-
(a) There is an implied condition that the goods are free from defects which are not declared or known to the buyer before or at the time when the contract is made: Provided that there is no such implied condition—
(i) where the buyer has examined the goods, in respect of defects which should have been revealed by the examination; . . .
(iii) where the goods are not sold by the seller in the ordinary course of his business, in respect of defects of which the seller was not, and could not reasonably have been aware.”
In the Bartlett case (supra) there was a clutch defect which was known to the parties though they underrated the extent of deficiency. In the present case the clutch defect was known as well as a disturbing hum in the engine. What was not known was the degree of damage. To this extent the similarity of the Bartlett case with the present cannot be missed. Bartlett v. Marcus (supra) substantially turned on the use to which the car had been subjected before rejection – one whole month. If a car has been in use for a whole month it cannot be confidently urged that it is “no use for the purpose for which a car is usually used.” A second-hand car must be taken as it is and not elevated into a new car with all the expectations of factory freshness.
On the facts I cannot see how any condition relating to the merchantable quality of the car could have been written into the contract (entered into by parties who were not car dealers). It is apposite to quote here the definition of “condition” given by Fletcher Moulton L.J. in Wallis, Son & Wells v. Pratt and Haynes [1910] 2 K.B. 1003 at p. 1012, C.A. affirmed in [1911] A.C. 394. It is as follows:
“There are some [obligations] which go so directly to the substance of the contract or, in other words, are so essential to its very nature that their non-performance may fairly be considered by the other party as a substantial failure to perform the contract at all. On the other hand there are other obligations which, though they must be performed, are not so vital that a failure to perform them goes to the substance of the contract … later usage has consecrated the term ‘condition’ to describe an obligation of the former class and ‘warranty’ to describe an obligation of the latter class.”
Lord Wilberforce also had this to say in Schuler A. G. v. Wickman Machine Tool Sales Ltd. [1973] 2 All E.R. 39 at p. 54, H.L. that “the affixing of the label condition’ cannot pre-empt the right of the court to estimate for itself the character of the breach.”
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Roskill L. J., also in the recent case of Cehave NV v. Bremer Handel-gesellschaft mbh, The London Times, 22 July 1975, p. 7, had this to say about conditions”:
“while a buyer was entitled to receive from his seller that which the seller had agreed to sell and deliver, it was not an essential corollary that any departure by the seller from his promise to the buyer should of necessity lead to the buyer being entitled to rescind the whole contract. A court should not be overready, unless so required by statute or authority, to construe a term in a contract as a ‘condition’ any breach of which gave rise to a right to reject.”
In my view the class of goods and the status of the persons contracting rule out any obligations as to conditions or warranties. In my view even if it were assumed that the subsequent state of the Mercedes Benz car at the time of sale constituted a breach of a condition, the respondent must be presumed to have waived his rights by retaining the car unduly long. This leads me to a computation of the length of time the respondent retained the car. He admits he collected the car from the Tutunji Workshop during the first week of March. The repudiation was not communicated to the appellant until 29 April 1969 (see his solicitor’s letter-exhibit 2). On the most favourable computation, a period of almost two months must have elapsed before the repudiation. On the face of such clear evidence, it is disquieting that the circuit court judge should find that the car was kept for only two or three days and that exhibit 2 was the result of a mistake. It is plain he fell into unpardonable error. There is the final puzzle hich arises from the respondent’s attitude to the repairs. The Briscoe estimates for repairs appeared very high; but granted that Briscoe’s overheads or business methods necessitated higher figures than elsewhere, the evidence points to extensive repairs being required. It seems incredible that the wayside fitter’s shop could satisfactorily have completed the repairs in the short space of a day. Well aware of all these facts, the respondent took the car. It must be inferred that, he exercised his own judgment in the matter and elected to continue with the purchase. This was a risk he took and in my view he is bound by his election: see Thornett and Fehr v. Beers & Sons [1919] 1 K.B. 486.
On a consideration of the evidence as a whole this appeal must succeed. It is accordingly allowed. The judgment of the circuit court and the order for damages and costs are hereby set aside. There will be judgment for the plaintiff-appellant for the recovery of the balance of the purchase price of his car. He will also receive his costs in this court fixed at 148.00 and in the court below at 110.00.
JUDGMENT OF SOWAH J.A.
I agree.
JUDGMENT OF ARCHER J. A.
I also agree.
DECISION
Appeal allowed.
D. R. K. S.
