NEOPLAN (GHANA) LTD vs. HARMONY CONSTRUCTION CO LTD [1995-96] 1 GLR 662

CASES REFERRED TO

(1) Morgan v Ravey (1861) 6 H & N 265; 3 LT 784; 30 LJ Ex 131.

(2) Chappell, In Re; Ex parte Ford (1885) 16 QBD 305; 55 LJQB 406, CA.

(3) Stindt v Roberts (1848) 5 Dow & L 460; 17 LJQB 166; 6 LT 257.

(4) Nelson (James) & Sons Ltd v Nelson Line (Liverpool) Ltd [1908] AC 108; 98 LT 322; 24 TLR 315, HL.

(5) Oscar Chess Ltd v Williams [1957] 1 WLR 370; [1957] 1 All ER 325, CA.

(6) Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [p.664] of [1995-96] 1 GLR 662 [1965] 2 All ER 65, CA.

(7) Finnegan v Allen [1943] KB 425, CA.

NATURE OF PROCEEDINGS

ACTION by the plaintiff for the recovery of the amount of ¢4,293,604.22 being the cost of repairs it had carried out on a truck belonging to the defendant but which the defendant had refused to pay on the ground, inter alia, that it was granted a warranty for free servicing by the vendor of the truck. The facts are sufficiently stated in the judgment.

COUNSEL

Mrs Gertrude Torkonoo for the plaintiff.

George Thompson for the defendant.

JUDGMENT OF BENIN JA.

The plaintiff sued the defendant claiming the following reliefs:

“(a) An order for the recovery of the sum of ¢4,293,604.22 being the total cost of repairs carried out on the defendant company’s vehicle.

(b) Interest at the rate of 30 per cent on the said amount from 14 April 1988 up to the date of final judgment.”

The plaintiff’s case as pleaded was that the defendant sent a vehicle to its workshop for repairs in April 1988. It carried out the repairs at a cost of ¢4,293,604.22. But the defendant has refused to settle the cost of repairs despite repeated demands made upon it to settle. Hence the reliefs sought.

The defence pleaded the following material facts, namely:

“(i) That it sent the vehicle to the plaintiff’s workshop upon the advice and direction of Messrs Transport Maschinen Export & Import (hereinafter called Transport Maschinen) who are the principals of the plaintiff in respect of IFA trucks (of which the defendant’s truck was one). The defendant was to inspect the damaged vehicle and give a technical report on it to Transport Maschinen.

(ii) That the defendant did not even request an estimate of repairs of the vehicle let alone to authorise the plaintiff to repair it.

(iii) That the plaintiff might have carried out the repairs upon the

[p.665] of [1995-96] 1 GLR 662 direction and request of Transport Maschinen who were liable under a warranty to pay for the said repairs.

(iv) That the repairs became necessary since it was the manufacturer’s defect that led to the damage to the vehicle thereby bringing the warranty to repair into play.”

In its reply the plaintiff denied being the agent of Transport Maschinen and that it (the plaintiff) only has an after sales service agreement for Ghana with it. The plaintiff averred that the defendant executed a job card authorising the plaintiff to execute the repairs. That it was after the repairs that Transport Maschinen requested the plaintiff to submit an official technical report on the defendant’s vehicle which it did. That the defendant never stopped the plaintiff from carrying out the repairs. That any warranty that existed between Transport Maschinen and the defendant had nothing to do with the plaintiff’s repairs of the vehicle.

At the summons for directions, the following issues were agreed upon:

(a) Whether or not the defendant entered into a contract with the plaintiff for the latter to do some repair work on its vehicle.

(b) If so, whether the defendant is liable to pay the plaintiff the sum of ¢4,092,382.91 being claimed as the total cost of repairs.

(c) Whether or not the plaintiff is the agent of Transport Maschinen and carried out the repairs on the latter’s instructions.

(d) Whether the plaintiff is entitled to his claim.

The plaintiff’s case appears to rest on a contract of bailment for hire of work and labour. This is because the plaintiff pleads that the vehicle was given to it by the defendant in order for it (the plaintiff) to repair it for reward. Thus the defendant (as bailor) was under a duty to pay the agreed price, and in the absence of an agreement as to the price, to pay a reasonable remuneration on a quantum meruit basis. It will seem that a bailee who executes repairs to the chattel without the owner’s consent cannot recover the expense from the bailor. In other words, no obligation arises unless there is an express or implied request from the defendant to the plaintiff for the work to be done or the services to be rendered. The law does not permit claim for services

[p.666] of [1995-96] 1 GLR 662 rendered or work done in the absence of an express or implied contract between the parties except in cases of salvage, agency of necessity and probably professional services rendered in an emergency. In all the known exceptional cases, there must be an emergency about the situation.

So the most important and indeed the crucial issue for determination in this case is whether there was an agreement, express or implied, that the plaintiff should repair the vehicle for the defendant. If that is settled then the next obvious issue will be whether the defendant or Transport Maschinen is responsible for the payment of the cost of repairs.

The initial burden of producing evidence to satisfy the court that an agreement existed between them whereby the plaintiff undertook to repair the defendant’s vehicle for reward rests on the plaintiff. Thus the plaintiff has to establish a contractual relationship between it and the defendant and when this is done then the claim for recovery of the sum of money will lie. As decided in the case of Morgan v Ravey (1861) 6 H & N 265, wherever a relationship exists between two parties, which involves the performance of certain duties by one of them and the payment of reward to him by the other, the law will imply or the court may infer, a promise by each other to do what is to be done by him.

The plaintiff, as stated already, pleaded that a job card was opened for the defendant when the latter brought the vehicle for repairs. The plaintiff also led evidence on this issue. The job card which was tendered in evidence as exhibit A was said to have been signed by the defendant.

These facts were admitted by the defendant’s managing director, Mohammed Abass, when he testified on oath. What is a job card? On this the plaintiff’s representative said:

“A job card is a document which we prepare when a customer brings his vehicle to us for repairs, on which we state the nature of repairs requested by the customer and we make the customer sign it to indicate that he has authorised us to do the job. The defendant signed it. When we finish the job we draw a bill for the customer based on the job card.”

This piece of evidence, material as it were, was never challenged or

[p.667] of [1995-96] 1 GLR 662 rebutted and so I accept the facts contained therein as true. The relevance of this evidence is that the contract for hire of work and labour was evidenced by this job card. The parties are identified, so is the subject matter. Aidoo, the first defendant witness, said he signed it not for the plaintiff, but for the foreign company, but this does not appear to be the position from the face of the exhibit. The defendant signified his acceptance by signing it.

It seems to me then, as it did to Lord Esher MR in Re Chappell; Ex parte Ford (1885) 16 QBD 305, CA that wherever circumstances arise in the ordinary business of life in which, if two persons were ordinarily honest and careful, one of them would make a promise to the other, it might properly be inferred that both of them understand that such a promise was given and accepted. In this case, by delivering the vehicle to the plaintiff for repairs, the defendant was understood to be saying it would pay for the repairs, and the plaintiff was, on the other hand, understood to be saying that it would do the work satisfactorily. And, in my view, ordinarily when you deliver your vehicle to a garage which in the normal course of business undertakes repairs, the very act of the delivery implies a contract between the parties for hire of work and labour. It is thus not far-fetched to adopt the analogy drawn in the case of Stindt v Roberts (1848) 5 Dow & L 460 that there may be a contract by the act of a party, such as if a man goes into a shop where he usually deals, and takes up an article, say nothing, and walks away; a contract would arise and the law would imply a contract to pay for the article. Let me also refer to a relevant point made by Lord Halsbury in Nelson (James) & Sons Ltd v Nelson Line (Liverpool) Ltd [1908] AC 108 at 115, HL: “I do not deny that there are some things so commonly known and practices so universal that, without evidence other than the transaction itself, one infers a contract. What the parties do is itself, where there is such a known course of dealing, evidence of their agreement. In such a case the mere action of the parties in accordance with usage is of itself evidence of a contract.”

It is commonly accepted that garages where vehicles are repaired open job cards for each vehicle sent there and ordinarily the very fact of the delivery of a vehicle to the garage and the opening of the job card constitute the contract between the parties. Thus in this case, the

[p.668] of [1995-96] 1 GLR 662 plaintiff had, prime facie, satisfied the court that there was a contract between it and the defendant to repair the latter’s vehicle for a reward. Hence the burden will be on the defendant to lead rebuttal evidence that notwithstanding the job card, there was no such contract between the parties herein.

The defence will thus be considered in detail. The defendant made the following material averments in its pleadings:

“(2) The defendant sent the said vehicle to the plaintiff’s workshop upon advice and direction by Messrs Transport Maschinen Export-Import the principals of the plaintiff in respect of IFA trucks for the plaintiff to inspect the damaged vehicle and give a technical report on it to Messrs Transport Maschinen Export-Import, Accra branch.

(3) The defendant says that the averment in paragraph (2) was the only reason why the defendant sent the vehicle to the plaintiff and not for repairs to be carried out on the vehicle. The defendant says that it did not either orally or by writing request even an estimate of repairs of the vehicle nor did it authorise the plaintiff to repair the vehicle either orally or by writing; in short the defendant has not entered into any contract with the plaintiff to carry out any repairs on the vehicle.

(5) The defendant says that the plaintiff might have carried out the repairs upon the direction and request of Messrs Transport Maschinen Export – Import of German Democratic Republic, who are liable under warranty to pay for the said repairs.”

All the foregoing averments were rejected by the plaintiff in its reply. The following matters have to be considered for the defence:

(i) whether the job card was signed for the plaintiff or on behalf of Transport Maschinen;

(ii) whether the work on the vehicle was done by the plaintiff or by officials of Transport Maschinen;

(iii) if it was done by the plaintiff, whether it was Transport Maschinen or the defendant which authorised it; and

(iv) the warranty.

Both parties as well as Transport Maschinen, being limited [p.669] of [1995-96] 1 GLR 662 liability companies, act by their accredited human officers or agents. The supervisor of the plaintiff’s workshop at the material time, one J K Aidoo, has testified in this case for the defendant and his evidence cannot be brushed aside lightly, especially in the absence of any suggestion as to collusion with the defendant. But we must consider his testimony rather critically, especially when viewed against the background that the plaintiff knew and had cause to believe that as its employee, Aidoo, the first defendant witness, was acting for it and in its interest at all times. The plaintiff knew and believed he had signed the job card for it as its supervisor. But he now says he rather signed it for Transport Maschinen. I will have to examine his testimony vis-a-vis that of the defendant’s representative, Mr Abass, who also signed the job card for his company.

Mr Abass’ relevant evidence was as follows: he said after the vehicle was involved in the second accident he made a report to Mr Scharm of Transport Maschinen and Mr Aidoo, who advised him to tow the vehicle to the workshop. He continued that:

“two weeks after the accident we towed the vehicle to the yard of the plaintiff and was sent to the rear of the yard in order not to scare off prospective purchasers of IFA vehicles. Scharm and Aidoo said they wanted to check and know why the bucket got off a second time.”

On the job card, this is what the witness said:

“Apart from signing a paper at the security check point, I did not sign any other paper. That paper I signed there was given to me by the security man at the place. The security man made me to understand that anybody who brought a vehicle was requested to sign.”

The relevance of his testimony was that he signed this job card for his company and that it was a security man, not Mr Aidoo, who gave him this job card to sign. Mr Aidoo in his testimony said he prepared this job card on the instruction of Mr Scharm and that he, Mr Aidoo, signed it for IFA, ie Transport Maschinen. On the face of the job card there is nothing to show that Mr Aidoo signed this job card for IFA or Transport Maschinen. But besides this, Mr Aidoo’s testimony is at variance with the defendant’s own pleadings. The defendant averred

[p.670] of [1995-96] 1 GLR 662 in paragraph (7) of the statement of defence that it sent the vehicle to the plaintiff’s workshop upon the advice and direction of Transport Maschinen, the principals of the plaintiff in respect of IFA trucks for the plaintiff to inspect the damaged vehicle and give a technical report on it to Transport Maschinen. This being the reason why the defendant took the vehicle to the plaintiff, it is hard to accept that the job card was not opened by and for the plaintiff. The defendant itself has pleaded it did send this vehicle to the plaintiff upon the instruction of Transport Maschine and indeed the vehicle was sent to the plaintiff and not Transport Maschinen as Mr Aidoo would want us to believe; hence he, Aidoo, did not sign for Transport Maschinen but as a representative of the plaintiff and I so find.

On the repairs of this vehicle the plaintiff’s representative, Tetteh, said when he took over the plaintiff’s Accra station as manager in February 1988 there were a number of vehicles undergoing repairs at the plaintiff’s workshop including the defendant’s vehicle. He continued that the plaintiff repaired this vehicle and then drew a bill which it sent to the defendant, a copy of which was tendered in evidence as exhibit B. This was the only available evidence on the repairs; Aidoo admitted he was not present when the vehicle was repaired. I find as a fact that the repairs were carried out by the plaintiff.

Whether the repairs were authorised by the defendant or Transport Maschinen should actually pose no difficulty as far as payment for the work goes. For there was undisputed evidence from the plaintiff’s representative that even though the plaintiff was the service agent for Transport Maschinen in respect of these IFA trucks, yet it was the customer, that is the owner of the vehicle, who had to pay for the servicing. The defendant sought to lead rebuttal evidence by saying such repairs were to be done and paid for under a warranty and I shall return to this in a moment. But the relevance of the plaintiff’s representative’s testimony is that it only knew one customer and not Transport Maschinen when it came to payment for servicing done on IFA trucks. Be that as it may, the existence of a job card duly executed by the parties meant that the vehicle owner had agreed to pay for the repairs which he had specified to be done by the plaintiff. I find as a fact that the defendant was to pay for the cost of repairs.

Now to the warranty. It was part of the defendant’s case that

[p.671] of [1995-96] 1 GLR 662

Transport Maschinen were “liable under warranty to pay for the said repairs.” The details of the nature of the warranty in so far as it affected repairs were not given in the evidence except that gathered here and there one could only say the defendant was entitled to free servicing for a certain number of kilometers and to free repairs if the defect was found to be that of the manufacturer. A warranty, as defined by Sutton and Shannon on Contract (6th ed) at p 86:

“is a term of the contract which is collateral to the main purpose of the contract, ie which is not so vital as to effect a discharge of the contract, if the circumstances are, or become inconsistent with it.”

See the following cases: Oscar Chess Ltd v Williams [1957] 1 All ER 325 at 327-328, CA per Denning LJ and Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 2 All ER 65 at 67, CA per Denning MR on the true meaning of warranty. For a warranty to be enforceable against a party, there must be proof of an existing contract to which he is a party and of which the warranty forms a part; where no contract exists at all you cannot talk of a warranty. Hence in the case of Finnegan v Allen [1943] KB 425 at 430, CA per Lord Greene MR, it was said that “Warranty is something collateral or incidental to some contract, but in this case there is no contract alleged to which it is incidental or collateral.” In the instant suit, there is no contract of sale of IFA trucks between the plaintiff and the defendant; there is also no after sales service contract between them. The connection which the defendant seeks to rely upon against the plaintiff is that the plaintiff is the service agent for Transport Maschinen. But I think the defendant cannot rely on the relationship between the plaintiff and Transport Maschinen since it is not a party to it. And also whatever warranty was given the defendant by Transport Maschinen, if any, was enforceable against only Transport Maschinen. Much as the plaintiff could not compel the defendant to bring the IFA vehicle to it (the plaintiff) for servicing under the warranty the defendant had with Transport Maschinen, the same way the defendant could not compel the plaintiff to service or repair its IFA truck under the said warranty. In short, I hold that in the absence of any contract between the plaintiff and the defendant, there can be no talk of a warranty between them, let alone an enforceable one. Thus if the vehicle was to be repaired under a

[p.672] of [1995-96] 1 GLR 662 warranty it only entitled the defendant to compel Transport Maschinen to pay for any repairs carried out under the warranty or to reimburse the defendant for the same reason. But the warranty does not entitle the defendant to refuse to pay for work done by a third party like the plaintiff herein who was not advised to carry out the repairs under a warranty.

It is my holding that the defendant having taken his vehicle to the plaintiff to repair, had accepted to pay for it. I therefore enter judgment for the plaintiff to recover the sum of ¢4,093,382.91 from the defendant plus interest at the prevailing bank rate from 14 April 1988 to the date of judgment. I award costs of ¢500,000 to the plaintiff.

DECISION Judgment for the plaintiff.

JNNO