SUPREME COURT, ACCRA
DATE: 21ST DECEMBER, 1962
BEFORE: SARKODEE-ADOO, MILLS-ODOI AND AKUFO-ADDO, JJ.S.C.
CASES REFERRED TO
(1) Darcy v. Allen (1602) Moo. K.B. 671; 72 E.R. 830.
(2) British Movietonews Ltd. v. London and District Cinemas Ltd. [1950] 2 All E.R. 390, C.A.
(3) Parkinson (Sir Lindsay) & Co. v. Commissioners of His Majesty’s Works and Public Buildings [1949] 2 K.B. 632
(4) Somu Pillai v. Mayavaram Municipal Council (1905) I.L.R. 28 Mad. 520 (India)
(5) Hart v. Wright (1885) 1 T.L.R. 538
NATURE OF PROCEEDINGS
APPEAL from a judgment of Acolatse, J. sitting in the High Court, Accra, dismissing the plaintiff-appellant’s claim for damages for wrongful seizure and detention of a Mercedes Benz truck purchased from the defendants-respondents under a hire-purchase agreement and for breach of warranty of the said agreement. The facts are fully set out in the judgment of the Supreme Court.
COUNSEL
Dr. de Graft-Johnson for the plaintiff-appellant.
C. T. Yebuah for the defendants-respondents.
JUDGMENT OF MILLS-ODOI J.S.C.
Mills-Odoi J.S.C. delivered the judgment of the court. By exhibit B dated the 25th October, 1957, the appellant entered into a hire-purchase agreement with the respondents for the purchase of a Mercedes Benz tipper truck, No. AF 603. The agreement was to expire on the 16th December, 1958. One of the clauses of the agreement permitted the respondents to seize the vehicle in the event of default in any of the payments due. The appellant fell into arrears with his payments and at the date of termination of the agreement there was a balance of £G777 7s. 3d. due and owing by him. Instead of exercising their right of seizure of the vehicle under the hire-purchase agreement, the respondents entered into a new hire-purchase agreement with the appellant, exhibit C, which was executed on 16th December, 1958, in which the outstanding balance of £G777 7s. 3d. was treated as the purchase price of the vehicle.
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By exhibit C the appellant agreed to pay the sum of £G777 7s. 3d. within eight months from the date of the agreement, viz: (a) £G75 per month for the first four months commencing from the 16th January, 1959, and thereafter on the 16th day of each succeeding month; (b) £G100 per month for three months commencing from the 16th May, 1959; and (c) the final instalment of £G77 7s. 3d. to be paid on the 16th September, 1959. Exhibit C also permitted the respondents to seize the vehicle if the appellant made default in paying any instalment. After seizure, “all payments previously made by the Hirer under the agreement shall be forfeited to the Owner.”
It was not disputed that on the 16th September, 1959, the date for payment of the final instalment, the appellant was indebted to the respondents in the sum of £G495 10s. 2d. The respondents did not enforce their right of seizure under exhibit C until the 11th March, 1960, when the appellant’s indebtedness to them had increased to £G576 18s. 1d. made up as follows: (a) £G402 13s. 10d. for arrears on the instalments; (b) £G97 5s. for insurance; and (c) £G76 19s. 3d. for repairs. After the date of seizure the vehicle remained in the possession of the respondents for nearly two months, and was thereafter sold on the 4th May, 1960.
The appellant then instituted this action, claiming £G4,000 damages for wrongful seizure and detention of the vehicle and for breach of warranty.
Clause 15 of exhibit C empowered the respondents to seize the vehicle “if the Hirer fails punctually to pay the rent . . . or to observe or perform any of the provisions and conditions hereof. . . .” It was not disputed by the appellant that he had defaulted in payment of the rent at the date of seizure of the vehicle. In exercising their right of seizure of the vehicle the respondents acted within the terms of exhibit C. We are therefore satisfied that the seizure was lawful.
We shall now consider whether the detention of the vehicle was wrongful. The appellant contended that the conduct of the respondents after the date of seizure of the vehicle was in breach of clause 17 of exhibit C. He alleged that on the 17th March, 1960, six days after respondents had taken possession of the vehicle, he tendered to them the sum of £G776 then due and owing by him, including expenses on insurance and repairs; but they refused to accept the money and they also failed to return the vehicle to him.
Clause 17 of exhibit C states as follows: “If the hiring be determined under clause 14 hereof and immediately upon such determination the Hirer shall deliver up the Motor Vehicle to the Owner or permit the Owner to retake possession of the same then the Hirer shall have the right to purchase the said Motor Vehicle provided he pays to the Owner within seven days of such determination a sum which together with the sum paid by the Hirer on the
signing hereof and the sum paid by him for rent will amount to £G777 7s. 3d. (Seven hundred and seventy-seven pounds, seven shillings and threepence only), and also all moneys due from the Hirer to the Owner under this agreement at the date of such determination and all costs charges payments and expenses incurred made or sustained by the Owner in relation to the premises provided always that until the Hirer shall have fully complied with the stipulations of this clause he shall not (after the hiring has been determined under Clause 14 hereof) be deemed to have any right or property or beneficial interest in the said Motor Vehicle.”
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It is clear from exhibit 1, a letter written by the appellant’s solicitor to the respondents and dated the 6th May, 1960, that no money was tendered by the appellant or by anyone on his behalf on the 17th March, 1960, in satisfaction of the total amount due by the appellant to the respondents under exhibit C. Paragraph 6 of exhibit 1 reads as follows: “My client further instructs me that he arrived today [i.e. the 6th May, 1960] at your office to pay off the remaining instalment together with the amount due on his machinery account plus commission but was informed that the said vehicle had been sold.”
The learned trial judge therefore held, and rightly in our view, that the appellant failed to take advantage of clause 17 of exhibit C by buying the vehicle from the respondents “within seven days after it had been seized.” We are satisfied that at the date of sale the appellant could not “be deemed to have any right or property or beneficial interest in the said motor vehicle.”
Learned counsel for appellant contended that clause 12 of exhibit C restricted the appellant to have the vehicle repaired only in the respondents’ workshop. This, in his view, constituted a monopoly and therefore rendered exhibit C void. In support of his contention he referred us to the following cases: Darcy v. Allen,1(1) British Movietonews Ltd. v. London and District Cinemas Ltd.,2(2) Sir Lindsay Parkinson & Co. Ltd. v. Commissioner of His Majesty’s Work and Public Buildings,3(3) and Somu Pillai v. Mayavaram Municipal Council,4(4) an Indian case referred to in the English and Empire Digest, Vol. 12, p, 285, para. 1063.
With respect to learned counsel for the appellant these authorities are irrelevant to the issues involved in this case. In British Movietonews Ltd. v. London and District Cinemas Ltd. the real question at issue, as set out by Denning, L.J., was “whether an agreement between the plaintiffs as film distributors and the defendants as film exhibitors, which was made during the war for the exhibition of newsreels, is still in force.”5(5) In that case and also in the case of Parkinson & Co. Ltd. v. Commissioners of Works and Public Buildings, the judgments show that no matter that a contract is framed in words which, taken literally or absolutely, cover what has happened, nevertheless, if the ensuing turn of events was so completely outside the contemplation of the parties that the court is satisfied that the parties, as reasonable people, cannot have intended that the contract should apply to the new situation, then the court will read the words of the contract in a qualified sense.
In the instant case the parties intended that the contract, exhibit C, should apply to the new situation.
This court will, therefore, do what is just and reasonable by giving full effect to exhibit C and restricting the parties thereto to the circumstances contemplated by them. Furthermore, clause 12 did not restrict the appellant to have the vehicle repaired only in the respondents’ workshop. The clause reads as follows: “12. The Hirer will during the continuance of the hiring at his own expense keep the said Motor Vehicle in perfect working order and thoroughly good condition and repair and will be responsible for all risks of whatsoever kind provided that the Hirer shall not be deemed to have
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authority to pledge the Owner’s credit for the repair of the said Motor Vehicle or to create any lien on the said Motor Vehicle in respect of such repairs or otherwise and if the said Motor Vehicle shall require repair the Hirer shall notify the Owner who shall be entitled to repair the said Motor Vehicle or have the same repaired by a person to be selected by the Owner at the expense of the Hirer and the Owner shall be entitled to the possession of the said Motor Vehicle for the purpose of such repair.”
Clause 12 gave the appellant a discretion to exercise, viz. either to allow the respondents to make repairs on the vehicle or to permit a third person selected by the respondents to effect such repairs.
Business people and their legal advisers have evolved a type of hire-purchase transaction and form of documents to evidence such transaction which have been actually tested in the courts and have been found to be watertight and rock proof: See Notes on Hire-Purchase Law by Jones and Proudfoot (2nd ed.) p. 4.
It is a common practice in hire-purchase agreements to make provision for the motor vehicle, the subject-matter of the agreement, to be repaired either by the hirer or by the owner, as the case may be.
The obligation to repair is almost invariably placed upon the hirer by an express term of the agreement, but if by the terms of the contract the owner is under a liability to repair, he is entitled to resume possession of the chattel for that purpose: see Halsbury’s Laws of England, (3rd ed.) Vol. 19, p. 536 at para. 865 (c).
If an owner is under an express contract to repair an article let under a hire-purchase agreement, that obligation is not limited to repairs necessitated by fair wear and tear, but includes damage due to an accident, though not due to the hirer’s wilful default: see Hart v. Wright6(6)
There is no rule or principle of law which prevents a clause similar to or identical with clause 12 of exhibit C being giving effect to. We are of opinion that the said clause is not repugnant to natural justice, equity and good conscience. Its provision cannot, therefore, be said to have constituted an agreement having for its object the creation of monopoly.
The learned trial judge in his judgment observed, “that the agreement exhibit C was made prior to the coming into operation of Hire-Purchase Act, 1958.”7(7) It follows, therefore, that that Act did not affect exhibit C. However, during the cause of his judgment he stated as follows: “The plaintiff and his witnesses, as the hirer, failed to satisfy me that the amount which the hirer had to pay in respect of the hire-purchase price exceeds the price of that part of the goods by at least 75 per cent of the unpaid balance of the hire-purchase price and I hold, therefore, that there was no breach under section 12 of the Hire-Purchase Act, 1958. . . . It follows therefore that the seizure and detention and the sale of the vehicle were not wrongful under the agreement or the Hire-Purchase Act, 1958.”
We are unable to agree with this opinion of the learned trial judge which is inconsistent with his observation that the Hire-Purchase Act, 1958, did not affect the parties to the agreement, exhibit C.
The judgment appealed from is, therefore, varied by deleting therefrom paragraph 18
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thereof commencing from the words “The plaintiff and his witnesses, as the hirer,” and ending with the following “section 12 of the Hire-Purchase Act, 1958.” Also by inserting a full stop immediately after the word “agreement” appearing at line 10 of paragraph 19 of the said judgment and deleting the following words and figures “or the Hire-Purchase Act, 1958” immediately appearing after the said word “agreement.”
Save as varied, the judgment of the court below is affirmed and for the reasons already given and for other reasons which we do not consider necessary to dilate upon we would dismiss this appeal.
DECISION
Appeal dismissed.
Judgment of High Court affirmed save as varied.
