Sillah v S.C.O.A. Ltd, 1972-73 ALR S.L. 192

SECTION 28

reference to the cases cited, I will give judgment for the plaintiff, and I make the following order: (a) that the will dated March lOth, 1952 and produced in this case be declared invalid; (b) that letters of administration be granted to the first plaintiff to administer the 5 estate of the late Kabba Turay (deceased) late of 40 Goderich Street, Freetown, and (c) that each party pay his or her own costs.

Order accordingly. SILLAH v. S.C.O.A. LIMITED High Court (Tejan, J.): April 14th, 1972 (Civil Case No. 365/70) [ 1] Contract-damages-hire-purchase-breach of agreement by owner hirer's loss of right to possession and option to purchase-deposit and instalments paid constitute measure of damages but additional loss to hirer by resale of goods may justify larger award: The damages for the loss sustained by the hirer under a hire-purchase agreement in conse quence of a breach of the agreement which defeats his right to pos session of the goods and prevents him from exercising his option to purchase, are the amount of the deposit and instalments he has paid, but any additional loss caused to the hirer by the owner's resale of the goods may justify a larger award (page 202, line 36- page 203, line 4; page 203, lines 11-17).

[2] Contract-damages-measure of damages-hire-purchase-hirer's loss of right to possession and option to purchase by owner's breach of agree ment-deposit and instalments paid constitute measure of damages but additional loss to hirer by resale of goods may justify larger award: See [1] above. [ 3] Contract-modification-modification by acquiescence-owner's accept· ance of several irregular instalments under hire-purchase agreement is acquiescence in variation and prevents enforcement of unperformed balance of original agreement: If an owner accepts an instalment under a hire-purchase agreement after the hirer has defaulted in an earlier payment he waives his right to exercise his option to terminate for breach of the agreement; if he accepts several irregular payments then he is deemed to acquiesce in a variation of the contract so that he cannot subsequently insist upon strict performance of the original agree ment (page 200, lines 16-22, lines 28-32). [ 4] Contract-waiver-nature and effect of waiver-acceptance of instalment payment under hire-purchase contract waives right to terminate for earlier default: See [ 3] above. 40 [ 5] Documents-interpretation-document to be interpreted as a wholeintention of parties clearly expressed on face of instrument prevails over ordinary meaning of words used: The words of a written contract

SILLAH v. S.C.O.A. LTD., 1972-73 ALR S.L. 192 H.C. should usually be given their obvious and ordinary meaning but if this conflicts with the intention of the parties clearly expressed on the face of the instrument the parties' intention prevails (page 199, lines 11-30). Hire-purchase-damages-breach of agreement by owner-hirer's loss of right to possession and option to purchase by owner's breach of agreement-deposit and instalments paid constitute measure of damages but additional loss to hirer by resale of goods may justify larger award: See [1] above. Hire-purchase-damages-measure of damages-hirer's loss of right to possession and option to purchase by owner's breach of agreementdeposit and instalments paid constitute measure of damages but additional loss to hirer by resale of goods may justify larger award: See [1] above. Hire-purchase-determination of contract-hirer's default-failure by owner to exercise rights to resume possession and terminate agreement -agreement remains in force despite hirer's default: A hire-purchase agreement which gives the owner an option to terminate the agreement and take possession of the goods upon the hirer's making default in payment of the rent is not ipso facto terminated by such default, nor is the hirer's option to purchase thereby lost; the agreement continues in force, and the right of the hirer subsists to pay all the purchase money and acquire the property in the goods, until the option to terminate is exercised (page 200, line 38- page 201, line 6). Hire-purchase-hirer's rights-option to purchase-not lost by hirer's default until owner resumes possession or terminates agreement: See (8] above. Hire-purchase-owner's rights-right to resume possession-failure to resume possession or terminate agreement-agreement remains in force despite hirer's default: See [ 8] above. Hire-purchase-owner's rights-right to terminate agreement-failure to resume possession or terminate agreement-agreement remains in force despite hirer's default: See [8] above. Hire-purchase-payment-default in payment of instalments-agreement remains in force until owner terminates or resumes possession: See [8] above. Hire-purchase-payment-default in payment of instalments-owner's acceptance of subsequent payment waives right to terminate for breach; acceptance of several irregular instalments is acquiescence in variation and prevents enforcement of unperformed balance of original agreement: See [ 3] above.

The plaintiff brought an action against the defendants for damages for breach of a hire-purchase agreement. 40 The plaintiff took a bus from the defendants' company on hire-

purchase with an option to purchase for 10 cents at the end of the hire period if the agreed daily payments were made. He defaulted in payment of the daily rent but did make irregular payments of varying amounts which the defendants accepted, giving him 5 receipts for them. Clause 14 of the agreement stated that if the plaintiff failed to pay any "monthly rent" the hiring would, at the option of the owners, be ipso facto determined but there was no provision governing the consequences of a default in daily payments. 10 Some time after the expiration of the' repayment period but before the plaintiff had paid the total amount due under the agree ment, the defendants seized the vehicle, purporting to exercise their option to terminate the agreement on the ground of the plaintiff's default in payment. They later sold the vehicle to a 15 third party. The plaintiff brought the present proceedings against the defend ants contending that (a) the defendants' purported exercise of their option to terminate conferred by cl. 14 of the agreement was invalid since that clause referred to "monthly rent" and the 20 default was in daily payments in respect of which there was no provision; (b) the defendants had waived the plaintiff's default by subsequently accepting payments from him; (c) having elected to depart from the terms of the original agreement and having acqui esced in the plaintiff's payment of varying amounts at irregular 25 intervals, the defendants were estopped from insisting upon strict performance of the original agreement; and (d) by their seizure of the vehicle the defendants were therefore in breach of the agree ment. He claimed damages for this breach which he maintained should take into account the fact that the plaintiff had lost not 30 only his right to possession but also his option to purchase, since the vehicle had been sold to another. The plaintiff also claimed interest at 5% from the date of breach to the date of judgment.

The court gave judgment for the plaintiff and awarded him damages but without interest as claimed. Cases referred to:

(1) Belsize Motor Supply Co. v. Cox, [1914] 1 K.B. 244; (1914), 110 L.T. 151, distinguished.

(2) Besseler Waechter Glover & Co. v. South Derwent Coal Co. Ltd., [1938] 1 K.B. 408; [1937] 4 All E.R. 552.

(3) Helby v. Matthews, [1895] A.C. 471; (1895), 72 L.T. 841.

F SILLAH v. S.C.O.A. LTD .• 1972-73 ALR S.L. 192

(4) Jalloh v. Baydoun, 1968-69 ALR S.L. 24, distinguished.

(5) Mallam v. Arden (1833), 10 Bing. 299; 131 E.R.

919. H.C.

(6) S.C.O.A. Ltd. v. Cassell, 1968-69 ALR S.L. 133, dicta of Tambiah, J.A. applied.

(7) Whiteley Ltd. v. Hilt, [1918] 2 K.B. 819; (1918), 119 L.T. 632, con sidered. Gelaga-King for the plaintiff; Barlatt for the defendants. TEJAN, J.: In this action the plaintiff claims damages for breach of contract, the return of the sum of Le2762.81 paid by the plaintiff to the defendants and interest at 5% per annum from November 23rd,

1968 till payment or judgment. 15 On October 13th, 1967, the plaintiff who is a transport oper ator entered into a hire-purchase agreement with the defendants' company, importers of motor vehicles, for the hire of one J2 M16 bus, registration No. WR

687. The evidence of the plaintiff is that he agreed with the defend- 20 ants that after the initial payment of Le700, he would pay the sum of Le12 daily for a period of 213 days, that the price of the vehicle was Le2728.85, and that after he had paid this amount plus a further token sum of lOc. the ownership of the vehicle was to pass to him. The plaintiff paid the total sum of Le2762.81 25 which said sum includ~ the initial payment of Le700. The evidence is that while the plaintiff was driving the vehicle along the Waterloo-Freetown Road, on November 23rd, 1968, a break down vehicle belonging to the defendants stopped in front of him. The plaintiff stopped his vehicle and two men came out of the 30 break-down vehicle and told the plaintiff to get out of his vehicle as the manager of the defendants' company had sent them to seize the vehicle. The plaintiff went to the manager and asked him why he had sent men to seize his vehicle. The manager told the plaintiff to get out of his sight and said that he (the manager) had authorised 35 the vehicle to be seized because the plaintiff had instituted legal proceedings against the defendants' company and that he (the manager) would like to see what the court would do about it. In their statement of defence, the defendants denied that the plaintiff paid the total sum of Le2762.81 and said that the plaintiff 40 never completed payment of the sum of Le2928.85, the total

value of the vehicle. The defendants admitted seizing the vehicle because the plaintiff was in default in respect of payments long overdue. The plaintiff was cross-examined by Mr. Barlatt, counsel for the 5 defendants. In answer to Mr. Barlatt, the plaintiff said he was given a receipt when he paid the sum of Le12 for the release of his vehicle after it had been seized. When being examined by his counsel, the plaintiff put in evi dence the following documents: (a) The hire-purchase agreement, 10 (b) a document given to him by the defendants and (c) 61 receipts showing payments made to the defendants. It appears from the evidence that negotiations for the hire of the vehicle began before October 13th, 1967. Five of the 61 receipts were referred to in the document given to the plaintiff by 15 the defendants and according to these receipts, payments made between September 20th, 1967 and October 9th, 1967 amounted to the sum of Le700, and according to the document this amount represented the following: Incidental expenses: 20 Licensing Le 21.55

Number plates 7.00 Insurance 486.60 Deposit on H.P. 184.85 Total Le700.00 The rest of the receipts which represented instalment payments are as follows: [The learned judge listed payments totalling Le2169.61 and continued:] Now, it appears from the receipts tendered that the plaintiff has paid the total sum of Le2169.61 plus the sum of Le184.85 being the hire-purchase deposit making an overall total of Le2354.46. According to the evidence of the plaintiff, he paid the total sum of Le2762.81. Presumably, the plaintiff took into consideration the sum of Le515.15 paid to cover the costs of licence, number plates and insurance policy. Even if the plaintiff had taken into account this amount, then the total payment should have been the sum of Le2869.61. I do not think the sum of Le515.15 was included in the value of the vehicle. The document which was signed by the plaintiff clearly shows that the value of the vehicle was Le2500 plus the sum of Le228.85 as interest, making the total value of the vehicle, apart from the incidental expenses for licence,

l SILLAH v. S.C.O.A. LTD., 1972-73 ALR S.L. 192 H.C. number-plates and insurance policy, the sum of Le2728.85. From my calculations, deducting the sum of Le2354.46 paid by the plaintiff from the sum of Le2728.85 the value of the vehicle, it would appear that the plaintiff is still indebted to the defendants' company in the sum of Le374.41 plus the sum of 10 cents. 5 In their statement of defence, the defendants stated that the value of the vehicle was Le2928.85. With due respect to the defendants, the document which they prepared clearly states that the total value was the sum of Le2728.85. Under cross-examination and in his address, Mr. Barlatt stressed the point that the receipts 10 put in evidence by the plaintiff included payments made for the seizure of the vehicle and the cost of four tyres. I have examined all the receipts very carefully, and none of the receipts was either for payments made for seizure of the vehicle or for the cost of tyres. Every receipt was for payments made to defray the cost of 15 the vehicle. The agreement between the plaintiff and the defendants is a hire-purchase agreement. The general nature of a hire-purchase agreement is that of bailment. The hire-purchase agreement in this case stipulates as follows: 20 "1. The owner shall let to the hirer and the hirer shall take on hire from the owners, with an option to purchase as hereinafter mentioned the vehicle J2 M16 bus registration No. WR 687 (hereinafter called the "motor vehicle") to be delivered on the signing of this agreement for a term 25 of 213 days from the date hereon (subject to prior determination as hereinafter provided).

2. The hirer shall pay to the owners on the signing of the agreement the sum of Le184.85 and thereafter during the hiring pay to the owners the sum of Le12 on each 30 day of the month without demand.

3. The hirer shall during the hiring at his own expense keep the motor vehicle in good perfect [sic] working order and condition to the satisfaction of the owners and take every reasonable precaution to guard the same and on 35 termination of the hiring otherwise than by purchase shall deliver the same to the owners in good and perfect working order and condition, ordinary wear and tear alone excepted." Clause 1 of the hire-purchase agreement confers on the plaintiff an 40 option to purchase on the performance of certain conditions.

Clause 3 on the other hand confers the right to terminate the hiring by either party otherwise than by purchase. It follows therefore that the agreement is a contract of hire of the vehicle by the defendants, conferring on the plaintiff-hirer an option to purchase, and under cl. 3, the plaintiff was under no obligation to buy, as he could determine the agreement and return the goods at any time: see Helby v. Matthews (3). Clause 2 of the agreement required the plaintiff to pay the sum of Le12 on each day of the month during the hiring after the plaintiff had paid the sum of Le184.85 on the signing of the agreement. The agreement was signed on October 13th, 1967, and the plaintiff was to start payments on the next day. The evidence before me shows that the first payment was made on October 16th, 1967 and was of Le16. After the signing of the agreement, payments of various sums were made irregularly and inconsistently with the terms of the agreement. It seems to me that the defend ants were well aware of the defaults of the plaintiff and continued to accept irregular payments up to July 26th, 1968. Having accepted the irregularities and defaults in payments made by the plaintiff, the defendants on November 23rd, 1968, suddenly decided to exercise their rights under cl. 14 of the agreement. Clause 14 states that- "if the hirer shall make default of any monthly rent aforesaid or any part thereof for seven days after the s~.me shall become due (whether the same shall have been legally demanded or not) or shall fail to observe and perform any of his other obligations to the owner, then in any such case the hiring shall at the option of the owners be ipso facto determined and thereupon it shall be lawful for the owners to seize and take possession of the motor vehicle wherever the same may be." Paragraph 4 of the statement of defence states as follows: "With regard to para. 5 of the statement of claim the defend ants admit that they seized the vehicle and say in doing so they exercised their right since the plaintiff was in default in respect of payments long overdue." I take it that para. 4 of the statement of defence refers to the right conferred on the defendant company under cl. 14 of the agreement. But there is another conflicting clause, that is, cl. 2 of the agree ment, which requires the plaintiff to make daily and not monthly payments as referred to in cl.

14. There is no provision in the agreement to define the rights of the defendant company if the