COURT OF APPEAL, ACCRA
ARCHER, KINGSLEY-NYINAH AND ANNAN JJ.A.
Archer J.A. In November 1971, the respondent entered into negotiations with the appellants with a view to procuring a vehicle from them on hire-purchase. Thereupon he paid a deposit of ¢1,600.00 on 24 November 1971, to the first appellant who appeared to be acting as an agent of the second appellant. Four months later, that is, 19 April 1972, the first appellant delivered to the respondent a Nissan bus GJ 4183 and on the same day the respondent signed an agreement which purported to be a hire-purchase agreement, produced by the second appellant who was described in the agreement as “owner” of the vehicle. The total hire-purchase price was stated as ¢12,000.00 and after crediting the respondent with the earlier payment of ¢1,600.00, it was agreed that the respondent should pay a monthly instalment of ¢500.00 and a last instalment of ¢400.00 in satisfaction of the total hire-purchase price. In September 1972, the vehicle was involved in an accident. After repairing the vehicle at his own expense, the respondent put the vehicle back on the road on 8 October 1972, but four days later the vehicle was seized by an agent of the Yellow Cab Company, car dealers, who were the legal owners of the vehicle and who had entered into a prior hire-purchase agreement with the second appellant in respect of the same vehicle. The respondent approached the
first appellant for an explanation. He was told that the appellants owed the Yellow Cab Company some arrears on the vehicle and the first appellant advised the respondent to pay up his own arrears to enable the vehicle to be released. The respondent then paid the arrears for September 1972, and the vehicle was returned to him at the end of November 1972. Subsequently the bus developed engine trouble in January 1973, but repairs could not be completed until May 1973. On 16 June 1973, the respondent put the vehicle back on the road but ten days later on 26 June 1973, the Yellow Cab Company seized the vehicle once more. The respondent thought he had had enough and therefore sued the appellants for the return of ¢4,800.00 the total sum he had then paid under the agreement for the vehicle because there had been a total failure of consideration. Alternatively, he also sought a declaration that the purported agreement entered into by the appellants and himself was a nullity and he was therefore entitled to a refund of the total sum he had paid to the appellants.
The issues set down for trial were:
(1) Whether the appellants represented to the respondent that they were the owners of the vehicle?
(2) Whether the respondent and the appellants agreed that Nissan bus GJ 4183 was the subject-matter of another hire-purchase agreement between the appellants and the Yellow Cab Company?
(3) Whether at the time the vehicle was involved in an accident the respondent was in arrears of three months amounting to ¢1,500.00?
(4) Whether the hire-purchase agreement between the parties is null and void?
(5) Whether the amounts so far paid by the respondent to the appellant amount to ¢4,800.00?
After hearing evidence, the learned trial judge found that the first appellant, the agent of the second appellant, did represent to the respondent that they the appellants were the owners of the Nissan bus and that he did not disclose to the respondent, during the negotiations and when the agreement was signed, the fact that the Nissan bus was the subject-matter of another hire-purchase agreement subsisting between the second appellant and the Yellow Cab Company. However he found that at the time of the second seizure of the vehicle in June 1973, the respondent was owing three or more months of arrears in respect of the monthly instalments. Finally, he held that as the hire-purchase agreement had not been completed in strict compliance with the statutory requirements laid down by Part VIII of the Sale of Goods Act, 1962 (Act 137), the agreement was unenforceable and void ab initio. The learned trial judge therefore entered judgment in favour of the respondent and ordered the appellants to refund to him the sum of ¢4,800.00 by virtue of section 57 (1) of the Sale of Goods Act, 1962.
Before this court, learned counsel for the appellants had intended to argue an additional ground filed by him to the effect that as the respondent did not plead the Sale of Goods Act, 1962, the learned trial judge erred in
law by basing his judgment on that Act. After some discussion between the court and learned counsel, the latter abandoned this ground. It ought to be said that learned counsel took the right course. He was therefore left with the only original ground filed, namely, that the judgment was against the weight of evidence.
It was argued on behalf of the appellants that when the hire-purchase agreement was entered into, the respondent knew that the vehicle belonged to the Yellow Cab Company and if he did not know he would have and should have repudiated the agreement when the vehicle was first seized in October 1972. It was further submitted that section 66 (3) of the Sale of Goods Act, 1962, did not render an agreement null and void for non-compliance with the provisions of that section. The section clearly provided that the agreement was unenforceable. It was strongly suggested that as the respondent had used the vehicle he was not entitled to a refund of the monthly instalments. Counsel for the respondent briefly relied on section 57 (1) of the Sale of Goods Act, 1962, which prohibits forfeiture to the seller of amounts paid by a buyer where the seller has recovered the goods.
Did the hire-purchase agreement comply with section 66 of the Sale of Goods Act? The answer is No. As Part VIII of the Act has been repealed, it is better to speak in the past tense. Section 66 (1) provided:
“66. (1) Before any hire-purchase contract is entered into in respect of any goods, the seller shall state in writing to the prospective buyer (otherwise than in the note or memorandum referred to in subsection (3)), a price at which the goods may be purchased by him for cash (in this Part referred to as the ‘cash price’), and shall also state the cash price to the purchaser orally.”
That subsection (3) stated in very clear terms that:
“(3) A seller shall not be entitled to enforce a hire-purchase contract or any contract of guarantee relating thereto or any right to recover the goods from the buyer, and no security given by the buyer in respect of money payable under the hire-purchase contract or given by the guarantor in respect of money payable under such a contract of guarantee as aforesaid shall be enforceable against the buyer or guarantor by any holder thereof, unless the requirement specified in subsection (1) has been complied with, and
(a) a note or memorandum of the agreement is made and signed by the buyer and by or on behalf of all other parties to the agreement, and
(b) the note or memorandum contains a statement of the hire purchase price and the cash price of the goods to which the agreement relates and of the amount of each of the instalments by which the price is to be paid and of the date or the mode of determining the date upon which each instalment is payable, and contains a list of the goods to which the agreement relates sufficient to identify them, and
(c) the note or memorandum contains a notice which is at least as prominent as the rest of the contents of the note or memorandum, in the terms prescribed in the First Schedule to this Act, and
(d) a copy of the note or memorandum is delivered or sent to the buyer within fourteen days of the making of the agreement.”
These were mandatory provisions to be complied with by the seller or owner of the goods and the words of the whole section made it plain that if none of the five provisions was complied with then the seller or owner could not enforce the hire-purchase agreement against the buyer; in other words, an owner could not in a court of law rely on any rights conferred on him by the agreement. These rights included the right of seizure when the hirer made default in paying the agreed instalments.
It follows that as the learned trial judge found as a fact that the respondent was not orally informed of the cash price at the time of entering into the agreement since the hire-purchase agreement tendered in evidence did not state the cash price, the provisions of section 66 had not been complied with and the legal consequence was that the appellants cannot justify their seizure of the vehicle by virtue of any right conferred upon them by the hire-purchase agreement. If the statutory requirements had been complied with then the rights of the parties would have been governed, subject to the statutory provisions in Part VIII of the Act, by the terms of the hire-purchase agreement and the seizure would have been lawful because the learned trial judge found as a fact that the respondent was in arrears at the time of the seizure.
Were the appellants entitled to keep the ¢4,800.00 partly paid by the respondent? The answer again is No. Part VIII of the Sale of Goods Act conferred and imposed on the parties to a hire-purchase agreement rights and obligations. There was a reciprocity of rights and duties. But in the case of the owner, the sanctions in Part VIII were more punitive and onerous. The owner was deprived of any protection given him by Part VIII of the Act or by the agreement. In that case the general law of sale of goods as embodied in other parts of the Act applied. The most relevant section is section 57 (1) and (2) which provide:
“57. (1) Where under a contract of sale the buyer has paid a part or all of the price to the seller and the seller refuses or neglects to deliver the goods to the buyer, having the right so to do, or, after delivering the goods, recovers the possession thereof having the right so to do, the buyer is entitled (without prejudice to any other rights, but subject to any counterclaim for damages by the seller) to recover from the seller the amounts which he has paid.
(2) This section applies whether the amounts paid by the buyer were expressed to be by way of part payment or deposit or otherwise, and notwithstanding any agreement to the contrary.”
It follows that as the right of the appellants to seize the vehicle was unenforceable by virtue of the non-compliance with Part VIII of the Act, the seizure or recovery of the vehicle was covered by section 57 (1) of the Act and the respondent was therefore entitled to the refund of the sum of ¢4,800.00 he paid to the appellants. But learned counsel for the appellants urged the court to hold that section 57 (1) was inapplicable. What then was applicable? Learned counsel answered that the hire-purchase agreement was applicable. But this answer obviously turns the whole argument into a vicious circle. How can one rely on an agreement that is unenforceable? It does not appear that learned counsel had a valid answer to this question.
If one reads the definitions in the Sale of Goods Act, 1962, it becomes obvious that the legislature chose to regard a hire-purchase agreement as a species of a contract of sale which is the genus. Section 1 reads in part:
“1. (1) A contract of sale of goods is a contract whereby the seller agrees to transfer the property in goods to the buyer for consideration called the price, consisting wholly or partly of money ...
(4) A contract of sale may be absolute or conditional.”
The above subsections do not contain any ambiguities and they do in fact repeat the common law notion of sale. But then confusion was bound to arise when section 81 of the same Act defined a hire-purchase contract as follows: “ ‘hire purchase contract’ means a contract of sale of goods in which the price is to be paid in five or more instalments.” In other words, a contract of sale and a hire-purchase contract had the same connotation of sale except that in the latter the price must be paid in five or more instalments. Was there any difference then between a credit sale and a hire-purchase contract? There is no doubt that the definitions were misleading and tended to blur the clear distinction at common law between an ordinary sale and a hire-purchase agreement. In this respect I wish to repeat all the observations I made in my opinion in the case of Royal Exchange Assurance v. Tailor  2 G.L.R. 265 at p. 284, C.A. on the impropriety of equating the two concepts in the Sale of Goods Act, 1962. It appears that the attempt to clothe a hire-purchase agreement in the cap and gown of academic respectability has wrought more confusion than certainty and order.
The next point is whether the appellants and the respondent expressly excluded Part VIII of the Sale of Goods Act. In the body of the hire-purchase agreement appears the following:
“The parties herein both the seller and the hirer have by mutual consent incorporated into this agreement the following provision.
The provisions of Part VIII of the Sale of Goods Act, 1962 (other than section 72 thereof), shall not apply to this agreement where the cash price of the vehicle exceeds N¢2,000 or such other as may from time to time be applicable permitting the exclusion by agreement of the provisions of the said Part VIII.”
This clause is a repetition of section 75 (2) of the Act which enabled the parties to exclude Part VII of the Act. This exclusion was not pleaded by the appellants and neither counsel referred to it in his address.
Nevertheless the learned trial judge considered it and held that the statutory right of exclusion applied only where the cash price exceeded N¢2,000.00 but as the hire-purchase agreement did not state the cash price the appellants were not at liberty to contend without challenge that the parties excluded Part VIII.
He, therefore, held that the purported exclusion was null and void. Even assuming that the exclusion was not null and void but valid and the parties had expressly agreed to exclude Part VIII, the legal consequence would have been the same. In other words, the hire-purchase agreement was outside Part VIII and therefore it was governed by the remaining Parts of the Act. This is so because although the hire-purchase agreement conferred a right of seizure on the appellants yet the words of subsection (2) of section 57 are paramount: “This section applies whether the amounts paid by the buyer were expressed to be by way of part payment or deposit or otherwise, and notwithstanding any agreement to the contrary.”
It is obvious, therefore, that whether or not the appellants or parties excluded Part VIII is of no consequence. If they did not and Part VIII applied, then on account of non-compliance with section 66, Part VIII afforded no protection to the appellants and therefore section 57 (1) operated to give back the respondent his money. On the other hand, if Part VIII was excluded, then the hire-purchase agreement as a contract of sale was regulated by the remaining Parts of the Act and section 57 (1) and (2) again operated notwithstanding what was stated in the agreement.
It was also submitted on behalf of the appellants that the learned trial judge erred when he ruled that the agreement was null and void. I think one has to peruse the judgment meticulously to see whether what he said applied to the whole agreement. In the first place when he dealt with the failure of the appellants to state the cash price orally to the respondent, he expressed himself as follows:
“To stop here for the moment, it is plain for all to see that the failure on the part of the seller fully to comply with the requirements of section 66 (1) of Act 137 makes the contract unenforceable against the hirer. It is specifically provided that the seller’s right to recover the goods is also unenforceable as against the hirer.”
Then he dealt with failure to state the cash price as follows:
“I have carefully looked at exhibit A. I note that the printed form provided space for the insertion of the ‘cash price.’ That space has been left blank which means and can only mean that the first defendant omitted to insert and state the ‘cash price.’ The first defendant has offered no explanation for this vital omission on his part. I am satisfied that the contract between the second defendant and the plaintiff as contained in exhibit A is for this additional reason unenforceable between the parties.”
Referring to the third non-compliance, he said:
“I wish finally to draw attention to the fact that exhibit A does not contain the ‘notice or memorandum’ specified in the First Schedule to Act 137 as stipulated in section 66 (3) of Act 137. The first defendant has not offered any explanation for this omission. This vital omission has the effect of making exhibit A unenforceable against the plaintiff.”
Nowhere in these three passages did he use the expression “void.” However when he considered the purported exclusion of Part VIII of the Act he expressed himself as follows:
“The criterion for excluding the operation and application of Part VIII of Act 137 is that the cash price exceeds ¢2,000.00. In my view where the cash price is not known or not stated it would be unsafe and unreasonable to assume that the cash price exceeds the statutory ceiling. I am therefore unable to hold that in a hire-purchase agreement in which no cash price is stated the parties can exclude the application of Part VIII of Act 137. I hold that that provision in exhibit A is therefore void and of no effect.”
In this context, the learned trial judge used the word void for the first time and in one of his concluding paragraphs he said: “I am satisfied that the hire-purchase agreement in this case exhibit A is unenforceable against the plaintiff and void ab initio for non-compliance with the mandatory statutory provisions.” Unfortunately, it is this passage that has impelled learned counsel for the appellants to assail the judgment. If this passage is read in conjunction with the earlier passages, it is clear that what the trial judge should have said was that insofar as section 66 was not complied with the hire-purchase agreement was not enforceable against the respondent; and as far as the purported exclusion of Part VIII of the Act was concerned, it was of no legal effect because the cash price which should be the basis and the evidence for the exclusion was wanting. I am convinced that inadvertently the two considerations were mixed up.
Section 66 (3) makes the contract merely unenforceable as the learned trial judge stated in the earlier passages. If the contract was void ab initio, then there would have been no necessity for section 66 (4) which empowered the court, for just and equitable reasons, to dispense with non-compliance. Indeed what is null and void cannot be resurrected or revived. It is unlike phoenix which can burn itself in a funeral pyre and then rise from its ashes with renewed strength and live on.
Learned counsel for the appellants in a daring attempt has argued that section 57 (1) of the Act cannot apply to this case. The more I think about his argument, the more I become convinced that section 57 (1) applies. In this respect I wish to reiterate all that I said in Abaka v. Ansah  G.L.R. 688 at p. 694 that
“Section 57 is a novel provision. It has no equivalent even in the English Sale of Goods Act, 1893. I think the Ghana legislature made
this provision to clear the doubt which now abounds in the matter in English law and also to prevent unconscionable enrichment.”
I may add that Part VIII of the Act was enacted purposely to protect the poor and that is why all hire-purchase agreements in which the cash price did not exceed ¢2,000.00 were caught by that Part. The affluent who could afford to enter into agreements with cash prices exceeding ¢2,000.00 were at liberty to opt out of Part VIII. Nevertheless there were over-riding statutory provisions which rendered their opting out valueless.
For the above reasons, I would dismiss the appeal.
Kingsley-Nyinah J.A. I agree.
Annan J.A. I also agree.