Nanor v. Auto Parts Ltd [1992] 2 GLR 273.

NANOR v. AUTO PARTS LTD [1992] 2 GLR 273

HIGH COURT, ACCRA

LUTTERODT J.

STATUTORY REF.
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Lutterodt J. The plaintiff, who at the date of the issue of this writ described himself as a lotto agent, has sued out this writ for an order of specific performance of a contract of sale of a Nissan Homer bus or in the alternative damages for breach of contract.

The plaintiff claimed in paragraphs (3), (4) and (5) of his accompanying statement of claim that (1) a firm contract for the sale of the vehicle was concluded between him and the defendants, a firm dealing in motor vehicles on 29 June 1977; (2) that he paid the full purchase price of ¢19,800; and (3) that the defendants promised to deliver the vehicle by 20 December 1977. These were all denied by the defendants. They contended on the other hand that:

(1) No firm contract was ever concluded between the parties.

(2) He did not pay the full purchase price though they admitted he did pay the sum of ¢19,000. Their case was that this was on account, i.e. part payment for the price.

(3) They gave no delivery date for the vehicle.

I will therefore in the first place determine whether or not a contract for the sale of a Nissan Homer bus was concluded between the parties. I will have no difficulty in answering in the affirmative. Under our Sale of Goods Act, 1962 (Act 137), s 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 a consideration called the price, consisting wholly or partly of money.” And section 6(1) of Act 137 provides that the price “may be fixed by the contract or may be left to be fixed in a manner thereby agreed, or may be determined by the course of dealing between the parties.”

The parties are agreed that the plaintiff offered to buy and the defendants promised to sell him a Nissan Homer 23-seater bus. The matters they are not agreed upon are (1) the price of the vehicle; and (2) the date of delivery.

But the mere fact that there is now a dispute over the price does not mean no contract was formed or that even if one was formed it is negated by the fact that no fixed price was agreed upon. Suffice it to say a price was agreed upon; either it was that which, as alleged by the plaintiff, was fixed at the date of contract, or as contended by the defendants, the price was to be finally ascertained at the date of delivery.

By the clear provisions of section 1(1) of Act 137, a contract of sale was entered into between the parties.

It is however crucial to determine which of these two rival claims represents the true state of affairs, for the defendants completely deny that (1) the plaintiff has fully paid for the vehicle and so performed all of his obligations under the contract; and (2) consequently that they are the defaulting party. In other words they are saying it is the plaintiff who is in breach.

It seems to me that contrary to the plaintiff’s assertion, all payments he made with respect to this vehicle were not final and full payment but payments made on account, that is to say payments in advance of a larger one. In other words, that the agreement was that he would be called upon at the date of delivery to make further payments in respect of the vehicle. The following concessions he made under cross-examination impel me to hold this view:

“Q The money you paid was said to be payment on account of a Nissan Homer bus? 

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A Yes, exhibit A says so.

Q How did you understand that?

A It was full payment for the bus.

Q You paid the ¢1,000?

A Yes.

Q You did not find anything wrong with paying this additional sums?

A No.

Q And you paid by exhibit B on 11 January 1978?

A Yes.

Q That payment was also described as additional payment on account of one bus?

A From what you are saying if by the time the vehicle arrives finally and the price has changed as a result of duties and taxes or as a result of a change in the cedi rate and the currency in which the vehicle was bought you would have to pay the difference?

A That is so.

Q Exhibit B was issued after the actual delivery date’?

A Yes, that is so.”

I agree with plaintiff’s counsel that there is a world of difference between the phrase “on account” and “on account of.” The former means payments of part of an amount, usually a larger amount whereas the latter means on “behalf of” or “because of.”

But, the plaintiff’s own confession that he paid an additional ¢1,000 and that he further understood as a term of the contract that he would be called upon to make an additional payment if the need arose makes it difficult to accept his version that he made full payment for the vehicle. On his own showing then even if the price was originally fixed there was a variation of this essential term of the contract at a subsequent date.

The other key issue is whether the parties agreed on a specific time for delivery. By the plaintiff’s evidence the defendants originally undertook to deliver the vehicle within six months from the date of the payment of the contract price. Exhibit A contains this other essential term of the contract. Although the defendants sought to challenge this crucial piece of evidence while cross-examining the plaintiff, it is clear he was most emphatic it was the defendant-company who wrote this date on exhibit A. He was not broken down under cross-examination which in any case 

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only sought to point out that those words were written in a different handwriting and were not initialed; and further that no one in the company was authorised to write it. It was not suggested that he wrote it or caused it to be written. Since the defendants led no evidence rebutting the plaintiff’s claim, I have no option but to hold that the defendant-company agreed to supply the vehicle within six months of the date shown on exhibit A.

But then, the plaintiff’s own evidence again reveals that when the defendants fell into breach, he went to the company, which not only announced a change in the price but a change in the delivery date. I reproduce the relevant portion of this testimony:

“Q The bus was to be delivered by 29 December 1977?

A Yes.

Q It was not delivered on this date?

A It was not.

Q What did you do?

A I went there to check up and I was told that the vehicles were on the way coming but there is a little change in the price and so I should pay an additional ¢1,000 so I will be supplied with the vehicle as soon as it arrived.

Q Were you told when specifically the vehicle would arrive?

A I was not told specifically but that at any time from the time I went to pay the money, they would arrive.

Q And you paid by exhibit B on 11 January 1978?

A Yes.”

Again the evidence does show that the plaintiff agreed to this new nebulous term.

Does the law recognize such contracts, namely contracts for which there has been a change in the time of delivery and for which no specific date has been substituted for the original date? The answer is yes. The clear provisions of section 16(4) of Act 137 shows that it is lawful to enter into such contracts. It reads:

“16 (4) Where the buyer agrees to accept delivery from the seller at a date later than stipulated in the contract without substituting another date therefor the seller must deliver the goods within a reasonable time, having regard in particular to the reasons for which delivery was postponed, and the buyer may, on reasonable notice to the seller, notify him of the latest 

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date on which delivery will be accepted.”

The plaintiff, with full notice of the breach, waived his rights as existed under the contract when by 29 December 1977 the vehicle had not been delivered. By 11 January 1978 the agreement therefore was that the vehicle was to be delivered within a reasonable time. What is a reasonable time is a question of fact dependant on a number of factors. From Act 137, the most notable among them being (1) the reasons for which delivery was postponed; and (2) the nature of the goods to be delivered.

Therefore, I would like to examine the reasons the defendants gave for postponing the delivery. By the plaintiff’s evidence they claimed (1) there has been an increase in price by ¢1,000; and (2) the vehicles were on the way coming and would be delivered to him as soon as they arrived. None of these facts were challenged by the defendants.

Five months later, when the vehicles did indeed arrive, the defendants would still not deliver the vehicle to the plaintiff. This time they maintained the vehicles were meant for others. The defendants’ representative in his evidence-in-chief denied that the company told him the vehicles had arrived but were meant for others. I think however the plaintiff ‘s version must represent the true state of affairs. These answers the defendants’ representative gave to the questions put to him by the plaintiff’s counsel demonstrates he has very little knowledge about what transpired between the parties when they first failed to deliver the vehicle:

“Q After you were unable to deliver within the six months what did you tell the plaintiff subsequently?

A He did not approach me.

Q Did he come to any officer, apart from you, with the company?

A I cannot tell.

Q What attempt did the company make to supply him after your inability to meet the delivery date?

A I do not know.

Q Up to date you do not know whether the plaintiff was invited at all?

A No.”

Then also, the following line of cross-examination by the defendants would confirm the plaintiff’s version as to the reason they gave for not supplying him with a vehicle when they arrived. 

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“Q What did you do?

A I went away and came back to find out four months later.

Q What was the position?

A That the vehicle had arrived but those were for some other customers.

Q You know at the time you paid the actual money that others had paid and were looking forward to receiving their vehicles?

A I was not told this.

Q You know the company had other customers?

A They may have other customers.”

Again, on this issue of who asked the plaintiff to make the further deposit of ¢1,000, I will accept his version that it was the defendants. Their representative’s version is that it was the plaintiff who, upon being told that the prices had shot up, on his own volition offered to pay an additional ¢1,000. Since he was not the importer and did not have the facts and figures which determine the prices, the question is, how did he arrive at the sum of ¢1,000?

Again, it is the fact that he was told the price of the vehicle had gone up coupled with the fact that he was called upon to make this additional payment of ¢1,000 that makes yet again the plaintiff ‘s story that he was told that the vehicle was on the way coming plausible.

When the vehicle did therefore arrive, at a time the plaintiff had paid the further ¢1,000 and there was no evidence that he was unwilling to pay any additional sums, and yet the defendants refused to deliver the vehicle, they were in breach and the plaintiff was entitled to treat the contract as at an end.

Would he be entitled to specific performance? It seems to me by the clear provisions of section 58 of Act 137 that such an order can properly be made only in respect of ascertained or specific goods. The section reads:

“58. In any action for breach of contract to deliver specific or ascertained goods the Court may, if it thinks fit, by its judgment direct that the contract should be specifically performed without giving the seller the option of retaining the goods on payment of damages. The judgment may be unconditional or upon such terms as to damages, costs and otherwise as the Court may think fit.”

It follows that under Act 137, no order for specific performance can be 

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made in relation to unascertained or unspecified or non-specific goods.

Happily, Act 137 has explained what is meant by the terms “specific or ascertained goods.” Under section 81(1) of Act 137 “ascertained goods” means goods “identified and agreed upon after a contract of sale is made.” Under section 81(1) “specific goods” means goods “identified and agreed upon at the time a contract of sale is made.” The only real difference between the two is the point in time at which the goods are identified and agreed upon. For ascertained goods they are so identified and agreed upon after the contract has been entered into, whereas for specific goods the identification and agreement is done at the time of the contract.

We will find from the evidence that at no point in time, that is to say either at the time the contract of sale was made or subsequently, that is to say after the contract had been concluded, did the parties identify or agree upon a particular vehicle that it shall be the subject matter of the contract.

This apart, the common law position (and section 52(1) of the English Act of 1893 is similar to ours, save with one addition which relates to procedure) is that the order should not be made where the goods are of a very ordinary description and are not alleged to be peculiar or of such rare or unique quality that similar goods are unobtainable elsewhere. Even so, in such cases, the court has other factors to consider, namely all the surrounding circumstances of the case, e.g. the conduct of the parties, what hardship, if any, would be caused the seller, etc. This then being the correct approach, I do not think the plaintiff in this instant case is entitled to the order of specific performance; the principal reason being that the parties never at any point in time identified or agreed on a particular vehicle as that which was to be delivered or sold to the plaintiff.

The innocent plaintiff, I should think, would be entitled to (1) receive all moneys paid; (2) general damages for the breach itself; and (3) damages for loss of use. The strict provisions of section 57(1) and (2) of Act 137 are my basis for saying that the plaintiff is entitled to receive all the sums he had paid.

They read as follows:

“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 

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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 not withstanding any agreement to the contrary.”

The law relating to damages in actions of this kind has been codified. Section 54 (1) and (2) of Act 137 spells out the mode of assessing damages in non-delivery cases thus:

“54. (1) The measure of damages in an action under section 53 of this Act is the loss which could reasonably have been foreseen by the seller at the time when the contract was made as likely to result from his breach of contract.

(2) Where there is an available market for the goods in question the measure of damages is prima facie to be ascertained by the difference between the market or current price and the contract price—

(a) if a time has been fixed for delivery, or if the seller repudiates the contract before the time of performance, and the buyer does not accept the repudiation, at the time or times when the goods ought to have been delivered;

(b) in any other case, at the time or times of the refusal to deliver the goods.”

In such cases, therefore, i.e. where there is an available market for the goods in question, the aggrieved buyer would prima facie be entitled to the difference between the market or current price and the contract price at the times stipulated under the Act.

The English, from whom we borrowed our Act 137, have wrestled with this problem of what is an available market and varying views have been put forward. I think the essential thing is that if it could be shown that the buyer could go out and buy equivalent goods, that market could properly be described as an available market and the court would award damages on the basis of the prices at which he can buy or alternately the current price.

We would find from the facts of this case that the breach occurred, from the plaintiff’s own showing, by about the end of June 1978; four months after the payment of the ¢1,000 on 2 February 1978. This was the time he demanded the vehicle and was met with a refusal. And

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therefore if any assessment has to be made using the prima facie rule, we can only take into account the market price or current price of an equivalent vehicle as at June 1978, not the current or the market price at the date of judgment.

The plaintiff led no evidence to show there was no available market to which he could go to buy equivalent goods. The “kalabule market” would even have qualified in my view, as an available market. It is the speech by Lord Denning in Mouat v. Betts Motors Ltd. [1959] A.C. 71, P.C. which persuaded me to conclude that our “kalabule markets” are available markets within the meaning and intendment of Act 137. I am not to be understood as commending “kalabuleism”; but the principle here is that in assessing the normal measure of damages in non-delivery cases, if the only available market is the “kalabule market”, the prices at which the equivalent good is obtainable from that source ought to be the price which must be taken into account in assessing damages. Using the legal or controlled price in such circumstances would not be just, it would not give a true and accurate picture of what damage the innocent party has suffered. It would also not restore him to the position he would have been but for the breach. In the Mouat case (supra) where interestingly enough the facts are somewhat similar to this case, the defendant breached an agreement to sell a car to the plaintiff and rather sold it to a third party. Although this was at a time the prices were fixed by law, i.e. controlled in calculating the normal measure of damages, the court did not use the controlled price but the much higher open illegal market price, what in this part of the world would be known as the “kalabule price.” Lord Denning concluded that the rule that a plaintiff is entitled to go into the market and buy equivalent goods at the market price applies even though the only available market is “a surreptitious market which is fed by persons who have broken their covenants.”

The evidence in this case would rather suggest that there was an available market for equivalent goods.

The plaintiff’s own confession is that he failed to approach perhaps the other well known company who deals in similar goods, Japan Motors, because he feared he would be treated the same way. By necessary implication what he feared was that they would toss him about or disappoint him, not that the goods were unavailable.

In actual fact, the promptness with which he obtained a substitute vehicle demonstrates the existence of an available market. However, the fact that he purchased the substitute good for ¢9,000 and so at no loss to himself does not mean he is entitled to nominal damages only. Since the 

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evidence led by the second plaintiff witness gave the market value of the vehicle as at the date of his evidence, I would not be entitled in law to use this to assess damages. The only just method of concluding this case is to call for fresh evidence, setting out the market price or current price of a Nissan Homer bus as at the date of the breach, i.e. 30 June 1978. 

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