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IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (GENERAL DIVISION)
ACCRA- A.D 2018
AUTO PLAZA LTD - (Plaintiff)
KENPONG COMMUNICATIONS - (Defendant)
DATE: 15 TH OCTOBER, 2018
SUIT NO:
JUDGES: GJ 656/2017
LAWYERS:
JUDGMENT
Plaintiff claims the reliefs endorsed on its amended writ issued against the Defendant:
a. An order for the recovery of US$165,700.44 being the total balance owed by Defendant to Plaintiff as at 31/10/16
b. Interest on the amount of at the agreed rate of 5% from 31/10/16 till date of final payment
c. Cost.
Plaintiff, a company whose principal business is in dealing in vehicles and its parts claim that the Defendant engaged her in a business relationship relating to the purchase of various vehicles. The first encounter recounted by Plaintiff as gleaned from the statement of claim is that on the 3rd of October, 2013 Defendant purchased a Hyndai Accent at a cost of US$18,000.00 on credit in addition to two Hyndai i10 also at a total cost of US$22,000.00 also on credit. That Defendant made a part payment of US$18,000.00 leaving a balance of US$22,000.00 and a further payment of US$2,000.00 and postdated cheques issued by defendant to cover the outstanding amount of US$20,000.00. To Plaintiff upon presentation of the cheques they were all dishonoured. Plaintiff claim that more vehicles were subsequently purchased by Defendant on credit and includes the following: two Hyndai i10 at a cost of US$22,000 on the 12th of November, 2013, purchase of two units of Hyndai i10 at the cost of US$22,000 on the 15th of January, 2014. That part payments were made for the purchase of these vehicles and postdated cheques issued but again upon presentations the cheques were not honoured by the Banks. Plaintiff avers that it immediately demanded for the repayment of the outstanding balance together with the interest which then stood at the time the writ was amended at US$102,509.05 as at 31st of October, 2016.
Defendant has denied the material claims of Plaintiff and has counter claimed for the following in its amended statement of defence and counterclaim:
a. A declaration that the Plaintiff has breached the various agreements between the parties for the sale and purchase of brand new vehicles devoid of defects.
b. A declaration that the vehicles sold to Defendant had latent manufacturer’s defects.
c. An order for defendant [sic] to rectify the latent manufacturer’s defects in the vehicles sold to Defendant/Or in the alternative an order directed at Plaintiff to replace all the vehicles sold to Defendant.
d. General damages.
e. Cost.
f. Any other relief(s) which this honourable court deems just and equitable
Defendant claim that upon purchase of the vehicles it found out that all the vehicles had latent manufacturer’s defects and were immediately brought to the attention of the Plaintiff. And due to the defects it stopped the cheques it had issued and notified Plaintiff but Plaintiff persisted and presented them at the Banks whereupon they were refused payment based on the instructions of Defendant. That due to the defects it sought a replacement of some of the vehicles. Plaintiff failed to make good its promise to change the vehicles and hence its counterclaim.
The following issues were set down at the application for directions stage as the issues for trial:
1. Whether or not the Defendant entered into vehicle sale agreement with the Plaintiff on the 31/10/2013, 12/11/13, 26/11/13 and 15/01/14 for the purchase of Hyndai vehicles.
2. Whether or not Defendant made known to Plaintiff any latent defects on the vehicles purchased by Defendant on credit.
3. Whether or not Plaintiff agreed to replace some of the vehicles purchased by Defendant on the grounds that they suffered from latent defects
4. Whether or not Defendant adhered to the servicing guidelines stipulated under the existing warranties covering Defendant’s purchased vehicles.
5. Whether or not vehicles purchased by defendant on credit suffered from any defects arising from Defendant’s misuse and improper care and other reasons other than latent defects.
6. Whether or not Defendant can raise the defence of latent defects after 4 years without complaint.
7. Whether or not Defendant agreed to penal interest rate of 5% or at all under the written vehicles sale agreements entered into between the parties.
8. Whether or not Plaintiff breached the written agreements between the parties for the sale and purchase of new vehicles devoid of defects
9. Whether or not vehicles purchased by Defendant suffered from latent defects
10. Whether or not Plaintiff ought to rectify the said defects or replace all the vehicles sold to Defendant
11. Whether or not defendant is entitled to general damages
12. Whether or not Defendant is indebted to Plaintiff
13. Whether or not Plaintiff is entitled to his claim
14. Whether or not Plaintiff is entitled to interest on the amount owing to demand cost
15. Any other issues arising on the fall of the pleadings.
Was it necessary for the multitude of issues to have been filed for trial? Surely not. In a suit of this nature for the recovery of what Plaintiff claim to be money owed it, the filing of as many as fifteen issues was uncalled for and I can only re-echo the words of the Supreme Court in the case of SMITH v BLANKSON [2007-2008] SCGLR 374 that:
“In a simple case such as this one and on the deducible fundamental facts, the admission of twenty six issues for trials is shocking and unjustifiable, it only affords counsel the opportunity to throw waffle all over the place whether in terms of evidence or argument resulting in inordinate wastage of the courts time and resource”
I find most of the issues quite duplicitous and needless for the resolution of the dispute between the parties. Every single paragraph in a pleading when traversed need not be set down as an issue for determination when it is palpable that it has no bearing to the final outcome of the case. What I even find troubling is that some of the issues have not even been traversed for it to be put down as an issue for resolution. For instance the first issue as to whether the parties entered into agreements for the sale of vehicles does not arise at all as Defendant never disputed the existence of agreements for the sale of vehicles. Wherein then arises such an issue? It seems to me that all the issues could conveniently be discussed and resolved by the court under two main broad headings namely whether Defendant is indebted to the Plaintiff in the sum of money claimed in the amended writ together with interest being monies outstanding for sale of vehicles to Defendant and whether or not the vehicles sold to Defendant had latent defects. I trust that in future the bench would not be inundated by counsel with such plentiful issues in a simple suit.
EVALUATION OF THE EVIDENCE AND APPLICATION OF THE LAW:
With a claim and a counterclaim, the respective burdens borne by the parties to prove their claims cannot be overemphasized. The onus that a party bears to prove his claim is too notorious to demand any detail treatment save to refer to the following recent cases of HENRY DOE SAMLAFO v. GREDA &ANOR. [2010] 26 GMJ 94, CA, MAC DAN v. GABRIEL GBORBLESHIE [2015] 85 GMJ 90 at 113; MARIAN OBENG MINTAH v. FRANCIS AMPENYIN, Civil Appeal No. J4/18/2013, dated 25th March 2015, SC (Unreported).
And for the burden that Defendant bears to discharge its regarding its counterclaim see the following cases: NII ODOI KWAO ASUMANG & 2 ORS. v. WILLIAM SOWAH CHARWAY & 14 ORS. [2014] 75 GMJ 108, CA at p. 135; J.K.KPOGO v. F.K. FIADZORGBE, Civil Appeal No. J4/9/2012, dated 6thMay, 2015, FOSUHENE v. OWUSU [2011] 32 GMJ 163. In its quest to prove its claim, Plaintiff testified through its Chief Executive Officer, Jihad Hijazi who testified in line with the pleadings of the Plaintiff and tendered Ex A’ to ‘K’, with some of the key
exhibits being Ex ‘A’, the statement of account of Defendant as at 30th of September, 2017, the agreement for the vehicle sale as Ex ‘B’, pre delivery inspection card as Ex ‘H, customer record card as Ex ‘J’ series and warranty provided for the vehicles as Ex ‘K’. The Defendant on the other hand testified through its Accountant, Mohammed Issah but did not tender any document in defence of the claim against Defendant or any document to advance its counter claim. There appears to be a number of agreements entered into between the parties, the first being Ex ‘B executed on the 12th of November, 2013. There is also Ex ‘D’ being another contract entered into between the parties for the purchase of vehicles.
Is the Defendant indebted to Plaintiff in the sums claimed in the writ together with interest? As a way of advancing its claim Plaintiff put forward numerous exhibits being first the agreements which are Ex ‘B’, ‘D’ and ‘F’ to demonstrate the agreements entered into by the parties. Plaintiff again tendered what he deemed to be the various statements of account of Defendant and these are Ex ‘A’, ‘C’, ‘E’ and ‘G’ series. Defendant’s answer as gleaned from its statement of defence, the evidence of its representative in court and in the cross examination of Jihad Hijazi can be said to be two fold. First that there were latent defects for which it drew the attention of the Plaintiff and second that the amount quoted by Plaintiff is incorrect. I intend to deal with the first defence of latent defects in the vehicles in the second main issue and wish to concentrate on the challenge mounted as to the correctness of the amount that Plaintiff claim defendant owes it. In all Plaintiff calculates the total indebtedness together with interest of 5% as at 31/10/2017 to be USD165, 700.00 or its cedi equivalent. Defendant claim that in Ex ‘B’, the first agreement captured an amount of USD$8,800 as the amount paid by Defendant as deposit instead of USD$9,900.
This is reflected in the cross examination of the Plaintiff’s representative on the 10th of May, 2018 in the following:
Q: Mr. Hajazi in paragraph 5 of the agreement it states clearly that the Defendant made a down payment of USD$8,800, is that the case?
A: That is correct. If I may add, what is in the agreement is what has been agreed upon. In some cases we decide to change the agreement if the customer decides to change the agreed upon terms of payment.
Q: But are you aware that the Defendant contends that in respect of this particular transaction it made a down payment of 9,900 US dollars
A: My Lord I am not
Q: Please take a look at paragraph 8 of your witness statement. You will agree with me that you stated that … Defendant made a down payment of 9,900 dollars
A: My Lord it may be, the statement of account, Ex ‘C, shows that on the 30th of November, 2013, the
Defendant made the agreed upon payment of 8,800 dollars And on the 8th of December, 2013 made a further payment of US$1,100”
The insistence by Defendant that the total amount of 9,900 dollars not captured in Ex ‘B’ and therefore the debt owed is not correct is untenable. The Ex ‘B’ can only capture the payments made on the date of the agreement and if Defendant had made further payment subsequent to Ex ‘B’ and on that basis expect it to be captured in that document begs belief. In any case the statement issued in Ex ‘C’ captures those payments made and wherein therefore lies the attempt by Defendant to impugn Ex ‘B’? Any cross examination on this claim was nothing but a fruitless venture to find fault with the monies Defendant owed. The second ground of impugning the correctness of the amount Plaintiff claim Defendant is owing is in respect of $100.00 dollars charge by the Banks for dishonoured cheques which Plaintiff has added to the amount owed and calculated interest of 5% on it.
This is brought to the fore in the following discourse between counsel for Defendant and Plaintiff’s representative:
“Q: You will agree with me that in terms of the agreement you brought before the court, precisely Ex ‘B’ and ‘D’, that the Plaintiff is to charge US$100 per a dishonoured cheque, is that not so?
A: That is correct
Q: When you take a look at various statements of accounts, you will agree with me that instead of totaling the amount charged for the dishonoured cheques separately from the accounts, it added to the debt and then the compound interest of 5% calculated on it
A: That is correct
Q: I am putting it to you that this approach highly inflates the actual debt owed you by the Defendant
A: My Lord appreciate that”
Besides, this issue of the $100 penalties which were added to the debt of Defendant and 5% penalty charged on it as admitted by Plaintiff I find nothing on record challenging the correctness of the figures that Plaintiff produced before the court. I hold that the amounts owed should be scaled down with the Plaintiff not adding the penalty charges paid for dishonoured cheques to the 5% penalty charges exigible as per the contract. And that deduction would be the amount standing as debt owed subject to the determination of the main defence of the Defendant in its statement of defence infra and the substance of its declaration in the counter claim. And that is the allegation of latent defects in the vehicles purchased. Paragraph 6 of the amended statement of defence of Defendant first introduced this claim of latent defence discovered in the vehicles and hence its response of stopping the cheques issued to the Plaintiff. Paragraphs 10, 11, 12, 13, 18, 19 of statement of defence are all about the allegation of latent defects in the vehicles purchased. And in the tersely written witness statement of Mohammed Issah he made this claim in paragraphs 6, 7, 8, 9, 10, 11 and 13. Defendant contends that it brought this to the attention of the Plaintiff. What is latent defect has been defined by Stroud’s Judicial Dictionary (5th Ed, Vol 2, page 663) as:
“A latent defect is not simply any defect not discoverable through ordinary use and maintenance, but a defect or a flaw, generally in the metal or material itself, which could not be discovered by known and customary test.”
As to whether a party has breached an agreement is dependent on the terms of a contract. For the terms of a contract is what defines the scope and extent of the obligations of the parties to the contract. For where an item forms part of the contract it is usually said to be a term of a contract. The term could come into being in a number of ways. One by express agreement of the parties. It used to be the law that breach of a term entitled the innocent party to greater damages than breach of warranty. It is not the nomenclature that matters any more than the essence of what has been breached. Here the parties seems by Ex ‘J’ agreed on a warranty whereby Plaintiff gave specific warranties regarding the vehicle. But even if there was no such express condition, it is trite that the other ways in which terms of a contract could be seen are terms implied by common law or statute law. In Ghana there are implied terms in respect of the sale of goods for both the seller and the buyer.
And this contract was a contract for the sale of goods within section 1 of the Sale of Goods Act, Act 137. Specifically section 13 on implied condition of fitness and quality of the goods sold states as follows:
(1) Subject to the provisions of this Act and any other enactment there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale except as follows—
(a) There is an implied condition that the goods are free from defects which are not declared or known to the buyer before or at the time when the contract is made:
Provided that there is no such implied condition—
(i) where the buyer has examined the goods, in respect of defects which should have been revealed by the examination;
(ii) in the case of a sale by sample, in respect of defects which could have been discovered by a reasonable examination of the sample;
(iii) where the goods are not sold by the seller in the ordinary course of his business, in respect of defects of which the seller was not, and could not reasonably have been aware.
(b) Where the goods are of a description which are supplied by the seller in the course of his business and the buyer expressly or by implication makes known the purpose for which the goods are required there is an implied condition that the goods are reasonably fit for that purpose.
What the provisions mean is that Ghana’s Sale of Goods Act, has moved away from the common law position of caveat emptor where the buyer must beware to one of caveat glovoson, where the seller must beware of the goods he is selling. The Act places onerous responsibility on the shoulders of sellers of both brand new and second goods as being liable for defects in them. The exceptions are, one, where the seller has declared the defects in the goods and nonetheless the buyer proceed to go ahead with the transaction, second where the buyer has examined the goods to satisfy himself and has been aware of defects that are manifest on the face of the goods. So by section 13 (1) (a), it is implied that the goods are free from defects which are not declared or made known to the buyer before or at the time of the contract. Thus where the defect is not visible or declared to the buyer the seller is bound by the defect and the buyer may reject same. The exceptions are what I have stated. Ansah JSC beautifully explains what section 13 of Act 137 means eloquently in the case of GEORGE SARPONG v SILVER STAR Suit No J4/43/2013 dated 15th January, 2014 in the following:
“Ghana law imposes a heavier responsibility on sellers of goods than is the case under English law. Moreover, the duty imposed by the Ghana law is the same for sellers of both new goods and second-hand goods. In short, the Ghana law approaches the topic of Sale of Goods with a Caveat Venditor gloveson rather than the Caveat Emptor approach of the English common law”.
A similar conclusion had earlier been reached by the same Supreme Court in the case of CONTINENTAL PLASTICS ENGINEERING CO. LTD v IMC INDUSTRIES – TECHNIK GMBH [2009] SCGLR 298 where the court speaking through Wood, CJ, noted the following:
The legal position can therefore be summed up as follows: a seller of either first or second hand goods is by an implied condition, liable for all defects in them. Based on what we believe is pure common sense the seller is however not liable for defects which he fully disclose or declares to the buyer at the time of the contract of sale. When the buyer has examined the goods the seller cannot be held liable for defects which ought to have been discovered on examination, as for example, patent defects. It does follows that if there were defects particularly latent defects which are not discoverable on examination, and which are not disclosed to the buyer before the conclusion of the contract, the seller cannot escape liability for the breach of an essential condition of the contract”
Having exhaustively laid down the law in respect of latent defects, what is the evidence on record to support the claim of Defendant that the vehicles sold to it suffered from latent defects? Where is the evidence of that notice to the attention of the Plaintiff? No exhibits were even put before the court and Defendant just by repeating what it had stated in its pleadings thought it had discharged its evidenciary burden. When Mohammed Issah came under cross examination, the whole defence of Defendant and the essence of its claim was exposed as a sham. The following are some of the instances when Marigold Allotey (Mrs) confronted the witness:
Q: Can you tell the court the particular vehicles that the Defendant found defective
A: At this moment I cannot recall all the vehicles that were defective ….
Q: Now tell the court, at what particular time after the delivery of the vehicles to the Defendant did the Defendant find some of the vehicles defective
A: My Lord, I believe we communicated by a letter to the Plaintiff …..
Q: And as you sit here are you aware that no such letter is before this honourable court
A: I am not aware
Q: I am putting it to you that no such defect were ever communicated to the Plaintiff, be it orally or in written form
A: No My Lord…..
Q: I am asking you can you tell us the specific defects that the Defendant found on these alleged defective vehicles
A: As I just sad from the beginning we have written to the Plaintiff. So the defects will be in the letter we wrote to the Plaintiff …
Q: You see you cannot tell me the specific defects because there was never any defect
A: That is not true”.
From the above exchanges, it is clear that Defendant knew very well that it had no cause at all to have raised the issue of latent defect as it had no scintilla of evidence, but in its quest to waste the time of the court and to buy more time not to pay its just debt it put up such flimsy and baseless defence upon which it mounted a façade of a counter claim. I find as fact that the claim of latent defects in the vehicles stood unproved, without any shred of evidence and indeed it remained a figment of the imagination of the Defendant.
There is ample evidence on record that the vehicles were only brought for servicing when some had clocked 8, 512 km, 7,370 km, 5160 km, 5731 km and some when they had been allowed to be flooded whiles some had recklessly been driven and been involved in accidents. The defence mounted against the claim of Plaintiff is dismissed as well as the entire counter claim of Defendant. On the other hand, save for Plaintiff ensuring that it does not lump the $100.00 penalties for the dishonoured cheques by taking out the 5% interest on those monies, the entire claim of Plaintiff for the recovery of USD$165,700.44 or its cedi equivalent is granted by the court as well as the interest on the monies from 31st of October, 2016 till the final date of payment.
COST
Award of cost is always at the discretion of the court and the principles are governed by those set out in Order 74 Rules 2 and 3 which states as follows:
“2(3) without prejudice to the powers and discretion of the court, an award of costs shall ordinarily be designed to
(a) Compensate for expenses reasonably incurred and court fees paid by the party in whose favour the award is made; and
(b) Provide reasonable remuneration for the lawyer of that party in respect of work done by the lawyer.
(4) In assessing the amount of costs to be awarded to any party, the court may have regard to
(a) the amount of expenses , including travel expenses, reasonably incurred by that party or that party’s lawyer or both in relation to the proceedings;
(b) The amount of court fees paid by that party or that party’s lawyer in relation to the proceedings.
(c)The length and complexity of the proceedings;
(d) The conduct of the parties and their lawyers during the proceedings; and
(e) any previous order as to costs made in the proceedings”.
I take into particular consideration the frivolous nature of the defence of the Defendant as well as its counter claim and the belief that it must fight such a hopeless cause to the very end by wasting the time of the court, the fees that Plaintiff paid in pursuing a claim of this nature and on the whole, I think cost of 6% on the figure or amount granted in relief (a) of the Plaintiff claim
