IN THE SUPERIOR COURT OF JUDICATURE
IN THE HIGH COURT (COMMERCIAL DIVISION)
KUMASI - A.D 2018
KWAME TIAKA - (Plaintiff)
ISAAC OSEI - (Defendant)
DATE: 21 ST JANUARY, 2018
SUIT NO: P/RPC/03/17
JUDGES: ANGELINA MENSAH-HOMIAH (MRS.) JUSTICE OF THE HIGH COURT
VIVIAN MFODWAA GYAN FOR PLAINTIFF
KWAME OWUSU SEKYERE FOR DEFENDANT
This court has been called upon to determine the rights and obligations of the parties herein under a sale of goods contract which they orally entered into, even though the endorsement on the writ of summons appears to be a normal liquidated demand. The amount being claimed is GHC 50,070.00 plus interest, from 01/01/2014, till date of final payment. The Plaintiff’s case is that for approximately six years prior to January, 2013, he supplied the Defendant with used ladies shoes and sandals. In the course of the dealings, the Plaintiff alleged that he supplied the defendant with ladies shoes and sandals worth GHC 54,870.00 on or before January, 2013, to be paid on or before December 2013. By the close of December 2013, the Plaintiff contended that the Defendant had not made any payment at all, and after repeated demands, he paid GHC 1,000.00.
He further alleged that two post-dated cheques issued by the Defendant as part payment could not be cashed, and following a report to the police, the Defendant made three payments of GHC 2,500.00; GHC 500.00 and GHC 800.00, leaving a balance of GHC 50,070.00. It has also been alleged that the Defendant has removed all the merchandise from his shop known by the Plaintiff at Kejetia K.O. The Defendant did not deny his course of dealings with the Plaintiff commencing 06/05/2013, but alleged that he fully paid for all the used ladies shoes and sandals delivered to him before December, 2013, including the goods worth GHC 33,750.00 supplied to him in July, 2013. It is his case that on 13/12/2013 and January, 2014 respectively, he took delivery of 2nd hand ladies shoes from the Plaintiff but most of them were damaged and he informed the Plaintiff that he could not sell them because they were damaged on arrival.
The Defendant further averred that he informed the Plaintiff about the condition of the shoes but the Plaintiff urged him to sell the goods ones and he would ‘do something’ about the rest. He also alleged that to the knowledge of the Plaintiff, he was unable to sell about 500 pairs of damaged shoes, and, in October, 2015, the Plaintiff agreed that he should pay the sum of GHC 16,000.00 as his total indebtedness. Further, the Defendant contended that the Plaintiff agreed to supply him with more shoes so that the proceeds could be used to offset his losses. In connection with the cheques which the Plaintiff could not cash, the Defendant stated that due to insufficient funds, he stopped his bankers from effecting payment and notified the Plaintiff accordingly. So, the Plaintiff was not supposed to present the cheques at all for encashment.
ISSUES FOR TRIAL
The issues which were tried, and must be determined are:
Whether or not the Defendant is indebted to the Plaintiff in the amount of GHC 50,070.00?
Whether or not the Plaintiff is entitled to his claims?
Whether or not the Defendant was supplied with damaged shoes which was brought to the attention of the Plaintiff?
These issues will be resolved simultaneously.
At the trial, the Plaintiff testified that after January, 2013, he has not supplied any goods to the Defendant because of his failure to pay for the goods worth GHC 54,870.00 supplied to him in January, 2013 and which was to be fully paid by December, 2013. He denied the defendant’s assertion that in July, 2013, goods worth GHC 33,370.00 were supplied to him for which full payment has been made. As regards the quality of the goods supplied, the Plaintiff said he never supplied any damaged goods to the Defendant, and the Defendant never informed him that some of the goods were damaged. Besides, he never agreed that the Defendant was to pay an amount of GHC 16,000.00 in total satisfaction of his debt. As at the time of instituting this action, the Plaintiff told the court that the Defendant had paid only GHC 4,800.00, which included the payments made at the police station. During the pendency of this suit, the Plaintiff said a total amount of GHC 3,000.00 has been paid by the Defendant, but he denied the alleged payment of GHC 3000.00 after the cheques issued by the Defendant had been dishonoured. He therefore prayed the court to grant his reliefs.
On his part, the Defendant testified that prior to December, 2013, the Plaintiff supplied him with 2nd hand ladies shoes at various times and he has fully paid for the same. His version of the story is that on 13/12/2013 and January 2014 respectively, he took delivery of 2nd hand ladies shoes from the Plaintiff most of which were damaged; he informed the Plaintiff that he would not be able to sell most of the shoes because they were damaged on arrival, the Plaintiff told him to sell those in good state and he would do something about the damaged shoes. He exhibited photographs of some used shoes as exhibits 1, 1A and 1B. He stressed that to the knowledge of the Plaintiff, he still has over 500 pairs of those shoes which could not be sold because of their bad state. It is also in the Defendant’s testimony that sometime in October, 2015, the Plaintiff agreed that since he had incurred losses, he should pay an amount of GHC 16,000.00, out of this sum, he has so far paid GHC 9,200.00, leaving a balance of GHC 6,800.00.These were denied by the Plaintiff.
In order to determine whether or not the Defendant is indebted to the Plaintiff in the sum claimed, or any part thereof, the court must first determine certain matters, namely: (i) whether the used ladies shoes and sandals worth GHC 54, 870.00 (hereinafter referred to as the goods), were in fact supplied to the Defendant in January, 2013 to be paid for by the end of December, 2013 and whether he accepted the same; (ii) whether the goods were defective (iii) Whether the Defendant rejected the goods supplied to him, but the Plaintiff prevailed upon him to sell the ‘good ones’; (iv) whether the property in the goods had passed; (v) if so, what are the obligations of the parties to that oral contract for sale of goods. Bearing in mind the law of proof in civil suits, that is, proof by the preponderance of the probabilities, coupled with the principle of proof in civil actions as stated in cases such as Zabrama v. Segbedzi (1991) 2 GLR 221, the onus of proof of the supply of the goods and their net value, rest on the Plaintiff who has made those positive assertions.
The defendant also bears the burden of proof of the alleged damaged or defective goods and the rejection of the same. From the Plaintiff’s evidence before this court, goods worth GHS 54,870 were duly supplied to the Defendant in January, 2013 but the same has not been fully paid for as agreed. The court rejects the defendant’s denial of this evidence as having been made in bad faith, particularly his insistence that the supplies were made on 13/12/2013 and January, 2014.He has not demonstrated to be a credible witness as far as the issues before this court are concerned.
Why is it so? By Section 80 (2) (b) of the Evidence Act, NRCD 323, the credibility of a witness may be attacked by the substance of his evidence. What the Defendant herein is telling the court is that even though supplies were made to him in December 2013 and the goods were defective, he again received a supply in January, 2014, consisting of defective goods. The Plaintiff has denied any of these. Two questions arise here: (i) Is it a prudent business practice to supply more goods when previous supplies have not been paid for as agreed? (ii) Will the ordinarily prudent business man accept delivery of defective goods whose resale is an issue twice? These questions will not be resolved in the affirmative by this court, particularly, since the Plaintiff has denied the same. This defence defies common sense, neither does it make business or economic sense. In any case, the exhibit ‘1’ series could have been photographs of any shoes, there is no link between those shoes and the consignment received from the Plaintiff, they are of no probative value in this trial.
Also, the conditions under which goods are stored can also lead to defects, how did the Defendant store the goods? He said he kept them at his warehouse at ‘Moro’ market, but did not indicate the conditions under which they were stored. Between the two rival accounts, that of the Defendant is the least probable and the court would accept the Plaintiff’s account as the truth. The court therefore concludes that the Plaintiff supplied goods worth GHS 54, 870.00 to the Defendant in January, 2013, to be paid for in full by December, 2013, the goods were not defective, and he accepted the same. Were the goods rejected? This is for the Defendant to prove. And, according to him, he told the Plaintiff that “the goods were damaged on arrival”, and would encounter problems selling the same, which said evidence has been denied by the Plaintiff. In the cross-examination of the Defendant on 21/11/2017, he admitted that whenever goods arrive, the Plaintiff gives him the ‘first selection’ in the used shoes parlance. It is reasonable to infer that the shoes were graded, and so the best out of each consignment would be the ‘first selection’ in the used shoes business. How then, can the ‘first selection’ of the goods metamorphose into damaged goods within a twinkle of an eye?
Obviously, if the goods were that bad, the Defendant, who is not a novice in the used shoes business would not have accepted the same; neither was he forced to accept the same at gun point. He willingly accepted delivery. His evidence in court that he told the Plaintiff that the goods were damaged on arrival is indeed an afterthought calculated to avoid paying his just debts. That statement, even if it was uttered, cannot amount to a “rejection” in law.
“Generally, there cannot be a “rejection” after “acceptance” as spelt out under section 51 (1) of the Sale of Goods Act 1962, Act 137. However, if the seller is guilty of a fundamental breach and the like, the buyer is at liberty to reject the goods in accordance with law. Section 49 of Act 137 states when a buyer may have a right to reject as follows:
49. When buyer has right to reject
(1) Subject to this Act, the buyer is entitled to reject the goods and to refuse to pay, or to recover, the price where
(a) the seller is guilty of a breach of a fundamental obligation; or
(b) the seller is guilty of a breach, not being of a trivial nature, of a condition of the contract, whether the breach is in respect of all of the goods or, subject to subsection (2), of part only of the goods; or
(c) the buyer has entered into the contract as a result of fraudulent or innocent misrepresentation on the part of the seller.
The Defendant herein cannot place himself under any of the situations envisaged under section 49 of Act 137, neither is the Plaintiff guilty of any such fundamental breach. As such, the Defendant did not even have a right of rejection after willingly accepting the goods, and for failing to exercise any right under section 52 of Act 137. In terms of sections 26 (2) and 27 (2) of Act 137, the property in the goods and the risks thereof, passed onto the Defendant when he accepted delivery. Consequently, the Defendant was bound to pay for the goods as is required of him under section 22 of
Act 137, it states:
Section 22 Payment Concurrent with delivery
Unless otherwise agreed, the buyer shall be ready and willing to pay the price in exchange for delivery of the goods.
In the present case, the Plaintiff is merely exercising his rights as an unpaid seller under section 46 of
Act 137, which are:
46. Action for price
(1) Where, under a contract of sale of goods, the property has passed to the buyer, and the buyer wrongfully refuses or neglects to pay for the goods according to the terms of the contract, the seller may maintain an action against the buyer for the price of the goods.
(2) Where, under a contract of sale of goods, the price or a part of the price is payable on a certain day, and the buyer wrongfully neglects or refuses to pay the price or the part which has become due, according to the terms of the contract, the seller may maintain an action for the price or the part which has become due, although the property in the goods may not have passed to the buyer.
It is on record that the Defendant judgment on admissions was entered against the Defendant for an amount of GHC 9,800.00 on 22/05/2017. The Plaintiff cannot also deny that the Defendant has made some payments to him after the commencement of this suit. When the Defendant was being cross-examined by counsel for the Plaintiff on 21/11/2017, he admitted that the amount which is being litigated then was GHC 40, 270.00, which excludes the admitted GHC 9,800.00. Indeed, the Defendant’s last answer in cross-examination demonstrates that he actually owes the Plaintiff. He said:
I am pleading with the court to order the plaintiff to deduct all the damaged goods so that I pay the difference.
The Defendant has also not introduced any satisfactory proof of his allegation that the Plaintiff agreed to accept GHC 16,000.00 in full and final satisfaction of his obligations under the goods supplied to him. That defence is also rejected by the court. Having found that the Plaintiff did not supply any damaged goods to the Defendant, and in the absence of any agreement for the Defendant to pay a lesser sum, he is under a legal obligation to pay the outstanding amount. By a simple arithmetic, when GHC 9,800.00 is deducted from GHC 50,070, the difference is GHC 40, 270.00. This is what the Defendant is to pay to the Plaintiff. Accordingly, judgment is entered in favour of the Plaintiff against the Defendant in the sum of GHC 40, 270.00 together with interest at the prevailing bank rate and at simple interest from 01/01/2014 to the date of delivery of judgment; and post judgment interest at the same rate up to the date of final payment. For the avoidance of doubt, the bank of Ghana 91-days Treasury Bills rate is to be used as the prevailing bank rate.
Costs of GHC 3,000.00 is awarded against the Defendant.