Mensah Vrs Rhema Motors and Eratruck [2023] GHAHC 371 (13 January 2023)

IN THE SUPERIOR COURT OF JUDICATURE. IN THE HIGH COURT OF JUSTICE (COMMERCIAL DIVISION) ACCRA HELD ON FRIDAY THE 13TH DAY OF JANUARY, 2023 BEFORE HER LADYSHIP JUSTICE AKUA SARPOMAA AMOAH (MRS.) SUIT NO. CM/RPC/0706/2017 SETH MENSAH VRS - PLAINTIFFS RHEMA MOTORS & ERATRUCK - DEFENDANTS ============================================================ PARTIES: PLAINTIFF – PRESENT 1ST DEFENDANT– ABSENT 2ND DEFENDANT REP BY RASHID BELLO – PRESENT COUNSEL: ABUBAKARI ABDULAI FOR PLAINTIFF – PRESENT ALEX ADJEI FOR 1ST DEFENDANT – ABSENT NO LEGAL REPRESENTATION FOR 2ND DEFENDANT ======================================================== J U D G M E N T INTRODUCTION SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. On the 10th of November, 2017, the Plaintiff who describes himself as a businessman resident in Accra, caused a writ to be issued against the Defendants herein seeking the following reliefs from this Court. a) Recovery of possession of Vehicles No GM 4456 and GM 4457 b) Damages for loss of use c) Costs Plaintiff’s case is that the 1st Defendant is a Ghanaian registered company which deals in the sale and servicing of trucks including Hohan Sino Trucks. The 2nd Defendant is also described as a Ghanaian registered company and the Principal of the 1st Defendant. According to the Plaintiff, on the 10th of October, 2014, he purchased two 6 X 4 Honan Sino Trucks for a total amount of Two Hundred and Sixteen Thousand, Four Hundred and Thirty-Six United States Dollars (USD$ 216,436.00.) from the 1st Defendant under a Conditional Sale Agreement tendered in evidence as Exhibit A. Pursuant to the terms of Exhibit A, Plaintiff made an initial payment of Forty- Two Thousand, Four Hundred and Twenty-Six United States Dollars (USD$ 42, 426.00.), as part payment for the said two vehicles. The said vehicles were however to remain in the name of the 1st Defendant per the terms of Exhibit A until Plaintiff had paid fully for same. SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. According to Plaintiff, after taking delivery of the vehicles, he continued to make payments as agreed. However, the 2nd Defendant, even though not a party to the agreement repossessed both vehicles from him on the 12th day of October, 2017. Plaintiff says that the 2nd Defendant was aware of his beneficial interest in the vehicles as a result of Exhibit A as 2nd Defendant had, through one Mr. Tang Fusang, its Managing Director, been offering Plaintiff advice on the maintenance of the vehicles. It is the case of Plaintiff that he had made payments amounting to about 93% of the total purchase price at the time the said vehicles were repossessed. It is for this reason that he is before this Court seeking the reliefs endorsed on his Writ of Summons. 1ST DEFENDANT’S CASE 1st Defendant admits selling the trucks in question to Plaintiff on the terms contained in Exhibit A. It says however that the said vehicles remained in the name of the 2nd Defendant even though it was agreed with the Plaintiff that the vehicles will be registered in its name (1st Defendant). 1st Defendant further admits receiving an amount of Forty-Two Thousand, Four Hundred and Twenty-Six United States Dollars (USD$ 42,426.00.) from Plaintiff as an initial deposit for the two vehicles. It however denies the Plaintiff’s assertion that he had paid 93% of the amount owed at the time the vehicles were repossessed by the 2nd Defendant. SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. According to 1st Defendant the vehicles were repossessed by the 2nd Defendant as a result of the Plaintiff’s failure to comply with the CSA. 2ND DEFENDANT’S DEFENCE The 2nd Defendant for its part vehemently denies Plaintiff’s claims. Its case is that it is the owner of the said trucks. The 1st Defendant made some payments towards the purchase of the said trucks however the same were repossessed from the 1st Defendant by a Court Order when the 2nd Defendant sued the 1st Defendant in this Court (differently constituted). The 2nd Defendant says the Plaintiff’s action against it is baseless and therefore prays that the same be dismissed with costs. Upon the breakdown of attempts at settlement of the dispute by the parties, the following issues were settled for trial by the Pre-trial judge: 1) Whether there was a Hire Purchase Agreement or a conditional sale between the Plaintiff and the 1st Defendant 2) Whether the 2nd Defendant was aware of the Hire Purchase or Conditional Sale Agreement 3) Whether or not the Plaintiff breached any of the terms of the Agreement 4) Whether the 1st Defendant breached any of the terms of the Agreement 5) Whether the Plaintiff has paid over 93% of the price of the two vehicles 6) Whether the two vehicles were possessed by the 2nd Defendant or by an Order of the Court? SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. It should be noted that both Defendants failed or refused to testify even though they filed Witness Statements as directed by the Court. This was their prerogative as Parties by law are under no compulsion to testify even when they file Witness statements. This position was emphasized in the Supreme Court case of John Dramani Mahama vrs Electoral Commission & Nana Akuffo Addo [2021] DL SC 9953 where the Court held that; “... it is ..an undisputed fact that a Defendant in a case can elect whether or not to adduce evidence at the close of the Plaintiff’s case, when such a Defendant is called upon by the Court to open his or her defence. We are of the considered opinion that it would be wrong in law to hold that a party is deemed to have elected to adduce evidence as soon as that party files and serves a Witness Statement in compliance with a Court order. To hold so would mean that once a party files and serves a Witness statement that party mandatorily has to mount the witness box and adduce evidence at the trial. This position is not borne out by the rules. Indeed order 38 r 3E (5) clearly provides otherwise as follows; “ (5) If a party who has served a witness statement does not call the witness to give evidence at the trial or put in the Witness statement as hearsay evidence, any other party may put in the Witness statement as hearsay evidence”. The above principle implies that when a witness statement is filed and served the party who filed same may choose not to give evidence at SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. the trial.... He suffers the penalty of the evidence being expunged from the record.” Flowing from the above, the respective Witness Statements of the 1st and the 2nd Defendants filed on the 19th of December, 2019 and the 21st of July, 2021 together with the Exhibits attached to same are expunged from the record. This leaves only the Plaintiff’s evidence for consideration by this Court. EVALUATION OF EVIDENCE First, I do not think the issue as to whether or not a Conditional Sale Agreement existed between the 1st Defendant and the Plaintiff requires any serious interrogation by this Court. This is because this fact is not disputed by the 1st Defendant. I also do not think the fact that the Parties refer to their transaction as a Credit Sale Agreement in Paragraph 2 of Exhibit A changes this fact. Section 24 of the Hire Purchase Act, 1974 [NRCD 292] defines a conditional sale agreement as; “an agreement for the sale of goods under which the purchase price or part of it is payable by instalments, the property in the goods is to remain in the seller notwithstanding that the buyer is to be in possession of the goods and under which certain conditions specified in the agreement are to be fulfilled by the buyer. SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. From a reading of Exhibit A the following matters do not seem to be in dispute. These are: a) That the 1st Defendant agreed to sell to the Plaintiff and the Plaintiff agreed to purchase two Hohan Sino Trucks from the 1st Defendant. b) That the agreed purchase price for both vehicles was Two Hundred and Sixteen Thousand, Four Hundred and Twenty-Six United States Dollars (USD$ 216,436. 00). c) That the Plaintiff made an initial deposit payment of Forty-Two Thousand Four Hundred and Twenty-Six United States Dollars (US$42,426.00.) d) That the Plaintiff took possession of the said vehicles after the initial deposit. e) That the balance of One Hundred and Seventy-Four Thousand and Ten United States Dollars (US$174,010.00.) was to be paid over a 24 month period. f) That property in the said vehicles were not to pass to Plaintiff until full payment of the purchase price to the 1st Defendant. It is also significant to note that the seller of goods sold under a conditional sale agreement does not necessarily have to be the owner of the goods. This is evident from a reading of Section 24 of Act 292 which draws a distinction between transactions by an owner and a seller of goods. Section 24 defines a Seller in relation to a conditional sale as one; “...who agrees to sell goods under the agreement and includes a person (other than the buyer) to whom that person’s property in the goods or SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. any of that person’s rights or liabilities under the agreement have passed by assignment or by operation of law” The unchallenged evidence of the Plaintiff is that he saw the vehicles, the subject matter of the present suit on display at the showrooms of the 1st Defendant. At the time, the 1st Defendant was conducting promotional sales. After negotiations between the Parties which span a period of 2 days, he made an initial payment of Seventy Thousand Ghana Cedis (GH¢ 70,000.00.) which was the equivalent of Forty-Two Thousand Four Hundred and Twenty-Six United States Dollars (US$42,426.00.). As it turned out, the said vehicles belonged to the 2nd Defendant and not the 1st Defendant. It is however important to note that Plaintiff’s claim that 1st Defendant was agent of the 2nd Defendant is vehemently denied by 2nd Defendant. It is a salutary principle of our jurisprudence that he who asserts prove. This is particularly so when a party’s assertion is denied by his opponent. This principle has been emphasized in countless cases including the case of KLAH v PHOENIX INSURANCE CO. LTD [2012]2 SCGLR 1139 where the Court held that; “Where a party makes an averment capable of proof in some positive way eg by producing documents, description of things, reference to other facts, instances and his averment is denied, he does not prove it by merely going in to the box and repeating the averment on oath or having it repeated on oath by his witness. He proves it by producing SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. other evidence of facts and circumstances from which the Court can be satisfied that what he avers is true.” In my view the Plaintiff’s assertion that the 1st Defendant acted as an agent of the 2nd was a matter capable of positive proof but which proof, the Plaintiff failed to provide. On the totality of the evidence it becomes clear that the Plaintiff was proceeding on an assumption which had no legal or factual basis. From his answers under cross-examination, the only basis upon which he concluded that an agency relationship existed between the 1st and the 2nd Defendants was that the 2nd Defendant was the “principal dealer” in the said vehicles in this country. Under cross-examination by Counsel for 2nd Defendant on the 8th of November, 2021, this is what Plaintiff had to say; Q: Can you substantiate this allegation of an agency relationship between Eratruck and Rhema Motors? A: Eratruck gives cars to Rhema Motors to sell, so on display of the truck anyone who want [sic] to buy [sic] cars on display at Rhema informs Eratruck and Eratruck registers this [sic] cars and present it. Q: Do you have any actual proof of an agency relationship between Eratruck and Rhema Motors? A: My proof is that Mr Tang told me that Rhema is their agent and that any issues concerning the trucks I should get in contact with him. SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. Q: I put it to you that Mr Tang never said this and that the nature of relationship between Rhema and Eratruck is not that of principal and agent. A: From my findings I got to [sic] Eratruck as a sole dealer of Ohan Sinotruck so for Rhema to display it for sale means [sic] he is their agent. Q: I put it to you that the nature of the relationship between Eratruck and Rhema Motors is that of seller and buyer A: No. my confirmation is that Eratruck is the principal dealer of the truck and Rhema is their agent. Clearly the Plaintiff sought to rely on possibilities and probabilities which are not supported by any evidence. It is for this reason that I have no difficulty rejecting this assertion of Plaintiff. Additionally, the fact that the 2nd Defendant was present at the execution of Exhibit A (even if true) does not make the 2nd Defendant a party to same or establish that the 2nd Defendant had knowledge of or consented to its terms. Indeed the Plaintiff conceded under cross-examination that the 2nd Defendant’s representative did not read the contents of Exhibit A even though he was present when it was executed. In the face of the total want of evidence to substantiate the Plaintiff’s claim that the 1st Defendant acted as agent of the 2nd, I must find as a fact that the 1st Defendant in its dealings with Plaintiff was not acting on behalf of the 2nd Defendant. There being no privity of contract between Plaintiff and 2nd SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. Defendant, the Plaintiff’s claims against the 2nd Defendant therefore cannot stand. Turning now to the 1st Defendant, what is unclear from the record are the exact terms under which it took possession of the said vehicles from the 2nd Defendant as there is no evidence in respect of same on record. However, what can be gleaned from the undisputed evidence is that the said vehicles were sold to the 1st Defendant by the 2nd Defendant on credit. 2nd Defendant retained certain rights (including ownership) which entitled it to recover same in the event of a breach on the part of 1st Defendant. Having retained ownership of the vehicles in dispute, the 2nd Defendant instituted an action upon the 1st Defendant’s failure to honour its payment obligations and obtained a Court Order to repossess same. This fact can be gleaned from the following exchange that ensued between Plaintiff and Counsel for 2nd Defendant on the 18th of January, 2022 during cross-examination. Q: Are you aware that Eratruck obtained judgment against Rhema Motors for defaulting payments of the same vehicle [sic] that is at subject of dispute here? A: Yes and on that day when Eratruck came to me to possess the two trucks , I saw on the documents that they brought to me which was written Rhema SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. Motors and Eratruck by which Eratruck had been given the order to seize Rhema Motors possession... Plaintiff contends that having paid 93% of the purchase price, he had acquired beneficial ownership in the said vehicles. This brings up the crucial issue of whether the 1st Defendant as non-owner could even pass good title to the Plaintiff in the first place. The law is well-settled that no one can transfer title that he does not possess: nemo dat quod non habet. Thus a seller can only pass ownership of goods to a buyer if he owns the goods or, if not the owner, has the right to sell them. This position is clearly captured in Section 28 of the Sale of Goods Act, 1962 (Act 137) which states that; “Subject to this Act and to any other enactment where goods are sold by a person who is not the owner of the goods and who does not sell them under the authority or with the consent of the owner, the buyer does not acquire better title than the seller had” On the evidence there is little doubt that the 1st Defendant was not precluded by the 2nd Defendant from selling the vehicles to Plaintiff. I say so because even though the 2nd Defendant resists the Plaintiff’s assertion that it endorsed the terms of Exhibit A, it does not deny that it was its Managing Director who processed the title documents covering the said vehicles and handed over same to the Plaintiff. SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. 2nd Defendant was therefore fully aware of the said sale. In light of undisputed evidence that the 1st Defendant had the authority of the 2nd Defendant to sell the vehicles to Plaintiff, the nemo dat principle cannot apply in this case. In my view that the Plaintiff had acquired good title to the vehicles subject of course to his fulfillment of conditions imposed by Exhibit A. As already noted, the Defendants did not testify. However Counsel for 1st Defendant sought to contend during cross-examination of Plaintiff that the trucks were repossessed as a result of the Plaintiff’s default in making payments. This contention I am unable to accept as the contract between the 1st Defendant and the 2nd Defendant were separate and distinct from that between the Plaintiff and the 1st Defendant. There is no evidence either viva voce or documentary and certainly not in Exhibit A which establishes that the 1st Defendant’s payment obligations to the 2nd Defendant were contingent upon the fulfillment of the Plaintiff’s payment obligations. There is indeed evidence that the Plaintiff even though he failed to comply strictly with the payment schedule set out in Paragraph 1(b) of Exhibit A, continued to make payments to the 1st Defendant. Exhibit E dated the 10th of October, 2016 (the authenticity of which is not denied by the 1st Defendant) shows that the 1st Defendant acknowledged that the Plaintiff’s indebtedness stood at Forty-Seven Thousand, Six Hundred and Thirty-Six Ghana Cedis SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. Ninety-One Pesewas (GH¢ 47, 636.91) as of that date. This lends credence to the Plaintiff’s assertion that he had paid 93% of the price of the vehicles at the time the vehicles were seized. The 1st Defendant cannot reasonably expect this Court to believe that the vehicles in question were sold to Plaintiff at the same price at which it purchased same from the 2nd Defendant. Indeed the Plaintiff testified under cross-examination that the 1st Defendant had factored into the purchase price an interest component of 48% for the two-year period which amounted to Fifty-Six Thousand United States Dollars (US$56,000). He added that the 2nd Defendant’s Managing Director had even described the total price charged by the 1st Defendant as “too much” for two trucks. These piece of evidence, it is significant to note, stands unchallenged. Consequently, even assuming without admitting that the performance of the 1st Defendant’s obligations to the 2nd were contingent upon the performance of Plaintiff’s, it becomes difficult to fathom how or why 1st Defendant would default in payments to the 2nd Defendant. The only reasonable conclusion I come to is that the instalment payments being made by the Plaintiff were not being utilized to pay off 1st Defendant’s indebtedness to the 2nd Defendant. It was on the basis of this default that the Court ordered repossession of the vehicles by the 2nd Defendant. Again, even if the Plaintiff defaulted in its payment obligations under Exhibit A, the 1st Defendant by its failure to take the necessary steps to enforce its SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. rights prior to the repossession of the vehicles by the 2nd Defendant, should be deemed to have waived or compromised same. After all Section 23 of Act 292 permits the parties to a Conditional Sale Agreement to expressly or by conduct vary their rights, duties and liabilities. That said, having made payments constituting 93% of the purchase price to the 1st Defendant, the said vehicles by virtue of Section 8(b) of Act 292 had become “protected goods” which could not be repossessed by the 1st Defendant without Court Action. Obviously, the 1st Defendant was not left without remedy when the Plaintiff breached his payment obligations under Exhibit A. What it ought to have done especially in light of its claim that it was the Plaintiff’s default that caused it to breach its agreement with the 2nd Defendant, was to have instituted an action in Court possibly to recover the amount outstanding or to repossess the said vehicles. Instead, 1st Defendant looked on unconcerned when it was sued by the 2nd Defendant. It is conceded that there is no evidence of what transpired in Court as far as the 2nd Defendant’s suit is concerned but what can be inferred from the fact that Plaintiff had no notice of those proceedings is that, 1st Defendant took no steps to notify Plaintiff of same or bring the Plaintiff’s interest in the vehicles to the attention of the Court. Sadly, the Plaintiff, despite the interest he had acquired in the vehicles remained totally oblivious to the pendency of those proceedings until he was surprised with the Court Order for seizure of same. SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. In my opinion, it is the default and misconduct of the 1st Defendant that gave rise to the events that spawned the instant suit and it is for this reason that the 1st Defendant should be fixed with the consequences of the “unlawful” repossession of the vehicles by the 2nd Defendant. I describe the said repossession as “unlawful” since it was done contrary to the provisions of Act 292 as far as the Conditional Sale Agreement between the Plaintiff and the 2nd Defendant was concerned. Section 8(2) of Act 292 headed Restriction of Right to Recover Protected Goods states that; a) The owner or seller shall not enforce any right to recover possession of protected goods from the hirer or buyer otherwise than by action b) If the owner or seller recovers possession of a protected goods in contravention of subsection (1), the agreement, if not previously terminated shall be terminated. c) The hirer or buyer shall be released from all liability under the agreement and shall be entitled to recover from the owner or seller, in an action for money had and received, all sums paid by the hirer or buyer and any security given by him in respect thereof.... The repossession of the said vehicles without Court Order was therefore contrary to law. Exhibit A is therefore deemed terminated as a consequence SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. and the 1st Defendant by virtue of subsection(c) above is required to refund all monies paid by the Plaintiff towards the purchase of the said vehicles. I note that by the terms of Exhibit A, the said transaction was denominated in United States Dollars. In his testimony the Plaintiff stated that the outstanding amount of Forty-Seven Thousand, Six Hundred and Thirty-Six Ghana Cedis Ninety-One Pesewas (GH¢ 47,636.91) had been converted by the Parties to Fourteen Thousand United States Dollars (USD$ 14, 000). In the absence of any credible evidence to the contrary, this Court has no option than to accept the Plaintiff’s claim at face value. 1st Defendant is thus to refund to Plaintiff the sum of Two Hundred and Sixteen Thousand, Four Hundred and Thirty-Six United States Dollars (USD$ 216,436.00.) less the Fourteen Thousand United States Dollars (US$ 14,000.00.) which was the amount that remained due and owing by Plaintiff at the time the said vehicles were repossessed by the 2nd Defendant. For the avoidance of doubt the said amount together with interest thereon may be paid in its cedi equivalent at the rate prevailing on the date of payment. In the result, Judgment is entered for Plaintiff to recover from the 1st Defendant as follows: a) The sum of Two Hundred and Two Thousand Four Hundred and Thirty- Six United States Dollars (USD$ 202,436) being the total amount paid by Plaintiff to the 1st Defendant towards the purchase of the two Hohan 6x4 Sino Trucks SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. b) Interest shall be payable by 1st Defendant on the said amount at the prevailing commercial bank Dollar interest rate from the 12th of October, 2017 until date of final payment. Plaintiff’s suit against the 2nd Defendant is dismissed. I award costs of Ten Thousand Ghana Cedis (GH¢10, 000) in favour of Plaintiff against the 1st Defendant. (SGD) AKUA SARPOMAA AMOAH J. (MRS) JUSTICE OF THE HIGH COURT Cases referred to: John Dramani Mahama vrs Electoral Commission & Nana Akuffo Addo WRIT NO J/1/5/2021 KLAH v PHOENIX INSURANCE CO. LTD [2012]2 SCGLR 1139 Statutes referred to: The Hire Purchase Act, 1974 [NRCD 292] The Sale of Goods Act, 1962 (Act 137) SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. SUIT NO. CM/RPC/0706/17 SETH MENSAH VS RHEMA MOTORS & ANOR. 19