Cases on Hire Purchase - PowerPoint Presentation

Cases on Hire Purchase By Prince Ganaku Prince Ganaku

Afriyie v Guardian Assurance Appiah took a vehicle from Assad & Co. on hire purchase. The agreement provided that if he parted possession with the vehicle or he tried to sell it, the company would terminate the agreement. This notwithstanding, Appiah sold the vehicle to one Osei, who insured it with Guardian Assurance Co. Ltd. Somewhere in 1961, Afriyie was involved in an accident with the vehicle in question. This time, it wasn’t Osei driving, but one Kofi Fofie. Prince Ganaku

Afriyie v Guardian Assurance She sued both Emmanuel Osei and Kofi Fofie for the injuries she sustained and was given judgment in her favour .This is where it gets tastyGuardian Assurance, with whom Osei had insured the vehicle, refused to indemnify Osei, which was contrary to s. 10 of the Motor Vehicles (Third Party Insurance) Act, 1958. Prince Ganaku

Afriyie v Guardian Assurance The reason they gave was that the vehicle, at all material times was the property of Assad & Co. Recall that the hire-purchase contract had said that any purported sale or parting of possession with the vehicle would operate to terminate said agreement. Thus, when Appiah purported to sell the car to Osei, the agreement was determined, and so Osei could not have acquired any property in the vehicle or any insurable interest in it. Prince Ganaku

Afriyie v Guardian Assurance One of the issues considered was whether the terms of the hire purchase agreement between Assad & Co. and Appiah operated to terminate the Appiah’s rights under the agreement. On this, the Court held that Assad & Co. had the option to terminate the agreement, but whether or not they did is immaterial, as Appiah never actually owned the vehicle.He, thus, had no legal title in it to transfer to Osei. Prince Ganaku

Afriyie v Guardian Assurance Another issue agreed on was whether at the time that the agreement between Appiah and Osei was effected, Osei had an insurable interest in the vehicle.To this the Court answered that despite not having legal title, Emmanuel Osei did, in fact, have an insurable interest. Prince Ganaku

Insurable interest in property is not confined to absolute legal ownership. Generally, any person who is so situated that he will suffer a loss as the proximate result of damage to or destruction of the property has an insurable interest. There must be some direct relationship to the property itself, otherwise then, the interest would be too remote, and therefore not insurable. Afriyie v Guardian Assurance Co. Ltd. Afriyie v Guardian Assurance Prince Ganaku

The mere possession of property is probably sufficient to give a person in possession an insurable interest in it. Even if the possession is wrongful as against the true owner, it is a right which is recognised by law against the whole world, except those who can show a better title. A person in possession may sue a third party who has damaged it, and may recover, from him, the full amount of the damage. Thus, it would seem to follow that a person in possession of property has, on that ground alone, an insurable interest to the full value Afriyie v Guardian Assurance Co. Ltd. Afriyie v Guardian Assurance Prince Ganaku

Afriyie v Guardian Assurance The final issue was whether Guardian Assurance was bound to indemnify Osei. The Court held that a policy of insurance is a personal contract between the insurers and the insured. In the instant case, Osei hadan insurable interest, he had been accepted by Guardian Assurance, who had also accepted the vehicle. On that basis alone, pacta sunt servanda! Prince Ganaku

Transport Hire v Dede Dede had tried to buy a Bedford Truck from Transport Hire Purchase Ltd. and had paid 300,000 in respect of it. Unfortunately, for one reason or the other, that agreement did not materialize, and she didn’t receive a refund, but she didn’t forfeit the money either. When she tried to buy a Toyota truck later, that 300,000 was treated as a deposit for it. Prince Ganaku

Transport Hire v Dede Indeed the agreement for the Toyota Truck was one of hire purchase. The cash price of the truck was 750,000. The agreement also provided that the money be paid in monthly instalments , and the company would have the right to seize the vehicle if she defaulted in the payments of any of the instalments.Further, the agreement provided for additional expenditure, independent of the cash price of the vehicle. Prince Ganaku

Transport Hire v Dede For example, since the vehicle was not in roadworthy condition, she had to make some repairs. The Company authorized her to repair the engine. However, as there were other repairs to be made, she effected them, and paid for insurance. However, when she missed a payment deadline, the company purported to exercise their rights under the hire purchase agreement and seized the vehicle. They subsequently brought an action for an order for the return of the vehicle. Prince Ganaku

Transport Hire v Dede Dede, for her part, contended that she had paid some monies in respect of the vehicle that needed to be refunded, including monies she had expended on repairs and insurance. The company counter-argued that they had only authorized Dede to repair the engine, and challenged her claim that she had spent upwards of 100,000 on the engine.Dede also denied the company’s right to seize the vehicle and counter-sued for a lien over the vehicle until the monies have been refunded Prince Ganaku

Transport Hire v Dede The first issue concerned the existence of an agreement, the Court thought that clearly there was an agreement.The second issue concerned how much the vehicle was to be sold for. The Court found that the vehicle itself was sold for 750,000. However, the company had charged extra costs and overheads that Dede had agreed to. The relevance of these extra costs is addressed later. The third issue concerned how much Dede had paid to the company. Prince Ganaku

Transport Hire v Dede This issue was in contention because of the earlier 300,000 that Dede had paid in respect of the vehicle that never materialized. If one added that 300,000 to the monthly instalments actually paid, the entire amount would come to 721,000. The Court held this to be the case.There was also the issue of how much Dede had spent repairing the vehicle. This issue was in contention because the company had only authorized Dede to repair the engine. However, she had made other repairs, in respect of which, she was seeking refunds Prince Ganaku

Transport Hire v Dede The Court held that it would have been impractical for her to only have repaired the engine if other parts of the vehicle were faulty. This brings us to the issue of whether the company was entitled to add expenses not made at the time of the sale to the purchase price. Counsel for Dede argued that Section 2 of NRCD 292 provides that before any agreement is made, the seller and owner shall state orally and in writing to the prospective buyer or hirer, the price at which the goods may be purchased by him for cash (in this Decree referred to as the "cash price") and the hire-purchase price or total purchase price, as the case may be. Prince Ganaku

Transport Hire Purchase Ltd. v DedeFor this reason, counsel for Dede contended that Transport Hire Purchase Ltd. is not entitled under the Hire Purchase Decree to add expenses not made at the time of the sale to the purchase price. In answering this, the Court distinguished between the cash price, which is the price at which the goods may be purchased for cash, and the hire-purchase price, which is the cash price + the extra charges and overheads. The hire-purchase price thus came to 1.4M, and was agreed to by both parties. Consequently, the contention that the extra charges were unlawful was untenable. Prince Ganaku

Transport Hire Purchase Ltd. v DedeFinally - and this is the meat of the matter – there was the issue of whether the company had the right to seize the car. Indeed the company argued that the hire purchase agreement gave them the right to seize the vehicle in question. The Court began with section 8, stating that although it prohibited the owner or seller from enforcing any right to recover possession of protected goods from the hirer or buyer, unless by an action…. Prince Ganaku

Transport Hire Purchase Ltd. v Dede…, section 23 clearly allows the parties to a hire purchase agreement to vary their rights, duties and liabilities by express agreement, course of dealing or by a custom, which the parties may be taken to have agreed to be applicable to their agreement, subject to the Decree. The import of these two sections is that the clause in the agreement which gave the company the power to seize the vehicle would only be lawful where it could be shown that the clause itself was not inconsistent with any part of the Decree. Prince Ganaku

Transport Hire Purchase Ltd. v DedeThe Court then turned its attention to Section 17 of NRCD 292 which prohibited the seller from enforcing any provision for the payment of damages or forfeiture or penalty for the acceleration of the payment of an instalment , or for the termination of the agreement or for repossession, unless he has made a written demand to the hirer or buyer to carry out the obligation within a specified period of not less than 14 days beginning with the date of the demand, and the hirer or buyer has failed to comply with the demand in the specified period.Thus, in spite of the legality of the clause, the right given by the clause had been exercised in contravention of the decree, and so the seizure was unlawful. Prince Ganaku

Transport Hire Purchase Ltd. v DedeAgain, the right to seize the goods, given under the clause in the agreement had to be read in light of the provisions of Section 8(1) & (4). The import being that although the plaintiff had the right to seize the vehicle where there had been a default, that right became limited at the point where the vehicle attained the status of a protected good. At that point, he could only repossess the goods by an action. Under Section 8(4) a protected good is one which is the subject matter of an active hire purchase agreement or a conditional sale agreement, in respect of which at least 50% of the hire purchase price has been paid. Prince Ganaku Prince Ganaku

Transport Hire Purchase Ltd. v DedeAccording to Section 8(2), where the owner violates the Section 8(1) by repossessing a protected good without resorting to an action, the agreement is terminated, and the hirer shall not only be released from all liability, he/she shall also be entitled to recover from the owner or seller all sums paid by the hirer and security given by him/her in their respect thereof, and this right extends further to a guarantor who shall also be entitled to recover all sums paid by him under the contract of guarantee or under any security given by him in respect thereof. After adding all the amounts she had paid, including what she spent on insurance, the Court found that she had paid more than 50% of the hire-purchase price, the good was a protected good, and the company had violated section 8(1). The provisions of section 8(2) would thus apply. Decision for Dede

Ekuona v Bank for Housing & ConstructionThe story begins with the a World Bank loan to the Government of Ghana earmarked for the maintenance of roads in the country. The maintenance of the roads were to be done by the Ghana Highway Authority (G.H.A) and the Bank for Housing & Construction (B.H.C). Under one of the projects, B.H.C was to find contractors to carry out works on contracts handed out by the G.H.A. Under the system, a contractor would apply to B.H.C for a loan. If they were credit worthy, B.H.C would direct them to the G.H.A. Prince Ganaku

Ekuona v Bank for Housing & ConstructionIf a particular applicant for the loan got handed the contract by the G.H.A, then B.H.C would give them the loan in the form of equipment and other machinery. So basically: Apply to B.H.C for loan. B.H.C will review your finances to see if you’re in good standing. If they find that you’re in good standing, they direct you to G.H.A. G.H.A is the one that hands out the contracts. If G.H.A refuses you the contract, for one reason or the other, there is no reason for B.H.C to give you the loan, so you don’t get it. However, if G.H.A does give you the contract, then B.H.C would give you the loan. The loan did not come in the form of money, but rather in the form of equipment and other machinery. Prince Ganaku

Ekuona v Bank for Housing & ConstructionThe contractor would then pay the for the equipment, whenever the Ghana Highway Authority paid them for the work done. Ekuona , in this case, went through the processes. They got the contract awarded to them, and then they were given the B.H.C loan. Among other things, the agreement provided that B.H.C would have the right to seize or take possession of the equipment only if Ekuona defaulted on their payments of the loan + interest Prince Ganaku

Ekuona v Bank for Housing & ConstructionSubsequently, and after the terms had been agreed, B.H.C, facing problems with defaulters on other loans it had given out, convened a meeting with the G.H.A. At the meeting, it was agreed that further terms should be added to the agreements that had been executed with the loanees . Consequently, a letter was circulated by B.H.C, in which they purported to add the following terms; Prince Ganaku

Ekuona v Bank for Housing & ConstructionThe equipment would be seized if an assignor or loanee defaulted for three consecutive months, received a reminder, and did not react accordingly The equipment would be seized if B.H.C and G.H.A agreed that there had been a failure to perform the contract for which the equipment had been released. After three years of performing the contract, Ekuona was ousted from the project, and relieved of their possession of the equipment by B.H.C, who cited a breach of contract. Prince Ganaku

Ekuona v Bank for Housing & ConstructionTo this effect, G.H.A wrote to Ekuona informing them that steps were being taken to terminate the contract with them. Thus, they (G.H.A) were inviting Ekuona for a final inspection of the work done. Subsequently, B.H.C seized the equipment, and Ekuona sued, denying along the way that they had breached any contract. Now, let’s change tack a little. Recall that the release of the equipment to Ekuona, by B.H.C, was dependent on them securing a contract from G.H.A. Prince Ganaku

Ekuona v Bank for Housing & ConstructionSo let’s begin from the point of the agreement between Ekuona and G.H.A. The Court submitted that although all the contracts signed (i.e. the two agreements between B.H.C and Ekuona for the loan; the agreement between G.H.A, B.H.C and the Government of Ghana and; the Government of Ghana and the World Bank) all existed to implement maintenance of the road, which was one objective, it had to be remembered that each one was a separate agreement on its own. Prince Ganaku

Ekuona v Bank for Housing & ConstructionThe agreement between G.H.A and Ekuona provided inter alia that if Ekuona failed to execute its duties under the contract, G.H.A would take over the job and then they would deduct whatever they spent finishing the job from whatever they were supposed to give Ekuona.Recall that G.H.A sent a letter to Ekuona saying that they were taking steps to terminate the agreement. The Court found that they hadn’t actually terminated the agreement, they had merely taken steps to do so.Thus, in the view of the Court, insofar as B.H.C was basing their seizure of the equipment on the termination of the agreement, they were wrong, and the seizure of the equipment was premature. Prince Ganaku

Ekuona v Bank for Housing & ConstructionBut there was another alternative to consider. Recall that the loan agreement between B.H.C and Ekuona gave B.H.C the right to seize the equipment if the assignor defaulted on payments of the loan + interest. The Court however argued that the right to do this, and the manner in which it could be done hinged on the nature of the transaction. Was it a loan simpliciter or a hire purchase agreement? Prince Ganaku

Ekuona v Bank for Housing & ConstructionTo answer this, they Court examined the facts. The money constituting the loan amount was never credited to Ekuona . Instead the Bank bought the equipment in both their names. Ekuona did not take part in the purchasing of the equipment, as such there was no contract between Ekuona and the suppliers of the equipment.The Bank had also referred to the agreement as a hire-purchase agreement. Prince Ganaku

Ekuona v Bank for Housing & ConstructionThe transaction, the Court concluded, was more than a loan where money is given to a borrower to purchase equipment himself on the loan, and it is secured with the equipment purchased and other securities. In this case, the lender provided the money and used it to procure equipment which would not become the property of the borrower until full payment for the property was made. So what was the nature of the agreement, if it wasn’t a loan? Prince Ganaku

Ekuona v Bank for Housing & ConstructionFirst, the Court looked at Section 24 of NRCD 292 which defines a hire purchase agreement as an agreement for the bailment of goods, under which the bailee may buy the goods, or under which the property in the goods will or may pass to the bailee; and where by virtue of two or more agreements, none of which, by itself, constitutes a hire purchase agreement, there is a bailment of goods, and either the bailee may buy the goods or the property in the will or may pass to the bailee, the agreements shall be treated for the purposes of this decree, as a single hire purchase. Prince Ganaku

Ekuona v Bank for Housing & ConstructionThen the Court looked at Section 3(1), which provided;that the owner state the cash price and the hire purchase price the amount and date on which the price is to be paid, and the date or the mode of determining the date upon which each instalment is payablea description or a list of the goods to which the agreement relatesa notice which is at least as prominent as the rest of the contents of the agreement, in terms set out in the first or second scheduleApplying these criteria to the instant agreement, the Court found that the agreement set down the description of the equipment, their value (which was equivalent to how much was supposed to have been lent), the purchase price (which was value + interest), and the manner of payment, thus satisfying all but the last requirement. Prince Ganaku

Ekuona v Bank for Housing & ConstructionIndeed, even if the requirements of section 3(1) had not been strictly adhered to, the Court was empowered by the Act to dispense with subsections b & c (requirements in previous slide not in bold font). Thus, the Court having regard to the circumstances held that it was a hire purchase agreement. It then moved to the provisions of Section 17 which contained all the necessary conditions for the termination of an agreement by an owner of goods; namely, a written demand for the hirer or buyer to carry out the obligation in question within a specified period of not less than fourteen days beginning with the date of service of the demand, and the hirer or buyer has failed to comply with the demand in the specified period. Prince Ganaku

Ekuona v Bank for Housing & ConstructionFurther, by section 8(1), the owner or seller could not enforce any right to recover possession of protected goods from the hirer or buyer, otherwise by an action. Subsection 4 of Section 8 defines protected goods as goods that have been let under a hire purchase agreement or sold under a conditional sale agreement in respect of which, at least half of the hire purchase price or total purchase price has been paid, whether in pursuance of a judgment or otherwise, or tendered by or on behalf of the hirer or guarantor, where the buyer has not terminated the hire purchase or conditional sale agreement or, the bailment by virtue of any right vested in him. Prince Ganaku

Ekuona v Bank for Housing & ConstructionLet’s go back a bit. If you recall, the Court said that BHC’s seizure of the equipment was premature , because they had seized the equipment when neither they nor GHA had terminated their respective agreements with Ekuona.This was because some time after the seizure had occurred, a cheque for upwards of 733,000 due to Ekuona was paid to BHC, by GHA. Again, if you recall, the loan was to be paid off with the money that GHA would pay Ekuona with. This sum of over 733,000 represented more than 50% and, in the view of the court, should have been enough to bring the equipment within the definition of protected goods. Prince Ganaku

Ekuona v Bank for Housing & ConstructionThe sticking point was that the seizure was done before the payment was made to BHC by GHA. However, the Court was off the view that the money had become due before the seizure had taken place because Ekuona had already done the work. Prince Ganaku

The difficulty with hire-purchase agreement cases is that a member of the public imagines himself to be buying the article by installments from the dealer, whereas he is in fact a hirer of the article from a finance company with whom he has been brought willy-nilly into contract, and of whom he knows nothing, and which, on its part has never seen the goods which are the subject matter of the hire Lord Harman; Yeovil Credit Ltd. v Apps Ekuona v Bank for Housing & Construction Prince Ganaku

UTC v Johnson Okoro Okoro took a vehicle on hire-purchase from UTC for a hire-purchase price of £1284. Consistent with the provisions of the Hire Purchase Act of 1958, the schedule to the hire purchase agreement provided that after £963 had been paid, the owners could not retake possession of the vehicle without the hirer’s consent or an order of the Court. Although, by March of 1962, Johnson Okoro had paid £963, there was still a balance of £320 which was overdue. Cost of repairs amounting to £118 and of insurance amounting to £159 was also owed. Prince Ganaku

UTC v Johnson Okoro In that month, Johnson Okoro took the vehicle to UTC for repairs. On completion, UTC refused to release the vehicle to Okoro unless the cost of repairs and all outstanding accounts had been settled. He had no money, and so was obliged to sign a second hire purchase agreement. The schedule to this new hire purchase agreement provided that after £644 had been paid, UTC could not retake the vehicle. Prince Ganaku

UTC v Johnson Okoro In January of 1963, Johnson Okoro , who, in spite of the second hire purchase agreement, had still not made a single further payment, again took the vehicle to UTC for repairs. UTC demanded that as a condition to commencement of repairs, Johnson Okoro would have to deposit £50. He asked to take the vehicle else where for repairs, but UTC refused to release the car until all outstanding debts had been paid.On his failure to pay, UTC instituted an action, claiming arrears of rentals, plus the cost of previous repairs, insurance and interest Prince Ganaku

UTC v Johnson Okoro The Court held that the second hire-purchase agreement was null and void, because it didn’t state, in addition to anything else, that UTC recognized that they could not retake the vehicle without an order of the Court . Further, as UTC had seized the vehicle without an order of the Court, Johnson Okoro was released from all liability under the agreement Prince Ganaku

Halaby v WireduHalaby belonged to a class of persons / business owners who had been required by statute to leave the country, to allow indigenous business owners to take over the sectors of the economy the occupied. He had two stores in which he carried on a spare parts business. He entered into 2 separate agreements with Wiredu for the ‘sale’ of the two stores. In both cases, the price was to be paid in 7 installments. Prince Ganaku

Halaby v WireduWiredu did not stick to the payment schedule whereupon an action was instituted by Halaby . Counsel for Wiredu based their argument on Section 81 of the Sale of Goods Act, 1962, which provides that a hire purchase contract means a contract of sale of goods in which the price is to be paid in five or more instalments.Consequently, since it was a hire purchase agreement, and Halaby had failed to meet the formal requirements under sections 66(1)-(3) of the Sale of Goods Act, the agreement could not be enforceable. Prince Ganaku

Halaby v WireduThe Court took issue with the notion that every contract of sale that was broken down into five or more instalments was a hire purchase agreement. In a bid to provide backing for her opinion that not every instalment transaction that exceeded four instalments was a hire purchase agreement, the judge referenced Section 81 which defined the hire purchase price, among other things, as excluding ‘any sums payable as a penalty or as damages or compensation’.This was particularly significant because, buyers in credit sales transactions, for example, do not pay any sums as penalty. By inference, credit sales and hire-purchase transactions were different Prince Ganaku

Halaby v WireduClearly then, the hire purchase price could not be conflated with what was a purchase price under a credit sale. Furthermore, the Sale of Goods Act retained the distinction between an ordinary contract of sale, which it defined in Section 1 as ‘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 a hire purchase agreement. Section 1 made no mention of a hire purchase price. Prince Ganaku

Halaby v WireduIn fact, the Sale of Goods Act devotes sections 1-65 to ordinary sale transactions, before it comes to deal with hire-purchase contracts under Sections 66-84. The fact that the Act is compendious does not blur the distinction between the two types of transactions. A credit sale is a type of sale distinct from a hire purchase agreement. Again, it was not true, as Counsel for Wiredu had argued, that once the agreement was broken down into five or more installments, the intention of the parties did not matter. Prince Ganaku

Halaby v WireduThe case counsel for the defence had relied on, Domestic Electric Rentals Ltd. v Dawson, did not even support counsel’s argument. The agreement in that case was one of hire. The parties knew it was. The only thing that made it sui generis was that the agreement was so ingeniously worded that the option to purchase, which is normal in a hire purchase agreement was left in the air, and that was done intentionally to take the agreement out of the scope of the English Hire Purchase Act. The agreement in this case was different. Prince Ganaku

Halaby v WireduThe instant agreement was the sale of a business. The sale of a business was not a sale of goods, within the meaning of Act 137. The sale of a business was a sale of more than the goods that was sold by the businessman. It included the sale of goodwill and a whole business organization. In the instant case, what was sold consisted also of an interest in land, and this could not be a sale of goods. Prince Ganaku

Halaby v WireduConsequently, the agreement was outside the scope of the Sale of Goods Act (including the sections on Hire Purchase Agreements), and sections 66(1)-(3) would not apply. Judgment for Halaby . Prince Ganaku

Yayo v NyinaseNyinase was an illiterate trader who wanted to carry on a transport business on the side. To this effect, she bought a truck from Yayo , who she met through a prophetess.She caused the truck to be test-driven twice, after which she paid ₵800 out of the ₵2000 that the car was valued at.It was agreed that she would pay the remaining ₵1200 in six installments. Prince Ganaku

Yayo v NyinaseSubsequently, she paid another lump some of ₵650, after which the truck began to give her problems. For this reason, she couldn’t meet the rest of her debt obliations . Yayo then seized the vehicle. The trial court entered judgment for Nyinase , basing the judgment on the belief that the agreement was one of hire purchase, and as such, the seizure was a breach of Section 69 of the Sale of Goods Act. Prince Ganaku

Yayo v NyinaseYayo then appealed. The first issue for determination was whether the trial court judge was right to apply the provisions of Section 69 of the Sale of Goods Act. The judge in the instant appeal opined that the answer would depend on whether the agreement was a valid and enforceable hire purchase agreement. He then moved to consider the submissions of Counsel for Yayo, who argued that a hire-purchase agreement could only be enforceable if it was in writing. Prince Ganaku

Yayo v NyinaseThe judge began with the argument that installment trading was widespread. However, many of the traders were illiterate or semi-literate. Thus, the proposition that an agreement solemnly entered into between such persons could be avoided by one party simply because the agreement had not been reduced into writing was one that needed to be examined. That examination began with definitions of hire-purchase agreements under the repealed Hire Purchase Act of 1958, the Sale of Goods Act and at Common Law. Prince Ganaku

Yayo v NyinaseUnder Section 81(1) of the Sale of Goods Act, a hire purchase was a contract of sale of goods in which the price was to be paid in five or more installments. The definition in Section 81(1) was complemented by another one in Section 1(2) of the same Act, which provided that where, by virtue of one or more contracts, a person had agreed, for value, to bail goods to a bailee , on such terms that the property in the goods will or may pass, at the option of the bailee, to the bailee, then, for the purposes of the Act, that person was deemed to have agreed to transfer property in the goods to the bailee, and the bailor would be deemed to be the seller, and the bailee would be deemed to be the buyer. Prince Ganaku

Yayo v NyinaseUnder Section 3(1) of the repealed Hire Purchase Act of 1958, a hire purchase agreement was an agreement for the bailment of goods, under which the property in the goods would or might pass to the bailee ; and where, by virtue of two or more agreements, none of which, by itself, constituted the hire purchase agreement, there was a bailment of goods, and the bailee might have bought the goods, or the property therein would or might have passed to the bailee, the agreements would be treated for the purposes of the Act as a single agreement, made at the time when the last agreement was made. Prince Ganaku

Yayo v NyinaseAt common law, the essence of a hire purchase transaction was;A bailment of goods, under a contract of hire by the owner to the hirer An option in the hirer to return or purchase the goods at a future time The object of such an agreement was to ensure that the property in the goods remained in the owner during the whole period of the bailment, and to vest in the hirer, a right to put an end to the bailement, either by purchasing the goods, or returning them. Prince Ganaku

Yayo v NyinaseThe judge noted that while the definition proffered in the repealed 1958 Act reflected the definition at common law, the definition in the Sale of Goods Act did not. The Sale of Goods Act provided simply that a hire purchase agreement was a contract of sale that differed from a regular sale of goods, only in respect to the terms provided for the payment of the purchase price; it must be in five or more instalments .It followed therefore that where the purchase price was payable in less than five installments, no hire purchase was created, even though the agreement could be one of hire of goods, with an option in the hirer to purchase them at a later date. Prince Ganaku

Yayo v NyinaseBy reason of the fact that the installments stated were 6 instalments , the judge believed that there was indeed a hire purchase agreement. This brings us to the second issue of whether this hire purchase agreement was enforceable. Section 66(1) provides that before any hire-purchase contract is entered into in respect of any goods, the seller shall state orally and in writing to the prospective buyer, the price at which the goods may be purchased by him for cash Prince Ganaku

Yayo v NyinaseSection 66(2) states that subsection 1 shall be deemed to have been complied with, if the seller states the cash price orally, and If the buyer has inspected the goods of like goods, and at the time of his inspection, tickets or labels were attached to or displayed with the price If the buyer has selected the goods by reference to a catalogue, price list, advertisement, which clearly stated the cash price either of the goods as a whole or of all the different articles or sets of articles comprised therein, Prince Ganaku

Yayo v NyinaseThe cumulative effect of this, in the view of the Court, was that in practice, it was only in respect of sale of second hand goods and such new items as furniture sold by small time or petty carpenters, craftsmen or fitters (the very people who are most likely to be semi-literate or illiterate) that a formal written statement of the cash price, as stipulated under Section 66(1) becomes necessary. Truly, most new goods normally subject to a hire purchase agreement, such as cars, pianos, fridges etc, either have the cash price displayed on them, or are purchased by reference to a price list. Prince Ganaku

Yayo v NyinaseSection 66(3) provided that unless the provisions of the subsections to Section 66 immediately preceding it are adhered to, the seller would not inter alia be entitled to enforce any agreement relating to the hire-purchase, or any right to recover goods from the buyer. Thus, it is clear that it is the seller who would suffer for non-compliance with the provisions of Section 66(1) of Act 137, and rightly so, if you consider the fact that it is the seller’s duty to state the cash price in writing.At this point, it is clear that Yayo could not enforce any further right under the agreement. But the Court was not done. Prince Ganaku

Yayo v NyinaseThe Court reeled off other provisions that dealt with formal requirements of a hire purchase agreement, the non-compliance with which would also operate to attract sanctions under 66(3). Under Section 69(1) of the Sale of Goods Act, where goods had been delivered under a contract of hire purchase to the buyer who has paid at least 50% or any such other minimum percentage as may be prescribed, the seller could not enforce any right to recover the goods other than by an action. Prince Ganaku

Yayo v NyinaseUnder Section 69(2), if the seller recovered possession of the goods in contravention of sub-section 1, the hire purchase agreement would determine and the buyer would be released from all liability under the contract, and would be entitled to a return of all sums paid under or in respect of the contract. In this case, the Court found that there was a hire purchase agreement, more than 50% of the purchase price had been paid, but the seller had seized the vehicle. The buyer’s right to recover all sums paid was upheld. Appeal dismissed. Prince Ganaku

Kwarteng v SeiKwarteng was a passenger in a car that Sei had been driving. It had rained and the road was slippery. The passengers, including Kwarteng, shouted at Sei to slow down. He responded that he was in a hurry to go and meet some market women.He subsequently lost control of the car, and drove it into a ditch.Kwarteng then brought an action, and in due course, Adebisi , the owner of the vehicle, was joined to the suit as the second defendant. Prince Ganaku

Kwarteng v SeiIn respect of Adebisi , it was contended that Sei was his servant and so he would have to be held vicariously liable for Sei’s negligence. He denied that this was the case. Rather, he had sold the vehicle to Sei, under a work and pay agreement.There were four issues;Whether Sei had been negligent Who owned the vehicle In what circumstances Adebisi could be held liable for Sei’s negligence What the quantum of damages would be Prince Ganaku

Kwarteng v SeiOn the first issue, the Court found that Sei had been negligent. On the second issue, evidence was led showing that the vehicle was registered in Adebisi’s name and so was the quarter license.Adebisi admitted that he had indeed been the owner of the vehicle, but he had sold it to Sei. To prove this, he produced an agreement showing that Adebisi had “agreed to sell a Bedford Lorry” to Sei “for the cash sum of £650”, and that Sei had paid £400, leaving a balance of £250, which, per the agreement, would be paid in 6 monthly installments. Prince Ganaku

Kwarteng v SeiThe agreement also provided that if the Sei failed to make the installments as agreed on, Adebisi would have the right to seize the Bedford Lorry.After the seizure, the vendor is only mandated to give the purchaser 10 days to make good on his debt, after which the vendor would have the right to sell the vehicle.Again, the purchaser had no right to sell or transfer the vehicle to any other person without the permission of the vendor Prince Ganaku

Kwarteng v SeiThe Court looked at the intention of the parties as evinced in the agreement, and the circumstances (i.e. the insurance and the vehicle registration) and came to the conclusion that the parties intended that property in the goods would not pass until the full price had been paid. Thus, ownership of the vehicle was intended to, and did, in fact, remain in Adebisi , at the material time. The Court, however, did not consider it material, but nonetheless stated that if it had been necessary to determine whether the agreement was one of hire purchase or credit sale, then it would have leaned towards hire-purchase, based on the license to repossess the vehicle for failure to discharge the debt. Prince Ganaku

Kwarteng v SeiFinally, to the question of vicarious liability, the Court held that since the vehicle belonged to Adebisi , the burden of proof was on him to show that Sei wasn’t his servant. He hadn’t discharged that burden, and was thus held liable. Prince Ganaku

Amegbor v Chahal & Atta BotsiAmegbor had been traveling as a passenger in a vehicle driven by one Ofori Yaw. At one point in the journey, they came to a portion of the road where two trucks had double parked.As Ofori-Yaw tried to navigate the passage bounded by both vehicles, he hit one, veered off the road and ran into a ditch. Prince Ganaku

Amegbor v Chahal & Atta BotsiAmegbor consequently sued Chahal and Atta Botsi (who, incidentally, could not be found for the purposes of serving a writ on him), claiming that the vehicle Ofori Yaw was driving, belonged to one or both of them; that Ofori Yaw was their servant, for which reason they ought to be held vicariously liable for his negligence.Chahal, for his part, denied that the vehicle belonged to him at the material time. It was his case that he had sold the vehicle to Atta- Botsi on work and pay basis. Prince Ganaku

Amegbor v Chahal & Atta BotsiHe further stated in his evidence that he often sold vehicles on hire purchase, but that in the case of some customers who he was familiar with, the agreements were not reduced into writing. This was the case with his agreement with Atta- Botsi . Per the agreement, the purchase price of the vehicle was £1100. It was agreed that Atta-Botsi would pay £200 upfront, and the rest in monthly installments of £60, as Atta-Botsi was going to work to discharge this obligation. Prince Ganaku

Amegbor v Chahal & Atta BotsiAgain, Chahal maintained that it was Atta- Botsi who would see to the maintenance, licensing and insurance of the vehicle. However, as a fail-safe against Atta-Botsi reselling the vehicle, the vehicle was registered in both their names as co-owners. Consequently, Atta-Botsi would have no right to sell the vehicle until Chahal gave him a note, upon full payment, that he was the owner of the vehicle. Prince Ganaku

Amegbor v Chahal & Atta Botsi The Court began its judgment with an attempt solving the issue of ownership. It found that Chahal was a dealer in motor vehicles who understood exactly what a hire-purchase agreement was, and had decided that he would not apply it to customers he was familiar with.According to the evidence on record, Atta-Botsi’s payment habits were not in consonance with the regularity one would expect from a hire purchase transaction (sometimes he paid more than he was supposed to, sometimes he paid less) Prince Ganaku

Amegbor v Chahal & Atta Botsi Accordingly, the court found that in the instant case, it was clear that neither of them intended the arrangement to be one of hire purchase .And so, was the agreement one of credit sale, which passed ownership in the vehicle to Atta-Botsi, and which resulted in a debt of outstanding balance in favour of the defendant?On this, the Court found that despite the unique nature of the incidents of the agreement, it was clear that Chahal never intended to divest himself of ownership of the vehicle. Prince Ganaku

Amegbor v Chahal & Atta Botsi It was intended that they would be joint owners until Atta- Botsi finished paying, at which point he would become sole owner.Thus, the terms of the agreement relating to ownership could be summarized thus; sole ownership ceased, and was replaced with part ownership exercised by Atta-Botsi and Chahal.Atta-Botsi also acquired a contractual right to possess the vehicle and to use it to earn an income. Prince Ganaku

The object of the contract was that the person described as the buyer should acquire possession of the vehicle, and with it, the right to work with it to earn an income, and out of that income, to buy the share of the person described as the owner, by means of monthly payments to him, of a figure in the neighbourhood of an agreed amount. The seller was under a contractual obligation to transfer sole ownership of the vehicle to the buyer after final payment for the interest of the seller in the vehicle, and the buyer had a contractual right to possession and the use for the purposes envisaged in the contract, namely to work with it. Amegbor v Chahal Amegbor v Chahal & Atta Botsi

The right of the buyer to possession and to earn an income with the vehicle, so long as he kept up with the instalments and performed the other obligations. These obligations were to insure the vehicle, to license it, and to maintain it at his own expense. It seems to me that the intention of the parties to the contact was to enable the ‘buyer’ to be put in a position in which he could obtain money with which to pay for the vehicle without going through the formalities of a hire-purchase agreement, and without transferring full ownership to the buyer before payment while at the same time give to the buyer rights in the vehicle itself more valuable than those of a mere hirer or bailee or licensee but less than those of full ownership .Amegbor v ChahalAmegbor v Chahal & Atta Botsi

Amegbor v Chahal & Atta BotsiThe transaction, to the Court, was one of a sale; a sale by one person, to the other, of part of his interest in the vehicle, coupled with an option in the buyer to buy out the rest. The Court refrained from stating categorically that it was a work-and-pay agreement, because “work-and-pay” wasn’t a legal term of art, but did concede that it could be what was known in the motor trade as “work-and-pay”, entered into for the purpose of getting outside the rigid features of a hire-purchase agreement, and without concluding an outright sale on credit of the vehicle. Prince Ganaku

Amegbor v Chahal & Atta BotsiTo that extent, the transaction may well be described as the ungainly mating of necessity between two well known and respected legal forms. The evidence did not support the assertion that Ofori Yaw was either the servant or agent of Chahal. There was no evidence that Ofori Yaw, at any time performed any service in connection with the vehicle in question, for or on behalf of Chahal.It was quite impossible then to say, on the evidence, that Ofori Yaw was driving the car as a servant or agent of Chahal . Prince Ganaku

Kobina v Badu A driver who had taken a vehicle on work-and-pay basis had negligently caused an accident. The terms of the agreement provided that the vehicle would remain the property of the owner until the final purchase price was paid. However, whatever repairs needed to be effected would be the responsibility of the driver. The driver would work and account for daily sales. Prince Ganaku

Kobina v Badu The Court held that it was clearly a joint venture, and that the owner was liable for the defendant’s negligence. But this case has been overruled by Fynn v Badu and Badu-Anum v Cluff Mining Ghana & Badu-Anum Prince Ganaku

Fynn v Badu Fynn sold a vehicle to one K on hire-purchase terms. Negligent driving of K killed one Mr. Busumtwe .The administrator of his estate sued, and wanted to hold the ‘owner of the vehicle liable’ for the negligent driving of K who he claimed was his servant.Fynn pled that the vehicle had been sold under the terms of a hire-purchase agreement, and so K could not be his servant. Prince Ganaku

Fynn v Badu Trial judge held that K was not Fynn’s servant, but that they were in a joint venture, and held both of them liable. Fynn appealled.The judge summed up the law on joint ventures thus;… Prince Ganaku

The legal principle is that the owner of a car, when he takes it or sends it on a journey for his own purposes owes a duty of care to other road users, and if any of them suffers from negligent driving of the car, whether by whether by the owner himself or by an agent to whom he has delegated the driving, the owner is liable.  There is the principle. In all the cases of joint enterprise, joint possession or joint right to control has been the basis of liability . Fynn v BaduFynn v Badu Prince Ganaku

I think that where the owner of an equipage, whether a carriage and horses or a motor, is riding in it while it is being driven, and has thus not only the right to possession, but the actual possession of it, he necessarily retains the power and the right of controlling the manner in which it is to be driven, unless he has in some way contracted himself out of his right, or is shewn by conclusive evidence to have in some way abandoned his right.  If any injury happen to the equipage while it is being driven, the owner is the sufferer.  In order to protect his own property if, in his opinion, the necessity arises, he must be able to say to the driver, 'Do this,' or 'Don't do that.' The driver would have to obey, and if he did not the owner in possession would compel him to give up the reins or the steering wheel.   Fynn v Badu Fynn v Badu Prince Ganaku

Fynn v Badu In the judge’s opinion, this case did not disclose facts that would bring it within the scope of joint ventures. Further, the judge was of the opinion that “there is not sound policy peculiar to Ghana for imposing liability upon a person who either sells on credit or hires his vehicle to a third person to whom he relinquishes control, simply because he retains in himself, the bare legal title and is interested only in the balance of the purchase price or the hire purchase rentals” Prince Ganaku

Where a person, owning a property, sells it to another, either on outright payment, or on credit, property in the subject is deemed to have been transferred from the owner to the purchaser upon delivery of the property to the buyer , unless a contrary intention is proved Credit Sales Donkor v Alhassan Prince Ganaku

For the purposes of road traffic violations, section 1 of the Road Traffic Ordinance provides that an owner is anybody who keeps and uses a vehicle, including the hirer in a hire purchase agreement; and the buyer in a work-and-pay agreement, even though property would not yet have passed Credit Sales Badu- Anum v Cluff Mining & Badu Anum Prince Ganaku

Fiadzoe v KuadziKuadzi took a bus on hire-purchase from Fiadzoe . The hire-purchase agreement did not confer a right of seizure. When Kuadzie first defaulted on a payment, Fiadzoe seized the vehicle.He sought to argue that the good had not reached the status of a protected good, and so he could seize the vehicle

Fiadzoe v KuadziThe Court said, that would be true, if the agreement conferred a right of seizure, but the agreement didn’t. Act 137 only regulated the right of seizure where one was conferred, it didn’t create one.