Lawrence V Bentworth Finance Nigeria Ltd (1965)

LawGlobal-Hub Lead Judgment Report

PER IDIDGBE JSC 

This is an appeal from the judgment of the High Court of Lagos (de Lestang, C.J.) allowing an appeal from the judgment of the Chief Magistrate, Lagos given in favour of the appellant. By his amended writ the appellant claims from the respondents-“Jointly and severally the sum of £230 being special and general damages for the unlawful seizure and detention of the plaintiff’s (i.e. appellant’s) vehicle LE 9483 return of the vehicle or £270 its value and ….£17 in £1 Nigerian currency notes and other documents and tools in the car at the time of seizure

PARTICULARS OF DAMAGE

(1) Special: Loss of use from 25th August, 1962 to 3rd October, 1962

(38 days) at £4

………………………………………………………………

£152

Money in the car

……………………………………………………………….

£ 17

(2) General Damages

……………………………………………………………….

61”

The evidence in the Magistrate’s Court is as follows:

Pursuant to a hire-purchase agreement between the 1st and 3rd respondents, the former as owners let to the latter a motor vehicle (a Volkswagen saloon car) No. LE 9483. The agreement provided, inter alia, for twelve monthly installment payments or hire rentals and, by clause 2, for an option to the hirers to purchase the vehicle for l 8s (eighteen shillings) “if he (the hirer) shall punctually pay the monthly hire rentals and any other sum due under the agreement and shall strictly observe and perform his obligations” thereunder. 3rd respondent defaulted after paying five hire rentals. When, in January, 1962, the 1st respondents brought an action against the 3rd respondent in the Chief Magistrate’s Court, Lagos (hereinafter referred to as the hire rental action) the arrears of rentals then due and including the option fee was £309-1s-0d; that amount was claimed by the 1st respondents in the hire rental action and judgment was entered in favour of the 1st respondents. On the 5th April, 1962, when the judgment debt had not been paid, the 3rd respondent purported to sell the vehicle (car No. LE 9483) to the appellant who took possession of the same.

On 25th August, 1962, the 2nd respondent, acting on the instructions of the 1st respondents, seized the car No. LE 9483; whereupon the appellant brought the present action against the respondents and claimed as set out above.

The learned Chief Magistrate was of the view that the judgment in the hire rental action transferred the ownership of the vehicle to the 3rd respondent who was entitled to sell the vehicle to the appellant; he therefore gave judgment for the appellant and ordered the 1st respondents to return the vehicle to him and to pay £200 damages, whereof £17 was the money which, according to the appellant, was left in the car. The learned Chief Magistrate dismissed with costs the action as regards each of the 2nd and 3rd respondents. The appeal by the 1st respondents to the High Court was allowed, and the learned Chief Justice held that the owners of the vehicle (i.e., 1st respondents) were in the circumstances of the case entitled to recover the unpaid hire rentals and retake possession of the car. In the course of his judgment the learned Chief Justice observed-

“So long as the judgment (meaning the judgment in the hire rental action) less the option fee remains unsatisfied the default continues and so does the right to retake possession. The learned Chief Magistrate, therefore, erred, in my view, in holding that the judgment had the effect of transferring the ownership in the article to the hirers”

Before us learned counsel for the appellant contended, as he did in the High Court, that the judgment in the hire rental action had the effect of transferring to the 3rd respondent the ownership of the vehicle and that the owners (i.e., 1st respondents) were not on 25th August, 1962, entitled to repossess the same. In support of their contention that they had a right to possession the 1st respondents relied on South Bedfordshire Electrical Finance Ltd. v. Bryant [1938] 3 All .E.R. 580. In that case the defendant as hirer under a hire-purchase agreement took a “cold-room” from the plaintiffs. As the defendant was in arrears of several hire rentals, the plaintiffs brought an action, and obtained judgment for the entire amount of installments due. This judgment being unsatisfied the plaintiffs retook possession of most of the “cold-room” but were prevented from retaking all of it. In an action for the recovery of the rest of the goods, the defendant contended that the judgment in the first action had the effect of terminating the contract and transferring the ownership of the “cold-room” to the defendant. The contention was rejected and it was held that the first action was merely one for installment due, and did not operate to transfer the ownership in the chattel; “and as there was still a breach of contract, the plaintiffs were entitled to recover possession.”

The appellant submitted that the present case is distinguishable from the case of Bryant and relied on (1) the fact that there was a provision in the hire-purchase agreement in the Bryant case (not present in the agreement in the case in hand) which entitled the owners to retake possession of the goods “if the hirer shall allow any judgment against him to remain unsatisfied”, and (2) the fact that in the Bryant case the earlier judgment was obtained for installments due and did not, as in the present case, include the option fee. We are unable to agree with the contention of learned counsel for the appellant which overlooks the fact that in a hire-purchase agreement there are two principal rights of the owner of goods let to the hirer-(1) the right to repossession of the goods, upon breach of a term of the hire agreement, which exists until the hirer after payment of all hire rentals due under the agreement, purchases the same by exercising his right under the option clause and (2) the owner’s right to the hire rentals due under the hire purchase agreement for any period which the hirer in fact made use of the goods-which must always be considered separately; this is clearly borne out by the decision in Brooks v. Beirnstein [1909] 1 K.B. 98. A careful study of the Bryant case undoubtedly shows that the decision in the case did not rest on the special terms referred to in the argument of learned counsel for the appellant. In that case Greer, L.J. after referring to clauses 6 and 7 of the agreement which authorise the owners to remove the goods “if payment of any hire rental was in arrears or if the hirer shall allow any judgment against him to remain unsatisfied” observed-

“I regard that as meaning when there was a right to arrears, whether or not these arrears are covered by a judgment,”

[that the owners had a right] “`to terminate the hiring and to retake possession of the chattel”’ underline and |.brackets supplied}-see [1938] 3 All E.R at 582.

In the case in hand it is our view that since the judgment in the hire rental action remained unsatisfied the 3rd respondent did not exercise his right of purchase under the option clause, and, since he was in breach of the terms of the hire-purchase agreement, the 1st respondents as owners had a right to terminate the hiring and repossess the motor vehicle. In those circumstances the appellant could not maintain against the 1st and 2nd respondents an action for wrongful seizure of the car, and the learned judge was therefore right in allowing the appeal.

As regards the claim for the sum of £17 and other documents and tools which the appellant said he left in the car at the time of its seizure, we are of the view that it is not maintainable in the circumstances of this case. In the first place, although the sum of £17 and “other documents and tools” are mentioned in the main portion of the claim, the money £17) is in fact set down as an item of “special damage” arising from the alleged wrongful seizure which has not been established. In the second place, there was no evidence apart from the allegation of the appellant that he left £17 and “other documents and tools” in the car, of any demand for their return having been made from the Ist and 2nd respondents. The keeping of another person’s goods does not amount to conversion unless there has been an unqualified and unjustifiable refusal to deliver the same following a demand by or on behalf of the owner.

In our view this appeal is entirely without any merit and it is dismissed with costs of 28 guineas payable by the appellant to the 1st respondents.

Other Citation: (1965) LCN/1195(SC)