Alhaji Shaibu Abdulkareem V. Incar Nigeria Limited (1984)
LawGlobal-Hub Lead Judgment Report
ESO, J.S.C.
It is necessary to state the facts of this case in some detail, as they are material to the points of law which have been raised before this court.
The appellant, Alhaji Shaibu Abdulkareem, was the plaintiff in the court of trial, the Kano High Court, where he claimed against the defendants, who are now the respondents to this appeal, for –
“(1) an account be taken of the entire transaction and the moneys which he has paid to the defendants to determine whether or not the defendants can repossess any of the vehicles,
(2) damages for breach of contract/warranty: N200,000.00,
(3) an injunction restraining the defendants from further seizing any of the vehicles now in the possession and custody of the plaintiff,
(4) release and possession of the said vehicles, registration Nos. KNF 3651 and KN 6638K now in custody of the defendants or in the alternative for the value of the said vehicles.”
The defendants, a limited liability company, were at all material times, motor dealers. They sold for cash as well as conducting transactions on hire purchase. The plaintiff was a customer of the defendants and for this particular transaction, the parties entered into twenty seven hire purchase agreements, one agreement for one vehicle. Of the twenty seven vehicles, 15 were of a new type, that is, a type that had never featured in previous transactions between the parties. The remaining twelve were of the old type to which the plaintiff was used. The parties were agreed on these facts. However, they differed on the question of reliance on a warranty allegedly given by the defendants’ manager to the plaintiff. In his statement of claim, the plaintiff had claimed that –
“4. During the negotiation leading to the purchase of these FIAT 110 PC type of vehicles (that is, the fifteen of a new type), the plaintiff entertained fears that they might not be good on Nigerian roads as they were introduced into the country for the first time but the defendants manager, Mr. Giovanardi, before whom the fears were expressed, warranted to the plaintiff that they were as good as the older type known as FIAT 682 T3 and the plaintiff relied on the said warranty in entering the said agreement………………………………
- Relying upon the said warranty and induced thereby, the plaintiff entered into a series of hire purchase agreements with the defendants in respect of the said motor vehicles…………….. and accepted delivery, of the said motor vehicles, and has paid the hire purchase price under the said agreements amounting to a total sum of N615, 149.62 out of hire purchase price…………….
- In breach of the said warranty, 15 of the said motor vehicles were not in perfect condition or of merchantable quality and gave the plaintiff considerable trouble, in that they were in a bad and dangerous condition and were not roadworthy………..”
Mr. Giovanardi denied that he ever made these representations to the plaintiff. It was admitted by him that the plaintiff did complain about the defects in the fifteen vehicles, but then, according to the witness, the vehicles were repaired and they were used after the repairs, by the plaintiff for about two years.
In so far as the defendants’ case of novation of the agreement went, Mr. Giovanardi’s evidence is very important. He said –
“He (that is the plaintiff) paid up until May 1976. Thereafter he stopped (sic) vehicles (payment) on fifteen vehicles and on those he never complained of.
On 1st February, 1977 the accounts were rescheduled because the promissory notes were all unpaid. N511,000 of them (sic) into 12 instalment, adding N41,000.00 (sic) interest charges bring total to N552,000.00 into 12 promissory notes of N46,000.00. Plaintiff agreed to this account, and signed the new promissory notes and a paper acknowledging receipt of the old promissory notes Instead we could have seized all the vehicles and charged him to court. After February 1977, in May 1977 plaintiff complained of fifteen tippers which he could not manage anymore. After various meetings we decided that the fifteen vehicles should be returned to us and that in replacement we should give four new types 682 N3. He had written asking for 4 tippers 682 plus two semi-trailers. We did not agree……We did not reply. He approached us again and appealed to us and he finally agreed to return the 15 vehicles in exchange for the 4 new types, as proved by the fact that we insured and licensed them in his name………..”
The learned trial judge believed that Mr. Giovanardi made the representations complained of by the plaintiff and that the 15 vehicles were defective but he relied on a new contract, as would be seen presently, made by the parties after this representation and knowledge of the defect in the vehicles. Now, the exchange of letters that went on between the plaintiff and the defendants, which the defendants claim to be novation of the hire purchase agreements are exhibits 2 and 3. They are very important and I reproduce them herewith even at this stage of the judgment.
Exhibit 2
”The Manager,
Incar Nigeria Limited,
Kano.
Dear Sir,
RE-Discussions on 15 Tippers Vehicles Purchased By Me: Further to the discussions we had on the above subject matter I have given very careful and anxious considerations to the terms offered me by you, and I have come to the conclusion that in view of the very good relationship between us, I would like you to give me the following in return for the 15 tippers which I have undertaken to return –
i. 4 Tippers valued N28,000.00 each
ii. 2 Trailers valued N40,000.00 ”
If you are able to give me the above in return for the said vehicles which I have undertaken to return, I will then accept the offer you have made to me.
You know as we” as I do, that the contract in respect of the 15 vehicles has failed very badly, but I am prepared to bear my own side of the loss without any resort to litigation, if you will fulfil the above stated condition. I have decided to do this, because of the good relationship that exists between the company and myself and the co-operation I have always received from your company at all times.
In addition, I will also like you to give consideration to the issue of my promissory notes with you. I now pay at the rate of N46,000.00 every month, but in view of the set-back my business transactions have received, I now undertake to pay at the rate of N36,000.00 and this means you will have to extend 45 the period within which the total amount will be liquidated. I however undertake that if you accept this offer, I will not fail to pay the amount due at the end of every month which I cannot guarantee at present if the amount remains at N46,000.00. I hope you will give this due consideration. I will like to have a reply to all these offers made by me in writing from you.
Yours faithfully,
(Sgd.)
Alhaji Shaibu Abdulkareem”
(Italics mine).
EXHIBIT 3
“Alhaji Shaibu Abdulkarim,
P. O. Box 654,
Kano.
Dear Sir,
Redrafted Nine Promissory Notes 14 x N30,450.00 – N426,300.00
With reference to the above subject, we are pleased to inform you that under the new agreement reached between you and this company, the new instalment above is agreed upon. To this effect, kindly note the following informations:- That the 1st and last instalments are due on 1st September 1977 and 1st October, 1978 inclusive. The following are the breakdown:-
Amount withdrawn from bank N368,000.00
Add unpaid instalment 46.000.00
= = = = = = = =
414,000.00
Add interest charged by UBA
on discounting 22.117.55
= = = = = = = =
436,117.55
Less part interest charged by
UBA on discounting now borne
by us. 9.817.55
= = = = = = = =
N426.300.00
= = = = = = = =
Kindly confirm that this agreement is acceptable to you by signing the space provided. 30
(Sgd.) (Sgd.)
INCAR (NIGERIA) LIMITED ALH. Shaibu Abdulkarim,
P. O. Box 654,
Kano.
NB: 8 P/Notes withdrawn
from Bank are attached.”
(Italics mine)
The plaintiff did sign the space provided in exhibit 3 for his signature. Another important aspect of the case worth serious consideration is the admission of Mr. Giovanardi that the defendants/company seized plaintiff’s vehicles though they were returned two days later. The judge held that the seizure was unlawful. After taking evidence and a careful consideration of the facts including the representation made by Mr. Giovanardi the learned trial Chief Judge of Kano State who tried the case came to the conclusion that –
”the substitution of four new types for fifteen lorries originally under separate hire purchase agreements must be taken as a new contract rescinding the fifteen hire purchase agreements.”
ABDULKAREEM V. INCAR NIGERIA LIMITED 609
He then dwelt on the issue as to the separation of the twelve lorries, about which there had been no complaint, from the fifteen defective ones. The Chief Judge’s view was that the parties never made any distinction between these two sets of vehicles even from the earliest stage of the transaction and also that when an agreement was reached about the alteration of the instalments in favour of the plaintiff, it was done as a single transaction. He held therefore that –
“In the minds of both parties there was now a single transaction and a single contract based upon an account stated and taking the place of the previous twenty seven hire purchase agreements.”
It is quite clear therefore that the decision of the learned Chief Judge rested mainly on novation of the agreement. He entered judgment for the defendants, dismissing plaintiff’s claim, and judgment for the full amount covered by the defendants’ counter-claim.
The plaintiff appealed to the Federal Court of Appeal, now the Court of Appeal, and which, hereinafter in this judgment. will be referred to, simpliciter, as the Court of Appeal.
In a considered judgment by Adenekan Ademola J.C.A., with which Wali and 20 Maidama JJ.CA were in full agreement, the Court of Appeal found no merit in the appeal, dismissed it but modified the part of the High Court Judgment which granted the plaintiff a declaration that the defendant could not now repossess any of the vehicles on the ground that the plaintiff never asked for that relief.
The court also found that the real issue in the case was whether or not the fifteen vehicles were still subject matter of the hire purchase agreement and whether there had been a surrender of the fifteen vehicles by the appellant thereby terminating the hire purchase agreement. Ademola J.C.A. then referred to exhibit 3 (already reproduced in this judgment) and asked whether that would be a new agreement between the parties superseding any hire purchase agreement either on the fifteen vehicles or the entire lot of twenty seven vehicles. This, then was the approach of the Court of Appeal.
And the learned Justice of the Court of Appeal, in answering the questions which he posed to himself, first referred to the finding of the trial court, which considered the agreement of the four new tippers which were delivered to the appellant in lieu of the fifteen vehicles complained of, the redrafting of the promissory notes and also exhibit 3, and wherein the learned trial Chief Judge had held –
“It seems to me perfectly clear that the Substitution of four new tippers for fifteen lorries originally under separate hire purchase agreements must be taken as a new contract rescinding the fifteen hire purchase agreements.”
After he had referred to this finding and all the points heretofore stated, the learned Justice of the Court of Appeal concluded that the finding of the trial court was not seriously challenged in the Court of Appeal. As to whether or not the hire 45 purchase agreements were still subsisting, the learned Justice of the Court of Appeal answered the question in the negative.
Then, as I have already said, the Court of Appeal, upon these points, dismissed the appellant’s case.
The appellant has now appealed to this Court. He filed five grounds of appeal. They are, however, in summary under four headings –
(1) misdirection: in the interpretation of Ex.3 on the part of the Court of Appeal as regards its being
(a) novation;
(b) an “account rendered” under s.6 of the Hire Purchase Act; and
(c) related to all the twenty seven vehicles whereas it should relate to only the fifteen defective vehicles and not the other twelve vehicles;
(2) non award of damages: on the two vehicles which the trial court found were unlawfully seized, notwithstanding the fact that the plaintiff (appellant before both the Court of Appeal and this Court) did not claim damages for the wrongful seizure;
(3) misdirection: in regard to repossession of the vehicles, there being no appeal against the decision of the High Court on the issue and the parties not given an opportunity to argue the matter; and
(4) misdirection: in allowing the counter-claim to stand in view of section 6 of the Hire Purchase Act.
In a carefully worded brief, Chief Olisa Chukura learned Senior Advocate representing the appellant, identified the issues in the case, with the background of the provisions of sections 3 and 8 of the Hire Purchase Act, 1965. Learned counsel’s submission was that there was a misconstruction of exhibit 3 by the Court of Appeal which construed the exhibit as representing an account stated, and also 20 as being a novation of the existing agreement between the parties. Counsel’s argument was that the liability of the appellant has now by virtue of exhibit 3 exceeded that to which he would have been subject had the hire purchase agreements been determined by him under the Hire Purchase Act. The detriment to the appellant was also a case of the respondents being absolved from the legal duty they owed the appellant, under the Hire Purchase Act, to furnish him with information about the transaction whenever he asked for such information. Finally, on the identification of the issues before the Court, Mr. Chukura queried the power of the Court of Appeal to set aside a decision which was not a subject matter of an appeal before it. This last one related to repossession of the vehicles.
In considering the submissions of Chief Chukura, I will at the same time make reference not only to his brief but also to his oral arguments on the grounds of appeal. Dealing with the first ground of appeal, Chief Chukura’s contentions, as regards the legal position of exhibit 3, are that the execution by the appellant of series of notes which represented each instalment only makes such notes to be collateral security for the payment of the instalments due on the transaction. As the fifteen vehicles (costing N257,000.00)were not fit for the purpose for which they were purchased, there was a breach of warranty and the provisions of section 4(1) (d); (2) and (3) of the Hire Purchase Act have been infringed; the respondents were therefore liable to reimburse the appellant for all the moneys they had paid or which were payable less any deduction that could be made for the use of the defective vehicles. Chief Chukura argued further that if any money was payable, at all, to the respondents, it would not be the amount stated in the counter-claim but would, on the most favourable construction, amount to N87,850.38.
Arguing further on exhibit 3, Chief Chukura drew attention to the fact that as the exhibit itself is headed “Redrafted Promissory Notes” and it deals with re-scheduling of the promissory notes which would not abrogate the existing hire purchase agreements, a novation in the circumstances would be illegal and void by virtue of section 3(b) of the Hire Purchase Act. Learned counsel maintained that exhibit 3 would also be void if it purports to be a novation of the subsisting hire purchase agreements since, and Chief Chukura laid considerable emphasis on this, it has imposed a liability to pay more money under it, than the appellant would have been obliged to pay under the hire purchase agreements.
In regard to an inference that the hire purchase agreements were still subsisting, it was learned counsel’s forceful argument that seizure of the seven vehicles after the date of the execution of exhibit 3 confirmed the intention of the respondents to keep the hire purchase transactions alive.
5 In any event, contended learned counsel, if there was going to be a novation of the old hire purchase agreements as purported by exhibit 3, those new agreements could not apply to the four vehicles which were given in substitution for the fifteen vehicles, nor to the twelve vehicles which were not in any way touched by the transaction of substituting four tippers for fifteen vehicles, as there was also, at the time of the making of the exhibit 3, subsisting hire purchase agreements in respect of at least twelve vehicles.
On the second ground of appeal, Chief Chukura submitted that since the learned trial judge had found that there was unlawful seizure of appellant’s vehicles, on the pleaded facts and the evidence before him, there was no reason why the trial court should have refused to grant the claim nor was there any justification for the Court of Appeal’s decision to uphold the decision of the High Court on the matter.
The brief of learned Senior Advocate dealt with grounds 3 and 5 together, though in his oral submissions he just dealt with issues arising in the appeal. But again, his complaint therein was predicated against the background of the provisions of section 6 of the Hire Purchase Act 1965.
For his part, Mr. Majiyagbe, (SAN.) also in a most lucid brief, regarded the pivot around which the case of the appellant revolves as the hire purchase law and practice. According to learned counsel, as those contracts, on which the appellant based his claim, were not in evidence in the trial court, nor were their contents proved, appellant could not base his arguments on them for the purpose of the Hire Purchase Act. The vehicles were purchased on different promissory notes and one hire purchase agreement might be different from the others.
In regard to the important point of novation, which indeed, to my mind, must be regarded as the core of this case, Mr. Majiyagbe’s argument went as follows –
That the agreements, had they been tendered, and going by exhibit 1, that is, the one tendered, would show that the powers of the hirer to terminate the agreements were wider under the agreement than the powers conferred by the Hire Purchase Act. The appellant, counsel argued, followed the stipulation in the agreement (exhibit 1) and so, in determining the agreement in regard to the fifteen vehicles, in pursuance of clause 9 of the agreement, he returned the fifteen vehicles to the respondents.
Clause 9 of exhibit 1 reads –
“9. The Hirer may at any time before the final payment under this agreement falls due determine-the agreement by giving notice of termination in writing to any person who is entitled to collect or receive the sums payable under this agreement or, whether or not such notice in writing be given, by returning the vehicle to the Owners, and in the event of such termination the Hirer shall be liable to pay to the Owners without prejudice to any liability which has accrued before the termination the sums specified in Clause 7 hereof.”
Learned counsel regarded this as the first step in the series of acts that denote the intention of the parties in making exhibit 3. He then referred to salient events which finally led to the making of the exhibit, to wit:-
(a) The discussion between the parties in June 1977 whereby the appellant offered to surrender the fifteen vehicles in return for four tippers,
(b) the default by the appellant to make the payment of the instalments when they became due and the drafting of a new set of promissory notes,
(c) the rescheduling of the accounts and agreement as to an account stated.
Mr. Majiyagbe also showed what he referred to as “consideration” in law given by both parties, which led to formation of the agreement, exhibit 3, and then discussed the interpretation to be placed upon sections 3 and 8 of the Hire Purchase Act 1965 which sections are of immense importance to the determination of this appeal and which sections I will refer to and discuss later in this appeal.
Now, I have set out the facts and various submissions of learned counsel in this case in some detail because of the nature of the claim which is under the Hire Purchase Act. There is no doubt that the Hire Purchase Act is aimed mainly at protecting a hirer against Shylockish businessmen who would take advantage of the weak financial position of the hirer by loading him with goods on apparently attractive terms, only to turn hard when the reality strikes the hirer that he is unable to meet those terms. Before the Hire Purchase Act 1965 the trend was for the hirer to lose both his money and the goods hired, for the owner after collecting almost all the instalments due, could still legally, upon the failure of one instalment, seize those goods and even resell them to other people. It was a position akin to the money lender at a time when that transaction was not regulated by law who would, after collecting almost all the money he had lent out, strike at the borrower and upon failure of an instalment, seize the collaterals.
This unsatisfactory situation in hire purchase business led to the enactment of section 3 of the Act, paragraphs (a) and (b) of which provide –
“3. The following provisions in an agreement shall be void, that is to say, any provision –
(a) whereby an owner or a person acting on his behalf is authorised to enter upon any premises for the purpose of taking possession of goods which have been let under a hire-purchase agreement or is relieved from liability for any such entry; or
(b) whereby the right conferred on a hirer by this Act to determine the hire-purchase agreement is excluded or restricted, or any liability in addition to the liability imposed by this Act is imposed on a hirer by reason of the termination of the hire-purchase agreement by him under this Act;”
(Italics mine)
and which provisions Chief Chukura used as a great weapon in his attack on the judgments of both the High Court and the Court of Appeal. I will therefore deal with what I have said I regarded as the most important aspect of this case, that is, whether there has been a new agreement in law wiping out the hire purchase agreements and creating a completely new one in the terms of exhibit 3, which, in the submission of Chief Chukura, has cast a greater liability 45 upon the appellant contrary to the provision of s.3(b) of the Act. It is in regard to this that the weighty submissions of both learned counsel must be taken seriously and given adequate consideration.
The question whether or not there has been a new agreement takes me to the illuminating points advocated by Mr. Majiyagbe. The parties did not just wake up one morning and execute exhibit 3, contended learned counsel. What then are the antecedents to this agreement
The appellant provided the first move. After he had maintained in evidence, in his examination in chief, speaking about the fifteen vehicles, that he threatened to stop payment on the promissory notes which were made in regard to the vehicles because they were defective, and that the respondents decided to rearrange the promissory notes, and upon a further threat that he could not carry on his job with the fifteen defective tippers, the respondents, he said offered a loan of tippers, pending the repairs to those fifteen vehicles, he was pressed in cross- examination.
And then he said –
“In June 19771 had discussion with defendants about payment. I wanted a reduction in the instalments to N36,000.00. Yes, I offer (sic) to surrender the 15 vehicles in return for 4 new tippers valued N28,000.00 each and 2 trailer lorries valued N40,000.00 each. Yes, I wished to change the terms of the H.P. agreement. I am shown a letter dated 8th May, 1977 which I wrote. Yes, I was carrying on business in the name of S. Abdulkarim and Co.”
(Italics mine).
The letter which he referred to herein is exhibit 2 which I have already reproduced and wherein he had said –
“and I have come to the conclusion that in view of the very good relationship between us, I would like you to give me the following in return for the 15 tippers which I have undertaken to return:
(i) 4 Tippers valued N28,000.00 each
(ii) 2 Trailers valued N40,000.00each”
(Italics mine).
As would be remembered, he said further in that letter –
“You know as well as I do that the contract in respect of the fifteen vehicles has failed very badly, but I am prepared to bear my own side of the loss without any resort to litigation.
(again Italics mine).
Now, before this letter was written (that is, before 8th May 1977) the appellant had in fact defaulted with his payments. The evidence in respect of this which was accepted by the trial court was given by 1st O.W. who said –
“In February 1977 he (that is the appellant) had defaulted in some payments. We met and discussed, and rearranged payments into a new set of promissory notes and he was given the originals from the bank. We re-arranged for all the 45 vehicles.”
(Italics mine).
Now, the re-arrangement, according to this witness, was in regard to all the vehicles, not just the defective vehicles! There was also evidence from 2nd D.W., that when the appellant wrote Ex.2. the respondents gave no reply to it, rather; it was the appellant who made another approach, appealing to the respondents, after which appeal, the appellant returned the fifteen vehicles in exchange for tippers. Though, according to the 1st D.W., the new arrangement would spread over a period of twelve months, yet the appellant honoured his promise only once!
This failure, led to exhibit 3, parts of which I would like to draw attention to. The agreement is in the form of a letter written by the respondents to the appellant. It refers to “the new agreement reached between you and this company.” Thus, it is being indicated that there had been a previous discussion before the terms were agreed, and which terms exhibit 3 now conveyed to the appellant. Then the exhibit concludes –
“Kindly confirm that this agreement is acceptable to you by signing the space provided”
and the appellant signed! This is definitely an agreement to which he freely subscribed his signature and consent.
With the consent of both sides to an agreement any contract of any kind could be abrogated and a new one substituted therefor – (see Chitty on Contract 23rd Edn. para. 1053). Being a new contract, there must be the elementary provisions of “offer” and “acceptance” and in regard to the evidence of “acceptance”, which is most important before a contract could be made, this could be inferred from the acceptor’s acts or conduct. See Re European Assurance Association Society Arbitration Act, Conquest Case (1875) 1 Ch.D 334 where Lord Cairns L.C. regarded cases of novation as raising only questions of fact. I believe the Lord 20 Chancellor meant by that, that the facts must be there to prove the “offer” and the “acceptance” and also facts that would amount to “consideration” in law. For, to my mind, the question of novation raises both the issues of fact and law. “Novation” in the old Roman Law of obligations – Lex Obligationes was recognised in the Institutes of Justinian as novatio and there is hardly any difference between novatio in Roman Law and novation under the common law as both import the element of consensus ad idem. The only difference is in the ingredient of “consideration”, which was not necessary for the formation of obligatio in Roman Law, “consideration” having come into the common law only in the 16th century to supplement assumpsit and indebitatus assumpsit.
In this case, the offer is clear, the acceptance is unambiguous. The appellant has accepted that he wrote exhibit 2 seeking a new situation after the previous arrangement had, according to him, failed. He signed exhibit 3 after that exhibit had indicated to him that his signature would mean acceptance of the terms contained in the exhibit. The old situation contained in the hire purchase agreements no longer existed. I agree with the learned Chief Judge of Kano State that this new agreement must be taken as a new contract rescinding the existing hire purchase agreements. See also Morris v. Baron and Co. 1918 A.C.1 as per Lord Haldane. I think the learned Chief Judge described the position aptly when he said –
“it seems fairly obvious that… the hire purchase agreements had ceased to be in the minds of either of the parties (sic)”.
Indeed, as Mr. Majiyagbe rightly submitted, there was ample consideration for this new agreement. This as I have indicated, is a precondition to novated agreement, which is, of course, the discharge of one contract, and a substitution of another. There must be in a novated agreement, like other contracts, “consideration.” What is the consideration here
(a) There is the surrender by the appellant of the fifteen defective vehicles in substitution for new tippers. These tippers were, on the uncontroverted evidence of the respondents, fully insured and taxed in the name of the appellant, whereas in an ordinary hire purchase agreement, the vehicles are invariably registered and insured in the name of the owner, and only hired out to the hirer.
(b) The appellant undertook not to take legal action once his request as contained in exhibit 2 was met; (forbearance not to sue).
(c) The appellant had a more relaxed arrangement of payment. By virtue of exhibit 3, the nine outstanding promissory notes of N46,000.00 were redrafted for payment in fourteen instalments of N30,450.00 each, which sum is less than the N36,000.00 the appellant himself offered in exhibit 2. From nine to a more relaxed fourteen instalments (benefit to the appellant). In pursuance of this, eight of the nine promissory notes which were already lodged in the bank were withdrawn and sent with the draft exhibit 3 to the appellant. In other words the appellant no longer had an obligation to meet those eight promissory notes (they no longer exist), nor had he any obligation on the outstanding one which he had failed to pay.
I have no doubt therefore, upon all these considerations, that exhibit 3, coupled with the antecedent negotiations including exhibit 2 is a new agreement which the appellant (sui juris, as he was) entered into, with his eyes wide open. The appellant certainly knew or must be taken to know what he was doing and he must also be taken to have agreed to determine the old hire purchase agreements. He got a better deal than he asked for in exhibit 2 in so far as the instalmental payments are concerned. He certainly should not complain. He had a new agreement because he never liked the old. To hold him to the new agreement upon all the facts revealed herein is only reasonable. And if I may add, it even accords with commonsense. Finally on this subject exhibit 3 which stipulates the amount outstanding to be N426,300.00 has taken care of all the transactions between the parties that is, the 12 vehicles of the old type, the fifteen vehicles which became defective and were returned and replaced by the respondents by 4 tippers. It therefore encompasses and replaces the entire transaction that was between the parties before the execution of the new contract exhibit 3.
Indeed, there is nothing new in this. Parties to novation are at liberty to wipe out an old contract. Parties sui juris could contract as they wish. The terms could be to their advantage or disadvantage. There is nothing stopping a party from committing a contractual suicide. Suicide in the sense that the agreement is entirely to his utter detriment. Such is the right of parties who freely enter into agreements so far all the legal pre-requisites are fulfilled.
Of course, I am not, in the least, suggesting that exhibit 3 is to the detriment of the appellant. I consider it to be to his advantage but that is beside the point.
And once there is a new contract, the benefits and detriments derivable from the old wiped out contract no longer exist. The representations made, the warranty given by the respondents, the inducement complained of, by the appellant, the wrongful seizure, by the respondents, of the appellant’s two vehicles, the protection of a hirer under the Hire Purchase Act, all these no longer avail the appellant to defeat the new contract which he has voluntarily entered into. The new arrangement has yielded the old for the new. What would matter are the terms of the new agreement. And so be it, that he must be bound by the terms, completely unadulterated.
The next thing is to examine the effect of paragraph (b) of section 3 of the Hire Purchase Act on the new agreement. Paragraph (b) renders void any provision in an agreement of this nature, which excludes or restricts the right of a hirer to determine the hire purchase agreement or which imposes any liability in addition to the liability which is imposed by the Act.
By virtue of exhibit 3, the appellant could no longer determine the hire purchase agreements by the process contained in section 8(1) nor would he be able to take advantage of sub-section (3) of section 8 which provides –
“8 (3) In any circumstances, where a hirer determines or has determined a hire purchase agreement under this section, he shall, immediately upon the determination, return the goods to the owner and settle all outstanding liabilities…”
Chief Chukura, of course, made heavy weather of this and submitted that exhibit 3 must be void by virtue of the provisions of s.3(b).
It appears to me clearly, by the wording of s.3 of the Act that the provision therein applies to a hire purchase agreement. In this case if there had been provision in exhibit 1 which offends against the provision of s.3 of the Act that provision will be void. I cannot stretch the provision of s.3 to cover agreements that are not covered by the Act. S.3 opens with the words –
”The following provisions in an agreement… ..” “Agreement” herein can only mean hire purchase agreement as has been defined under s.1 of the Act which, subject to s.19 of the Act, makes the provisions of the Act (this includes s.3) to apply to “all hire purchase agreements ….” and “all such agreements in respect of motor vehicles…” Apart from s.1 of the Act, s.3(a) has talked of “hire purchase agreement”. Paragraph (b) itself talks throughout of “hire purchase agreement.”
There is no doubt whatsoever that the opening words which talk of “agreement” can only refer to a hire purchase agreement.
Surely, exhibit 3 is not a hire purchase agreement. Nor is exhibit 2 either. The issue of hire purchase agreement no longer exists since the negotiations that culminated in exhibit 3. It is my view therefore, with respect to Chief Chukura, that s.3 of the Act does not apply to this case.
Even, if one agrees with Chief Chukura that exhibit 3 is not a novation, s.3 would still not apply to this case. Exhibit 3 can stand by itself. There is nowhere in the Hire Purchase Act which limits the right of parties to a hire purchase agreement to enter into any agreement other than a hire purchase agreement even after such parties had earlier entered into a hire purchase agreement.
And if exhibit 3 is part of the hire purchase agreements, or a grafted agreement to the hire purchase agreements, Sub-section (4) of section 8 of the ‘Act which provides –
“(4) Nothing in this section shall prejudice any right of a hirer to determine a hire purchase agreement otherwise than by virtue of this section.” (Italics mine)
permits a hire purchase agreement to be terminated by means outside the Act.
And this was precisely what the appellant did. By exhibit 3 he freely and voluntarily determined the hire purchase agreements by means outside the provision of the Act. If exhibit 3 is part of the hire purchase agreements the Act [s.8(4)] permits him to terminate as he has terminated, and exhibit 3 is valid.
Indeed, by this act of determination, the point of distinction between 12 vehicles and 15 vehicles raised by Chief Chukura, seems to me, with great respect, to be irrelevant. For, with the provision of s.8(4) of the Act the hirer is free to determine the 12 agreements, the 15 agreements or the whole of the twenty seven agreements with exhibit 3. It is also clear from the terms of exhibit 3 that there is no longer anything outstanding between the parties save the provisions of the exhibit.
What is left between the parties in this case after the execution of exhibit 3 is, no doubt a matter of accounts, simpliciter.
After disposing of what I regard as the main issue in this appeal I must refer to other less contentious issues which arose in the case. The trial court had granted a declaration to the appellant after finding that the respondents were right in regard to exhibit 3. The Chief Judge said –
“It is therefore my view that defendants are right to take their stand upon exhibit 3………… therefore decline to order an account but I grant the plaintiff a declaration that defendants can not now lawfully repossess any of the vehicles.”
Now, this is a finding in favour of the appellant and obviously, and he never complained about it in the Court of Appeal. However, without an appeal against the finding the Court of Appeal interfered with the finding. Ademola J.C.A. held after concluding that there was no merit in the appeal –
“However, I would before leaving this judgment modify that part of the judgment in which the learned trial judge did grant plaintiff a declaration that the defendants cannot now lawfully repossess any of the vehicles the subject matter of this action! With great respect to the learned trial judge plaintiff did not ask for this and it is to that extent, the declaration granted is set aside.”
One would have expected that the learned Justice of Appeal having ordered that the trial court could not deal with a matter not before it would not fall into the same error. But so he did. The matter was not before the Court of Appeal and that court has no jurisdiction to deal with a matter not placed before it. A court of law is only concerned with the lis before it. It is not an all-purpose dispute settling tribunal. It is true Ubi juris ibi remedium yet the court, guided by law and the Constitution and also rules should never interfere except parties bring their complaint to it. Until the jurisdiction of the court is invoked it shall not grant a remedium. Sowemimo J.S.C. (as he then was) in Shodeinde v. Registered Trustees Anmediyya Movement-In-Islam 1982 2 S.C. N.L.R. 284 at p.326 put the matter beyond par when he said (this is about the Supreme Court) –
“It is not for this court to embark on an investigation to which it has not been called. It is the duty of the parties to put their facts before the courts in order 35 for a judicial decision to be pronounced, both on the facts and the law involved.”
As it is in the Supreme Court, so shall it be in other courts.
On a final score there was the complaint that the trial court failed to award damages for the two vehicles which were wrongly seized by the respondents on the ground that the appellant never claimed damages for this. The appellant referred us to paragraph 17(b) of the statement of claim to justify that he made a claim for this. That paragraph reads –
“To determine the hire purchase agreement in respect of vehicles registration 45 No. KNF 3652 and KNF 4741 respectively and return of all moneys found paid on them to the plaintiff.”
I am not able to find anything in this paragraph to justify the contention of the appellant. The learned Chief Judge was right in his conclusion on the matter when he said –
“I would award damages if any had been claimed. But none was claimed, and none proved.”
The Court of Appeal was equally right to dismiss the appeal against the finding of the learned Chief Judge.
On the whole this appeal must fail. I hereby dismiss it with N300.00 costs to the respondents.
BELLO, J.S.C.: I had a preview of the judgments of my learned brothers, Eso and Obaseki, J.S.C. and for the reasons so ably stated in the two judgments, I agree that subject to the restoration of the declaration ”that the defendant cannot now lawfully repossess any of the vehicles the subject matter of this action” the appeal should be and is hereby dismissed with N300 costs to the respondent.
The main issue in controversy between the parties has been whether there was a novation, which means a substitution of a new contract for an existing one. The learned trial Chief Judge found, which finding was upheld by the Court of Appeal, that the parties had substituted a new contract for the original hire-purchase agreements. In my view, novation is a question of fact to be decided from the totality of the evidence adduced by the parties. The evidence establishing novation in this case on appeal, as is shown in the judgments of Eso and Obaseki JJ.S.C., is overwhelming. In consequence of the novation all the other issues than damages for the wrongful seizure of two vehicles, which were canvassed by the appellant’s learned counsel on the assumption that the hire-purchase agreements were still in existence, must fail. Damages for wrongful seizure cannot be awarded because, being special damages, were neither pleaded nor proved.
OBASEKI, J.S.C.: I have had the advantage of reading in advance the draft of the judgment just delivered by my learned brother, Kayode Eso, J.S.C. and I find that his opinions on the issues raised in this appeal accord with mine.
The genesis of the matter that gave rise to the dispute between the parties is a series of 27 hire-purchase transactions entered into in 1975 and 1976 in writing concerning 27 vehicles sold by the respondent to the appellant on hire purchase terms. Although about 15 of the vehicles developed complaints and gave poor service to the appellant, the main problem arose from the difficulty the appellant experienced in meeting the terms of payment. This inability gave birth to proposals from him to the respondent which on his calculation would improve his ability to meet the terms of payment. The respondent did not agree to all the proposals and after a joint meeting between the parties at which their difficulties were freely and frankly discussed, a completely new agreement was born, executed and implemented.
Among the proposals from the appellant was the return of the 15 vehicles riddled with complaints to the respondent and the supply of 4 new tippers with larger capacity. This proposal was accepted and implemented by the respondent. These 4 new vehicles supplied were registered, licensed, and insured in the name of the appellant. In addition, the unpaid 8 promissory notes were returned and the amount outstanding rescheduled to be paid in 14 instalments each instalment amounting to N30,450.00; the 1st instalment to be paid on 1st September, 1977 and the last on 1st October, 1978 inclusive. The new instalments agreed upon are 45 clearly stated in exhibit 3 dated 28th July, 1977 signed by both parties which refers to the new agreement.
A few months later, the appellant ran into new problems created by the government’s failure to pay him for work done and he started pleading with the respondent for accommodation as is evident from exhibits 6, 7 and 8. This exhausted the patience of the respondent and to enforce payment, the respondent threatened and proceeded to seize seven of the appellant’s vehicles. Five were later returned.
Following the seizure of the two vehicles, the appellant took out in the High Court of Justice, Kano, a writ of summons claiming:
“(1) That an account be taken of the entire transaction and the moneys which he had paid to the defendant, and to determine whether or not the defendant can repossess any of the vehicles;
(2) As damages for breach of contract-warranty, N200,000.00;
(3) An injunction restraining the defendant from further seizing any of the vehicles of the plaintiff;
(4) Release and possession of the said vehicles with registration Nos. KNF 3651 and KN 663 EK now in the custody of the defendant or in the alternative the value of the said vehicles.”
The respondent counter-claimed for N219,240.00 as amount still owing by the appellant. The appellant lost his case both in the High Court (Jones, CJ.) and in the Court of Appeal to which he appealed and has now further appealed to this Court.
The learned trial judge, dealing with the appellant’s claims, commented as follows in the closing paragraphs of his judgment:
“On the question of an account, I have no hesitation in holding that exhibit 3 is an account stated. It contains an absolute admission by the debtor of the amount of this debt with details of how the final sum was calculated: Lane v. Hill (1852) 18 OB 252. This is an account stated for good consideration. It is in the nature of a compromise on both sides. It is as Mr. Majiyagbe has stated binding on the (sic) both sides. Bullen and Leake 12th Ed. 187. In any case, the plaintiff has not been able to show any error in the account. It is therefore my view that defendants are right to take their stand upon exhibit 3. To return to the claim, I therefore decline to order an account but I grant the plaintiff a declaration that the defendant cannot lawfully repossess any of the vehicles the subject matter of the action. Plaintiff asks for a ruling that the seizure and retention of two of his vehicles terminate the hire-purchase agreements in respect of them. I have already held that those hire-purchase agreements had already been rescinded and replaced by a new single contract. I find that I believe the evidence for defence that in fact they now have only one of these vehicles KNF 3652 in their possession and only because it is in need of repairs and not because they have any claim to it. Nevertheless, plaintiff would be entitled to damages for this admitted wrongful seizure. I would award damages if any had been claimed. But none was claimed and none proved. So I regret I am unable to award any.
Plaintiff’s claim of N200,000 for breach of contract and warranty cannot succeed. The breach of warranty, if any, was waived by the new agreement of July, 1977. No other breach of contract had been pleaded.
As to the request for an injunction, I do not consider it necessary in view of the declaration I have made above and of defendant’s admission that the seizure of the vehicles complained of was a mistake”
On the counter-claim, the learned trial judge said:
“Finally, I come to the counter-claim. The evidence of this is clear. The exhibits ‘4A’, ‘4B’ and ‘4C’ as explained in the evidence are to my mind, conclusive proof that this amount is still owing. Plaintiff himself explained how they came to be made. His only objection is that of an unsupported assertion that he found the calculation in exhibit 3 to be incorrect.
Exhibit 3 was made on 28th July, 1977; exhibit 4 was made on 7th August, 1978; exhibit 7 was written on 21st August, 1978. None is evidence of any query of the calculation in exhibit 3 indeed all these documents are based upon an acceptance of that calculation. There is no iota of evidence upon which I can doubt that calculation or upon which I can doubt that the amount still owing by the plaintiff to the defendant is the total of exhibits ‘4A’, ‘4B’ and ‘4C’ and that is to say N219,240 the amount of the counter-claim.”
As earlier indicated, the Court of Appeal (Ademola, Wali and Maidama, JJ.C.A.) dismissed the appeal lodged by the appellant against the decision of the High Court (Jones, C.J.). The court even went out of its way, without any appeal to it or address by counsel on the issue, to set aside the declaration that “the defendant cannot now lawfully repossess any of the vehicles the subject matter of this action.” Indeed, Ademola, J.CA, concluded his lead judgment as follows:
”The over-all effect of all this, in my view, is to come to the conclusion which the learned trial judge had rightly come to, that there is a new contract the overall effect of which is to replace previous hire-purchase agreements between the parties. To that extent, the defence of novation fully applies. See the case of G.B.O. & Co. v. Effioms Transport (1934) 2 WACA. p.91.
On the issue of the account, I do not think much time should be wasted on this for, in my view, exhibit 3 was at the time it was made an account rendered in respect of the transactions between the parties and under exhibit 3 the appellant is in no doubt as to how much is due from him to the respondent and I am in agreement with the learned trial judge that this claim by the appellant should be dismissed. On the question of claim for N200,000.00 for the breach of the contract of warranty, this claim also, in my view, cannot succeed because whatever breaches that might have occurred prior to July, 1977 have been taken care of by the agreement reached in exhibit 3 which is the culmination of discussion, negotiation as outlined in exhibit 2 written by the appellant in May, 1977.
I come now to the question of damages in respect of wrongful seizure of the cars. I am in agreement with the learned trial judge in the non-award of damages on this item for the reasons he gave that no damages were claimed and no damages were proved. It is trite law that a court of law cannot award what was not claimed nor could it give what was not proved.
Finally, I come to the question of counter-claim, I am in agreement with the learned trial judge that the respondent have (sic) succeeded on this ground on the evidence tendered and on the documents in support of the claim. Reading exhibits 6 and 7 from the appellant to the respondent, one is left in no doubt at all as to the indebtedness of the appellant to the respondent.
On the whole, there is no merit in the appeal. All the grounds of appeal argued on behalf of the appeal fail. However, I would, before leaving (sic) this judgment, modify that part of the judgment in which the learned trial judge did grant the plaintiff a declaration that the defendant cannot now lawfully repossess any of the vehicles the subject matter of this action.
With great respect to the learned trial judge, plaintiff (now the appellant) did not ask for this and is (sic) to that extent, the declaration granted is set aside.”
(Italics mine).
It is against this judgment that the appellant has appealed to this Court. Five grounds of appeal were filed and their complaints spanned the field of the claims before the court below. More expressly they read as follows:
- The Federal Court of Appeal misdirected itself in law when it held:
“The overall effect of all this in my view is to come to the conclusion which the learned trial judge had rightly come to that there is a new single contract the overall effect of which is to replace previous hire-purchase agreements between the parties. To that extent, the defence of novation fully applies. See the case of G.B.O. & Co. v. Effioms Transport (1934) 2 WACA 91.
Particulars
(a) Upon the construction of exhibit 3 and the intention of the parties, it is an alteration in the manner of payment and not a novation of 27 (or 15 or 12) hire-purchase agreements.
(b) A novation in the circumstances is illegal by virtue of section 3(b) of the hire-purchase Act 1965 No. 111.
(c)……………………………………
(d)……………………………………
(e)……………………………………
(f) The transaction related only to the 15 defective vehicles and not to other 12 vehicles subject matter of current hire-purchase agreements and the effect of exhibit 3 should be limited to 15 vehicles and not to 27 vehicles.
(g) Judgment should have been entered for the appellant in the sum of N200,000.00 as claimed on the breaches of warranty and of merchantability.”
- The Federal Court of Appeal erred in law in not allowing the appeal on the claim for the value of the two vehicles unlawfully seized by the respondents (i.e. N79,000.00) on the grounds that: “it is trite law that a court of law cannot award what was not claimed nor could it give what was not proved.” The claim and the proof tendered (which proof was uncontradicted) are sufficient in law to sustain an award of damages.
- The Federal Court of Appeal erred in law in endorsing the dismissal of the appellant’s claim for an account on the ground that exhibit 3, at the time constituted an account rendered.
Particulars
35 (a) Exhibit 3 was shown to contain such errors and omissions as negatived its standing as account stated or account rendered.
(b) The respondents in refusing to furnish information relating to accounts breached section 6 of the Hire Purchase Act which ought to have attracted sanctions provided by the Act.
- The Federal Court of Appeal erred in law in setting aside the judgment of the High Court in favour of the appellant “that the defendant cannot now lawfully repossess any of the vehicles subject matter of the action” when there was no appeal against that decision and the parties were not given any opportunity to argue the matter and when there was a claim therefore in the writ and in the statement of claim.
- The Federal Court of Appeal erred in law in not allowing the appeal against the counter-claim when:
(a) the respondents by breaching section 6 of the Hire Purchase Act were precluded from urging their claim;
(b) the counter-claim was not proved and the proof offered by the respondents showed that all said and done, the appellant was entitled to credit for N2,149.62.
Briefs of arguments of counsel were filed by both the appellant and the respondent. These briefs presented in admirable detail the submissions of counsel on the questions for determination in the appeal which the appellant put at 5 (five).
These five crucial issues are:
“(i) whether in the circumstances of the case and upon a true construction of the exhibit 3, the exhibit could be held to be account stated or novation of the hire-purchase agreements or account rendered;
(ii) whether sections 3 and 8 of the Hire Purchase Act 1965 No. 111 allow for novation in any manner and particularly in the manner which made the appellant’s liability exceed that to which he would have been subject if the hire-purchase agreements had been determined by him under the Act as has occurred in this case;
(iii) whether in the circumstances of this case the claim for the value of the two vehicles unlawfully seized was not sufficiently made in the writ and in the statement of claim and further, whether the evidence led on the issue as appears on the record is not sufficient to sustain the claim;
(iv) whether exhibit 3 or any other matter in the case absolved the respondents from their duty to furnish information about the transaction when asked for by the appellant as provided for in section 6 of the Hire Purchase Act particularly, whether the sanction provided in section 6(2) of the Act does not preclude the respondents from urging their counter-claim and in addition make them liable to a fine for their continued default;
(v) whether the Federal Court of Appeal had power to set aside a decision of the High Court which was not the subject of a cross-appeal before the court and on which the parties were not called; and if the court had jurisdiction, whether it was properly exercised.”
I propose to give the short answers to these questions in the first instance and then go on to deal with them in elaborate detail. The short answer to the first question raised is that exhibit 3 constitutes a novation which had its basis in the account rendered.
The short answer to the second question is that section, 8(4) of the Hire Purchase Act 1965 definitely allows for novation whereas section 3 controls the terms 35 of any hire purchase agreement by making certain provisions of the hire purchase agreement caught by the provision of section 3 of the Act void and of no effect.
The short answer to question 3 (three) is that the claim for the two vehicles was not sufficiently made in the writ in that the values of the two vehicles alleged to have been seized by the respondent were neither stated in the writ and the statement of claim nor proved by evidence in court. What was claimed was the release of the said vehicles or their value. Their value was neither stated nor proved.
There is nothing said to justify a reversal of the findings of the learned trial judge confirmed by the Court of Appeal. It is a well settled principle of law that special damages must be pleaded and strictly proved. The short answer to question 4 is that with the return of the 15 vehicles, the execution of exhibit 3 by both parties and the implementation of its terms, the hire purchase agreements terminated and their provisions ceased to have binding force on the parties and therefore became unenforceable. The counter- claim was not made under the hire purchase agreements but under exhibit 3 and could not therefore be affected by the provisions of section 6(2) of the Hire Purchase Act.
The short answer to question 5 (five) is that the Court of Appeal exceeded its appellate jurisdiction by taking the matter suo moto and overlooked the provisions of Order 3 rules 2, 5 and 14 of the Federal Court of Appeal Rules 1981. Until a right of appeal to the Court of Appeal conferred by the Constitution is exercised by a respondent [see section 222 of the Constitution] in accordance with the rules of court regulating the powers, practice and procedure of the Court of Appeal, the Court of Appeal cannot exercise jurisdiction to grant him any relief. See also 5 Odiase v. Agho (1972) 1 All NLR (Pt.1) 170; Kuti v. Balogun (1978) 1 LRN 353 at 357.
I now proceed with the examination of the issues for determination in greater detail.
NOVATION: The first question deals with the issue of Novation. Indeed, it is the main and substantial question for determination in this appeal. Learned counsel for the appellant, Chief Olisa Chukwura, SAN. submitted that exhibit 3 is headed “Redrafted Promissory Note” and deals with the rescheduling of the promissory notes. He contended that it did not abrogate any existing hire purchase agreement and therefore did not work a novation. He submitted that a novation would be illegal and void by virtue of section 3(b) of the Hire-Purchase Act. The promissory notes were delivered by the appellant to the respondent subject to the antecedent hire purchase agreements and are to be submitted to payoff instalments of the hire-purchase rents on the due dates. [See H. J. Wigmore & Co. Ltd. v. George Harold Rundle & Ors. (1930) CLR. 222 at p. 228 and 229].
Majiyagbe, SAN., learned counsel for the respondent submitted that apart from exhibit 1, none of the hire purchase agreements was tendered before the court and none was proved.
I think the failure to tender or produce in evidence all the hire purchase agreements is fatal to the appellant’s case. It is observed that one of the 27 hire purchase agreements, i.e. exhibit 1 is in evidence. But exhibit one relates to only one vehicle and not all the 27 vehicles. The existence of the 27 hire-purchase agreements is admitted on the pleadings but the contents are not as they were not pleaded. The particulars of one vehicle naturally differs from the others. The date of delivery, the instalment payable, the date of commencement, and the period of completion are all particulars which were conspicuously absent from the pleadings. Since such questions turn on the contents of the hire purchase agreements, it is important that the court which tries the case should have the actual contracts properly produced and exhibited and marked so that this court will know precisely what the documents were that were before the trial court (see Hodge Industrial 35 Securities Ltd. v. Cooper (1962) 1 All EA. p. 403 per Lord Evershed, M.R.).
Mr. Majiyagbe, SAN. further submitted that it was the clear intention of the parties to substitute exhibit 3 for the hire purchase agreements. He maintained that there was consideration from both parties leading to exhibit 3. The appellant surrendered 15 vehicles. The respondent delivered 4 new tippers with bigger capacity with all insurance and road tax fully paid for on behalf of and in the name of the appellant. There was forbearance to sue on either side for breaches of the hire purchase agreement.
In my view, there is solid ground for the opinion held by both the High Court and the Court of Appeal that the defence of novation was available to the respondent company and that exhibit 3 constitutes novation. See G.B. Ollivant & Co. v. Effioms Transport {1934} 2 WACA 91.
What is Novation Novation is an act whereby with the consent of all parties, a new contract is substituted for an existing contract and the latter discharged. The new contract may be between the original parties or new parties. See Vol. 8 Halsbury Laws of England 4th Ed. paragraph 580 p. 401; Scarf v. Jardine (1882) 7 App Cas 345 at 351; G. B. Ollivant & Co. of Aba v. Effioms Transport & Anor. (1934) 2 WACA 91.
In Scarf v. Jardine (supra), Lord Selborne, LC. defined the term thus, at page 351:
“In the court of first instance the case was treated really as one of what is called ‘novation’, which as I understand it means this – the term being derived from the Civil Law – that there being a contract in existence, some new contract is substituted for it, either between the same parties (for that might be) or between different parties; the consideration mutually being the discharge of the old contract.”
In the instant appeal, exhibit 3 which is the agreement substituted for the 27 hire purchase agreements read:
28th July, 1977
Alhaji Shaibu Abdulkareem
P. O. Box 654,
Kano.
Dear Sir, 15
Redrafted Nine Promissory Notes 14 x N30,450.00 – N426,300.00
With reference to the above subject, we are pleased to inform you that under the new agreement between you and this company, the new instalment above is agreed upon. To this effect, kindly note the following informations:
That the 1st and last instalments are due on 1st September, 1977 and 1st October, 1978 inclusive. The following are the breakdown:
Amount withdrawn from Bank N368,000.00
Add unpaid instalment 46,000.00
= = = = = = =
N414,000.00
Add interest charged by
U.B.A. on discounting 22,117.55
= = = = = = =
N436,117.55
Less part interest charged by
U.B.A. on discounting now
borne by us 9,817.55
= = = = = = =
N426.300.00
= = = = = = =
Kindly confirm that this agreement is acceptable to you by signing the space provided.
Yours faithfully,
Signed
Incar (Nigeria) Limited.
Signed:
Alh. Shaibu Abdulkareem
P.O. Box 654, Kano. 45
N.B.
8 P/Notes withdrawn from Bank attached.”
What was the intention of the parties Was it to abandon the terms of the hire-purchase agreement for a new contract This can be gathered from the evidence on record.
Before exhibit 3 was entered into and executed, there was negotiation between the parties consisting of offers and counter- offers or proposals. I refer in particular to exhibit 2 dated 8/5/77 a letter from the appellant to the respondent. The letter is headed
“Re-Discussions on 15 tipper vehicles purchased by me and reads “… I have come to the conclusion that in view of the very good relationship between us I would like you to give me the following in return for the 15 tippers which I have undertaken to return.
(i) 4 Tippers valued N28,000.00 each
(ii) 2 Trailers valued N40,000.00 each
if you are able to give me the above in return for the said vehicles which I have undertaken to return, I will then accept the offer you have made to me… In addition I will also like you to give consideration to the issue of the promissory notes with you. I now undertake to pay at the rate of N36,000.00 and this means you will have to extend the period within which the total amount will be liquidated.
I hope you will give this due consideration. I will like to have a reply to all these offers made by me in writing from you.
Yours faithfully,
Signed:
25 Alhaji Shuaibu Abdukareem”
I can find no better evidence than exhibit 2 to establish and prove that a new contract was in contemplation and a desire to determine the old hire purchase agreements.
After great effort to ensure compliance with the terms of exhibit 3 new difficulties beset the appellant and as he fell into arrears with payment of the agreed instalments, he wrote exhibits 7 and 8 for more and better accommodation as regards time for payment.
In exhibit 8, the appellant regarded the threat of confiscation of the vehicles as 35 “new ideas”. In part, that letter reads:
“That as soon as the State Government pay me some money or when I am able to obtain overdraft facilities which I have applied for from the Bank of the North, Kano, I shall definitely payoff the outstanding. This is a discussion between me and your good self already but as per your paragraph two of your letter, I feel unhappy to note your new ideas of confiscation of the vehicles
In other words, it was never part of the new agreement that vehicles be seized for non-payment of the new instalments,
At the hearing in the trial court, the respondent conceded the point that they were in error to have seized two vehicles for non-payment. In his testimony under cross-examination, the appellant’s evidence in parts reads:
” ’91In June, 1977 I had discussion with the defendant about payment. I wanted 50 a reduction in the instalments, to N36,000.00. Yes, I offered to surrender the 15 vehicles in return for 4 new tippers valued N28,000.00 each and 2 trailer lorries valued N40,000.00 each. Yes, I wished to change the terms of the hire purchase agreement July, 1977 the amount owing was N426,000.00 I agreed to pay this by N30,450.00 monthly instalments. Exhibit 3 contains no qualification and I signed it. Since then I have paid only seven promissory notes
I am shown three promissory notes signed by me. They represent the remaining seven promissory notes’.
Majiyagbe: Tendered three
Ayinde No objection
Court Exhibits 4A, 8 and C
‘Yes exhibit 4 total N219,240.00 ‘
Exhibits 4A, 8 and C have not been paid’.”
In view of the above evidence on record, I agree with the learned trial judge when he said:
“It is my considered opinion that in the minds of both parties there was now a single transaction and a single contract based upon an account stated and taking the place of the previous twenty seven hire purchase agreements. When I say that this was in the minds of the parties I think I should qualify that by saying that it seems fairly obvious that at this stage the hire-purchase agreements had ceased to be in the minds of either of them.”
In view of exhibits 4A, 48 and 4C, the unpaid promissory notes, the decision of the learned trial judge and the Court of Appeal on the counter-claim is perfectly justified. The appeal against that decision is without substance and fails totally. That disposes of questions (1), (iii) and (iv) raised by the appellant in this appeal.
Turning to question (ii), the provisions of section 3(a), (b) and (c) and 8(1), (3) and (4) of the Hire Purchase Act 1965 deserve examination. They come under the heading of “operation and termination of agreements etc.” They read:
“3. The following provisions in an agreement shall be void, that is to say, any provision:
(a) whereby an owner or a person acting on his behalf is authorised to enter upon the premises for the purpose of taking possession of goods which have been let under a hire-purchase agreement or is relieved from liability for any such entry; or
(b) whereby the right conferred on a hirer by this Act to determine the hire-purchase agreement is excluded or restricted; or any liability imposed by this Act is imposed on a hirer by reason of the termination of the hire purchase agreement by him under this Act; or
(c) whereby a hirer, after the determination of the hire- purchase agreement or the bailment in any manner whatsoever, is subject to a liability which exceeds the liability to which he would have been subject if the agreement had been determined by him under this Act;
8 (1) A hirer shall, at any time before the final payment under a hire-purchase agreement falls due, be entitled to determining the agreement by giving notice of termination in writing to any person entitled or authorised to receive any sums payable under the agreement and shall on determining the agreement under this section, be liable, without prejudice to any liability which has accrued before the termination, to pay the amount, if any, by which one half of the hire-purchase price exceeds the total of the hire-purchase price immediately before the termination, or such less amount as may be specified.
(3) In any circumstances where –
(a) a hirer determines or has determined a hire-purchase agreement under this section, he shall immediately upon the determination, return the goods to the owner and settle all outstanding liabilities subject as prescribed in the foregoing provisions of this section; and
(b) having determined the hire-purchase agreement the hirer wrongfully retains possession of the goods, then, in any action brought by the owner to recover possession of the goods from the hirer, the court shall, unless it is satisfied that, having regard to the circumstances it would not be just and equitable so to do, order the goods to be delivered to the owner without giving the hirer an option to pay the value of the goods.
(4) Nothing in this section shall prejudice any right of a hirer to determine a hire-purchase agreement otherwise than by virtue of this section.”
The provisions of sections 3 and 8 of the Hire-Purchase Act set out above and which appellant’s counsel dealt with at length at the oral hearing, do not appear to me to support the contention of the appellant in this appeal. Exhibit 3 not being part of an existing hire-purchase agreement does not violate the provisions of section 3 of the Hire Purchase Act to render it void.
Exhibit 3 is a classical example of the exercise of the right of the hirer (the appellant herein) under subsection 4 of section 8 to determine the hire purchase 25 agreements otherwise than by virtue of the procedure in subsection 1 of section 8 of the Hire Purchase Act. The whole of section 8 of the Hire Purchase Act emphasizes the right of the hirer at all times to determine the hire purchase agreement. It does not enable a hirer to reactivate or resuscitate a hire purchase agreement that has been determined for the purpose of providing a basis for litigation.
Having arrived at the decision that the hire purchase agreements have been determined and a new agreement exhibit 3 substituted, the submissions of counsel on sections 2(2)(c), 2(2)(d) and 8(1) of the Hire Purchase Act 1965 together with the cases cited to explain their application to wit:
Bowmaker Ltd. v. Taylor (1941) 2 K.B.1 at 4-6 Maritime Electric Co. Ltd. v. General Dairies Ltd. (1937) A. C. 610 at 620 – 621
Shell v. Unity Finance Co. Ltd. (1964) O.B. 203 at 215-216, 220, 222, 223 and 225: and
40 United Dominion Corporation (Jamaica) Ltd. v. Shoucair (1969) 1 A.C. 340 at 346 & 347.
are of no assistance to the appellant.
With regard to the fifth question for determination, Mr. Majiyagbe, SAN. Finally 45 conceded and wisely, too, that the Court of Appeal was in error to have set aside the declaration that the defendant cannot now lawfully repossess any of the vehicles of the subject matter of this action made by the learned trial judge. It is apposite on this issue to refer to the decision of this Court in the case of Odiase and Anor. v. Agho and Ors. (1972) 1 All NLR (Part 1) 170 at 175-176 where Lewis, J.S.C. (delivering the judgment of the court) said:
“Chief Williams also relied on Whall v. Bullman (1953) 2 O.B. 198 in particular on Denning, LJ. at page 202 as showing that an appeal court can take points suo motu, though it is to be noted that the point taken suo motu there was that parties could not agree on a false hypothesis and ask the court to adjudicate upon it. Finally, in his submission, an appeal court should not uphold an obviously wrong decision and so confirm bad law because the point was not taken before it.
That however is not the position at all as we see it. When a judgment is delivered in a lower court, here the High Court, it is presumed on appeal to be correct until the contrary is shown. This court is certainly entitled in its discretion to take points suo motu if it sees fit to do so but it is not the normal practice, and it is done if we think in the special circumstances of the case that justice demands it, such as on a fundamental issue as to whether the trial court has jurisdiction. Normally, if there is an appeal against a judgment on one point then the appeal stands or falls on that one point. When we give judgment on that point we have not pronounced on points not argued and though they rest as part of the decision of the High Court, they remain open to arguments as points of law in any other future appeal before us unfettered by any pronouncement of this court as to their validity. It is moreover important to appreciate this as it is only the ratio decidendi of a decision of this court that binds all lower courts, and the House of Lords has only just had cause to reprove the Court of Appeal in England for seeking to say a decision of the House of Lords, the final appellate court in England just as this court is in Nigeria, was given per in curiam when it was in fact bound by the decision of the House of Lords. See Cassell and Co. Ltd. V. Broome Times Law Report of 23rd February, 1972.
Indeed we would agree in principle with the general proposition enunciated by Lord Wrenbury in Wilson v. United Counties Bank Ltd. (1920) A.C. 102 when 25 at page 143 he said: “It is certainly a salutary principle that a court of justice should confine itself to adjudicating upon the questions raised by the parties litigant to the exclusion of other questions which they do not advance.”
In a similar vein, in Kuti v. Balogun (1978) 1 LRN 333 at 357, Eso, J.S.C. (delivering the judgment of the Supreme Court) commented:
“They were not, as counsel has rightly submitted, canvassed by either party to the case, either before the trial court or before the judge on appeal. It was, with respect, a case of the judge going on a voyage of his own which conduct this court deprecated in T. O. Kuti (trading as Abusi-Odumare Transport) v. Oludademu Jibowu (1972) 5 S.C. 747. There, this court said that in this type of circumstance, it is not open to the Court of Appeal to raise issues which the parties did not raise themselves either at the trial or during the hearing of the appeal. There could be instances, however, when a point which has not been raised is material to the determination of the appeal. When a Court of Appeal feels inclined to raise such point, parties must be given an opportunity to make their comments thereupon before the court takes a decision on the point.” (Italics mine).
Parties were not given any opportunity to make their comments on the issue raised by the Court of Appeal before they arrived at their decision on the point. That was a grave error. The decision arrived at as a result of that error will not be allowed to stand. It must be set aside and it is hereby set aside.
For the above reasons and the reasons so ably set out by my learned brother, Kayode Eso, J.S.C. I too would dismiss the appeal and I hereby dismiss it subject to the restoration of the declaration ”that the defendant cannot now lawfully repossess any of the vehicles the subject matter of this action”.
The respondent is entitled to costs in this appeal fixed at N300.00 to be paid by the appellant.
SC.40/1983
