M H Motors v Man Friday Beach Limited [1977] FJSC 3; Civil Action 154 of 1975 (28 January 1977)

Fiji Islands - M H Motors v Man Friday Beach Limited - Pacific Law Materials

IN THE SUPREME COURT OF FIJI

CIVIL JURISDICTION

ACTION NO. 154 OF 1975

BETWEEN

M.H. MOTORS
Plaintiff

AND

MAN FRIDAY BEACH LIMITED

Mr. B. Sweetmaeetman for the Defendant

JUDGMENT

In this action the plaintiff company seeks to recover from the defendant company a sum of $3,510 said to be the balance amount owing on the sale to the defendant company of a Ford Falcon 500 Reg. No. AN 178 in January 1974.

The plaintiff company claim that on or about 19th January, 1974 a sale transaction in respect of the said motor car was concluded with the defendant company. The price for the car was $6,000. A discount at 5% was allowed on the sale. The net price was $5,700. A registration fee of $38 on the car was charged to the defendant bringing the total amount payable on the car to $5,738 (see Ex.2). According to the plaintiff company the transaction was treated as a cash sale payable by the defendant on a 60 day account. The company alleges that $2,228 was paid at or about the time of the transaction by the defendant company towards the purchase of the car leaving a sum of $3,510 still owing thereon and this amount is the subject of the present claim against the defendant company.

The defendant company denies owing any money to the plaintiff company in respect of the said sale transaction. According to the defendant company the price of the said car has been met in full by the payment of $2,228 on a company cheque (Ex.9) and by a credit worth $3,500 which the plaintiff company had allowed to the defendant company by way of a guaranteed price on the sale of vehicle Reg. No. AC 189 owned by a Mr. Burgess, a director of the defendant company.

Mr. Shandil Sharma (P.W.1) gave evidence to the effect that he was sales manager in Suva for M.H. Motors, the plaintiff company, in January 1974. He is now managing the company's branch at Labasa. He recalls that on morning of 18th January, 1974 at about 10.30 a.m. Mr. Bennison and Mr. Burgess, both directors of the defendant company, came to see him. He know Mr. Burgess before but not Mr. Bennison who was introduced to him that morning. He said that after the introduction they discussed about a new Ford Falcon they were interested in purchasing to replace the car Reg. No. AC 189 which was recently involved in an accident. They said they were in a hurry to get a new car. There was at the time a Ford Falcon 500 of beige colour on display in the showroom and in which they were interested. They agreed to purchase the car at a price of $6,000 with a discount at 5%. Mr. Sharma said it was to be a cash sale. They asked that the car be delivered the next morning at Man Friday near Sigatoka. They also enquired that morning whether their company would repair the damaged car. Mr. Sharma said he told them that that was for the garage to decide. Mr. Sharma said that Mr. Bennison then asked whether they could sell the car after it was repaired. According to Mr. Sharma he told them the company could sell the car after repairs but would charge 5% commission against the sale. Mr. Sharma said there was no discussion about the proceeds of the sale of the car being credited against the price of the new car. He said afterwards he took them to see Mr. Marchant, divisional manager of the plaintiff company at the time. He said he did not know what was discussed between them as he did not remain with them. A little later Mr. Marchant came with them and told him to prepare the car for delivery next day. Mr. Sharma said when they returned he was preparing the order form for the new car. He said when he asked Mr. Bennison as to whose account he should charge the car Mr. Bennison grabbed the form and after reading it wrote down "Man Friday" as purchaser of the car and signed the form (Ex.2). At the back of Ex. 2 Mr. Bennison wrote down the delivery instructions. According to Mr. Sharma no one discussed anything about trade-in of vehicles. He said the company had no such practice nor was the question of a deposit for the car discussed. He said it was the practice at the time to allow cash sales on account to their better customers payable over a period of sixty days. He said he was not told by either Mr. Burgess or Mr. Bennison to sell the damaged car at $3,500 and credit the proceeds to the defendant company's account. He said the car was delivered next day, Saturday, at Korolevu. Mr. Sharma said he did not see the damaged car prior to the transaction. He said he saw it a day or two afterwards. The car Reg. No. AC 189 was badly damaged. The vehicle was not repaired by the plaintiff company but by Southern Motors Limited and after repairs it was brought back to them towards the end of May 1974 to be sold.

He said he was instructed by Mr. Marchant to sell the car. Mr. Sharma said the car was advertised for sale several times in 1974 and 1975 but no sale could be made because the asking price was $3,400 (excluding commission). He said the highest offer received was $2,800 about which both Mr. Burgess and Mr. Bennison were informed but they were not prepared to take anything less than $3,200. In the meantime the vehicle was deteriorating in condition and rust was forming. The car was left in an area adjacent to the company's car park where used cars for sale ware normally kept.

Mr. Arthur Bennison (D.W.1) gave evidence to the effect that he was at all material times a director of the defendant company. Mr. S.C. Burgess was the other director. He said Mr.. Burgess owned the car Reg. No. AC 189 which was involved in an accident in January 1974. The accident occurred while it was being driven by an employee of the plaintiff company on a delivery trip to Korolevu for Mr. Burgess. Mr. Bennison said he went with Mr. Burgess to see about the damage to the car in Suva. The damage was fairly substantial. He said they wanted repairs to be done an soon as possible. He said at the plaintiff company's garage he was introduced to the man in charge and just then Mr. Sharma (P.W.1) came by. Mr. Burgess introduced him to Mr. Sharma. He said Mr. Sharma suggested to them they should buy a new car in place of the damaged one. Mr. Bennison said whilst they were in the garage he discussed with Mr. Burgess about a new car. They went to M.H. Motors' showroom in Renwick Road and saw Mr. Sharma there. They made enquiries about a new Ford Falcon. Mr. Bennison said they inspected the cars there and at Walu Bay before deciding to purchase a Ford Falcon Reg. No. AN 178. Mr. Bennison said they discussed with Mr. Sharma about the damaged car. He told him he wanted to trade in the damaged car after repairs have been done. He said Mr. Sharma told them the proposal was contrary to the company's policy and that all he could do was to sell them the new car at a discount. He said they told Mr. Sharma that they might as well go to Burns Philp Limited and get a Japanese car. At that point Mr. Sharma said he thought they should meet Mr. Marchant, the divisional manager of the plaintiff company, who was in his office. They saw Mr. Marchant. Mr. Sharma did the introduction after which he left them. Mr. Marchant confirmed that it was not the company's policy to accept trade-in sales on motor care. Mr. Bennison said Mr. Marchant enquired from them whether they would proceed against the company on the accident to the car which was caused by one of his own employees. After considering the matter Mr. Marchant said he could credit them a guaranteed price on the sale of the damaged car after repairs. A discussion followed about what the guaranteed price for the car should be. After a certain amount of bargaining they finally agreed on the sum of $3,500 as the guaranteed price for the car. According to Mr. Bennison they shook hands on the deal. He said Mr. Burgess wrote out a cheque for $2,228 (Ex.9) to cover the difference but he could not recall when the cheque was paid. It could either be on the same day or soon afterwards. He said after the deal was completed Mr. Marchant told Mr. Sharma that everything was settled and instructed him to sell Mr. Burgess's car after repairs. Mr. Bennison said he signed Ex.2 after the deal was completed. The new car was later delivered to Mr. Burgess for the company. Ha said he was completely satisfied there was nothing left to be paid to the plaintiff company on the new car. He said after the deal was closed he took no further interest in the car Reg. No. AC 189. He said he did not make any enquiries as to its fate. He said the plaintiff company never referred to them any of the offers received for the car. He said during a subsequent discussion with Mr. Gilmore (P.W.2), the credit controller of the plaintiff company, he came to learn that Mr. Marchant had resigned from the firm and gone away overseas. He said Mr. Gilmore expressed surprise when he told him about the deal. He said he got the impression from Mr. Gilmore that Mr. Marchant had left his job with the plaintiff company not long after the deal was made.

I have carefully considered the whole of the evidence adduced in this case. The facts are rather unusual. However, on the balance of probabilities I am inclined to accept the evidence about the purchase deal relating to the car Reg. No. AN 178 as deposed to by Mr. Bennison. I found him to be a most impressive and convincing witness in the box. It would appear that Mr. Marchant had had a pang of conscience when Mr. Burgess and Mr. Bennison saw him about trading in their damaged car for a new one. He was no doubt aware that Mr. Burgess's car was damaged whilst being driven by one of the company's own employees. This may well have actuated him to circumvent the prohibition against trade-in sales of motor care by allowing then a guaranteed credit amount of $3,500 on the sale of the car. He must have been satisfied that the car would after repairs fetch at least $3,500. I am satisfied Mr. Marchant took that somewhat unorthodox course of action because he felt his company was responsible for the damage sustained to Mr. Burgess's car Reg. No. AC 189. It was indeed a bold action on his part and may well have been the reason why his employment with the plaintiff company did not last much longer after the alleged deal. Mr. Marchant resigned his job and returned overseas.

I accept that a purchase deal, unusual as it may seem, was in fact made in the terms already described. It will be noted that several months after the alleged deal Mr. Gilmore, the divisional credit controller, discussed with Burgess and Mr. Bennison the state of the defendant company's to the plaintiff company. According to Mr. Gilmore during the discussion Mr. Bennison kept on insisting that as a result of the deal concluded with Mr. Marchant no amount was owing on the price of Ford Falcon 500 Reg. No. AN 178. Mr. Gilmore's evidence which. I accept greatly enhances in my view the essential credibility of Mr. Bennison regarding the alleged deal. His credibility is I think further strengthened by the fact that the order form (Ex.2) was completed somewhat informally and in an unbusiness-like manner. No date is noted on it nor the method of payment specified. The fact that Mr. Marchant himself could not be available to give evidence on the discussion in which the deal was allegedly concluded does not help matters at all for the plaintiff company. In those circumstances I am constrained to hold that the plaintiff company was bound by the terms of the deal concluded between Mr. Marchant and Mr. Bennison and his partner Mr. Burgess on the ordinary principles of agency. Although the deal as made may have been contrary to the rules of the company this is clearly besides the point. That being so, I am satisfied that the plaintiff company has not discharged the onus of proof which rests on it with regard to the subject matter of this action and consequently is not entitled to recover from the defendant company the sum of $3,500 as claimed. The action is dismissed with costs.

T.U. Tuivaga
JUDGE

Suva,
28th January, 1977.