H.H.Motors Limited v Reddy [1979] FJSC 66; Action 48 of 1977 (22 October 1979)

IN THE SUPREME COURT OF FIJI
(WESTERN DIVISION)
AT LAUTOKA

Civil Jurisdiction
Action No. 48 of 1977

BETWEEN:

H. H. MOTORS LIMITED
(PLAINTIFF)

AND:

RAJAIHHA REDDY d/o Munsami
DEO LINGAM REDDY s/o Munsami Reddy
(DEFENDANTS)

Mr. H. C. Sharma, Counsel for the Plaintiff
Mr. C. Gordon, Counsel for the Defendants.

JUDGMENT

Carpenter Motors Limited sue the two defendants for the balance allegedly owing under a bill of sale held by the plaintiffs in respect of a motor lorry which the defendants had purchased from them.

The indorsed writ suggests a simple transaction involving the sale to the defendants of a Ford motor truck; failure of the defendants to pay instalments, the amount claimed being the balance remaining after the truck had been seized and sold. The amount claimed is $2406.24.

The defence which was filed on 12.4.77 denies the claim in all respects and contains a counter-claim showing that the truck was bought for $5,000 on 31/1/75; that in August, 1975 it was involved in an accident and the plaintiff as mortgagees under the Bill of Sale took over the repairs and later without informing the defendants of their intention to do so sold the truck for $1250. In consequence the defendants have suffered a loss of $4, 250.

It seems that the plaintiffs were in no hurry to conclude the proceedings. On 27.6.77, more than 2 months after the counter-claim they filed a reply to the effect that the purchase price had been $5000; that they carried out repairs to the truck, that it was advertised in the press "as a mortgagee's sale" and that offers of $2,500 and $2000 were not followed up and they finally sold it for $1, 250.

On the face of the pleading the price of $1, 250 in September, 1976 seems an incredibly low price in view of the fact that the plaintiff's claim to have repaired the truck following the accident. One would expect that if repairs were properly effected its value would have been restored to something approaching its original value of $5000.

The plaintiff's own pleadings indicate that there is something for them to explain.

When the defendants purchased the lorry the defendant 2 was a salesman in the employ of the plaintiffs. They hired out a lorry to the transporter, Piara Singh, D.W. 1 who used it on the construction work on the Nadi O Suva Highway. Whilst being used on that work in August, 1975 it ran down a hill, left the road and was extensively damaged underneath, and there was damage to the cab, the truck sides, lights and so forth. It was comprehensively insured for purposes of the Bill of Sale and the New India Insurance Co. towed it from Sigatoka where the accident occurred to Lautoka and it was handed to the plaintiffs to carry out the necessary repairs.

The defendant 2 says, and there is absolutely no evidence from the plaintiffs to contradict him, that whilst the lorry was being repaired by the plaintiffs he visited their garage at Veitari, Lautoka, to see the lorry and to check on progress of the repairs.

The day prior to the accident the defendant 2 says he had arranged to sell it for $5,500 to a transporter, N.N. Khan, D.W.2. The latter says that he was still interested in the truck after the accident provided repairs were satisfactorily carried out and he went 3 or 4 times to look at it whilst it was undergoing repairs. He estimates that about 70% only of the necessary repair work was carried out by the plaintiffs but even in that condition it was worth about $4000-$4,500.

D.W.1 who was familiar with the lorry as the contractor hiring it said that the repairs were not fully effected when he saw it in the plaintiff's garage and he spoke to their foreman. He valued the truck at $4000-$4,500 even though it had not been fully repaired.

D.W.3 Ambika Prasad Sharma was employed in the plaintiff's credit control section in Lautoka at the material time. He now works elsewhere. He said that the plaintiffs obtained the insurance tender for the repairs and that the defendant came to see him several times about the repairs. He says that the defendant complained that the repairs were not satisfactorily and that he (D.W. 3) passed the defendant 2's complaints on to one Ah Sen the plaintiffs' credit controller who is based in Suva. During the dispute between the plaintiffs and the defendants about the nature of the repairs it appears that the lorry was standing in an exposed compound of the plaintiffs in the Veitari area of Lautoka. Whilst in the compound it suffered from the attacks of pilferers who took away the metal side walls, and the hydraulic tipping device (it was a tipper) and such like. Apparently, it was in such a sorry state when the plaintiffs, as mortgagees, advertised it for sale in May 1976 on an "as is where is" basis that no firm tender was obtained. Eventually they left it go on a private sale at $1,200 when it had been in their custody for 8 months.

In view of the history of the lorry which I have set out briefly one would have expected evidence from the plaintiffs to show that as bailees in the form of mortgagees in possession, and prior to that as bailees carrying out repairs, they had taken care of the lorry. What were the repairs needed to be done after the accident? How much did they cost? What, if any thing, remained to be done after the accident repairs had been affected? I have set out the defendant's evidence at this stage to direct attention to my initial comment that on the plaintiffs' own pleadings there is something which requires explanation. The lorry was in their possession at all times material to the claim. They were in a position to explain how a lorry which they had repaired under an insurance claim and which never left their possession dropped in value from about $5,500 to $1, 250. They have called no evidence on such matters.

P.W.1, the plaintiff's credit Supervisor from Suva could give no information concerning the purchase of the lorry, the Bill of Sale or its seizure except that which he gleaned from records which he presumably brought from Suva.

The foregoing outline and comments are based on a presumption that the lorry was not seized under the Bill of Sale until after the repairs were affected.

Under the Bill of Sale the defendants had paid a deposit of $1850.55 the purchase price of $5000 to which was added Bill of Sale charges, comprehensive insurance and agreed interest of $666. Instalments were payable at $193 per month on from 1/3/75.

The true position is that on 3.10.75 about 2 months after the accident the lorry was seized by the bailiff P.W. 2 and his warrant Ex. P.8 shows at that stage the instalments owing amounted to $383.00 which is 2 months' instalments. It would seem that the defendants stopped paying any instalments after the accident. It was apparently lying at Mudaliar's garage Lautoka to where it had been towed after the accident and the bailiff then towed it to the plaintiffs' garage.

One wonders why after the lorry was seized and in the possession of the plaintiffs as mortgagees the defendant 2 was going backwards and forwards to the garage of the plaintiffs to inspect the repairs .Was it because he was not aware that the lorry had been re-possessed? Defendant 2 was trying to gain time and postpone the payment of arrears of instalments which were mounting whilst the lorry was not earning money. I am satisfied on his evidence and on that of D.W.3 that he tried to effect some arrangement with the Credit Controller Ah Sen to defer the payment of instalments I think it is unlikely that the defendant 2 was aware at that stage that the truck had been re-possed. His conduct was not such as to display such an awareness. I accept his evidence that he did not know that the bailiff had seized it.

From 3/10/75 the truck was in the possession of the plaintiffs. They had the right to sell it but before selling it they clearly owed a duty to the defendants to repair the lorry properly and to maintain it in that condition until sale. There is no evidence from the plaintiffs that they ever did this.

I think that what I am concerned with is what was the lorry's probably value if the plaintiffs carried out proper repairs. The day before the accidents it was the subject of a sale agreement, defendant 2 had agreed to sell it to D.W.2 for $5,500. I accept their evidence in that respect. Following the accident I see no reason why it should not have been restored by the plaintiffs to its pre-accident value; their tender for repairs was apparently accepted. The defendants had paid the insurance premium and the plaintiffs were paid by the insurance company to bring the lorry up to its pre-accident value as nearly as could be done. If this was impossible to achieve then someone from the plaintiff's garage should have been able to explain. Presumably they brought it up to a value of $4000-$4,500 by effecting about 70% of the necessary repairs according to D.W.2. Moreover, D.W.2 says, and I accept his evidence in the absence of anything to the contrary from the plaintiffs that he would have paid $5000 for it had the plaintiffs properly repaired it.

I am satisfied that the plaintiffs repossessed themselves of the defendants' truck on 3.10.75 whilst it was in a damaged condition; on being properly repaired it would have realised $5000. They failed to properly repair it and whilst it was in their possession its condition deteriorated to such an extent that it was sold for $1250.

I find that the depreciation in value of the lorry from $5000 to $1250 is an item which must be borne by the plaintiffs.

The plaintiffs' amendment to the Statement of Claim filed on the hearing date is a summary of the defendant's account showing a final balance allegedly due to the plaintiffs of $2373.57 based on a re-sale value of $1250. If one substitutes a re-sale of $5000 it credits the defendants with an additional $3750.00. That item alters the defendants debit balance of $2, 373.57 to a credit balance. This gives a figure of $(3,750-2373.57) =$1,476 due from the plaintiff's to the defendant.

The plaintiff's claim is dismissed with costs.

On the counter-claim I give judgment for the defendants for $1, 476.43 with costs.

(Sgd.) J.T. WILLIAMS
JUDGE.

LAUTOKA,
22nd October, 1979.