Jonathan v Boroko Motors Ltd [2004] PNGLR 44 (26 November 2004)

NATIONAL COURT OF JUSTICE

LOLE JONATHAN; AND
MARTIN TINANIKE

V

BOROKO MOTORS LIMITED

BOROKO MOTORS LIMITED
CROSS-CLAIMANT

V

LOLE JONATHAN; AND
FIRST CROSS-DEFENDANT

MARTIN TINANIKE
SECOND CROSS -DEFENDANT

WAIGANI: KANDAKASI J

21 July; 26 November 2004

CONTRACT – Sale of Goods by description – Invitation for purchase by tender of motor vehicle by particular photo and other description – Good supplied not confirming with description – Breach of contract – Purchaser entitled to a reimbursement of purchase price and other damages – Goods Act 1951 ss.14 and 34.

EVIDENCE – Defence not calling relevant and available witness – Witness called not the person directly involved in the transaction and in no position to give any direct evidence – Effect of – Defence failing to rebut plaintiff's case – Judgment for plaintiff .

Facts

By a newspaper advertisement, the defendant advertised the sale of a particular motor vehicle (the vehicle") located in Port Moresby by description. The advertisement carried a picture of the vehicle. The plaintiffs jointly responded to the advertisement and paid a sum of K9,000.00 to the defendant to have it delivered to them via the defendant's Lae branch. Upon receipt of the payment, the defendant arranged for a consignment of the vehicle to its Lae branch for the plaintiffs to take delivery. When the vehicle eventually reached Lae, the defendant tried to deliver the vehicle but the plaintiffs refused to take delivery claiming the vehicle did not fit the description disclosed in the advertisement and demanded a refund of their K9,000.00.

The plaintiff issued proceedings claiming a refund of their K9,000.00 and other damages. The defendant denied the claim, and filed a cross-claim saying the plaintiffs have wrongfully refused to take delivery.

Held

1. The relevant question is always whether the goods correspond with the description and not whether they are of good quality in contracts for sale of goods by description. (Arcos v. Ronaasen [1993] AC 470; Grant v. Australian Knitting Mills Ltd [1936] AC 85)

2. Where the issue of delivery also arises as in this case, it is dependant on a determination of the issue of description. If the Court finds against the description of goods fitting the description by which the parties contracted, there would be no obligation on the purchaser to take delivery nor should the Court presume delivery completed.

3. As the sale and purchase was through the newspaper advertisement and subsequently through the telephone, the plaintiffs did not have the opportunity to examine or see the vehicle physically before the attempted delivery.

Papua New Guinea cases cited

Central Province Forest Industries Ltd (Provisional Liquidator Appointed) v. Rainbow Holdings Pty Ltd N321.
John Jaminan v. The State (N0.2) [1983] PNGLR 318.
Michael Yai Pupu trading under the name and style of South Pacific Arts v. Tourism Development Corporation (28/06/02) N2258.
Tapenda Ltd v. Wahgi Mek Plantations Ltd (10/11/98) N1787.
The State v. Ben Noel & Ors (31/05/02) N2253.
The State v Emmanuel Bais and Felix Fimberi (11/06/03) N2416.
Toba Pty Ltd v. Dennis Poole [1984] PNGLR 84.
Wara Wau Plantations v ANGCO Pty Ltd [1997] PNGLR 134.

Other cases cited

Arcos v. Ronaasen [1993] AC 470.
Grant v. Australian Knitting Mills Ltd (1936) AC 85.

Counsel

P. Parkop for the plaintiff.
B. Frizzell for the defendant.

26 November 2004

Kandakasi j. By a newspaper advertisement, the defendant advertised the sale of a particular motor vehicle (the vehicle") located in Port Moresby by description. The advertisement carried a picture of the vehicle. The plaintiffs jointly responded to the advertisement and paid a sum of K9,000.00 to the defendant to have it delivered to them via the defendant's Lae branch. Upon receipt of the payment, the defendant arranged for a consignment of the vehicle to its Lae branch for the plaintiffs to take delivery. When the vehicle eventually reached Lae, the defendant tried to deliver the vehicle but the plaintiffs refused to take delivery claiming the vehicle did not fit the description disclosed in the advertisement and demanded a refund of their K9,000.00.

The defendant refused to refund the money saying, it had already sold the vehicle, which fitted the description to the plaintiffs. This caused the plaintiff to issue these proceedings claiming a refund of their K9,000.00 and other damages. The defendant denied the claim, and filed a cross-claim saying the plaintiffs have wrongfully refused to take delivery. This caused it to incur storage costs and other damages, which it wishes to recover from the plaintiffs. After the trial however, the defendant abandoned its cross-claim conceding that, it did not adduce the relevant evidence to establish it.

Relevant Issues

The issues then left for determination by this Court by agreement of the parties were these:

1. Did the vehicle the defendant tried to deliver to the plaintiffs fit the description disclosed in the newspaper advertisement? And

2. Was delivery of the vehicle completed upon its consignment to Lae for collection by the plaintiffs thereby obliging the plaintiffs to accept the vehicle?

The second question is dependent on the first question. If the Court answers the first question in the affirmative, it will then be necessary to answer the second question. If however, it answers that question in the negative that will render a consideration of the second question unnecessary. I will therefore consider the first question first, which I note is essentially a factual as well as a legal question given that, the Goods Act 1951 does provide for a sale of goods by description.

The Relevant Facts

The facts giving rise to these issues are in the main part agreed and simple. This starts with an agreement of the parties that the sale of the vehicle by the defendant to the plaintiffs was a sale by description. That description was in an advertisement in the Post Courier dated 26 June 1996 which described the vehicle as a "Tata LWB Tone Truck, 5 Speed Diesel Drives as new K8,900.00" This statement was adjacent to a photograph of the truck in the advertisement. A copy of the advertisement is in evidence, confirming this description, which also confirms that, the front bonnet area is short, appears to be as new and white in colour.

The plaintiff paid the defendant K9,000.00 for the truck and arranged the defendant to have it delivered to them in Lae through the defendant's Lae branch. Upon receipt of the payment, the defendant consigned the vehicle to Lae. When it arrived at Lae, the plaintiffs turned up at the defendant's Lae branch and the defendants tried to deliver the vehicle to them. However, plaintiff refused to take the delivery claiming, the vehicle the defendant sought to deliver did not fit the description they contracted for and demanded a refund of their money. The defendant refused to refund their money claiming, the vehicle fitted the description in the advertisement. Herein is the only dispute between the parties.

The first plaintiff, Mr. Lole Jonathan, gave evidence for the plaintiffs. This was essentially by affidavit and some oral evidence. He was subject to cross-examination by the defendant. His testimony was that when the plaintiffs turned up at the defendant's branch in Lae to take delivery of the vehicle, they found that while the vehicle was indeed a 4 ton, LWB Tata truck, it failed to meet the description under which it was sold. The witness identified the following features from which they concluded it was a different vehicle:

(a) it had a long front or bonnet area unlike the one described in the newspaper advertisement, especially in the photograph;

(b) it was old and rusty;

(c) it had holes at the back base;

(d) it was not as new as it had been made out to be; and

(e) it was not white as apparent from the newspaper description.

The witness also testified that immediately after they refused to take delivery of the vehicle because it failed to fit the description, they made representations to the defendant stating these facts to it and demanded a refund of the moneys they paid over to it. They did this by themselves and their lawyers as early as October 1996. The defendant did not respond to these representations until the issue of these proceedings on 20 March 2000.

The defendant called its current used car manager, a Mr. Kila Kila to give evidence in its defence. At the material time, he was a sales representative employed by the defendant with its Used Car Division in Port Moresby but not the one directly involved in the transaction. From the records of the defendant, he testified that the defendant did ship a "Tata 4 ton truck, 5 speed, LWB, diesel engine" to Lae. He also testified that the vehicle had registration in the name of the first plaintiff at the time of shipment. He was otherwise able to say that the vehicle shipped to Lae was in good condition and did not have the defects the plaintiff's evidence showed.

This witness was not able to say the vehicle shipped and it sought to deliver to the plaintiff was the same one that the defendant advertised in the newspaper for sale and the plaintiffs paid for. The defendant could have called the sales representative who sold the vehicle to the plaintiffs but did not. Similarly, the defendant could but failed to call the person who took delivery of the consignment from Port Moresby on behalf of the defendant to on deliver to the plaintiffs. The defendant did have reason to know and indeed knew the whereabouts of these witnesses and chose not to call either or both of them.

I am of the view that this failure should result in an adverse inference against the defendant. In the criminal case of The State v. Ben Noel & Ors (31/05/02) N2253. I discussed the relevant authorities on point and arrived at the conclusion that a party who fails to call a relevant witness and fails to provide a reasonable explanation for it, does so because the witness will not support his case. I am of the view that this equally applies even in a civil case, whilst noting the difference between a civil and criminal case, which does not really matter when it comes to calling of witnesses and adducing evidence in Court.

Mr. Kila Kila tried to give evidence of what these potential witnesses told him, but the Court ruled them out as hearsay evidence. Consequently, the defendants failed to call any direct and admissible evidence in terms of the vehicle presented to the plaintiffs in Lae fitting the description. The defendant also failed to show that, the vehicle was the same vehicle the defendant advertised, sold and the plaintiffs bought.

Further, the defendant did not specifically contest the plaintiffs' claims that, when they made representations immediately after they refused to take delivery of the vehicle and demanded a refund of the moneys they paid to it, the defendant said nothing in response and remained silent until after the issuance of these proceedings. This saw the passage of a long time without any word in rebuttal from the defendant to the plaintiff's claims. Where a party fails to speak when required amounts to acceptance and or acquiescence of the representations or actions of the other. Recently, my brother Gavara-Nanu J. stated and applied that principle in these terms in the case of Michael Yai Pupu trading under the name and style of South Pacific Arts v. Tourism Development Corporation (28/06/02) N2258:

"In the circumstances, the plaintiff was even entitled to assume that the defendant had agreed to buy his artifacts based on the representations made by Mr Jawa. There is another reason - the fact the defendant had sat back and said nothing to stop the stock take which took about two weeks to complete and then the subsequent transfer of the artifacts to the shed where they were sold for the defendant, means that, by its silence and inaction, the defendant had acquiesced in the transactions. "

I note that even in criminal cases where there is the important concept of "presumption of innocence until proven guilty" in favour of an accused person, the principle applies against an accused who fails to state at the earliest opportunity his defence such as an alibi. There are many cases on point led by the Supreme Court judgment in John Jaminan v. The State (N0.2) [1983] PNGLR 318 at pp. 332-333 per Bredmeyer J. I adopted and applied this principle in a number of cases already as in The State v Emmanuel Bais and Felix Fimberi (11/06/03) N2416.

In these circumstances, I find that the defendant accepted by his conduct the representations the plaintiffs made to it. The only problem was that the defendant did not reimburse the amounts paid over for the purchase and delivery of the vehicle. That resulted in the issuance of these proceedings. In an attempt to avoid obvious liability, the defendant belatedly raised its defence, thereby forcing a trial. At the end of the trial, the plaintiffs produced evidence establishing their claims, which I find the defendant failed to rebut. Obivously, this calls for judgment for the plaintiffs on the facts.

The question then is, does this mean also a finding as a matter of law that the defendant failed to supply a vehicle fitting the description in its advertisement? This requires a consideration of the relevant law.

The Relevant Law

The Goods Act, 1951 governs the sale of goods. The plaintiff submits that sections 14 (implied conditions for the sale of goods by description), s.15(2) (ii) (implied condition as to quality, s.30 (delivery of wrong quality), s.34 (buyers right to Examine), s.35 (breach of warranty) and s.54 (interest and special damages) are relevant. I do not see the relevance of all of these provisions except for ss.14 and 34.

These provisions read as follows:

"14 Implied condition in sales by description.

(1) Subject to Subsection (2) where there is a contract of sale of goods by description there is an implied condition that the goods correspond with the description.

(2) Where there is a contract for the sale of goods by sample, as well as by description, it is not sufficient that the bulk of the goods correspond with the description"

...

34. Buyers right to examine good.

(1) Where the goods are delivered to the buyer that he has not had previously examined, he shall not be deemed to have accepted them until he has had a reasonable opportunity to examine them for the propose of ascertaining whether they are in conformity with the contract.

(2) Unless otherwise agreed, when the seller tenders delivery of goods to the buyer he is bound on request to afford the buyer a reasonable opportunity of examining the goods for the purpose of ascertaining whether they are in conformity with the contract."

There is no local case dealing with either or both of these provisions. Given, that, the plaintiff referred to Tapenda Ltd v. Wahgi Mek Plantations Ltd (10/11/98) N1787; Wara Wau Plantations v ANGCO Pty Ltd [1997] PNGLR 134; Toba Pty Ltd v. Dennis Poole [1984] PNGLR 84 and Central Province Forest Industries Ltd (Provisional Liquidator Appointed) v Rainbow Holdings Pty Ltd N321 for general guidance.

The first of these cases concerned one of the implied warranties in the sale of goods, namely warranty of merchantable quality. The second case involved the concept of quality in the sale of goods. The third case was in relation to the shipment of a motor vehicle in a particular way. The final case concerned a purchaser failing to pay for and take delivery of goods pursuant to a contract of sale. As can be clearly seen, the first three cases do not concern the issue of sale by description. They are therefore irrelevant.

The fourth case would appear to be relevant on the question of failure to take delivery. However, a closer examination of the case reveals that, there the Court dealt with a case of the purchaser failing without good reason to pay for and take delivery of the goods contracted for. No other issue, and certainly not the issue of the goods not fitting the description arose. Hence, that case is also not relevant for the purpose of the case before me.

In the absence of any local case authority on point, I turn to overseas case authorities for guidance on the issue at hand. Arcos v. Ronaasen [1993] AC 470, a case referred to and relied upon by the defendant is on point. There, the Court held that, the relevant question is always whether the goods correspond with the description and not whether they are of good quality in contracts for sale of goods by description.

In another case, Grant v. Australian Knitting Mills Ltd [1936] AC 85, also referred to by the defendant, the Court held that the contract was for a sale by description. There, Grant went to the defendant's shop and asked for some men's underwear. The defendant's employees showed him some woolen underwear and he bought them. From this, it is clear once again that what matters is the description given and the good or goods subsequently supplied fitting that description.

A closer examination of the provisions of s.14 and the cases on point, it seems clear to me that, the pertinent question is whether the goods fit the description. I therefore accept the defendant's submission that the key issue is one of identification of the goods to the description where the contract is one of sale by description. Hence, the issues of quality, quantity and or fitness of purpose of the goods are irrelevant. It is to the goods in question and the description given should the Court focus its attention to determine the issue.

In my view, where the issue of delivery also arises as in this case, it is dependent on a determination of the issue of description. If the Court finds against the description of goods fitting the description by which the parties contracted, there would be no obligation on the purchaser to take delivery nor should the Court presume delivery completed. This brings into play the provisions of s.34.

This provision, in my view, seeks to protect a person who buys goods by description. I consider this is an important protection particularly for consumers. Often times motor vehicle dealers and other goods dealers sell a wide range of goods by description over the various modes of mass media. Most of the time, the purchaser will not get to see the goods he is purchasing until it reaches him or her. When that happens, there surely must be opportunity to him or her to examine the goods and ensure it fits the description before accepting it. Now with the proliferation of the internet and sales through that mode, I consider this protection is a very important one.

At the same time, I am fully aware that a purchaser might either deliberately or inadvertently destroy or damage the goods to change the description. In order to protect a vendor from such eventualities, the law should require the purchaser to examine and decided either for or against the description at the point of delivery and not a few days or some days later. The general principles of acquiescence and acceptance mentioned earlier in this judgment equally applies here with appropriate modification.

This provision enables and grants a purchaser the right to examine the goods before accepting delivery and ensure that they fit the description by which he contracted. If he finds the goods not fitting the description he contracted for, he has every right to reject them and refuse delivery. He would then be entitled to demand a delivery of the goods of the correct description or failing that, a refund of the purchase price if already paid, and or sue for damages, where he or she suffers other damages.

Application of the Law to the Present Case

The defendant argues that the vehicle it sought to have delivered to the plaintiffs fitted the description given in its newspaper advertisement. On the evidence before the Court, the description given was this, a "Tata LWB 4 Tone Truck, 5 Speed Diesel Drives as new K8,900.00." A photograph of the vehicle accompanied the advertisement. That showed a long wheel base truck with a shorter nose or bonnet area. The cabin housed the engine of the vehicle. It also appeared as new with no damage to the body. Clearly, therefore, the vehicle was not sold on an "as is where is" basis.

The vehicle the defendant tried to deliver to the plaintiffs was a "Tata LWB 4 Tone Truck, 5 Speed Diesel" white in colour. However, it had a longer front or bonnet area. Its body was old and rusty with holes at the base of the back. It was therefore not as new as advertised. This was critical because the defendant did not sell it on a "as is where is" basis. On this evidence, I find that the vehicle did not fit the description.

As the sale and purchase was through the newspaper advertisement and subsequently through the telephone, the plaintiffs did not have the opportunity to examine or see the vehicle physically before the attempted delivery. The earliest opportunity they had was when the defendant tried to deliver the vehicle to them thorough its Lae branch. Upon seeing the vehicle for the first time, the plaintiffs examined the vehicle and found that the vehicle was not of the description they contracted for. Therefore, they immediately indicated to the defendant that the vehicle did not fit the description. Accordingly, I find that they correctly demanded a return of their K9,000.00. They followed this through formally in writing both by themselves and later through their lawyers. The defendant did not say a word in response but refused to return the money.

Consequential on these findings, I find that an obligation was on the defendant to either reimburse the K9,000.00 the plaintiffs paid over to it or deliver a vehicle that fitted the description. The defendant did neither. In these circumstances, I have no hesitation in arriving at the conclusion that the defendant is liable to the plaintiff in terms of a return of the purchased price.

The plaintiffs also claim a reimbursement of their travel, accommodation and legal costs spent in pursuing this claim against the defendant. Whilst I find that the plaintiff may be entitled to such claims, they had the duty to plead this part of their claim with sufficient particulars. Thereafter, the plaintiffs had the duty to prove their claims. The plaintiffs failed to discharge both of these duties. I therefore, decline this part of their claim, but do order costs to be agreed within 14 days from today, if not taxed.

I also order interests against the defendants. The interest shall be at 8% from the date of the issue of the writ to the date of the judgment. If the defendant continues to delay in a reimbursement of the K9,000.00 to the plaintiff and a period of 21 days passes, interest at 8% on the judgment inclusive of interests thereon up to the date of judgment shall become payable in accordance with the Judicial Proceedings (Interest on Debts and Damages) Act (Chp. 52) .

Lawyers for the plaintiffs: Parkop Lawyers.
Lawyers for the defendant: Warner Shand Lawyers.