IN THE SUPREME COURT OF NIGERIA
ON THURSDAY, THE 15TH DAY OF APRIL 1976
ANDREW EBOHIMI OMOIJUANFO .............................................. APPELLANT
NIGERIAN TECHNICAL COMPANY LTD ...................................... RESPONDENTS
BEFORE: Sowemimo, Madarikan and Idigbe, JJ.S.C.
After the hirer had made instalmental payments totalling over three fifths of the hire-purchase price of the hired vehicle under the hire-purchase agreement between the parties, he defaulted with three consecutive instalments. The owners repossessed the vehicle under s.9 of the Hire-Purchase Act 1965 pursuant to subs. (5) thereof, which was inserted by the Hire-Purchase (Amendment) Decree 1970. The hirer sued for money had and received, contending that as he had already paid three fifths of the hire-purchase price the owners could not lawfully repossess.
The mischief aimed at by the amending Decree is the considerable hardship worked by s.9 of the principal Act on the owner of a hired vehicle, who, as the law then stood, was unable to repossess the vehicle from a defaulting hirer until he could bring an application to court pursuant to the provisions of subs. (1) of that section; and the intention of the Decree is to remedy this situation and give the owner of such a vehicle the necessary power to repossess and keep the vehicle in a state of repair pending the intervention of the court under the said subs. (1) of s.9 of the principal Act.
(2) On the facts in this case the defendants were entitled to repossess the hired vehicle.
Dr P.I. Ijewere for Appellant.
A.A. Fayokun (O. Fayokun with him) for Respondent.
Idigbe, J.S.C. (delivering the judgment of the Court):-By a hire-purchase agreement of the 19th day of June, 1972, the appellant undertook to purchase from the respondents a Steyr Tipper for the total purchase of £5,643
(N11,286.00). Under the terms of the hire-purchase agreement (hereinafter called "the hire agreement") the appellant was required to make an initial deposit of £1502 (N3004.00) before collecting the Steyr tipper (hereinafter referred to as "the vehicle") and thereafter to make fifteen regular and consecutive monthly instalment payments of £276 (N552.00) on or before the end of each successive month, commencing from the 4th day of August, 1972 in order to complete payment of the total purchase price. The appellant took delivery of the vehicle after making the initial deposit of N3004, and subsequently made regular instalment payments as provided in the hire agreement until August 1972; thereafter he made irregular payments, the last of which being N78 was on the 4th day of May, 1973. No payments were made for the months of June, July and August until the 25th September, 1973, when the appellant again paid the sum of N80.00 leaving outstanding a balance of N4,510.61 being arrears of instalments due and unpaid.
By letters Ex. G and G1, dated 13th June, 1973, and 15th June, 1973, respectively the respondents drew attention of the appellant to the unpaid arrears of instalments and gave notice of their intention to repossess the vehicle. On the 4th October, 1973, the respondents repossessed the vehicle from the appellant who subsequently by an action filed in the High court of the Bendel State on 3rd day of December, 1973, claimed a total of
N12,956.00 "as money had and received by the respondents". Relevant portions of the statement of claim filed by the appellant pursuant to an order of the trial court read:-
"(1) By a hire-purchase agreement entered into in Benin City ... the defendant let to plaintiff a Steyr 568 2R Tipper ... at a hire-purchase price of
N11,286.00 and the said tipper was delivered to the plaintiff on the 19th day of June, 1972 ...
(2) On the 3rd day of October 1973, at which time the plaintiff had paid the sum of
N6,856.00 under the said hire-purchase agreement, the defendant wrongfully and in breach of the provisions of Section 9(1) of the Hire-Purchase Act 1965 (and even as amended by the Hire-Purchase (Amendment) Decree 1970), repossessed the said Tipper from the plaintiff without the plaintiff's consent.
(i) And the plaintiff claims the sum of
N12,000 as money had and received and costs."
(ii) The respondents admitted that they repossessed the vehicle in October, 1973, but denied that they did so in breach of the Act (i.e. Hire-Purchase Act 1965), and they further averred in their statement of defence that, as owners, they repossessed the vehicle "which was immediately taken to their premises for purposes of protecting it from damage or depreciation pending the determination of the issues between the parties to the said hire-purchase agreement."
The learned trial Judge after a very careful review of the evidence adduced by parties and consideration of the provisions of Decree No. 23 of 1970 made the following observations:-
"It is admitted that at the time the defendants repossessed the vehicle the total amount of payment made by the plaintiff had exceeded three-fifths of the hire-purchase price and it is also admitted that there were no payments made for three successive months. Learned Counsel for the defendants further stated that before they repossessed the vehicle they had written two letters Exhibits G and H (i.e. G1) to the plaintiff to bring the vehicle in order to satisfy themselves whether the plaintiff was complying with Clauses 3, 4, 5 & 6 of the Hire-Purchase agreement The sole basis of this case rests on the interpretation to be given to section 9(5) under the amendment. Dr Ijewere, learned Counsel for the plaintiff maintains that the only legitimate interpretation which the court can give to subsection 5 of the Hire-Purchase (Amendment) Decree No. 23 of 1970 is that in no circumstances could the vehicle be repossessed on October 4, 1973 after the payment of
N80.00 was made on 25th September, 1973 and that before the defendants could repossess the vehicle under that sub-section they would have to wait for three or more instalments to fall due failing which any seizure by the company was wrongful. This is because the plaintiff had paid three-fifths of the hire-purchase price by September 25th, 1973 ... The question to which I have to address my mind is whether section 9(5) is subject to section 9(4)(b) or it is to be read as standing on its own without being qualified by the earlier sub-section ... In the principal Act the power of the owner of a vehicle ... bought on hire-purchase to seize the vehicle was completely removed after the hirer had paid three-fifths of the hire-purchase price. This was no doubt working great hardship on the owners of hired vehicles and it is my opinion that section 9(5) of the (sic) Amended Act was introduced to remove the hardship which the owners of hired vehicles were ... experiencing. It is therefore clear to me that notwithstanding the fact that three-fifths of the hire-purchase price had been paid, the owner of a vehicle has authority to repossess the vehicle under the law if there is a default in the payment of three instalments. It is to be realised that such repossession does not immediately give the owner of the vehicle power to deal with it in any way which is prejudicial to the interests of the hirer. It is only a means of ensuring that the vehicle is safe ... so that if in the end the owner is to sell the vehicle with leave of the court in order to recover the unpaid balance of the hire-purchase price the owner will not be at a loss. I think this is the spirit and intention of the amendment..."
(Brackets and italics supplied).
The learned trial Judge (Ogbobine J.) then dismissed the appellant's claim with costs, and it is from the above judgment that the plaintiff appeals to this Court. We have taken the trouble to set out in detail relevant portions and observations of the learned trial Judge because precisely the same arguments and contentions put forward before him were urged upon us. The sum of the argument and submissions of learned Counsel for the appellant is this: Notwithstanding the provisions of sub-section (5) of section 9 of the Hire-Purchase Act 1965 the respondent as owners of the hire vehicle could not on 4th October, 1973, lawfully repossess that vehicle because on the 25th September, 1973, the appellant had paid three-fifths of the hire-purchase price of the vehicle and there were not, as of that date, "three or more instalment payments due from, and unpaid by, the appellant." We will deal with the above argument and submissions of learned Counsel for the appellant later but for the moment we think it is desirable to set out the relevant sections of the Hire-Purchase Act involved in the above submissions: and these are Sec. 9 of the Hire-Purchase Act 1965 (hereinafter called "the Principal Act") and sub-section (5) of the said section which was introduced by Decree No. 23 of 1970 (hereinafter called "the Amending Act"). Section 9(1) of the Principal Act reads:-
"(1) where goods have been let under a hire purchase agreement and the relevant portion of the hire purchase price has been paid (whether in pursuance of a judgment or otherwise) or tendered by or on behalf of the hirer or any guarantor, the owner shall not enforce any right to recover possession of the goods from the hirer otherwise than by action.
(2) If an owner recovers possession of goods in contravention of the foregoing sub-section, the hire-purchase agreement, if not previously determined, shall determine and-
(a) the hirer shall be released from all liability under the agreement and shall be entitled to recover from the owner in an action for money had and received all sums paid by the hirer under the agreement or under any security given by him in respect of the agreement; and
(b) any guarantor shall be entitled to recover from the owner in an action for money had and received all sums paid by him under the contract of guarantee or under any security given by him in respect of that contract.
(3) The foregoing provisions of this section shall not apply in any case in which the hirer has determined the agreement or the bailment by virtue of any right vested in him.
(4) In this section and elsewhere in this Act 'the relevant proportion', where the reference is to the relevant proportion of the hire-purchase price of any goods or to the relevant proportion of a part (however described) of that price means-
(a) in the case of goods other than motor-vehicles, one-half; and
(b) in the case of motor vehicles, three-fifths."
and section 2 of the Amending Act provides as follows:-
"(2) Section 9 of the principal Act (which relates to restriction on recovery of goods otherwise than by action) shall be amended as follows:-
(a) at the end of subsection (1) thereof, there shall be inserted the following 'and except as provided by subsection (5) below."
(b) immediately after subsection (4) thereof, there shall be inserted a new subsection:-
'(5) In the application of the foregoing provisions to motor vehicles, where three or more instalments of the hire-purchase price of a motor vehicle under the agreement are due and unpaid, the owner may remove the motor vehicle to any premises under his control for the purpose of protecting it from damage or depreciation and retain it there pending the determination of any action, and the owner shall be liable to the hirer for any damage or loss which may be caused by the removal'."
We endorse the learned trial Judge's interpretation of the provisions of sub-section (5) of section 9 of the Principal Act as contained in his observations in portions of his judgment quoted above. There is, in our view, no doubt that prior to the amendment introduced by the Amending Act the provisions of section 9 of the Principal Act, worked considerable hardship on the owner of a hired vehicle who, as the law then stood, was unable to repossess the same from a mischievous hirer who having contrived to pay three-fifths of the hire-purchase price, albeit with considerable difficulty and by irregular instalments even if in breach of the provisions of the hire agreement, deliberately embarks upon complete abuse and misuse of the hired vehicle, until he could bring an application to court pursuant to the provisions of the subsection (1) of that section. It is undoubtedly the intendment of the Legislature, by promulgating Decree No. 23 of 1970, to remedy this situation and give the owner of the hired vehicle the necessary power to repossess and keep the same in a state of repair pending the intervention of the court under the provisions of Section 9(1), of the Principal Act. This, we think, is the raison d'etre of sub-section (5) of s.9 of the Principal Act.
On the view that we hold of the Amending Act (Decree No. 23 of 1970) it is patent from the facts in this case-and learned Counsel for the appellant, in the end, conceded the point albeit with some measure of reluctance-that there is, indeed, no merit in this appeal. He had laboured under a misapprehension that it was the payment of
N80.00 on the 25th of September, 1973, that brought the total instalment payments made by the appellant, as of that date, to three-fifths of the hire-purchase price whereupon he argued that notwithstanding the provisions of sub-section (5) of section 9 of the Principal Act the respondent had not on 4th October, 1973, "the power to repossess the hired vehicle" until the appellant defaulted by three or more consecutive instalments "due subsequent to the 25th September, 1975". We do not however, find it necessary to make a ruling on this particular issue because the appellant (although he made irregular instalment payments after August 1972) had in fact on the 4th May, 1973, when he paid N78 brought his total instalment payments to just over three-fifths of the hire-purchase price; so that when on September 25th, 1973, he made another irregular payment of a very small fractional part of the monthly instalment of N552.00 provided in the hire agreement, he was already in arrears of more than three consecutive instalment payments. In those circumstances, there is no doubt that the respondents were entitled to repossess the vehicle.
There is, therefore, no merit in this appeal which is hereby dismissed with costs to the respondents assessed at