It is not denied however that the first defendant was not given a copy of the Hire Purchase Agreement or that his letter of 20th September 1993 to the oven suppliers demanding the removal of the oven and foreshadowing the charging of a 'storage fee' was NOT copied to or received by the plaintiff company; nor is it deposed that the documents were either signed in the offices of the plaintiff company or were witnessed by an officer of the
plaintiff company.
The above letter is significant in my view insofar as Clause 10 of the plaintimpany's Hire Purchase Agse Agreement enables:
"(the defendants) on giving seven days notice in ng to (the plaintiff bank) ank) (to) determine the hiring ..."
In this regard the majority judgments in Financing L. Stimson [1962] EWCA Civ 1; (1962) 3 ALL E.R. 386 plainly held held that the dealer should amongst other things, be regarded as the agent of the finance company to receive, and accept,
a notice by the hirer of revocation of his offer to buy.
Furthermore Lord Wilrce in Branwhite v. Worcester Works Finance (1968) 3 All E.R. 1044 in referring to Stimsons case 'as authoritative' said at p.122:
"The matters included within the n> (agency relationship) should be the fixing and receipt of the deposit, representations as to the goods, probably, ... delivery of the goods to the hirer. As to all these matters, the dealer should be treated as the finance company's agent and the finance company accordingly bound, irrespective of whether or not an effective hire-purchase transaction comes into existence."
(my underlining)
As fo 'defectiveness' of the 'bread oven' the plaintiff company's 'Head'Head of Recoveries' without denying it, merely refers to 'the terms and conditions' of the Hire Purchase Agreement, in particular, to Clause 6 and the provisions of the DELIVERY RECEIPT signed by the first defendant (See: para.9(e) of the affidavit).
In this regard bearing in mind the first defendant's own declaration of being 'not well-educated', I can do no better than to draw attention to the judgment of Diplock L.J. in Lowe v. Lombank Ltd. (1960) 1 ALL E.R. 611 especially at pp.615ff and to the observations of Denning M.R. in Stimsons case (op.cit) when he said at p.388:
"I am aware, of course, that the finance coes often put clauses into tnto their forms in which they say that the dealer is not
their agent. [See: Clause 15(9) of the plaintiff company's Hire Purchase Agreement] But these clauses are not worth the paper they are written on. Nobody can make an assertion of that kind in an agreement so as to
bind the courts if it is contrary to the facts of the case."
Be that as it may no reference was made in the affidavit to theisions of Clause 7 which recognises that the the conditions and warranties as to fitness and quality implied under the Sale of Goods Act (Cap. 230) applied to the plaintiff company's Hire Purchase Agreement.
In this latter regb>Section 16 of the Sale of Goods Act (Cap. 230) relevantly provides:
"(3) Wher seller sells goods in the course of a business and the buye buyer, expressly or by implication, makes known to the
seller any particular purpose for which the goods are being bought, there is an implied condition that the goods supplied under the
contract are reasonably fit for that purpose, ... except where the circumstances show that the buyer does not rely, or that it is
unreasonable for him to rely on the seller's skill or judgment.
(5) Thegoing provisions of this section apply to a sale by a pers person who, in the course of a business, is acting as agent for
another ...; and
ass=MsoN=MsoNormal style="margin-left: 36.0pt; margin-top: 1; margin-bottom: 1"> (6) In the application of subsection (3) to an agre for the sale of goods unde under which the purchase price or part of it is payable
in instalments, any reference to the seller shall include a reference to the person by whom any antecedent negotiations are conducted."
In my considered view the efff subsection (6) on the plaintiff company's Hire Purchase Agreement cannot, iot, in the particular circumstances of this case, be so easily ignored or avoided by merely asserting an absence of any
knowledge on the part of the plaintiff company.
Furthermore the term 'antecedent negotiations' although undefined in the Sale of Goods Act would, in my considered opinion, include any negotiations conducted or arrangements made between the oven supplier and the first
defendant whereby the latter was induced to enter into the Hire Purchase Agreement with the plaintiff company or which otherwise promoted the transaction to which the Hire Purchase Agreement relates.
In Slater v. Finning Ltd. (1996) 3 W.L.R. 190ord Steyn in discussing the ambit of Section 14(3) of the Sale of Goods Act 1979 (U.K.) which is in identical terms to our Section 16(3), said at p.200:
"... the old rule of caveat empto become the rule of caveat venditor in order to meet the rehe requirements of modern commerce
and trade ... (and) ... While the implied condition that the goods are reasonably fit is inherently a relative concept, it is well
established that the liability under Section 14(3) is strict in the sense that the seller's liability does not depend on whether
he exercised reasonable care."
Furthermore and despite the plaintiff company's seemingly strict reliance upon the provisions of its Hire Purchase Agreement, there can be no doubting that the very nature of the 'bread oven', the subject matter of the Hire Purchase Agreement, was such that no meaningful examination could have been carried out by the defendants prior to its installation in their premises
and then only after it had been operated for sometime.
In this regard as long ago as 1831 (prior to any 'of Goods' legislation) Lord Tenterden Ch. J. sab> said in Street v. Bray (1831) 36 R.R. 626 at p.631:
"It is to be observed, that although the vendee of a specific chattel, delivered with a warranty, may not have a right to return
it, the same reason does not apply to cases of executory contracts, where the article, for instance, is ordered from a manufacturer,
who contracts that it shall be of a certain quality, or fit for a certain purpose, and the article sent is never completely accepted
by the party ordering it. In this and in similar cases the latter may return it as soon as he discover the defect, provided he has
done nothing more in the mean time than was necessary to give it a fair trial."
I note however from the Statement of Claim dated 2nd February 1996 the averment in paragraph 3:
"... (that) the Plaintiff had taken possession of the items under the (Hire Purchase) Agreement and has sold the same to recover the amount owed by the First Defendant."
This may be compared and contrasted with paragraph 14 of the First Defendant's affidavitn on the 11th of Septembptember 1996 (i.e. 7 months after the Statement of Claim) in which he deposed:
"The oven was never removed from my premises and it is still occupying space at my bakery and contrary to the claim in paragraphs
(3) and (4) of the Statement of Claim ... no one has taken possession of the said oven."
Both assertions could not be correct but in any event Clause 10 enables the defendants to 'return the goods' to the plaintiff company and Clause 12 empowers the plaintiff company 'without notice to retake possession of the goods'.
In this case the failure of the defendants to invoke the provisions of Clause 10 and their continuous insistence that the oven supplier should remove the 'bread oven' from their premises tends to support their assertion that they were not given a copy of the Hire Purchase Agreement and confirms Diplock J's observations in the Lombank Ltd. case (op. cit) at p.614:
"(that) under modern conditions transactions, particularly of hire purchase, are entered ired into by ignorant persons whose
only choice is either not to enter into the transaction at all or to enter into it on the terms of a standard agreement, drafted
by the hire purchase company, and containing numerous clauses printed in miniscule characters which the hirers do not in fact read
and, if they did, would be incapable of understanding."
In light of the foregoing I am satisfied that the defendants have an arguable defence to the plff company's claim on the mthe merits
and accordingly I shall exercise my discretion in allowing their application.
The default judgmetered and sealed on the 7th of March 1996 is accordingly set aside and the defendants are oare ordered to file and
serve a properly particularised Statement of Defence on the plaintiff company within 21 days of the date hereof. Costs to be in the cause.
D.V. Fatiaki
JUDGE
At Suva,
29th July, 1/span>
Hbc0052j.96s
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