Contract -
Sale of goods – Latent defects -
Replacement of vehicle – Whether
or not the Court of Appeal
misinterpreted what constitutes
a latent manufacturer’s defect -
Whether or not there was breach
of the Sale of Goods Act -
section 13 (1) of the Sales of
Goods Act
HEADNOTES
In October
2004 Hotel Georgia Limited, a
limited liability company
engaged in hotel and hospitality
industry in Kumasi and Accra,
the Plaintiff herein,
(hereinafter plaintiff company),
purchased for the use of its
managing director, a brand new
Mercedes Benz E240 Avant-garde
at a cost of €58,500 from the
Silver Star Limited, the sole
dealer of German-made Mercedes
Benz vehicles in Ghana, the
Defendant herein (hereinafter
defendant company) In September
2006 the vehicle broke down at
Ejisu en route to Kumasi after
minor repairs at the workshop of
the defendant company at Tema.
The plaintiff company had the
vehicle
towed to Kumasi and inspected by
a private mechanic who declared
the car engine defective. After
that the plaintiff company
brought a claim against the
defendant company alleging that
the vehicle suffered from latent
defects.
HELD
A latent
manufacturer’s defect is
generally defined as a fault in
a product that cannot be
discovered by reasonable
inspection upon its delivery to
the buyer. A complaint should
be made within a reasonable time
and after reasonable inspection
for defects. If the car is new,
it is reasonable to expect that
it be free from defects. Since
the plaintiff company failed to
follow the guidelines for
inspection of the Mercedes Benz
after a certain mileage and did
not have a properly licensed or
experienced electrician conduct
the inspection after the vehicle
broke down en route to Kumasi,
there is evidence suggesting
there are other potential causes
to the faults in the vehicle
rather than latent defects. The
existence of noise in the engine
after 2 years of use is not by
itself proof of latent defect.
The burden is on the plaintiff
company to prove the existence
of the latent defect at the time
of purchase which it failed.
Since Plaintiff Company had the
car in their possession for
almost two years without any
complaints, and did not bring
the car in for proper servicing,
without proof of any latent
defects, it cannot legally
reject the vehicle, and mount an
action. The plaintiff company
remedy was to request the
defendant company to repair the
vehicle under the existing
warranty. The appeal accordingly
fails on all grounds. From the
foregoing we dismiss the appeal
and affirm the decision of the
Court of Appeal.
STATUTES
REFERRED TO IN JUDGMENT
Sale of Goods
Act 1963 Act 137
CASES
REFERRED TO IN JUDGMENT
Continental
Plastics Engineering Co. Ltd vs.
I.M.C. Industries Technik
GMBH (2009) SCGLR 298
Rogers and
Another vs. Parish (Scarborough)
Ltd and Others 1987 2 All ER 232
US vs. Lembke
Const Co. Inc, CA, Ariz. 786 F
2d 1386-87
Parente
(Robert A) vs. Bayville Marine
Inc. and General Insurance of
America(1975) 1 Lloyds Reports
333
Bichl vrs
Poinier 71 Wash 2d 492, 429 p2d
228, 231
Lempke v.
Dagenais, 130 N.H. 782,
Terlinde and
Redarowicz 92III 2d at 185, 441
N.E.2d at 331
Ghana Rubber
Products Ltd vs. Criterion Co.
(1984-86) 2GLR 56
BOOKS
REFERRED TO IN JUDGMENT
Black’s Law
Dictionary, 6th Edition
Stroud’s
Judicial Dictionary of Words and
Phrases Sixth Edition Vol. 1
Benjamin’s
Sale of Goods 5th
Edition
DELIVERING
THE LEADING JUDGMENT
SOPHIA
ADINYIRA (MRS.) JSC:
COUNSEL
ATTA AKYEA
(WITH HIM MRS. PHILIPPINA AKYEA)
FOR THE PLAINTIFF/
RESPONDENT/APPELLANT.
ACE ANKOMAH
FOR THE
DEFENDANT/APPELLANT/RESPONDENT
____________________________________________________________________________________
J U D G M E N
T
____________________________________________________________________________________
SOPHIA
ADINYIRA (MRS.) JSC:
In October
2004 Hotel Georgia Limited, a
limited liability company
engaged in hotel and hospitality
industry in Kumasi and Accra,
the
Plaintiff/Respondent/Appellant
herein, (hereinafter plaintiff
company), purchased for the use
of its managing director, a
brand new Mercedes Benz E240
Avant-garde at a cost of €58,500
from the Silver Star Limited,
the sole dealer of German-made
Mercedes Benz vehicles in Ghana,
the
Defendant/Appellant/Respondent
herein (hereinafter defendant
company)
In September
2006 the vehicle broke down at
Ejisu en route to Kumasi after
minor repairs at the workshop of
the defendant company at Tema.
The plaintiff company had the
vehicle towed to Kumasi and
inspected by a private mechanic
who declared the car engine
defective. After that the
plaintiff company brought a
claim against the defendant
company alleging that the
vehicle suffered from latent
defects.
The plaintiff
company claimed by its writ of
summons filed on 15 February
2007:
1.
The
replacement of Mercedes Benz
E240 Avant-garde vehicle…with
a brand new one, by reason of
the latent defect in the said
vehicle which the plaintiff
bought from the defendant in
October 2004.
2.
In the alternative, the payment
of the full replacement value of
a brand new Mercedes Benz
saloonE240 Avant-garde to the
plaintiff by the defendant by
reason of the wrongful sale of
the wrongful sale of the
defective brand new vehicle to
it.
3.
Loss of use.
4.
Costs including solicitors
professional fees.
On 28 July
the High Court delivered
judgment in favour of the
plaintiff company for recovery
of €58,500, interest at the
prevailing bank rate from
October 2006 to the date of
payment, $10,000 for loss of use
and costs of GH2, 000. This
decision was reversed on appeal
on 2 December 2010.
The
plaintiff company appeals on the
grounds that:
a)
On the agreed evidence by the
appellant as expressed in
Exhibit CE1
the Court
of Appeal misinterpreted what
constitutes a latent
manufacturer’s defect as it
applied to the brand new
Mercedes Benz E240NAvante-garde
the Appellant bought from the
respondent. The
misinterpretation and
misapplication of what
constitutes a latent defect has
occasioned the Appellant a
substantial miscarriage of
justice.
b)
The Court erred when it relied
on suspicion and conjecture to
find that the fault on the car
was caused by the Appellant’s
agent.
c)
The judgment is against the
weight of evidence.
What is a
latent manufacturer’s defect?
According to
Black’s Law Dictionary 8th
Edition relied on by the trial
judge, a hidden or latent or
inherent defect is defined as ‘a
product imperfection that is not
discoverable by reasonable
inspection” A manufacturing
defect is defined as an
“imperfection in a product that
departs from its intended
design.” According to the High
Court judgment, the imperfection
must thus exist at the delivery
of the product. The Court took
into account the implied fitness
for which the vehicle was
intended as well. Thus, a new
vehicle should be free from
defects at the time it is
delivered from seller to buyer.
The Court of
Appeal considered what
Black’s
Law Dictionary, 6th Edition
defines a latent defect as a
“hidden or concealed defect, one
which could not be discovered by
reasonable or customary
observation or inspection; one
not apparent on the face of the
goods, product or document…
Defect which the owner has no
knowledge or which the owner has
no knowledge of
as held in
Bichl VRS
Poinier;”
The Appeals Court referred to
the case of
US vs.
Lembke Const Co. Inc, CA;
where the term was described as
“one which cannot be discovered
by observation or inspection
made with ordinary care.
The Appeals
Court also referred to Shroud’s
Judicial Dictionary
which described the term latent
defect as “ a latent defect is
not simply any defect not
discoverable through ordinary
use and maintenance, but a
defect or a flaw, generally in
the metal or material itself,
which could not be discovered by
any known and customary test.’
The Appeals Court referred to
Parente (Robert A) vs. Bayville
Marine Inc. and General
Insurance of America
Parente defines a latent defect
as “a defect generally in the
metal or material itself which
could not be discovered by any
known and customary test.”
The Court of
Appeal then stated that: “From
the above it is clear that a
latent defect is a term of art
that is generally used to
describe a thing or situation of
which one has no knowledge
whatsoever; it is a matter of
total absence or lack of
knowledge or justifiably be
expected that a person would
talk or complain about that
state of affairs that he had no
knowledge of. A person would
only become aware of that state
of fact when it becomes patent,
i.e. when he gains knowledge of
it.”
In the view
of this Court, by the mere
definition of latent defect, it
means the defect is a
manufacturing defect, which must
exist at the time of production
and delivery of the product. By
being a hidden or latent defect
both the seller and most
importantly the buyer could not
detect or be aware of the defect
upon reasonable examination at
the time of conveyance.
Reasonable inspection of the
vehicle and the acceptable time
period for claiming that a
latent defect exists are also
factors to be weighed in
determining the outcome of this
case.
In the case
Lempke v.
Dagenais,
the court found that latent
defects “become manifest after
the subsequent owner’s purchase
and [were] not discoverable had
a reasonable inspection of the
structure had been made prior to
purchase. Lempke states that
the “implied warranty of . . .
quality for latent defects is
limited to a reasonable period
of time.” See also Richards,
Terlinde;
and Redarowicz
some US cases on this point.
Terlinde states that the length
of time for latent defects
should be controlled by [a]
standard of reasonableness and
not an arbitrary time limit
created by the Court.
The
definition of latent or hidden
manufacturer’s relied upon by
the plaintiff company is “a
product imperfection that is not
discoverable by reasonable
inspection,” or “an imperfection
in a product that departs from
its intended design.” The
plaintiff company relies on the
definition of latent defect
from
Stroud’s Judicial Dictionary of
Words and Phrases Sixth Edition
Vol. 1: “a latent defect is
not simply a defect not
discoverable through ordinary
use and maintenance, but a
defect or a flaw generally in
the metal or material itself,
which could not be discovered by
any known and customary test.”
Were there
latent defects in the vehicle?
The High
Court and Court of Appeals
differ on whether the existence
of latent defects were
established. The learned trial
judge found that the car had a
latent manufacturing defect
which the Court of Appeal
rejected. What does a second
appellate court do when
confronted with two conflicting
findings of a fact; one from a
trial court and the other from a
first appellate court? Does it
automatically accept the
appellate court’s finding, it
being the higher of the two
courts?
This Court
per Georgina Wood, CJ said at
pages 307 to 308 of Continental
Plastics [2009] SCGLR 298 that:
“An appeal
being by way of rehearing, the
second appellate court is bound
to choose the finding which is
consistent with the evidence on
the record. In effect the court
may affirm either of the two
findings or make an altogether
different finding based on the
record.”
It is
therefore pertinent to set out
the evidence produced at the
trial.
Plaintiff’s
Case
In paragraph
11 of the statement of claim the
plaintiff company gave the
particulars of the latent
defects as follows:
“Paragraph
11. The performance of the
vehicle, later on, revealed its
latent defects.
Particulars
i.
The vehicle in being put to its
normal use could freeze and
become immobilized.
ii.
When the vehicle is in motion,
it would keep a very slow pace
although the accelerator pedal
had been pressed to secure fast
movement.
iii.
When (ii) above happens, the
vehicle would then
over-accelerate putting the
driver and the passengers in
danger.
iv.
The entire engine is defective
by reason of the malfunctioning
of the oil pump.
v.
The air mass sensor and the
pedal sensor are both defective.
vi.
There is a massive noise in the
vehicle when you start it up.”
Mrs. Georgina
Konadu Kusi, the owner and the
Managing Director (MD) of the
plaintiff company in her
evidence said on the day she
paid for the vehicle she could
not take delivery as the lights
were not working. She eventually
took delivery of the car and in
less than a year she saw ‘visit
the workshop’ sign on the
dashboard and she took it to the
workshop for repairs. She said
the defects in the vehicle
included the sudden surge of
speed in the vehicle on pressing
the accelerator and noise in the
engine. She said she always sent
the vehicle for repairs when she
sees the fault. She said she was
not comfortable driving the car
as it was not as smooth as her
other 7 Mercedes Benz cars.
Paul
Tsimekpe, PW1 an auto mechanic
was called in by the MD to
repair the broken down vehicle.
He did not work on it and came
back with a diagnostic machine.
He said he could not spark the
car so he had to use his battery
to jumpstart the car. He heard
some noise in the engine as if
there was no oil in the car. He
checked the dashboard, but it
indicated the oil was okay, but
when he checked the oil tank he
saw that the oil has congealed.
He concluded that the oil pump
was defective and recommended
that the vehicle be sent to the
dealer for repairs and to change
the engine. He said when he
plugged in the diagnostic
machine, the faults that showed
were Air Flow Censor, Pedal
Sensor and Out writer. He was
able to correct some of the
faults leaving the Airflow
Censor and Pedal Censor.
Benito Owusu
Bio, PW2 a director of the
plaintiff company and a nephew
of the MD, did not mention any
defect in the Mercedes Benz car
in his evidence in chief. His
centered mainly on the breakdown
of the vehicle at Ejisu after
picking it up from the workshop
of the defendant company and the
cost of hiring a vehicle for the
MD’s use after the breakdown of
the vehicle. It was in
cross-examination that he said
they sent the vehicle to the
workshop after seeing the ‘visit
the workshop’ sign on the dash
board.
Defendant’s
Case
The defendant
company gave evidence per Mr.
Hussein Mohammed Noubani, the
after-sales General Manager. He
said the Plaintiff Company did
not keep to any maintenance
schedule and from their records
the vehicle came to the workshop
on only 3 occasions: March 2006,
June 2006 and September 2006.
The first visit was to change
the trafficator bulb due to an
accident, replacement of left
mirror light and normal
servicing and cleaning of engine
compartment area. The other 2
occasions were also for repairs.
He indicated during cross-exam
that they do not have any record
of the faults or defects that
the plaintiff mentioned in its
pleadings and evidence.
The trial
court ordered an inspection of
the vehicle to be carried out by
Mr. Hussein Mohammed Noubani in
the presence of the Registrar of
the Court, PW1, a son of the MD
and others. His report was
tendered in evidence as Exhibit
CE1. The faults that were
detected were: Engine
Noise(Tappet Noise),and with
the aid of a diagnostic machine
the faults detected were Idle
speed , Engine Control Unit,
Anti Lock Brake System, Upper
Control Panel. The diagnostic
machine indicated the faults
were due to low voltage. He said
the plaintiff company allowed
the battery to discharge,
resulting in the faults the
machine diagnosed. He said from
his experience the noise in the
engine was tappets noise, and “a
tappets noise is some element to
regulate the clearance of the
valves.’’ The other fault
detected was the Audio System
which was due to an open
circuit. With regard to the air
mass sensor, accelerator pedal
sensor, and the oil pump which
the plaintiff company claimed
were defective, Mr.Noubani said
the diagnostic machine did not
detected any fault in them. He
said the oil pump was working
otherwise he couldn’t have
sparked the car. He also said
this type of vehicle does not
splash oil as there a protective
blade under the cylinder head
cover. So the fact that the oil
does not splash does not mean
the oil has congealed. He also
said PW1 wrongly sparked the
vehicle which could cause damage
to the control unit of the two
batteries in the car.
The witness
concluded that all the faults
were minor and could be easily
repaired, and there was no need
to change the engine. He added
that at the time the vehicle
broke down it was still covered
by a warranty and all the
repairs could have been easily
done including replacing the
engine if it had become
necessary.
In assessing
the above evidence the trial
court and the Court of Appeal
differed on whether the
existence of latent defects have
been established. The trial
Court in assessing the evidence
before it held that two defects
i.e. noise in the engine, and
idle speed had been proven and
concluded that coupled with the
other defects; namely, Audio
System, Upper Control Panel,
Anti Lock Brake System, and
Engine Control Unit the defects
in the car were quite
substantial. The High Court
accordingly held that the
vehicle was not fit for the
purpose for which it was bought
and it suffered from latent
defects. See pg. 233-34.
The Court
of Appeals on its part found the
plaintiff company failed to
prove latent defects in the
vehicle. The Lordships were of
the view that the noise in the
engine did not exist anytime in
the life of the car prior to 26
September 2006. Customarily, the
vehicle should have been sent
for servicing after attaining
5,000km. Rather, the plaintiff
company did not bring it in for
servicing until it has done
9,486 km and almost two years
after having retained delivery
of the car. This may be viewed
as negligence on the part of the
plaintiff company, as the
Appeals Court found, since the
service was not carried out in
due time, and that the
reappearing “visit workshop
sign” in the vehicle does not
necessarily prove that there was
a latent defect.
The plaintiff
company argues that the
abnormality, which was hidden
initially, did not manifest
until after delivery and
therefore was latent at the time
the buyer retained possession.
This is a valid point as a
latent defect would only
manifest itself after the buyer
of the product has tested it or
put it to its normal use.
Accordingly the burden of proof
is on the plaintiff company to
prove the existence of latent
defects in the car.
At the end
of the trial the only evidence
or fault that was established
was the noise in the engine.
Clearly all the other defects
including the idling speed
recorded in Exhibit CE1 were
diagnosed by the diagnostic
machine as due to low voltage.
These defects by no stretch of
imagination are latent
manufacturer defects. The blame
for the low voltage falls
squarely on the plaintiff
company under whose custody the
vehicle’s battery was allowed to
completely discharge to cause
these faults. The High Court
accordingly erred in coming to
the conclusion that the noise in
the engine as well as the other
defects in the vehicle showed
that the vehicle suffered latent
manufacturer’s defects.
In our view,
the mere existence of noise in
the engine, by itself is not
proof of a latent defect
existing at the time of delivery
and which could not have been
discovered upon reasonable
examination of the vehicle. PW1
and PW2 described the noise as
that of a corn mill and
definitely anyone would have
noticed it if it had existed at
the time of delivery or the
occasions that the vehicle
visited the workshop. At the
time the MD went to take
delivery of the vehicle the only
fault she detected were faulty
lights and she refused to take
delivery. When she later took
delivery of the car definitely
she would have heard the noise
in the engine if it had existed
then.
PWI diagnosed
the noise was due to a faulty
oil pump and this cannot be
correct as this did not appear
on the diagnostic machine.
Significantly PW1 in further
examination by counsel for
plaintiff company after the
court inspection of the vehicle
said there was no indication of
an engine fault on the
diagnostic machine. He said the
engine indicated ‘correct’.
On the other hand Mr. Noubani’s
diagnosis that the noise in the
car was due to tappets noise is
more likely. This according to
him could easily be corrected.
The Mercedes
Benz car was used for almost two
years after its purchase and we
note that the plaintiff company
was unable to prove that the
faults complained of existed,
and were brought to the notice
of the defendant company before
the breakdown at Ejisu. The
driver who used to send the
vehicle to the workshop and thus
we consider as a material
witness was not called to give
evidence. Pw2 who accompanied
the driver to service the car on
the last occasion said they
visited the workshop because
‘visit the workshop’ sign was
showing on the dashboard. He
never mentioned any of the
defects particularized in
Paragraph 11 of the statement of
claim.
The plaintiff
company could not produce any
evidence to show the vehicle had
been at the workshop more than
three occasions. The defendant
company claims the only job done
was based on those complaints
received upon which a job card
was raised. The plaintiff
company could not produce any
evidence to counter that.
Incidentally
the only job cards produced at
the trial were for those 3
occasions only. We note that the
repairs done on the car was
mostly on lights; i.e.
trafficator light, driving
mirror light and battery light
sign that was flashing on the
dashboard and fixing of screw
and washer. The receipts
tendered were for jobs done on
only those days that the
defendant company claimed the
vehicle was brought to their
workshop. The receipts the
plaintiff company produced was
for the last visit.
The overall
evidence does not provide
significant proof that would
allow the burden to shift to the
defendant company. The auto
electrician PW1 was not an
expert and did not have the
requisite experience to examine
and repair the vehicle. Even the
trial judge disregarded his
evidence. Consequently the
conclusion by the trial court
that the car had hidden or
latent defect was not borne out
by the evidence. His conclusion
that the vehicle had hidden
defects flies in the face of the
evidence that the diagnostic
machine indicated the engine was
correct.
Accordingly
we hold that the plaintiff
company failed to prove the
existence of latent defects in
the vehicle. The Court of Appeal
rightly set aside the High
Court’s findings in favour of
the plaintiff company on this
issue.
Is there a
breach of the Sale of Goods Act?
The High
Court further held that there
was a breach of the Sale of
Goods Act as the Mercedes Benz
car was not fit for the purpose
for which it was bought.
It is
provided by section 13 (1) of
the Sale of Goods Act, 1962 (Act
137), that:
“13. Quality
and fitness of the goods
(1)Subject
to this Act and to any other
enactment, there is no implied
warranty or condition as to the
quality or fitness for a
particular purpose of goods
supplied under a contract of
sale except
(a) that
there is an implied condition
that the goods are free from
defects which are not declared
or known to the buyer before or
at the time when the contract is
made, but that condition is not
an implied condition
(i) Where the
buyer has examined the goods in
respect of defects, which should
have been revealed by the
examination;
(ii) In the
cases of a sale by sample, in
respect of defects which could
have been discovered by a
reasonable examination of the
sample;
(iii)where
the goods are not sold by the
seller in the ordinary course of
the seller’s business in respect
of which the seller was not, and
could not reasonably have been
aware;
(b)that where
the goods are of a description
which are supplied by the seller
in the course of the seller’s
business and the buyer expressly
or by implication makes known
the purpose for which the goods
are required, there is an
implied condition that the goods
are reasonably fit for that
purpose.”
From the
above provisions, a buyer can
avail himself of the implied
condition that goods purchased
are free from defects which are
not declared or known to the
buyer before or at the time when
the contract is made. However
there is no such implied
condition where the buyer has
examined the goods in respect of
defects which should have been
revealed by the examination.
Accordingly section 13(1) can
only avail a buyer where there
are latent defects in the goods
which could not be revealed by
examination at the time of the
contract of sale.
Under the
Sales of Goods Act, the buyer
bears the burden to prove the
existence of latent defects in
goods bought at the time the
contract was concluded.
In order for
there to be a breach of Section
13 (1) of the Sale of Goods Act,
a purchaser must show that the
seller of the vehicle knew or
was in the first place aware of
defects in the vehicle they sold
to him at the time of sale or
delivery, and also that the
seller deliberately or
negligently failed to disclose
his knowledge of the defects to
the purchaser.
A case that
addresses this issue is
Continental Plastics Engineering
Co. Ltd vs. I.M.C. Industries
Technik GMBH (2009) SCGLR
298.The facts were that in
July 1998, the plaintiff company
sold a plastic machine HBD to
the defendant company “as is, as
seen/inspected, without
warranty, delivered to the
factory without inspection.” The
plaintiff company claimed the
defendant company inspected the
equipment before the contract of
sale was concluded and certified
it to be in good and perfect
condition. The defendant denied
this claim and asserted that it
could only rely on the plaintiff
company’s representation at the
time of the purchase, as the
machine has not be installed,
and that it was only after the
installation and a test run that
it discovered a number of latent
defects. The defendant company
failed to make a report of the
alleged defects until payment
was due. The plaintiff company
therefore sued for the cost of
equipment with interest. In its
defence the defendant company
claimed the plaintiff company
was in breach of section 13 (1)
of the Sales of Goods Act. The
defendant company’s position was
rejected by both the high Court
and the Court of Appeal.
The Supreme
Court affirming the decision of
both courts held
section
13 (1) of the Sales of Goods Act
can only avail buyer who has
succeeded in establishing the
existence of defects in goods
bought at the time the contract
was concluded. The Supreme
Court held on the evidence that
there was no proper proof that
the defects complained of
existed or were real and as such
the plaintiff company cannot be
held to have breached the
implied condition that the
equipment was free from defects.
The plaintiff
company in his statement of case
relied heavily on the English
case of
Rogers and Another vs. Parish
(Scarborough) Ltd and Others.
In the Rogers case, the
plaintiffs bought a brand new
Range Rover for abut £16,000 in
November 1981. After a few weeks
use, the Range Rover proved
unsatisfactory and was replaced
with another. After six months
use and having driven it for
5.500 miles the plaintiff
rejected it. The court of Appeal
held the car was not fit for the
purpose that it was bought and
found for the plaintiffs.
The plaintiff
company in this case had no
cause to complain about any
latent defect until September
2006. Even then instead of
taking advantage of the warranty
period as was done in the Rogers
case to have the vehicle
repaired or have the engine
replaced the plaintiff company
went to Court. We find no
evidence of a manufacturer’s
defect at the time of the
purchase Accordingly the Court
of Appeal correctly held that
Section 13 (1) of the Sales of
Goods Act cannot avail the
plaintiff company.
The trial
Court also found that the
replacement of new parts on the
vehicle was an admission that
the original parts were either
defective or did not measure up
to the high standards expected
in the vehicle. The Court of
Appeals found that the issue of
global recall and replacement of
parts and not the vehicle itself
was not indicative of an
admission of latent defects.
The replacement was carried out
with appellant’s knowledge and
consent without complaints. We
find no reason to depart from
this conclusion.
The other
ground of appeal is that the
Court of Appeal erred when it
relied on suspicion and
conjecture to find that the
fault on the car was caused by
the plaintiff company’s agent.
The Court of
Appeal reiterated that the
plaintiff company’s witness,
Paul Tsimekpe (PW1), was not an
auto-mechanic with sufficient
knowledge about the type of
luxury vehicle he was working
on. Mr. Tsimekpe’s work on the
vehicle could have contributed
to some of the faults found and
registered at the time of
inspection. Due to the
negligent inspection undertaken
by an individual who did not
have sufficient knowledge to
properly repair the vehicle,
there is less proof that the
problems experienced by the
vehicle were in fact latent
defects. The auto electrician,
Mr. Tsimekpe, was not an expert
and did not have the requisite
experience to examine the
vehicle. Because of this, the
trial Court ordered an
additional examination, upon
which the CE1 is based, but this
was conducted more than three
years after the vehicle was
delivered, and nine months after
the vehicle had remained parked
with no record of regular
starting. The period of time
between the purchase of the car
and the complaint, the lack of
proper servicing suggested by
the manufacturer and the
incompetency of the electrician
who initially examined the
vehicle supports the conclusion
reached by the Appeals Court. In
our view the court-ordered
examination of the vehicle does
provide some evidence, rather
than simply suspicion and
conjecture as the plaintiff
company contends the Appeals
Court based its judgment on.
The
plaintiff company also failed to
prove that the defendant company
had sometimes failed to open job
cards when it sent the vehicle
to the workshop. The driver of
the plaintiff company who took
the car for servicing was a
vital witness on this issue, but
was never called by the
plaintiff company. On the last
visit before the breakdown of
the vehicle, PW2 who accompanied
the driver in his evidence only
said the vehicle was sent to the
workshop because the visit the
workshop sign appeared on the
dashboard. Accordingly we hold
that the plaintiff company did
not complain to the defendant
company about the defects
enumerated in their statement of
claim. In regards to the claim
that the Court was surmising and
guessing that the life span of
the brand new Mercedes Benz
could be below two years because
of failure to service every
5000kms, may be justified. We
think there is some fault on the
part of the plaintiff company
for not adhering to the
servicing guidelines for such a
luxury vehicle. The fact that
the plaintiff company failed to
inspect the vehicle at the times
suggested by the manufacturer
does not necessarily prove that
the defects were not
discoverable by inspection. It
is possible that upon proper
inspection on behalf of the
plaintiff company any defect on
the part of the manufacturer
could have been discovered and
remedied.
The conduct
of the plaintiff company in
deciding to tow the vehicle to
Ejisu and call an inexperienced
auto mechanic to repair the car
is rather surprising. It is not
far-fetched to say that the
reasonable thing for the
plaintiff company to do in the
circumstances was to call the
defendant company to come and
tow the vehicle back to their
Tema workshop to change the
engine if that was the solutions
to end the complaints the
plaintiff company alleged the
car suffered then; since the
warranty on the car was still
valid. The significant lapse of
time between delivery of the
Mercedes Benz car and the
complaint of latent defects is
relevant to determine whether
the plaintiff company had a
right to reject the vehicle
after the breakdown.
Did the
Appellant reject the vehicle?
Benjamin’s
Sale of Goods 5th
Edition
states that
intimation for a rejection of
goods need not necessarily be
express, but must be clear.
Under Section 50 of the Sales of
Goods Act, the buyer is not
necessarily bound to return the
car to the seller. When the
price of the purchased goods has
been paid, the buyer may retain
possession of the goods until
the seller repays or tenders the
amount the seller had received
from the buyer. While the High
Court found that rejection had
been made within a reasonable
amount of time, the Court of
Appeals disagrees. The Court of
Appeals found that the plaintiff
company had not rejected the
vehicle. In
Ghana
Rubber Products Ltd vs.
Criterion Co. (1984-86) 2GLR 56
Apaloo C.J., the Court found
that there could be no right of
rejection after the goods had
been delivered and the purchase
price paid. Rejection, in its
ordinary meaning, is to refuse
to accept goods or unacceptable
goods. In this case, the Court
found it was less than accurate
to say that a rejection of goods
has occurred when a company took
delivery of merchandise it
intended to buy into a warehouse
and paid the contractual price.
In relation
to the present case, under
normal and ordinary
circumstances, it would be
difficult to find that the
vehicle had been rejected after
delivery. The Court of Appeals
found that the trial judge had
applied the wrong understanding
of the legal requirement for
what amounted to a rejection of
goods.
The fact
that there were no complaints
about latent defects until a
significant time after delivery
is evidence that the goods were
not rejected. The plaintiff
company used and enjoyed the car
for almost two years after its
purchase. From the evidence,
the conclusion by the High Court
was unjustified.
Conclusion:
A latent
manufacturer’s defect is
generally defined as a fault in
a product that cannot be
discovered by reasonable
inspection upon its delivery to
the buyer. A complaint should
be made within a reasonable time
and after reasonable inspection
for defects. If the car is new,
it is reasonable to expect that
it be free from defects. Since
the plaintiff company failed to
follow the guidelines for
inspection of the Mercedes Benz
after a certain mileage and did
not have a properly licensed or
experienced electrician conduct
the inspection after the vehicle
broke down en route to Kumasi,
there is evidence suggesting
there are other potential causes
to the faults in the vehicle
rather than latent defects. The
existence of noise in the engine
after 2 years of use is not by
itself proof of latent defect.
The burden is on the plaintiff
company to prove the existence
of the latent defect at the time
of purchase which it failed.
Since
Plaintiff Company had the car in
their possession for almost two
years without any complaints,
and did not bring the car in for
proper servicing, without proof
of any latent defects, it cannot
legally reject the vehicle, and
mount an action. The plaintiff
company remedy was to request
the defendant company to repair
the vehicle under the existing
warranty. The appeal accordingly
fails on all grounds.
From the
foregoing we dismiss the appeal
and affirm the decision of the
Court of Appeal.
(SGD) S. O. A. ADINYIRA
{MRS.}
JUSTICE OF THE SUPREME COURT
(SGD) J. ANSAH
JUSTICE OF THE SUPREME COURT
(SGD) J. V. M. DOTSE
JUSTICE OF THE SUPREME COURT
(SGD) N. S.
GBADEGBE
JUSTICE OF THE SUPREME COURT
(SGD) V. AKOTO-BAMFO {MRS.}
JUSTICE OF THE SUPREME COURT
COUNSEL;
ATTA AKYEA
(WITH HIM MRS. PHILIPPINA AKYEA)
FOR THE PLAINTIFF/
RESPONDENT/APPELLANT.
ACE ANKOMAH
FOR THE
DEFENDANT/APPELLANT/RESPONDENT.
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