CIV/A/4/81IN THE HIGH COURT OF LESOTHOIn the Appeal of :HLOMELANG LEROTHOLI Appellantv 'MATHABO MANARE RespondentJUDGMENTDelivered by the Hon. Chief Justice, Mr. Justice T.S. Cotran on the 24th day of September1961
This is an appeal from the Judgment of the Senior Resident Magistrate, Maseru (B.K. Molai, Esq) in which he awarded the plaintiff, now the respondent, the sum of M1110 being the unpaid balance of instalments due on a Datsun vehicle sold to the defendant, now the appellant, in March 1978 together with interest and costs. In this Judgment I shall refer to the parties as the plaintiff and defendant.The plaintiff wanted to sell her husband's car and employed for this purpose Mr.attorney Masoabi to draft a document. For reasons which appear later in this Judgment this turned out to be a most unfortunate document for her.The following is the full text of the agreement:-"MEMORANDUM OF AGREEMENT OF SALE MEMORANDUM OF AGREEMENT entered into by and between:MATHABO MANARE(married woman)on behalf of her husband TEBOHO MANARE (hereinafter referred to as the Seller)andHLOMELANG LEROTHOLI(hereinafter referred to as the Purchaser)NOW THEREFORE the parties have agreed as follows :(1)/
-2-(1)The Seller has agreed to sell and the Purchaser has agreed to buy the vehicle Datsun 1804 1975 Model.(2)The Purchase price for the said vehicle is Two Thousand and Two Hundred Rand(R2,200-00).(3)The amount of One Thousand Two Rand (R1.000) shall be payable immediately upon the signature of this agreement.(4)The balance of One Thousand Two Hundred(R1,200-00) shall be payable within the next fourteen (14) months from the signature of the Agreement and shall be payable as follows:(a) The Purchaser shall with effect from April 1978 and at the end of each sub- sequent month pay the amount of One Hundred Rand (R100)(b) All the monthly instalments shall be paid promptly by the Purchaser at the Attorneys Offices of CM. MASOABI & COMPANY 2nd Floor, Motikoe House, Leabua Highway, MASERU and such funds or instalments shall be deposited in the Trust Account of the Attorneys for transmission to the Seller.(5)The Purchaser shall not be deemed to be in default until after the lapse of thirty(30) clear days and until the Attorneys of the Seller have given the Purchaser fifteen(l5) clear days within which to pay the arrear instalments.THUS DONE and SIGNED at MASERU on this 8th day of March 1978.M. Manare Hlomelang LerotholiSELLER PURCHASERAS WITNESSES AS WITNESSES 1 .. 1 2 2
The agreement contains an artithmetical error. If the purchase price was M2200 and the balance still unpaid was M1200 to be settled at the rate of M100 monthly the balance would have been cleared in 12 months not 14 months which is the period that appears in Clause 4 of the agreement. The declaration, drawn by Mr. Masoabi on behalf of the plaintiff, also contains an error. She wanted the balance unpaid. Mr. Masoabi knew what that balance was but he claimed M1600 and I am at a loss to understand as to how he arrived at this/figure.
-3-figure. I shall not venture to guess whether these were typographical errors or were symptomatic of the slovenly waythe affairs of this plaintiff have been handled.The Datsun was duly delivered to the defendant. The plaintiff was soon to depart from the country and entrusted Mr. Masoabi with collecting the instalments. The first instalment as per Clause 4(a) was due in April. It was not, however, paid. It is common cause that in May the defendant paid M60 and M30 on different dates at Mr. Masoabi's office. In July 1978 the vehicle was stolen. No evidence was forth- coming on the circumstances of this theft and since no one in evidence suggested to the contrary I can assume with confidence that the defendant was not negligently instrumental in its loss.The agreement is silent as to who is the "owner" pending the payment of the instalments, and is also silent as to who was to bear the incidence of risk in the event of damage or loss to the vehicle. Now if we look at paragraphs 3, 5 and 6 of the plea, we see that defendant challenged plaintiff's contention that ownership of the vehicle had passed to him. He alleged that the plaintiff "and or" her attorney(a) failed to pass ownership of the vehicle to enable him to register it in his own name,(b) that there was no proper delivery,(c) that the risk had not passed,(d) that he was not liable to pay the arrears of the instalments.To this the plaintiff, through her attorney, replied :(a) denying that she refused to pass ownership,(b) alleging that defendant was duly paying his monthly instalments, (factually incorrectfor he was in default in April, May and June),(c) that "after delivery", the risk of loss or profit "in fact and in law" was to be borne by the defendant,(d) that her attorney was not "in law obliged" to pass ownership since the vehicle did not belong to him,(e) that alternatively, if the court should hold that ownership had not passed, "nevertheless the risk of loss of the car passed to the defendant as purchaser at the time of delivery".The pleadings are not particularly elegant. Learned attorney for the plaintiff submissions on the law are not entirely correct. In our law ownership is never passed by/mere
-4-mere delivery "unless in addition to giving delivery the seller has the intention of transferring the property and the purchaser has the intention of becoming the owner" (per Juta AJAWeeks v. Amalgamated Agencies Ltd 1920 (A.D.) 218 at 230). It was clear from the defendant's pleadings that he intended to prove that this contract of sale was in fact conditional on the happening of an event even though the contract did not say so expressly. Two matters were in issue: firstly whether such evidence as the defendant sought to establish was admissible and secondly whether, if it was, the defendant was able to discharge the onus placed upon him which onus text book writers and judicial precedents say is a heavy one indeed.Some passages of the learned magistrate's Judgment were rather curious. He certainly appreciated the law about delivery and intent to pass ownership and the law about the incidence of risk, but in sum total, he seems to have come to the conclusion mero moto so to speak, that the text of the agreement (supra) must prevail over the intention of the parties thereto, and on his reading of the text, (there being no suspensive or resolutive conditions) the sale of the vehicle was unconditional and the risk therefore passed to the purchaser even though the parol evidence adduced by both parties to the agreement was definitely to the contrary.I say mero-moto because no argument whatsoever was advanced by either of the legal representatives about the law relating to the circumstances under which parol evidence may be admissible to vary or alter an agreement that has been reduced into writing by the will of the parties. The law on this subject is extremely complex but there are many exceptions to the rule which the magistrate invoked and applied. There is support for the proposition that a sale, absolute on its face, may be proved by extrinsic evidence to be something else (Phipson on Evidence 12th Ed. para 1904) and extrinsic evidence is admissible to prove any matter which by substantive law effects the validity (fraud or mistake come to mind) of a document or entitles a party to any relief in respect thereof notwithstanding that such evidence tends to vary, add to and in some cases contradict the writing, e.g. defective or conditional execution (Phipson, supra, para 1909 and see Hoffmann South African Law of Evidence 2nd Ed. 212 at pp 215-216 (b) and (c), Scoble The Law of Evidence in South Africa 3rd Ed. p.430 et seq and MacKeurtan Sale of Goods in South Africa 4th Ed. p. 148 top/of page
-5-of page at (c)). In Cambell Discount Co. v. Gall 196l(2) All E.R. 104 at p. 107 B-E (partly overruled on other points not relevant to the case before me in Branwhite v. Worcester Works Finance, Ltd 1968(3) All E.R. 104, and departed from in United Dominions Trust v. Western 1975(3) All E.R. 1017) Pearce LJ, stated the rule thus:"In Bank of Australasia v. Palmer(1897 A.C. 540)Lord Morris said: parol testimony cannot be receivedto contradict, vary, add to or substract from the terms of a written contract, or the terms in which the parties have deliberately agreed to record any part of their contract.'Parol evidence can be used, however, to show whether a written contract is void for mistake: see cases cited in CROSS ON EVIDENCE at p.477: or was signed subject to a condition precedent. Moreover, in certain cases parol evidence is admissible when it is relevant for the court to find the true nature of the transaction.The Hire-Purchase Acts(4), like the Bills of Sale Acts, 1878 and 1882, and the Rent Acts(5), cannot in my judgment be excluded by documents which, though purporting to be outside the Acts, represent a transaction which is in truth within it. Under the two latter categories of Acts,(6) parol evidence has always been admissible to show the true nature of a written transaction which appears to satisfy or exclude the Acts although that evidence varies or contradicts the documents. Such evidence is admissible here for the purpose of showing that the true bargain was within the Hire-Purchase Act, 1938, as amended (although the written document is outside it) unless the defendant is estopped from so contending."The way the case was presented I think the defendant should have been called upon to begin. Mr. Masoabi however called his client into the box first and she admitted in cross-examination as follows (pages 4 and 5 of the typed record of the proceedings):"This agreement was a kind of hire-purchase agreement. The ownership papers for this vehicle are with the defendant. The papers are in my husband's name. The ownership was to be changed when the purchase price had been fully paid. I would say the ownership of the vehicle still remains with my husband".The defendant testified as follows (p.6):"On 8/3/78 I entered into a Hire-Purchase Agreement with the plaintiff."This Court is perepared to accept that the parties, who/are lay,
-6-are lay, did not quite appreciate the legal niceties of the consequences of the true nature of the transaction they entered into. The plaintiff was not advised about the incidence of risk nor was she told that by agreement this could be altered. The parties were however ad idem that ownership was not to pass until the instalments were fully paid. Learned attorney Masoabi did not reflect this in the document he drafted on plaintiff's behalf. Though the "ownership papers" were handed to the defendant these it seems were limited to the Registration Book. Passing the Registration Book simpliciter does not have the effect of making the defendant the statutory owner in terms of sections 11 and 24 of the Road Traffic and Transport Order 1970. The transferor (plaintiff) and the transferee(defendant) have to sign Form TCI for presentation to the Licencing Authority and the plaintiff implies that this was to take place when all the instalments have been paid. The transferor is enjoined by s.20 of the Motor Vehicle Insurance Order 1972 to remove the third party token before delivery of the vehicle and to inform his insurers of the name and address of the transferee. This was not apparently done for defendant testified (and this was not contradicted) that the papers and the disc on that car were in the name of the plaintiff's husband and that he (defendant) had not paid clearance, third party and comprehensive insurance for it. This was a hire- purchase agreement and it did not comply with the provisions of s.6(2)(g)of the Hire-Purchase Act 1974.There is no doubt that on the evidence, though the sale looked absolute on the face of the document, it was in fact subject to a true suspensive condition and not therefore a "perfecta" sale. (Norman's Law of Purchase and Sale in South Africa 3rd Ed. p. 157, and see also Wille and Mullin's Mercantile Law of South Africa 3rd Ed. p.169, MacKeurtan's, supra, p.154). That being the case the risk, in the event of total loss not attributable to the default or negligence of the purchaser remained with the vendor.Judgment should therefore have been entered for the defendant.The appeal is accordingly allowed with costs here and in the Court below.
CHIEF JUSTICE 24th September 1981 For Appellant: Mr. KolisangFor Respondent: Mr. Masoabi