5/4/22, 8:52 AM ADDAI vs. PIONEER TOBACCO CO. LTD.

[1989]DLSC511

ADDAI vs. PIONEER TOBACCO CO. LTD. [1989]DLSC511      

Info Coram Lawyer(s)

Date 1989-01-13
Suit No.
Citation No. [1989]DLSC511 

ADDAI

vs.

PIONEER TOBACCO CO. LTD.

[HIGH COURT, ACCRA]

[1989-90]1 GLR 526

DATE: 13 JANUARY 1989

COUNSEL:

T.E.K. AMESIMEKU FOR THE PLAINTIFF.

STANLEY AMARTEIFIO FOR THE DEFENDANTS.

CORAM:

FRANCOIS J.S.C.

JUDGMENT OF FRANCOIS J.S.C.

The plaintiff ‘s action is founded on detinue. The claim arises from a breach of contract to release a vehicle
after a successful tender.

On 3 June 1986, the defendants placed advertisements in some local newspapers expressing an intention
to sell some of their vehicles. The advertisement in the Ghanaian Times of 3 June 1986 was repeated on 6
June 1986 and in the Peoples Daily Graphic of 12 June 1986 (see exhibits a, b and 1).

The plaintiff who describes himself as a dealer in vehicles, says the advertisement of 3 June caught his eye
and he consequently sent bids to the defendants for all the vehicles advertised. He was unsuccessful in all
the bids except one which related to a Land Rover, ARA 74. It is the subject of controversy in this suit.

The plaintiff pleaded that prior to his tender, he inspected the Land Rover ARA 74, which was then at the

workshop of Leyland Motors. Indeed, the advertisements provided for such an inspection. It was the
plaintiff’s case that he observed a new engine being mounted on ARA 74, and being encouraged by such
a tempting offer, bid for the vehicle in the sum of ¢380,000. In paragraph 7 of his statement of claim, the

plaintiff’s perception of the bargain that induced him to bid is summed up as follows:

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“7. Encouraged by and having been satisfied with the new engine which was mounted on the chassis of
the said vehicle No. ARA 74, the plaintiff in his letter of 3 June 1989 offered to buy the vehicle in the state

and condition in which he found it at the time of his inspection, for the sum of ¢380,000.” of the defendants
to the plaintiff’s bid, was a letter of acceptance dated 26 June 1986 (exhibit C). This letter further requested

the plaintiff to effect payment by Friday 18 July 1986.

On 4 July the plaintiff paid the sum of ¢380,000 and was issued with a receipt in acknowledgment (exhibit

D). The defendants, further instructed the Licensing Department of the Ghana Police Motor Unit by a letter
of 4 July (exhibit E) to regularise their records by the transfer of ownership of the said Land Rover to the

plaintiff.

At that stage the plaintiff considered himself the proud owner of ARA 74. The debate whether it carried a
new engine or an old one had not then erupted to sour matters. Broadly then, the defendants’ offer to sell,

with the reciprocal successful bid of the plaintiff’s, were not at that stage the subject of dispute. Indeed, the
dispute had remained within the narrow confines of what was offered for sale.

The defendants say no new engine was mounted on the Land Rover ARA 74 at the time it was advertised
for sale. The plaintiff urges the contrary and maintains that this is borne out by the subsequent acts of the

defendants which sought to annul the sale and counter offered the Land Rover conditioned upon the
plaintiff additionally bearing half the price of the new engine. It was the plaintiff’s determination to resist

what he considered as new terms engrafted upon his ownership of ARA 74 that has provoked this action.

There is consequently a preliminary factual issue of prime importance for determination. It is simply
whether a new engine had been mounted on ARA 74 at the time it was offered for sale. The plaintiff

maintains that he actually saw ARA 74 being fitted with a new engine when he inspected it at Leyland
Motors, and it provided the compelling inducement for his offer. The defendants deny this. It is their case

that the Land Rover they advertised for sale did not have installed on it a new engine.

Obviously the two stances are contradictory, and plainly one of the parties must be telling a falsehood. I

turn now to the established facts. The relevant evidence of the defendants’ representative, Mr Kwabena
Akomeah, the company secretary, was as follows:

“Sometime in June I wrote to the plaintiff that he had won the tender on vehicle No ARA 74 and that

he should pay the amount he indicated in his bid to the defendants’ cashier, obtain a receipt and
collect the vehicle. Mr. Addai (the plaintiff) did not collect the vehicle. Sometime in July I was

informed that Leyland had refused to deliver the vehicle to the plaintiff. At the time of the
advertisement the vehicle was at Leyland Motors. It had been there for more than a year. The

engine had broken down and we wanted a new engine to be installed so the defendants sent it

there. At the time the advert was placed in the newspapers, the Pioneer Tobacco Co. Ltd. (the
defendants) were not aware that a new engine had been installed in ARA 74 . . . As soon as I

became aware of the fitting of a new engine I wrote to the plaintiff.”

The secretary further stated: “It is true when we made the advert we did not ask Leyland Motors not to work

on the vehicle.” And up to 4 July 1986 when exhibit E was written to the Licensing Department transferring

the vehicle into the plaintiff’s name, no instructions had gone to Leyland Motors to stop work on ARA 74.

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The company secretary’s evidence concludes with the following question and answer excerpt:

“Q. When did you get to know a new engine had been mounted on the vehicle? A. I got to know

when the plaintiff went to Leyland for the vehicle and he had been refused and he reported to me.”

And in answer to the court, the defendants’ representative said if Leyland had not created the problem the

plaintiff could have gone away with his Land Rover ARA 74 fitted with the new engine.

An unfortunate contretemps seems to have occurred. The defendants plead that they requested Leyland

Motors some time ago to fit a new engine on ARA 74; Leyland informed them that no new engine was

available. It was in this state that the defendants offered ARA 74 for sale. The defendants plead in

paragraphs 9 and 10 of their defence that after the advert for sale, Leyland Motors commenced fitting a
new engine on ARA 74, this was on 6 June 1986. But they deny that the plaintiff tendered for ARA 74 with a

new engine mounted on it. They say the new engine could only have been mounted on or after 6 June

1986 when it was requisitioned from the Leyland stores. Paragraphs 15 and 16 of the statement of defence

set out the defendants’ side of the matter. Leyland Motors, however, admit they never informed the
defendants that they had fitted a new engine on ARA 74. The workshop manager put it this way:

“Somebody was sent with a letter to collect the vehicle; it was then that we told the person who
came with the letter that we had fitted a new engine on to the vehicle; that Pioneer Tobacco Co.

Ltd. should pay the bill before collecting the vehicle.”

It was suggested to the workshop manager that exhibit 9, the requisition form, was backdated. He denied
this but there is nothing to support the denial. The exhibit itself appears self-serving. Exhibit 8a suggests

that work started afresh on 3 June and continued to 25 July. There is no indication that on 5 June when the

new engine was allegedly requisitioned, work was done on the vehicle, yet the workshop manager stated

“we started mounting the engine as shown by the requisition on 5 June 1986.” If that were true the job card
should have reflected what happened on 5 June 1986. The workshop manager’s statement that it took

about two to three days to obtain the engine must be placed in the context of his further statement, which

I quote: “We completed mounting the new engine in August—September 1986.” It could not therefore be

true that the workshop started mounting the engine on 5 June for that would make completely
incomprehensible the lapse of two to three days he had stated earlier.

In any case the job card should show the work done on ARA 74. Though nothing is shown on 5 June there is

an entry for 3 June which seems to support the plaintiff’s testimony. The true position as I see it is this: that

having gone ahead to mount a new engine without informing their principals, and realising the vehicle

had been sold by tender, Leyland Motors had suddenly woken to the need for circumspection to avoid
being saddled with any legal liability.

In a letter from the defendants’ solicitors, exhibit 5, the following contention is made:

“It is very strange for your client to think that he was tendering for a second-hand vehicle with a

brand new engine on the strength of the advertisement which appeared in the Ghanaian Times on

3 June. As you are no doubt aware, our clients are not dealers in motor vehicles and for that matter
they cannot be expected to place a new engine in an old chassis just to be sold to the public below

cost.”


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But the truth of the matter is that that is exactly how it appeared. The defendants’ garage, Leyland Motors,

had failed to communicate with their principals when they fitted the new engine on to ARA 74. The

defendants consequently did not know the actual state ARA 74 was in. In the normal course of events after
fitting the new engine, the defendants would have withdrawn ARA 74 from the list of vehicles offered for

sale. In their pleadings the defendants aver that since Leyland Motors had not fitted a new engine on ARA

74 they had decided to sell it, but unknown to them Leyland Motors had subsequently mounted the new

engine. The sound and fury in the outburst contained in exhibit 5 has no justification whatsoever.

The question which remains, however, is whether a genuine mistake had occurred which at law would

nullify any consensus between the parties. That is the real issue in this case. Its factual complement is in
exhibit 6 which asked the plaintiff to contact the defendants’ company secretary “for an important

discussion.” I accept the plaintiff’s testimony that the discussion that ensued was to vary the sale price

because it was then realised that a new engine had been fitted on to ARA 74. Further support for this

appears in the defendants’ statement of defence paragraph 16 which is as follows:

“16. The defendants accordingly called the plaintiff and gave him the option either to take the

vehicle with the new engine and pay for the new engine or in the alternative his money would be

refunded to him and the defendants will withdraw their offer.”

The paragraph clearly concedes the occurrence of a mistake. This paragraph does not ride the high horse

of exhibit 5. Indeed if the bid of the plaintiff affected an old engine, the offer to rescind the contract and
refund any moneys paid would have been pointless. A redeeming feature I find, is the fulsome admission

by the defendants’ representative that “the company would share a bit of the blame for not examining the

vehicle ARA 74 before putting it to tender.” In my view, this is the crux of the matter. Obviously, the

defendants had no intention of selling ARA 74 with a brand new engine.

On 11 July 1986 the defendants by a letter of that date (exhibit C) purported to withdraw their offer to sell
vehicle ARA 74 to the plaintiff. Obviously, this was their response to the plaintiff’s refusal to share the cost of

the new engine. It supports the impression that the defendants attempted to induce the plaintiff to pay
more for the new engine. Indeed, as adverted to before, the pleadings admit that much. It also reveals the
recognition of a mistake whose effect the defendants sought to minimise by seeking a contribution from

the plaintiff. When it failed they tried to withdraw from the sale to prevent the plaintiff exploiting an
advantage.

The ambivalence of the defendants’ stance in this action is to say the least, unfortunate. They fail to
recognise that a mistake cannot be urged to abrogate the contract when the fact upon which such a plea

derives its sustenance are challenged and impugned.

Now to the law. The bid is the contractual offer which is capable of being accepted or rejected. In normal

circumstances the contract is completed when the bid is accepted. This is not an irrevocable rule of
thumb. For a successful plea of mistake may wipe out any view of a consensus and destroy the foundation
of an agreement. I take the view that the statement, “As is and where is” appearing in the advertisements

exhibits (a), (b) and (1) were the conditions of sale that normally should bind the parties. Borrowing from
an analogous situation in auction sales where the fall of the hammer is a public declaration and
identification of the successful bidder, I accept, with respect, the accuracy of the law as stated by Broome

J. in Estate Francis v. Land Sales Property Ltd. (1940) N.P.D. 441 at 457:


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“An auction is a form of competitive bargaining with the object of a contract of sale resulting,

carried out in accordance with certain rules. These rules are the conditions of Sale. They are framed
by the seller to represent the terms upon which he is prepared to submit his property to
competition. They are, so to speak, the rules of the game and they bind all players.”

That is qualified only to the extent that a mistake at law may play in the eventual outcome of a suit. To the

vexed question then: would a plea of mistake succeed in annulling this contract?

The plaintiff’s actions also tell a story. In exhibit 1 of 3 June 1986, he bid for six vehicles. Two were Land

Rovers ARA 73 and ARA 74. For the former he offered ¢350,000 and for ARA 74, he bid ¢380,000. The
minimal disparity in the bids for the two Land Rovers when one vehicle had installed in it a brand new
engine whose engine alone cost over ¢400,000 must expose the colossal avarice of the plaintiff; was it a

desire to overreach and profit by a mistake or was it acceptable commercial exploitation of an

opportunity? It is true commercial astuteness obtains its rewards elsewhere in inflated profits, an elevated

life style and the perks of luxurious living. In the court of equity, the line is drawn between honest risk taking
with its commensurate rewards, and the overreaching that amounts only to unjust enrichment. The fact
that the plaintiff failed in his bid for ARA 73, a similar Land Rover and yet won the one fitted with a new

engine clearly explodes any theory that the defendants intended to sell ARA 74 fitted with a new engine for
the price the plaintiff had offered.

Had the plaintiff showed less commercial greed or avarice and the bids for ARA 73 and ARA 74 reflected

the value of a new engine, the issue would have been resolved differently. I take the view that a clearer
case of mistake could not have been exposed by the evidence in this case.

There is a long line of authority which suggests that where what was offered was fundamentally different

from what was sold, a plea of mistake would succeed. I do not wish to embark on an excursus into that
difficult terrain of mistake at law. But it has been declared for instance that Russian hemp and Russian tow
are fundamentally different commodities; a picture offered as a Constable which only masquerades as

that famous painter’s work cannot enjoy a status it ill deserves. And see the numerous examples cited in
Bell v. Lever Bros. Ltd. [1932] A.C. 161, H.L.

The mistake of course must be fundamental and basic and as expressed in Norwich Union Fire Insurance

Society Ltd. v. Price (Wm. H) Ltd. [1934] A.C. 456, P.C. must “affirmatively exclude an intention.” This principle
of the law runs with an equally important principle that there should not be a fundamental difference in

the bargaining knowledge of the parties to erode the viability of the agreement. A passage in Cheshire
and Fifoot, The law of Contract (9th ed.) at 224 seems to me apposite. The authors there state as follows:

“A mistake is wholly immaterial at common law unless it results in a complete difference in

substance between what the mistaken party bargained for and what in fact he will obtain if the

contract is fulfilled; as for example where the buyer intends to buy real pearls and the seller intends
to sell imitation pearls. Translated into the familiar rubric of offer and acceptance, this means that
the only type of mistake which is ever capable of excluding offer and acceptance is one that

prevents the mistaken party from appreciating the fundamental character of the offer or the
acceptance.”

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The defendants offered two similar Land Rovers for sale. They rejected a bid for one with an old engine but

apparently accepted a bid for the one with a brand new engine although it did not reflect any enhanced
value.

There was clearly no intention to fit the vehicles with new engines before sale, otherwise the other five

would have been also refitted. It does not make commercial sense to instal a new engine on a used
vehicle only to offer it to tender, or accept a bid that takes no account whatsoever of the enhanced value
of the refitted new engine.

In my view, a mistake clearly occurred in this case. On an examination of the law and the equities involved,
the plaintiff fails and his action must be and is dismissed. He is entitled to the return of his moneys in the

hands of the defendants and it is so ordered. Furthermore, a refund by the defendants of payments to the
Motor Licensing Department is hereby ordered.

I award no costs as this unfortunate comedy was induced by the negligence of the defendants.

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