Rex v Hemani Provision Stores (Criminal Appeal No. 176 of 1951) [1951] EACA 274 (1 January 1951)

### COURT OF APPEAL FOR EASTERN AFRICA

$\mathcal{L}_{\mathcal{A}}$ $\overline{\mathcal{A}}_{\mathcal{A}}$

Before Sir Newnham Worley, Ag. President, Lockhart-Smith, Ag. Vice-President, and SIR DAVID EDWARDS, C. J. (Uganda).

REX (The Honourable The Attorney General), Appellant

# HEMANI PROVISION STORES, Respondent

## Criminal Appeal No. 176 of 1951

(Appeal from decision of H. M. High Court of Uganda—Pearson & Ainley, JJ.)

Price Control—Sales on credit—Invoices attached to statement of a/c—Ten per cent surcharge on monthly account as buyer not a registered customer-Whether *contra* to Defence (Control of Prices and Distribution) Regulations, 1943, regulations 11 $(1)$ and 16.

Defendants were charged on two counts of selling certain specified price regulated goods at prices exceeding maximum prices fixed *contra* to Defence (Control of Prices and Distribution) Regulations, 1943, regulations 11 (1) and on two counts of imposing a condition of sale in respect of same goods other than a condition requiring immediate payment therefor without the permission of the Controller of Prices and Distribution *contra* to regulation 16 of the same regulations.

Defendants were retail provision merchants dealing with customers concerned on monthly credit terms. During August defendants delivered to the order of the customers provisions some of them subject to price control. An invoice was given each time the order was fulfilled stating the lawful maximum price of such goods as were subject to price control. In September defendants sent their bill for August and in this account each invoice was referred to and amount thereof was correctly entered and the total of all invoices was shown. On each sheet of the monthly account was rubber-stamped the following words "when sending cheque please add 10 per cent more, being the difference in prices as you are not our register (sic) customer, or register your name soon".

At hearing on close of prosecution case defence submitted no case to answer and Magistrate agreed and acquitted the defendants. On appeal to the High Court the appeal was dismissed with costs.

$Held$ (6-10-51).—Before the account with the stamped addition was delivered to the customer there had been a completed sale of all goods delivered to customer during Augustthe property in the goods passed and in default of payment of the invoice price an action for goods sold and delivered lay. The fact that the seller did not really intend to sell at that price, or to impose an undisclosed condition did not invalidate a contract of bargain and sale. The 10 per cent demanded was gratuitous and without consideration. Appeal dismissed.

### Slade, Solicitor General for Appellant, Crown.

#### B. K. S. Verjee, for respondent.

JUDGMENT.—The respondents in this matter were charged in the District Court of Kampala on two counts of selling certain specified price-regulated goods at prices which exceeded the maximum prices respectively fixed therefor contrary to regulation 11 (1) of the Defence (Control of Prices and Distribution) Regulations, 1943, and on two counts of imposing a conditions of sale in respect of the same goods other than a condition requiring immediate payment therefor without the permission of the Controller of Prices and Distribution contrary to regulation 16 of the same regulations.

The regulations in question, which were made under and are to be read as one with the Defence Regulations, 1939, continue to have effect by virtue of the Supplies and Services (Transitional Powers) Order, 1946. (See item 23 of the Schedule thereto) together with the Supplies and Services (Continuance) Order. 1950 (See Legal Notices Nos. 24, 25 and 42 of 1946 and Legal Notice No. 275 of 1950).

At the close of the case for the prosecution the advocate for the respondents submitted that on the evidence adduced his clients had no case to answer as the evidence disclosed no offence in law. The learned Magistrate agreed with this submission and acquitted the respondents as he was entitled to do under section 209 of the Uganda Criminal Procedure Code, 1950. An appeal to the High Court was dismissed and the Crown was ordered to pay Sh. 400 costs to the respondents.

We take the material facts as set out in the judgment of the learned Judges of the High Court. The respondents are retail provision merchants and dealt with the customers concerned in this case on monthly credit. On several days during the month of August, 1950, the respondents delivered to the order of the customer a variety of provisions, some of them being subject to price control and some being free of control. An invoice was given each time the customer's order was fulfilled and in each instance the invoice stated the lawful maximum price of such goods included therein as were subject to price control. Early in September the respondents sent in their bill for the month of August and in this account each invoice was referred to and the amount of each invoice was correctly entered and the total of all the invoices correctly shown. There were about forty invoices. On each sheet of the monthly account appeared the following words impressed with a rubber stamp: "When sending cheque please add 10 per cent more, being the difference in prices as you are not our register (sic) customer, or register your name soon".

The case for the Crown, which was rejected by the learned Judges of the High Court, was that the effect of this endorsement on the account was—

- (a) to increase the invoice price for each individual item in the account by ten per cent, and that since some of the items related to price controlled goods which were invoiced at the maximum price fixed therefor the respondents were seeking to sell these goods at a price above the permitted maximum; - (b) that by demanding from the customer an extra 10 per cent as an alternative to registering with them as their customer, the respondents were imposing an illegal condition. The grounds of appeal in the petition to this Court are that the learned Judges erred in holding— - $(a)$ that an endorsement on a bill for goods supplied demanding ten per cent extra payment on all goods thereon referred to, some of which were already set down on the said bill at the maximum price permitted by law, does not constitute an endeavour to sell goods at a price greater than the maximum price fixed therefor contra regulation 11 (1) of the Defence (Control of Prices and Distribution) Regulations, 1943; - (b) that such endorsement does not constitute an attempt to impose $a$ condition of sale other than a condition requiring immediate payment *contra* regulation 16 of the said regulations;

(c) that a valid contract for the sale of goods had been entered into by the parties and had been completed by the delivery by Hemani Provision Stores to Mr. Smith and Mr. Searle of the goods set out in the bill referred to in paragraphs $(a)$ and $(b)$ hereof."

It is common ground that in order to ascertain the primary meaning to be given to the term "sale" in this matter the Court may apply the relevant definition in the Sale of Goods Ordinance (Cap. 157, Vol. III of the Laws of Uganda Protectorate): see *Mischeff v. Springett* (1942), 2 A. E. R. 349. Also that this meaning is extended by the special definition in the Defence (Control of Prices and Distribution) Regulations, 1943, to include an offer or attempt to sell.

The contentions of the Acting Solicitor General arguing in support of the appeal were-

- (a) that the usual rules governing contracts of sale are to be applied to this case, and that to establish a completed transaction of sale it must be shown that there was a willing seller and a willing buyer of agreed goods at an agreed price; and that if there were no agreed price, there could be no completed sale. There would indeed be no consensus *ad idem* and therefore no contract; - (b) that from the inception of the transaction, i.e. presumably when the respondent fulfilled each order in turn, he had already formed the intention of charging the customer 10 per cent over and above the invoice prices of the goods delivered unless, before paying therefor, the customer became a "registered" customer. In other words, the respondent had decided to attach to the contract a condition which he failed to disclose at the time of delivery; - (c) that, apart from the regulations, this misrepresentation or failure to disclose a material condition would render the contract (or to use a neutral term the transaction) voidable at the option of the customer: but that the effect of the regulations is to render the contract illegal and therefore void, since the imposition of the condition would itself offend against regulation 11 and further it would, if the customer complied, result in price-controlled goods being sold above the permitted maximum prices; - (d) the result, therefore, is that the respondent's disclosure of the condition $\frac{d}{dt}$ on the monthly account avoided the contract, or, to put it another way, showed that there had been no completed contract; and constituted both an endeavour to sell goods at excessive prices and an attempt to impose an illegal condition of sale.

The learned Judges of the High Court rejected this argument because they held, rightly in our view, that "before the account with the stamped addition was delivered to the customer there had been a completed sale of all the goods delivered to the customer during August. The customer asked for certain goods. They were sent to him with an invoice indicating the price at which the respondents were willing to sell. The customer accepted the goods and retained them. Here was an offer and acceptance at the invoice price. Plainly, the property in the goods passed, the sale was complete, and, in default of payment of the invoice price, an action for goods sold and delivered would have lain".

It is, we think, an entirely novel proposition that the validity of a contract of bargain and sale of ascertained goods at an agreed price can be impugned in the absence of mistake or misrepresentation, on the ground that the seller did not really intend to sell at that price, or to impose a condition which he did not disclose. No authority was cited for this proposition, and we should be surprised if any could be found.

The sale of the goods was completed: what the respondents were doing was, as the learned Judges of the High Court say, making an impudent and gratuitous demand, gratuitous in the sense that there could be no consideration for the payment by the customer of an extra 10 per cent for goods which he had already purchased at the invoice prices.

It may be that this case reveals the possibility of an undesirable practice which escapes the meshes of the law: if so, that is a matter for the Legislature. But we think that the Court on first appeal was entirely right in holding that this demand, having been made after the completion of the sale, did not offend against the relevant regulations and, accordingly, we dismiss this appeal.