Velji v Jivraj (Civil Appeal No. 41 of 1949) [1949] EACA 18 (1 January 1949)

## COURT OF APPEAL FOR EASTERN AFRICA

### Before SIR GRAHAM PAUL, C. J. (Tanganyika), EDWARDS, C. J. (Uganda), and SIR JOHN GRAY, C. J. (Zanzibar)

### **JUTHALAL VELJI, Appellant (Original Defendant)**

# **GULAMHUSEIN REMTULIA JIVRAJ, Respondent (Original Plaintiff)** Civil Appeal No. 41 of 1949

(Appeal from decision of H. M. High Court of Tanganyika-LLOYD-BLOOD, J.)

Contract—Sale of "new tyres and tubes"—Ex-military—Meaning of "new".

The plaintiff-respondent sued the defendant-appellant for breach of two contracts relating to the sale of new tyres and tubes. The contracts were in the form of broker's notes. The tyres had in fact been purchased from Government Disposals Board and were part of Army surplus. The question to be decided was whether the plaintiff-respondent supplied "new tyres" within the meaning of the contract. There was evidence that the appellant had inspected the tyres and found them to be "new", with the word "military" stamped on them.

Held $(2-11-49)$ .—(1) The appellant cannot be heard to say that he used the word "new" in his sworn evidence in a different sense from his use of it in the contracts.

(2) The tyres actually tendered were in fact new tyres of the only kind that would suit the appellants purpose, namely from military stocks.

(3) There was no evidence of fraudulent misrepresentation on the part of the respondent.

(4) There was nothing to support the appellants contention that the word "new" had a special meaning of "tyres" which had not lost their "commercialness" by being sold to and stored by a potential consumer (i.e. the Army) instead of being stored by a commercial dealer.

Cases referred to: Anderson v. Scrutton (E. and E. Digest, 1940, supplement, p. 41).

#### Chitale for the Appellant.

**MacRoberts** for the respondent.

SIR GRAHAM PAUL, C. J.—This is an appeal by the defendant from the judgment in a suit in the High Court of Tanganyika in which the plaintiff-respondent sued the defendant-appellant claiming in respect of the alleged breach of two contracts between the parties relating to the sale of motor lorry tyres. The defendant-appellant had rejected the tyres and tubes on the ground that they were not in accordance with the terms of the contracts, whereupon the plaintiff-appellant sold the goods and claimed the difference between the contract price and the sum realized. The defendant-appellant counter-claimed for damages by reason of loss of profits owing to the plaintiff's failure to supply goods according to the contracts. The Court below gave judgment for the plaintiff as prayed and dismissed the counter-claim. From that judgment the defendant has appealed to this Court.

As usual in these commercial litigations in this country the main issue is as to what was in fact the contract between the parties. In this case the contract was reduced into writing in the form of a broker's note which makes it clear that the contract was for the sale of a certain quantity of "new tyres and tubes". The plaintiff supplied the right quantity of tyres and tubes but they had been purchased from the Government Disposals Board and were ex-military tyres, part of Army surplus stock at the end of the war. The main question in the case was whether this was a supply of "new" tyres and tubes within the meaning of the contracts. Upon this question we have heard lengthy arguments both as to fact and law but it seems to me that, when stripped of non-essential and irrelevant matter, the questions of fact may be answered quite simply and that the law applicable is trite well-established law about which there can be no real controversy or need for quotation of authorities.

We have heard a good deal as to the meaning of the word "new" in the contracts and appellant's advocate at the outset of his argument explained that his case was that the word must be construed in its ordinary sense and that the learned Judge unnecessarily limited the word "new" in holding that it meant "unused and not deteriorated in quality".

The ordinary meaning—so far as the dictionary shows—of the word "new" as applied to a manufactured article is "lately made or manufactured". This is supported by the Australian case Anderson v. Scrutton, E. and E. Digest, 1940, suppt. p. 41, quoted to us by appellant's advocate, "New" and "old" are of course just adjectives and they are both *relative* adjectives. I tried to get from appellant's advocate at what period of time after manufacture a tyre would cease to be "new", and there is no evidence whatever on that point.

My study of the record of the evidence has explained the learned advocate's difficulty because one thing that is clear from the evidence is that people dealing in new tyres neither know, ask, nor care what was the date of manufacture or the date of importing. All they are interested in is the make or makes of the tyres, the facts that they are unused, and that they are not deteriorated by storage. The tyres in question in this case were examined by an expert on the appellant's instructions, and this expert reported (exhibit $7$ ): —

"All the above tyres were in new condition and none showed evidence of having been used or of having been stored for any length of time."

It must be taken on the evidence that the tyres in question were unused and undeteriorated by storage. It is not suggested that there was anything wrong about the make or makes of the tyres. There is nothing to show that, by virtue of the time elapsed since manufacture or since importing, the tyres in question could not be rightly described as $new$ tyres.

Faced with that awkward state of the facts it seems to me that appellant's advocate had to throw overboard his contention as to the *ordinary* meaning of "new" and instead rely on a very highly special meaning, namely that "new tyres" in this contract by established custom of traders meant tyres which had not lost their "commercialness" by being sold to, and stored by, a potential consumer; that the Army was a potential consumer and not a commercial dealer in tyres and that therefore tyres obtained from the Army stores were not "new" tyres within the *special* meaning of the word in the contract, however "new" in the *ordinary* sense of the word they might be.

Neither the appellant nor the respondent, nor the broker through whom they dealt, was or is a regular dealer in tyres. For each of these people this was a first transaction in the selling or buying of tyres. It is difficult to see how a rule established by custom among regular dealers in tyres could be known to, or relied on by, the appellant, the respondent, or their broker. In any case the evidence is certainly very far from establishing such a customary rule of construction, even among regular dealers in tyres. It is not without interest to note that the Disposal Board's issue form has a column headed "new or used" as a description of tyres.

This was, according to the appellant's case, a sale by description and it is difficult to see how in such a sale under the description "new tyres" it is possible to exclude tyres which are, in fact, new just because of the source from which they were obtained by the seller. That seems to me to be in effect the addition of a clause by implication to a written contract of sale by description, an addition which it is well settled that Courts will not make except on the clearest evidence

establishing that such a clause was implied by a custom of trade effective between the parties. It is most important to repeat that not one of the parties had ever dealt in tyres before. Even if there were proof of this established custom among regular dealers in tyres—and in my view there is no such proof—how would that apply to alter the express terms of a contract made by parties none of whom had ever dealt in tyres before?

The appellant himself in evidence said: "When I inspected the tyres I found them to be new, but 'Military' was stamped on them". The appellant cannot be heard to say that he used the word "new" in his sworn evidence in a different sense from his use of it in the contracts.

Respondent's advocate has suggested that the appellant, having made his contracts, found, or thought he found, that the respondent had charged too high a price and for that reason wanted to get out of his contracts. It is possible that from his lack of experience and from his haste and anxiety to cut out rival traders, the appellant may have made a miscalculation in accepting the contract price. Though that would not of course enable him to resile from his contract already concluded it might explain his rejection of the tyres which otherwise seems inexplicable.

It is important to note that the defendant was purchasing tyres for export to, and sale in, the Belgian Congo. That being so there is great significance in the evidence of the appellant himself: —

"I know that I could not have bought up military tyres in Tanganyika Territory and sent them to the Congo.

Question.—The only tyres you could have bought for export to Congo would have been from Military Stocks?

Answer.—Yes."

In the face of that evidence it is impossible to believe that the appellant was not aware that the tyres he bought for export to the Congo *must* have been from military stores. The tyres actually tendered were in fact new tyres of the only kind that would suit the appellant's purpose, namely from military stocks.

In the pleadings and in the arguments in this Court it is alleged for the appellant that there was fraudulent misrepresentation by the plaintiff or by his undisclosed principal. An allegation of fraudulent misrepresentation is a most. serious allegation involving for the party making it a very heavy onus of proof. From my perusal of the evidence in the case I am quite unable to find that such onus has been discharged by the appellant, or indeed that there has been any evidence at all to support such an allegation. It is enough to say that the whole basis of the allegation of fraud is the special construction of the word "new" in the contract which the appellant now attempts, and—so far as 1 am concerned unsuccessfully—to show was the correct construction.

For the reasons I have indicated I consider that the learned trial Judge was right in the result at which he arrived in his judgment, and I would dismiss the appeal with costs.

EDWARDS, C. J. (Uganda).—I respectfully agree with the judgment just delivered by the learned Acting President. I would merely add that, during the argument, it was faintly suggested that the term "new" should be applied only to tyres obtained direct from the warehouse of a recognized wholesaler dealing in tyres or from the shop of a like retailer. For myself I reject such a narrow definition. An important consideration, to my mind, in deciding whether the tyres were new is the fact that they seem to have been still wrapped up in their packing material. Both before the trial Court and this Court the defence of lack of consensus *ad idem* was put forward. I fail to see the applicability of this doctrine to the present case. Merely because the defendant now says that he did not expect that the tyres which he had contracted to buy would come from surplus military

stores does not mean that the parties were not *ad idem* as to the articles to be supplied. The articles to be supplied were "new tyres and tubes" and the sole<br>question, as My Lord has pointed out, is whether those actually supplied answered this description. Had the defendant wished to ensure that the tyres and tubes would not be surplus military stores he could easily have so stipulated in the contract.

SIR JOHN GRAY, C. J. (Zanzibar).—I have had the advantage of reading the judgment of the learned President. As he says, the main issue in this case is as to what was in fact the contract between the parties and he has so fully dealt with the facts as disclosed by the evidence that I find myself unable usefully to add anything to his observations except to say that I entirely agree with his finding of fact and the law to be applied to such finding of fact.

I also respectfully agree with My Lord when he says that the appellant has completely failed to discharge the very heavy burden imposed upon him of proving fraudulent misrepresentation.

I accordingly agree that this appeal should be dismissed with costs.