Monday, 27 February 2017

PRACTICE AND PROCEDURE


RECENT LEGAL DEVELOPMENT OF AN APPLICATION FOR STAY OF EXECUTION TOGETHER WITH A GARNISHEE ORDER

NIGERIAN BREWERIES PLC V DUMUJE (2016), 8 NWLR (PT 1515) 536
Perfect case on tort of negligence, it establishes the neighborhood principle (an English law principle which says that persons should take reasonable care to avoid acts or omission which are reasonably foreseeable to likely cause injury or harm).
It is similar to the case of Donoghue v Stevenson. The legal as well as factual distinction is concerning a garnishee order granted by the court, and also the stay of execution applied for by the appellant. This is strictly with regards to practice and procedure.

GARNISHEE ORDER: a court order to a third party who owes money to a judgment debtor to pay the money to the judgment creditor.
STAY OF EXECUTION: the suspension of carrying out of a court order.

When a party receives a judgment in its favor, it will likely take steps to enforce the judgment if the other party fails to comply with its terms. The Sheriffs and Civil Processes Act provides for the enforcement of judgments and orders.
Considering that a stay of execution is entered to suspend the judgment pending the appeal, the argument was whether the application for stay of execution could prevent the judgment creditor from using his garnishee order to enforce judgment.  In the case of Purification Techniques Nigeria Limited v AG Lagos State & Ors ((2004) 9 NWLR (PT 879) 665) and Hon Justice Sotonye Denton-West v Chief Chuks Muoma SAN ((2008) 6 NWLR (PT 1083) 418, the Court of Appeal held that the existence of a stay of execution does not make it impossible for the judgment creditor to obtain his debt by other methods.

The decision of the court in the Nigerian breweries case was, that such could not occur as the application for stay of execution already imposed a fait accompli on the court of appeal. The court made efforts to distinguish between 'execution' and 'enforcement', some legal practitioners argue that such distinction is unnecessary as both execution and enforcement are ways of effecting a judgment.
I end by quoting from the case,
 “The litigation process is not a spectator sport, it does not accommodate of having persons as cheerleaders, whose presence will only be to observe and applaud the fore actors in the litigation”
                                  S.A. NWANODI wrote it

Friday, 3 February 2017

Hire purchase and agency



A Contract of Hire Purchase:
The meaning of hire purchase has been defined by the Hire Purchase Act. According to the provision of S. 20(1) of the Act, a contract of hire purchase is:
The bailment of goods in pursuance of an agreement under which the Bailee may buy the goods or under which the property in the goods will or may pass to the Bailee.
In order to understand the above definition further, the meaning of “bailee” has to be known. According to the Black’s Law Dictionary 9 Edition, a bailee is:
A person who receives personal property from another, and has possession of but not title to the property.
From the above, a contract of hire purchase can simply be understood as an agreement whereby the owner of goods transfers possession of the goods to another person called the hirer for an agreed periodical payment at the end of which the hirer has the option to either buy or return the goods.
History of Hire Purchase Law in Nigeria
The law of hire purchase is of recent origin in English law. The earliest statute relating to it was promulgated in 1938. However, it has been recognised under the English Common Law since the 19 century. The first judicial recognition of a contract of hire purchase was in the decision of the House of Lords in the case of
Helby vs. Mathews [1] .
In this case, the plaintiff gave possession of a piano to a third party. The title in the piano was to pass to the third party upon the payment of certain instalments. Before the instalments were completely paid, the third party pledged the piano to the defendant. The plaintiff/owner thus sued to reclaim possession of the piano.
The House of Lords held that until the instalments were completely paid, the title in the goods still resided in the plaintiff, thus the third party could not validly transfer same to the defendant by the way of a pledge.

Hire Purchase under the Common Law:

Under the common law, hire purchase transactions were tilted more in the favour of the owner of the goods than to the hirer. The owner had a lot of privileges to the detriment of the hirer. Also, under the common law, the contract was not usually set in writing. This provided the owner with a lot of opportunity to exploit the hirer.

The following are some of the characteristics of a hire purchase agreement under the common law:

The hirer didn’t have any right to redeem the hired goods if he doesn’t complete the payment of his instalments. This even applies if he had paid all previous instalments punctually and he was a day late in paying the last instalment. In the case of Bentworth Finance Nig Ltd vs. De Bank Transport Ltd [2] , the court held that a provision for punctual payment meant that the instalments must be paid on the stipulated date. A one day delay in the payment could be regarded as breach of the agreement, entitling the owner to retrieve the goods. This is regardless of the fact that it was the last instalment that was delayed.
The agreement transferred no property or proprietary interest in the goods to the hirer. The hirer would only have property rights in the goods after he has exercised his rights of purchase. No rights would accrue to him even though he has paid a substantial part of the amount for the goods.

The hirer might be liable to pay an excessive amount due to the minimum payment clause. In the case of Amusa & Anor vs. Bentworth Finance Nig Ltd
[4] , the court held inter alia that where a hirer exercises his option of terminating the agreement, he cannot complain that the minimum payment clause is a penalty.
When the owner seizes the goods and he decides to sell to another party, he was not accountable to the hirer, even if there was just one arrears of installments to be paid.
The absence of statutory regulation created room for a lot of sharp practices like owners charging exorbitant interest rates against the hirer.
Copies of the signed document, if any, were not usually given to the hirer.
In Nigeria, the common law rules in relation to hire purchase were in operation. These rules evidently worked a lot of hardships on parties, especially the hirer of goods. Thus, in 1965, the Hire Purchase Act was passed into law to regulate contracts of hire purchase in Nigeria.
The Hire Purchase Act of 1965
This Act was enacted in the year 1965. At the time of enactment, the Act applied only to the Federal Capital Territory of Lagos. It was subsequently given national application by virtue of the Hire Purchase (Application Act) 1966. However, application of the law didn’t start until October 1 1968 by virtue of the Hire Purchase (Appointed Day) Order 1968.
The Act of 1965 has a lot of provisions that protect the interest of the hirer. Some of the ways it does this include:
It provides for the full involvement of the hirer in the formation of the transaction.
It restricted the owner’s contractual freedom by inserting some implied terms. It also prohibits the implementation of some terms that are detrimental to the hirer.
The statute granted the hirer the right to terminate the agreement while also limiting the liability that he would incur as a consequence of this.
The acts restricts the power of the owner to repossess the goods indiscriminately. He can only gain possession of the goods when the hirer has defaulted in payment or in breach of the agreement.
The Act made certain conditions and warranties implied. It also nullifies any attempt at trying to exclude these terms and warranties.
Classes of Goods Covered Under the Hire Purchase Act
According to the provision of S.1 of the Hire Purchase Act, the following are the classes of goods that are covered by the provisions of the Hire Purchase Act:
All hire purchase agreements where the price of the goods in question does not exceed two thousand naira.
All agreements that concern motor vehicles and other automobiles.
A motor vehicle has been aptly defined by s. 20 of the Hire Purchase Act as “a mechanically propelled vehicle intended for or adapted for use on road or for agricultural purposes”.
In respect of other goods that aren’t covered by the above provision, the English Common Law and Equity would apply.
Reasons for the Adoption of Hire Purchase in Nigeria
There are a handful of reasons that informed the adoption of Hire Purchase in Nigeria. Some of them are:
It offers the opportunity to those who are in need of a particular product but do not have all the funds they need. Under hire purchase, such people can deposit some amount of money and would complete the payment after a series of installments.
Another reason is due to the fact that it helps manufacturers to profitably sell their stocks in order to prevent them from piling up. In this situation, a financier steps in, pays the manufacturer and subsequently carries out hire purchase agreements with the customers.
Another reason is due to the fact that hire purchase agreements are not within the purview of the old Money Lenders Act 1939[5] . According to Section 2C of the Act, Money Lenders excluded:
Any person
bona fide carrying on any business not having for its primary object the lending of money.
Hire purchase agreement clearly are not for the purpose of lending money. This was reiterated by the courts in the case of Olds Discount Ltd vs. Playfair Ltd[6] .
Nature of Hire Purchase Agreement
Like all other commercial agreements, before a hire purchase agreement can come into fruition, there must be the following:
Offer and Acceptance: The hirer offers to hire the goods and the owner accepts. The mere signing of the hire purchase agreement is enough to constitute acceptance of the agreement.
Consideration: The consideration in a hire purchase agreement is usually in the form of periodical payment.
Capacity: The general rule of capacity in the law of contract also applies to a hire purchase agreement. Thus, an infant cannot be bound in a contract of hire purchase unless it is a contract for necessaries.
A hire purchase agreement can be terminated by the parties and by statutory provisions. If there is a breach of the agreement by either party, it gives the other party the right to terminate the hire purchase agreemeent
AGENCY
Agency is the relationship between a person, or “agent,” that acts on behalf of another person, company, or government, usually called the “master” or “principal.” An agency is formed when a principal asks an individual to make a delivery or names someone as an agent through a contract leading to the responsibility of the principal for actions made by the agent while the agent’s actions are akin to those of the principal. This form of agency can be, and often is, enforced by written agreements made through a power oRelationship
Creation of Agency Relationship.
An agency relationship is generated by the consent of both the agent and the principal. No person can unwittingly become an agent for another. A written contract is common, but not necessarily essential when it is clear that both parties intend to act in their respective principal and agent roles. The intent of the parties can be inferred from their words or implied by their actions.
       Control
An intricate element of the principal-agent relationship is the concept of control. The agent agrees to act under the direction of the principal. The agent's authority may be actual or apparent. If the principal deliberately advises express and implied powers to the agent to act for him or her, the agent has actual authority. When the agent exercises actual authority, it is as if the principal is acting, and the principal is bound by the agent's acts and is legally responsible for them. If the principal either knowingly or mistakenly, authorizes the agent or others to assume that the agent holds authority to carry out specific actions when such authority does not exist, this is known as apparent authority. If other persons believe in good faith that such right exists, the principal remains liable for the agent's actions and is unable to rely on the defense that no actual authority was established. The scope of an agent's authority, regardless of whether it is apparent or actual, is considered in determining an agent's legal responsibility for his or her actions. An agent cannot be individually liable to a third party for a contract the agent has entered into as a representative of the principal if the agent acted within the scope of authority and contracted as agent for the principal. If it so happens that the agent exceeded his or her authority by entering into the contract, the agent is then financially responsible to the principal for failing to uphold the fiduciary duty.
      Termination
Termination of the agency relationship must be in accordance with the agency contract that initially fashioned the principal-agent relationship. A principal can retract an agent's authority at any time, but may be liable for damages if the termination violates the contract. Other happenings such as the death, mental state, or bankruptcy of the principal also end the principal-agent relationship by operation of law.
References
[1] 1895 AC 471
[2] 1968 3 ALR Comm. 52
[3] 1968 3 ALR Comm
[4] 1966 NWLR 276
[5] Cap 124 Laws of the Federation of Nigeria 1958
[6] 1938 3 ALL ER 285