Rex v Highland Garage Ltd (Criminal Appeal No. 223 of 1945) [1946] EACA 63 (1 January 1946)

APPELLATE CRIMINAL

Before SIR JOSEPH SHERIDAN, C. J., and DE LESTANG, Ag. J.

REX, Respondent v.

HIGHLAND GARAGE, Ltd., Appellants (Original Accused No.

2) Criminal Appeal No. 223 of 1945

Criminal Law—The Defence (Sale and Purchase of Motor Vehicles) Order, 1943, Reg. 2—Selling a motor vehicle without a permit in writing—Meaning of "sell" in Regulation—Sale of Goods Ordinance, 1930—Sentence.

In December, 1943, the appellants purchased a motor lorry for resale in the course of their business. In January, 1944, they purported to resell it to two natives, receiving the purchase price and delivering the yehicle to them. Although several unsuccessful attempts were made to obtain the necessary permit to sell from the Controller the vehicle remained in the possession of the natives who used it and the purchase price remained with the appellants for a considerable time.

The appellants were prosecuted for selling the motor lorry in question to the natives without being in possession of a permit in writing from the Deputy Commissioner of Inland Revenue contrary to Regulation 2 of the Defence (Sale and Purchase of Motor Vehicles) Order, 1943. They were convicted and sentenced to pay a fine of $£500$ .

The appellants appealed against the conviction and sentence.

Held $(18-4-46)$ .—(1) That the word "sell" in the Regulation must be given the meaning it bears in the Sale of Goods Ordinance, 1930.

(2) That where in a contract of sale of specific goods the price is paid and the goods are delivered the property in them passes to the purchaser on delivery. Thus in this case<br>the property in the motor lorry passed to the natives and there was a "sale" within the meaning of the Sale of Goods Ordinance, 1930.

(3) That the sentence although severe was not excessive in the circumstances of the case.

Appeal dismissed.

Burke for the Appellants.

Todd, Grown Counsel, for the Crown.

JUDGMENT.—The appellants were convicted by the learned Resident Magistrate, Nakuru, of selling a motor vehicle without being in possession of a permit in writing in that behalf issued by the Deputy Commissioner for Inland Revenue contra Reg. 2 of the Defence (Sale and Purchase of Motor Vehicles) Order, 1943. and sentenced to a fine of $£500$ .

The Regulation in question reads as follows: —

"No person shall sell any motor vehicle unless he is in possession of a permit in writing in that behalf issued to him by the Deputy Commissioner for Inland Revenue. When issuing any such permit the Deputy Commissioner for Inland Revenue shall specify to whom the vehicle shall be sold."

The facts which the learned Magistrate found proved may be summarized as follows: $-$

On 31st December, 1943, the appellants purchased a motor lorry from one T. G. Panara, for Sh. 5,500. They obtained delivery of the vehicle and paid the purchase price by cheque on the following day and subsequently resold it to two

natives for Sh. 6,900 or Sh. 7,000 (there being some dispute about Sh. 100). It would appear that the natives paid Sh. 4,900 or Sh. 5,000 as the case may be on 31st December, 1943, or early in January, and Sh. 2,000 on 19th January, 1944, on which date they also obtained delivery of the vehicle. It appears also from the documents produced at the trial that on 31st December, 1943, application for a permit to sell to the natives was made by Panara through the appellants. This application was refused apparently because it did not bear the recommendation of the D. C. A second application containing the necessary recommendation was made on 31st February, 1944, and notwithstanding that the natives were granted a T. L. B. licence to use the vehicle for transport work no permit to sell the vehicle was issued on the second application and to this day no such permit has been issued. The vehicle is still in the possession of the natives and the purchase price with the appellants.

Three points have been raised in this appeal on behalf of the appellants.

The first is that in the transaction which took place between Panara, the appellants and the natives the appellants acted merely as intermediaries and that if there was a sale of the vehicle at all it was between Panara and the natives. The learned Magistrate found as a fact that there were two sales—one by Panara to the appellants and a second by the appellants to the natives—and as there was abundant evidence upon which he could arrive at such a finding we would not be justified in interfering with it. Indeed we think that on the evidence he could not have come to any other decision.

The second point is that the transaction between the appellants and the natives was not a sale within the meaning of the Regulation because it was conditional on the necessary permit being obtained. This condition is nowhere expressed but it is contended that it must be implied from the knowledge of all the parties that a permit was necessary and from their efforts to obtain it. In short the contention of the appellants is that the property in the motor lorry did not pass with delivery and there was thus no sale. It is frankly conceded by the Crown that unless the property in the motor lorry did pass on delivery, which it contends it did in this case, there was no sale in contravention of the order.

We agree that the word "sell" in the Regulation must be given the meaning which it bears in the Sale of Goods Ordinance, 1930. Thus a sale implies a transaction under which property in the goods have passed. Mr. Burke's contention is that the property in the motor lorry did not pass in this case because the transaction was merely an agreement to sell which did not mature into a sale owing to the failure of the alleged condition to which it was subject.

We think that it is a fair inference to draw from the evidence in this case that the obtaining of a permit was within the contemplation of the parties because not only were they aware that a permit was required but they actually tried to obtain it. Whether this constituted a condition precedent which would have had the effect of preventing the property from passing is a different matter.

It is, in our view, settled law that the passing of property depends in the first instance on the intention of the parties and it is only when such intention cannot be ascertained that rules laid down by the Sale of Goods Ordinance apply. That this is so appears clearly from Section 19 of the Sale of Goods Ordinance, which reads: $-$

"19. (1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such times as the parties to the contract intend it to be transferred.

(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case."

The real question, therefore, in this case is what was the intention of the parties here? In the absence of any written record of the transaction their intention can only be ascertained from their conduct and the surrounding circumstances of the transaction. In the first place, bearing in mind the maxim "res peril domine", is it conceivable that if the property in the motor lorry was not intended to pass the appellants would have delivered the vehicle to the natives without proper safeguards? In the second place why was not the vehicle returned to the seller and purchase money refunded to the purchasers when no permit was forthcoming? To this day the purchasers have the vehicle and the sellers the money. Furthermore prima facie where in a contract of sale of goods the price is paid and the goods are delivered as in this case the property in the goods passes to the purchaser on delivery even though something remains to be done by either or both parties under the contract. In such a case that something which remains to be done is in the nature of a condition subsequent and not a condition precedent as alleged here. Section 21 of the Ordinance appears to confirm that view.

For these reasons we consider that the learned Magistrate was right in finding that there had been a sale without a permit.

The third point in this appeal relates to sentence which it is alleged is excessive. The Magistrate's view was that "the offence ... is a deliberate infringement of the Regulation which was devised to prevent inflation of prices, a war-time measure".

To this ground of appeal we have given long and anxious consideration and having as we think appreciated the ratio for imposing what on a first consideration would appear to be an excessive sentence, we have decided to leave it undisturbed. The evidence reveals that the appellants deliberately flouted the Regulations by selling to two unfortunate natives for an inflated price of Sh. 7.000 a lorry which they had just acquired for Sh. 5,500. The case was not at all a mere omission to obtain a permit, but rather a deliberate plan to sell the lorry without a permit at a price which they must have known would not have been approved. Moreover they had the impudence to bolster up their case by submitting to the authorities two applications for a permit containing false statements. Those applications can only be regarded as part of a design to cloak the real transaction. The learned Magistrate in our opinion correctly appreciated the case and rightly imposed what it is hoped may serve as a deterrent sentence.

We dismiss the appeal.