A CECIL COLE Vs. NANALAL MORAJI DAVE

JUDGEMENT

(1.) [His Lordship after giving the facts of the case proceeded:] The first point that really arises is what is the nature of the agreement which the parties entered into. Was it a hire-purchase agreement in the sense in which it is so understood in England, viz., no absolute sale, but only a hiring of the chattel by a person, who has the option of returning it at anytime before the various installments are paid ? Or, on the other hand, despite the language which, the parties have used, was it really a sale having regard to what the parties in fact agreed to do ? Before I turn to the natural document in this case, I wish, to keep (sic) two points of principle clearly before me so that when I come to the document, I can show what in particular are the relevant passages to be borne in mind.

(2.) Now there are two lines of authority illustrating, what I have Just said. The first line of cases illustrates a hire-purchase agreement proper, viz, where the hirer of a chattel has only an option to purchase the goods and is under no obligation to purchase. That is shown in Helby V/s. Mattheus (1). A leading case on the other side of the line it Lee V/s. Butler (2) where notwithstanding the fact that the parties spoke of themselves as being hirers and so on, and notwithstanding that it was expressly agreed that no property other than as tenant should vest in the hirer until the whole of the payments of rent thereby reserved should have been actually paid, the Court there held that the hirer of the goods had agreed, to buy them notwithstanding the language used in the agreement.

(3.) Then if I turn to Belsize Motor Supply Company V/s. Cox (3) the Judgment of Mr. Justice Channel states the dividing line between these two classes of cases. In that particular case the owners of a, motor vehicle let it to certain hirers for twenty-four calendar months at threat of -1512$ 2d per calendar month. On the signing of the agreement the hirers were to pay, and dis pay, - 50 on account of hire in advance and each subsequent payment was to be made in advance on specified dates. The hirers were not to re-let, sell, or part with the vehicle without the consent in writing of the owners. But if the hirers should, on or before the expiration of the twenty-four Calendar months, be desirous of purchasing the vehicle they could do so by making the amount of hire paid equal to the amount of -42211s 6d. Then if the hirers did certain things, of which parting with the possession of the vehicle without the owners consent in writing was one it was made lawful for the owners and they were authorized to take possession of the vehicle and terminate the agreement. Then it appears that while the agreement was subsisting, there being a sum due and unpaid on account of hire, the hirers without the consent of the owners, pledged the (sic) to a pledgee who took it in good faith and without notice of the owners rights. Subsequently the owners on hearing of pledge demanded the vehicle from the the full amount required to purchase cab; but the - 50 would have been paid as deposit on account of purchase-money in advance, The document on the face of it gives the hirers an option to purchase at any time by paying up the difference between - 424 11 s. 6d. and the sum already paid. That is an option which no doubt the hirers would probably exercise unless it proved valueless, but it is none the less an option when they had paid the twenty-fourth installment to decline to proceed with the purchase, and to claim a retain of the - 50 deposit. In my view they were never bound to pay more than - 374 12 s. They never bound themselves to pay the whole sum of - 424 11 s. 6 d. The case, therefore, comes within the principle of Helby V/s. Matthews (1) and not within Lee V/s. Butler (2) "