(COURT OF APPEAL)*

ROUCHDI BOUTROS v. CHRISTOS SIMOS

(AC/REV/1 957)

Principles

·  Hire-purchase-contract providing for recovery of car and installments on default — question of penalties and liquidated damages.

Hire-purchase-contract providing for recovery of car and installments on default — question of penalties and liquidated damages.

Judgment

The defendant took possession of a car under a hire-purchase agreement with the plaintiff. The total price was L.E,800 to be made up bay an initial deposit. Of 200 and balance by month installments of L. E.40 each, after the payment of which the defendant was to have the option of buying the car. The plaintiff alleged that the defendant had only made an initial payment of L.E. 150 and had paid no installments. The trial judge made an order for delivery of the car to the plaintiff, and for payment by the defendant of L.E.6oo.

Quaere  this decree could stand, having regard to Lamdon Trust v. Hurrell (1955) 1 all E.R.839.(1955) 1 W.L.R.391………revision  the plaintiff and   defendant  entered  into contract for the hire- purchase of a Peugeot motor car, at a total price of!J.8oo. The defendant agreed to pay an initial deposit of £.200 and the balance by monthly installments of 4O each. The plaintiff alleged that the defendant had only paid an initial sum of and no installments. The defendant alleged that he had paid the initial sum of /J.200, and that he had in fact paid some installments. He also raised various other pleas which are irrelevant to this report. The trial judge found in favor of the plaintiff except that he found that the defendant had paid the initial sum of .2oo, and he gave judgment for £.6oo and also ordered the defendant to deliver up the car to the plaintiff. The defendant complained that the trial judge had not granted him an adjournment to enable him to bring his witnesses. He applied for Revision to the High Court Judge who summarily dismissed it. The defendant now applied for

(*) Court: R.C. Soni and.B.awadalla  JJ

Revision to the Court of Appeal. The Court granted this application on grounds which do Is for report, but at the end of the judgment the Court commented on the question whether the decree was in any even right in law.

Advocates

Abd  el Wahab Mohmd. Abd el Wahab for the applicant (the defendant)

The respondent (the plaintiff) appeared in person.

R.C. Soni, J. explained the reasons why the Court had decided to grant a retrial, and continued.

Before we conclude we must say that we drew the attention of the learned advocate for the plaintiff to the fact that the present decree in any case required consideration. Merely because a hire-purchase agreement has been entered into, it does not follow that agreement can be made a basis for a decree. A contract is not enforced if there is a sum set out to be paid as a penalty. Whether the sum set out as a penalty or represents liquidated damages is a matter which the Courts have to examine. In the present case the trial Court in its decree ordered the return of the car, and it also allowed the whole of the unpaid price of the car, amounting to /J.6oo, with interest. We were informed that the car had, on sale, fetched.600is means that the plaintiff is going to get .I2o0instead of L.8oo, which itself was a higher figure than the cash price, as it was to be paid by installments. We are not deciding what should be the final result of the case, nor the final figure, but are merely drawing the attention of the trial Court to the lengths to which the decree goes.

Recently the Courts in England have held a number of hire-purchase agreements unenforceable as involving penalties. This matter should receive the attention of the trial Court when the case is heard afresh.

A case which the Court might study is Lamdon Trust v. Hurrell (1955)   1 All E.R. 839, 1 W.L.R. 391, wherein is mentioned a judgment of the English Court of Appeal, which Denning L.J. followed. The court at the retrial should reframe the issues if necessary.,

B. Awadalla, J. I concur.

Retrial Ordered

1-The case referred to is Cooden En Ltd. v.Stamford [ I.Q.B. 86. Ed.