The court emphasized that a financier cannot entirely exclude liability for latent defects in a vehicle even if the purchaser signed an acceptance of good condition.

JUDGMENT

Leong Wai Hong JC:

Introduction

[1] The Plaintiff ["Sri Siva"] bought a car from the 1st Defendant ["Naza Kia"]. Sri Siva obtained hire purchase financing from the 2nd Defendant ["Affin Bank"].

[2] Sri Siva sued Naza Kia and Affin Bank in the Sessions Court alleging there were defects in the car.

[3] Affin Bank filed an application under O 18 r 19(1)(b) and/or (c) and/or (d) of The Rules of 2012 to strike out the suit. This was allowed by the Sessions Court on 3 June 2021. In essence, the Sessions Court accepted the submissions of Affin Bank that Sri Siva had examined the car at the time of taking delivery of the car from Naza Kia and had signed the vehicle delivery order dated 5 April 2019 which states that he had received the car "in good order and condition". ["Vehicle Delivery Order"]

[4] The Sessions Court also held that Affin Bank can rely on clauses [d], [e] and [f] of the hire purchase agreement dated 5 April 2019 to exclude its liability to Sri Siva. ["Hire Purchase Agreement"]. Sri Siva filed an appeal to the High Court.

[5] This appeal thus concerns an issue of public importance. I allowed the appeal on 23 March 2022. Affin Bank has now applied for leave to appeal to the Court of Appeal. These are my Grounds of Judgment.

Background Facts

[6] The pleaded case of Sri Siva is as follows. On 16 February 2019 Sri Siva bought a car model Kia Stinger 2.0 GT-Line from Naza Kia for RM 264,178.61. A deposit of RM 27,488 was paid. The car was a Complete Built-Up Unit imported directly from Kia Motors Corporation, South Korea.

[7] Affin Bank financed the purchase through the Hire Purchase Agreement for RM 245,000. Affin Bank thus becomes the owner of the car while Sri Siva is the hirer.

[8] Sri Siva took physical possession of the car on 5 April 2019 and immediately drove it to Johor Bahru to return to his home. During the journey Sri Siva heard an unusual sound coming from the steering wheel. He immediately called Mr Vince a representative of Naza Kia who told him it was a small matter which can be rectified when the car is sent to the service centre after the end of the first 1000 km.

[9] The car continued to give problems from the date of delivery ie 5 April 2019 to 3 August 2019 despite numerous visits to the service centres of Naza Kia.

[10] Details of these problems are pleaded in the Statement of Claim at paras 9 to 28. A list of defects is pleaded in the Statement of Claim at para 29. [Jumping ahead in time sequence - Documents evidencing these defects and complaints are referred to in Sri Siva's reply affidavit dated 21 April 2021 at paras 9 and 10 and exhibited as SS-1 and SS-2 filed to reply to the striking out affidavit of Choy Yen Nye dated 7 April 2021 filed on behalf of Affin Bank.]

Proceedings In The Sessions Court

[11] Sri Siva filed a suit in the Sessions Court on 3 February 2021 against Naza Kia and Affin Bank to cancel the purchase contract with Naza Kia and the Hire Purchase Agreement with Affin Bank, Naza Kia to refund the deposit paid, Affin Bank to refund all instalments paid, general and special damages and costs.

[12] Affin Bank filed an application on 7 April 2021 to strike out the suit under O 18 r 19 (1)(b) and/or (c) and/or (d) of the Rules of 2012.

[13] In the striking out application Affin Bank had submitted that Sri Siva had inspected the car and signed the Vehicle Delivery Order which states that he had received the car "in good order and condition". Affin Bank relied on s 7 (2) of the Hire Purchase Act 1967 to exclude liability.

[14] Affin Bank also relied on the Hire Purchase Agreement clauses [d], [e] and [f] to exclude liability.

[15] The Sessions Court agreed with both grounds and allowed the striking out application on 3 June 2021.

Appeal Before Me

The Law On Striking Out Under Order 18 Rule 19 ROC 2012

[16] The locus classicus on the test to be applied in an application to strike out under O 18 r 19 ROC 2012 was settled by the Supreme Court, the then apex Court, way back in the year 1993 in Bandar Bu