Abdul Hamid J:

The plaintiffs, Credit Corp (M) Berhad, a finance company, are asking for a declaration that motor-car bearing chasis number KE11-805076, engine number 3K-5106032 and registration number JJ4733 is its property (I shall call "the said car").

It is not in dispute that the plaintiffs purchased the said car, a new Toyota Corolla from Borneo Motors (M) Sdn. Bhd. on 20 March 1971.

On 31 March 1971 the plaintiffs entered into a hire-purchase agreement (I shall call "the plaintiffs' agreement") with one Soo Peng Kun of Jalan Kempas, Batu Pahat Garden, Batu Pahat, Johor (I shall call "the hirer") letting on hire the said car to the hirer for a total sum of $8,634 payable by a deposit of $1,759 and the balance by 30 monthly hire rentals commencing on 30 April 1971.

The said car was registered with the Registrar and Inspector of Motor Vehicles, Muar, in the name of the hirer with the plaintiffs' claim to the ownership endorsed on the Register and the registration card of the said car.

It was agreed between the plaintiffs and the hirer inter alia -

(i) that he would not part with personal possession or control of the said car without the prior consent of the plaintiffs;

(ii) that he would not unlawfully sell, dispose of or encumber the said car or any right, title, or interest therein or attempt, purport or agree to do so;

(iii) that upon the plaintiffs becoming entitled to immediate possession under the hire-purchase agreement he would deliver up possession of the said car to the plaintiffs; and

(iv) that until he exercised his option to become the owner of the said car by paying the total rentals and fulfilling all his other obligations under the said hire-purchase agreement the hirer had no property in the said car and would be only a bailee thereof.

It is the plaintiffs' case that the hirer defaulted in payment of hire-purchase rentals from 30 September 1971 and had not completed payment of all his hire rentals. It is alleged that by cl. 6(a) of the agreement, the plaintiff became entitled to immediate possession of the said car from 1 October 1971.

On or about 18 June 1973 the plaintiffs re-possessed the said car while it was in the possession of the second defendant. It bore the same chasis and engine numbers but with registration number JJ4733. The registration number was changed from JJ1807 to JJ4733 on or about December 1971. On the date the car was re-possessed, the said car was registered in the name of the second defendant with an ownership claim by the first defendant endorsed in the Register.

On or about 6 September 1973 Messrs Ng Ek Teong wrote to the plaintiffs alleging that the first defendant was the owner of the said car and second defendant the hirer.

It is also the plaintiffs' case that they had no prior knowledge of and at no time consented to the transfer or sale of the said car to either of the defendants or any other person.

It is not in dispute that on or about 1 February 1972, the second defendant purchased the said car from one Tan Ah Lek of Zin Hoe Motor Co, 28, Jalan Sultanah, Batu Pahat. It is also not in dispute that the registration card of JJ4733 did not bear an existing ownership claim by the plaintiffs.

Finance for the purchase of JJ4733 by second defendant was given by first defendant and a hire-purchase agreement was entered into between the first and second defendants on 1 February 1972.

The second defendant has not paid in full his instalments under the hire-purchase agreement and the registration book for JJ4733 shows second defendant as owner of the car and acknowledges a prior ownership of the first defendant.

It is the second defendant's contention that he is a bona fide purchaser for value without notice of any form of encumbrance at the date and time of purchase whilst the first defendant contend that they had no prior knowledge of any valid existing ownership claim by the plaintiffs at the time they financed the purchase by the second defendant.

It is