KC Vohrah J:

The defendant wanted to buy a Proton Saga from the plaintiff. What he did on 29 May 1989 was to sell a car, a Toyota Corolla, bearing registration number CR 9806, purportedly registered with the JPJ Pahang, to the plaintiff and he used almost the whole bulk of whatever he received from the sale of that car to purchase the Proton Saga from the plaintiff on the same date.

The Toyota car was seized by the police some six months later, on 18 January 1990. It is not disputed that the car that the defendant sold to the plaintiff was a stolen car and that the registration card in respect of the car was a forgery. Neither is it not disputed that the plaintiff or the defendant had not known that the car was a stolen car.

The plaintiff sued for the refund of RM18,728.45 being the money had and received by the defendant as consideration for the Toyota car.

The defendant resisted the claim on the ground that the defendant when he originally bought the Toyota from a third party was not aware that it was a stolen car; he had been a bona fidepurchaser of the said car with no knowledge whatsoever of defects relating to the ownership of the car and he had acquired good title in the car under s. 29 of the Sale of Goods Act 1957. The defendant also relied on Soon Teck Finance (M) Bhd v. Public Finance Bhd [1988] 3 MLJ 417 for the proposition that the defendant had a better title. With respect the case of Soon Teck Financedoes not apply in this case as the plaintiff is relying on s. 14(a) of the Sale of Goods Act 1957.

Before I go to s. 14(a) of the said ActI would like to point out to s. 4(1)which states that a "contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price." The transfer of property as stated in the provision constitutes the essence of a contract of sale and the seller who does not so transfer the property breaks the basic duty created by the contract and there is a total failure of consideration. I now turn to s. 14(a) of the Sale of Goods Act 1957.

Section 14(a) reads as follows:

14. In a contract of sale, unless the circumstances of the sale of the contract are such as to show a different intention there is:

(a) an implied condition on the part of the seller that, in the case of a sale, he has a right to sell the goods, and that, in the case of an agreement to sell, he will have a right to sell the goods at the time when the property is to pass;

(b) ...

(c) ...

Section 14(a) of the said Actis equivalent to s. 12 of the English Sale of Goods Act 1893. In the English Court of Appeal case of Rowland v. Divallat 505 Scrutton LJ had this to say about s. 12 at 505:

Section 12 says in express terms that there shall be 'An implied condition on the part of the seller that ... he has a right to sell the goods.' It now being a condition, wherever that condition is broken the contract can be rescinded, and with the rescission the buyer can demand a return of the purchase money, unless he has, with knowledge of the fact, held on to the bargain so as to waive the condition.

In that case the plaintiff bought a motor car from the defendant and used it for several months. It appeared that the car had been stolen before the defendant became possessed of it and therefore he had no title to it. The plaintiff was compelled to surrender it to the true owner. The plaintiff sued the defendant to recover back the purchase money that he had paid, as on a total failure of consideration.

It was held by the Court ot Appeal that notwithstanding that he had had the use of the car the consideration had totally failed, and he was entitled to get the purchase money back.

Atkins LJ had this to say at 506 and 507:

... there can be no sale at all of goods which the seller has no right to sell. The whole object of a sale is to transfer property from one person to another ...

... In fact the buyer has not received any part of that which he contracted to receive - name