Mohd Ghazali Mohd Yusoff J:

[1] This is an appeal against the decision of the Sessions Court Judge, Sessions Court, Johor Bahru wherein the learned Sessions Court Judge allowed the respondent's claim for the sum of RM57,000 together with interest and costs in respect of breach of condition and warranties arising out of a hire-purchase agreement with regard to a purchase of a motor-car, dated 27 March 1991, entered into between the respondent (as hirer) and the appellant (as owner) and dismissed the appellant's counterclaim for a sum of RM25,294.01 being the sum of money paid by the appellant to purchase the said motor-car from its previous owner.

[2] The facts of the case are as follows:

[3] The respondent purchased a motor-car bearing registration No JBX 2923 (hereafter referred to as "the said vehicle") from one Tan Chin Cheng (hereafter referred to as "Tan") at an agreed price of RM82,000 and paid a sum of RM57,000 out of which RM40,517.97 was paid to Tan and the balance of RM16,482.03 to the appellant, a finance company, for the purpose of settling Tan's outstanding account with the appellant as the said car was still under finance by the appellant.

[4] For the balance of RM25,000 the respondent entered into a hire-purchase agreement (hereafter referred to as 'the said agreement") with the appellant on 27 March 1991 wherein that sum was advanced by the appellant to pay Tan the balance of the purchase price.

[5] In the said agreement, the appellant is described as "the owner" and the respondent as "the hirer". The said agreement referred to the said amount of RM57,000 which was earlier paid by the respondent, as being the deposit and that the amount payable by the respondent to the appellant under the said agreement is RM28,250 (inclusive of term charges). It was also stated in the said agreement that the hiring shall be deemed to have commenced on 27 March 1991 and that the hirer shall pay 23 monthly instalments of RM1,178 each and a final instalment of RM1,156.

[6] However on 8 May 1991 the said vehicle was seized by the Customs and Excise Department for an alleged offence under s 135(l)(d) of the Customs Act 1967; that section reads:

Whoever.... knowingly harbours, keeps, conceals or is in possession of, or permits, suffers, causes or procures to be harboured, kept or concealed, any uncustomed or prohibited goods... shall be guilty of an offence...

[7] The evidence adduced at the trial shows that on that date, the Customs issued a notice of seizure (p 94 of the Appeal Record) pursuant to s 114 of the Customs Act to the respondent and informed him that if he wished to claim that the said vehicle is not liable for forfeiture, he must give notice to the Customs and make a claim within one month from the date of seizure failing which the vehicle will be deemed to be forfeited under the provision of s 128(1) of the Customs Act; s 128(l) reads:

[8] If there be no prosecution with regard to any goods seized under this Act, such goods shall be taken and deemed to be forfeited at the expiration of one calendar month from the date of the seizure unless a claim thereto is made before that date in the manner hereinafter set forth.

[9] By a letter dated 13 May 1991 the appellant gave instructions to their solicitors to write to "the relevant authorities" for the return of the said vehicle as they "are the hire purchase owners of the said vehicle" (p 100 of the Record of Appeal) and by a letter dated 19 May 1991, their solicitors wrote to the customs to inform that their client, the appellant, is the lawful owner of the said vehicle and requested for its return.

[10] The customs replied on 20 July 1991 informing the appellant's solicitors that the matter was still under investigation for a suspected offence relating to the vehicle's import permit and/or duty.

[11] Subsequently by a summons dated 27 July 1991 the respondent (plaintiff) filed an action in the Sessions Court, Johor Bahru against the appellant (defendant) claiming that by rea