Nik Hashim J:

The Appeal

This is an appeal against the decision of the learned senior assistant registrar (the SAR) given on 26 September 2000 dismissing with costs the appellant debtor's notice to oppose at encl. 8A (the notice) the respondent creditor's petition (the petition) at encl. 3A. The bankruptcy proceeding against the appellant debtor was based on the judgment in default for a sum of RM103,310.92 obtained by the respondent creditor against the appellant debtor arising from a hire purchase agreement dated 17 October 1995 entered between them for the hire purchase of a tipper dump truck (the truck) as per terms and conditions contained in the said agreement.

According to s. 5 schedule C to the Bankruptcy Act 1967 (the Act), the respondent creditor must state in his affidavit whether he is or is not a secured creditor. And according to s. 5(2) of the Act, the respondent creditor is required to state in the petition that if he is a secured creditor he must either state that he is willing to give up his security for the benefit of the creditors in the event of the debtor being adjudged bankrupt or give an estimate of the value of his security.

In the said petition at encl. 3A, the respondent creditor stated at para. 3 of the statement:

That we do not nor does any person on our behalf hold any security in the said debtor's estate or any part thereof for the payment of the said sum.

The appellant debtor disputed the above statement contending that the respondent creditor does in fact hold a security in that the appellant debtor has an interest in the truck as a beneficial owner whilst the respondent creditor being the legal owner.

The issue here is to determine whether under s. 5(2) of the Act, the respondent creditor, who is the financier owner of the truck, is a secured creditor in the hire purchase contract.

The learned SAR ruled that the respondent creditor was not a secured creditor. Hence the appeal.

Contentions Of Counsel

Before me, Encik Rajoo D. Moothy, learned counsel for the appellant debtor, argued that goods under a hire purchase agreement, where the financier owner (referring to the respondent creditor) terminates the agreement and sues for the full sum payable under the agreement, must be goods belonging to the hirer. If this is not the case the financier owner will have the best of both worlds, ie, adjudge the hirer a bankrupt based on a certain judgment sum, and still claim rights over the goods. Counsel further submitted that the respondent creditor is a secured creditor by adopting the arrangement of a hire purchase agreement and endorsing "hakmilik dituntut oleh" (ownership claim by) on the registration card (exh. H1 to encl. 11A). By this arrangement the respondent creditor holds on to the goods as a security for a debt. If the respondent creditor were the absolute owner of the goods, why then there is a need for endorsement "hak milik dituntut oleh" on the truck registration card? Since there is no evidence that the respondent creditor has withdrawn the endorsement, the respondent creditor therefore ought to have stated in statement number 3 of the petition that the respondent held security for payment.

Encik Teo Siaw Peng for the respondent creditor, on the other hand, submitted that in hire purchase transaction, until the hirer had exercised his option to purchase the property by paying all the instalments due and fulfil all his obligations under the agreement, the property does not pass to the hirer. Learned counsel cited Credit Corporation (M) Bhd v. The Malaysia Industrial Finance Corpn. & Anor[1976] 1 MLJ 83 in support. He urged the court to rule that the wide definition of "property" in the goods to be limited to the property belonging to the bankrupt. He concluded by saying that since the truck was not held by the respondent creditor as security from the appellant debtor by way of mortgage, charge or lien on the property of the debtor, non- statement of the security in para. 3 of the