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2025 MarsdenLR 4914
HIGH COURT MALAYA KOTA BHARU
PUSAT PEMERIKSAAN KENDERAAN BERKOMPUTER (PUSPAKOM) – Appellant
Versus
SUFRIN MANSOR & ORS AND OTHER CASES – Respondent
[Civil Suit No: DA-12B-19-05/2023 DA-12B-20-05/2023 & DA-12B-22-06/2023]
The court held that motor vehicle inspection must meet reasonable care standards, rejecting invasive methods, and affirmed that contracts are void if the subject matter is illegal, necessitating refunds.
Headnote:(A) Road Transport Act 1987 - Sections 10(3)(a), 12(1) - Contracts Act 1950 - Section 25 and Section 66 - Appeal regarding negligence in vehicle inspection and non-disclosure of tampered chassis number - The court found Puspakom did not breach its duty of care in conducting visual inspections; standard operating procedure satisfied legal requirements (Paras 24, 26). The findings showed the object of the sale was void as the subject was illegal and Maybank was obliged to return the purchase price to Sufrin (Paras 62, 66).
(B) Negligence - Duty of care - The court held that reasonable care does not require invasive procedures such as using paint removers; Puspakom complied with expected standards (Paras 31, 33).
(C) Caveat emptor - The principle does not apply when the identity of the object of sale is under question (Paras 52, 54).
(D) Damages - The claimant was found not entitled to damages for loss since the contract was void (Paras 78, 80).
Facts of the case:
The appeals were filed by three parties regarding a judgment ordering payment of RM67,500.00 for a vehicle traction after it was later found to have tampered identification markings.
Issues: The main issues were whether Puspakom was negligent in its inspection and whether the claims against Maybank and Focul Park hold merit.
Findings of Court:
The court found that Puspakom met its standard of care, that Focul Park did not provide misleading information, and that Maybank was liable for selling a vehicle with a void contract.
Ratio Decidendi: The court ruled there was no breach of duty by Puspakom, emphasized the limits of caveat emptor regarding identity issues, and identified the obligation of the seller to provide a legal title.
Result: Puspakom's and Focul Park's appeals allowed; Maybank's appeal dismissed.
In this case, Puspakom conducted a visual inspection of the vehicle during the first inspection, which was in accordance with its standard operating procedure. The inspection involved visually checking the chassis and engine numbers, which, at the time, could be seen clearly and without signs of tampering. The court found that this visual inspection was sufficient and met the reasonable standard of care expected of Puspakom for vehicle registration purposes (!) (!) .
Furthermore, the court determined that requiring Puspakom to perform more invasive procedures, such as using paint remover or conducting chemical tests, would be unreasonable and impractical, as it could cause damage to the vehicle and delay the registration process. The court emphasized that the inspection carried out was consistent with the standard set by relevant authorities and was sufficient for the purposes of registration, which does not necessitate more invasive or extensive testing (!) (!) .
The court concluded that Puspakom had fulfilled its duty of care within the reasonable standard expected of it, given the circumstances and the nature of the inspection. Therefore, it was not negligent in its conduct during the first inspection. The visual inspection was deemed adequate, and Puspakom had not breached any duty by adhering to the standard operating procedures and legal requirements (!) (!) .
| Table of Content |
|---|
| 1. overview of appeals and factual background. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 2. necessity for diligence in inspection. (Para 11 , 12 , 13 , 14 , 15) |
| 3. duty of care in vehicle inspections. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23) |
| 4. reasonable standard of care established. (Para 24 , 25 , 26 , 29 , 30) |
| 5. negligence and misdescription in auction. (Para 34 , 36 , 37 , 39 , 40 , 41 , 42 , 43 , 44) |
| 6. evidentiary issues regarding ownership and legal rights. (Para 49 , 50 , 54 , 56) |
| 7. breach of contract due to illegality. (Para 58 , 60 , 61 , 62 , 63 , 68 , 70) |
This Appeal
[1] There are 3 appeals before this court. The 1st appeal is an appeal filed by Pusat Pemeriksaan Kenderaan Berkomputer ("Puspakom Appeal"), the 2nd appeal is an appeal filed by Focul Park Sdn Bhd ("Focul Park Appeal"), and the 3rd appeal is an appeal by Maybank Islamic Berhad ("Maybank Appeal").
[2] All the 3 appeals above are against the judgment of the Sessions court allowing the respondent's claim against them and ordered them to jointly and severally pay the respondent ("Sufrin") the sum of RM67,500.00 as a refund of the purchase price of a car purchased via auction, general damages of RM30,000.00, interest and costs of RM10,000.00.
[3] These appeals are heard together before this court as they arose from the same judgment of the Sessions court and arose from the same factual matrix. I will address all the appeals in this Grounds of Judgment.
Background Facts
[4] Maybank is the owner of a car bearing registration number WYL4221 ("the Car") which was previously hired by one Mohd Syaifun who hired the car under a hire purchase agreement with Maybank. The said Mohd Syaifun defaulted in the payment under the hire purchase agreement and the Car was repossessed by Maybank.
[5] Upon repossession, the Car was kept at Focul Park's storage facility pending an auction. Focul Park is Maybank's garage panel and was appointed by Maybank to handle its auction of repossessed vehicles.
[6] Sufrin participated in the auction conducted by Focul Park and was successful in the said auction and subsequently entered into a motor vehicle sales contract with Focul Park. It is stated in the contract that Maybank is the legal owner of the Car and the payment for the purchase price is to be made to Maybank. Sufrin had paid a total sum of RM67,500.00 to Maybank.
[7] As a requirement to effect the transfer of ownership, Sufrin brought the Car to Puspakom to be inspected ("the 1st inspection"). The Car passed the inspection and was subsequently registered in Sufrin's name.
[8] Subsequently, on 28 April 2016 (about a month after the 1st inspection), Sufrin brought the car to Puspakom for another inspection ("the 2nd inspection") for the purposes of financing. However, the car failed the 2nd inspection as Puspakom detected tampering on the Car's chassis number.
[9] After failing the 2nd inspection, Sufrin sent the Car to Jabatan Pengangkutan Jalan ("JPJ") for inspection. JPJ subsequently sent the car to the Chemist Department who confirmed that the chassis number is not original, resulting in the car to be impounded by JPJ.
[10] Sufrin claimed for the refund of purchase price and general damages against Maybank, Focul Park, and Puspakom.
Puspakom's Appeal
[11] The issue in this appeal is whether Puspakom was negligent in failing to detect the tampering to chassis number of the Car in the 1st inspection.
[12] The trial judge ("SCJ") found that Puspakom was negligent in the 1st inspection for its failure to detect the tampering to the chassis number of the Car and it should have used paint remover to inspect the chassis number.
[13] Puspakom argued that it had complied with its standard operating procedure by conducting visual inspection during the 1st inspection as the chassis number can be seen clearly. It also argued that the usage of paint remover was not necessary in the circumstances.
[14] Sufrin argued that Puspakom was negligent when it did
