GROUNDS OF DECISION

1. This is an appeal by the Appellant against the decision of the learned Magistrate given on 25.5.1996 dismissing the Appellant’s claim and allowing the Respondent’s counterclaim of RM20,302.00.

2. The grounds of appeal are as contained in the Memorandum of Appeal (encl. 8).

Brief Facts

3. As stated in the Statement of Agreed Facts (please see page 89, Record of Appeal), the Appellant is a finance company incorporated in Malaysia. Pursuant to a hire-purchase agreement (hereinafter to be known as “the said agreement“) dated 17.7.1990 entered into between the Appellant and the Respondent, the Respondent agreed to obtain hire purchase facilities from the Appellant in respect of one Honda Prelude (hereinafter to be known as “the said vehicle“).

4. The said agreement stipulated that the total rental of RM20,480.00 was to be paid by the Respondent to the Appellant vide 48 monthly instalments which comprised 47 monthly instalments of RM427.00 and a final instalment of RM411.00.

5. Some 2 years after the said agreement was entered into, the Respondent was informed that the police was looking for the said vehicle for the purpose of investigation. Apparently the Respondent voluntarily surrendered the said vehicle to the police between the 5.10.1992 and 17.10.1992. As no exact date was made available as to when the said vehicle was surrendered and since 5.10.1992 was the date the Respondent came to know that the police was looking for the said vehicle and 17.10.1992 was the date the Respondent first defaulted in the payment of his instalment, the said vehicle must have been surrendered within this period.

6. As stated earlier, the Respondent defaulted in the payment of his instalments to the Appellant from 17.10.1992 onward and according to the Respondent, this was due to the fact that the said vehicle had been seized by the police.

7. Subsequently, upon the completion of the police investigation, the said vehicle was released into the custody of the Appellant on 8.4.1994.

8. However as far back as 29.11.1993, the Magistrate’s Court had ordered that the said vehicle be returned to the Respondent subject to the payment of duty imposed by the Royal Custom and Excise Department (please see pages 60 - 63, Record of Appeal).

9. Nevertheless, consequence upon the Respondent’s failure to service the instalment payments since 17.10.1992, the Appellant in compliance with the Hire Purchase Act, 1967 and the Hire Purchase Regulations 1976 issued and sent a Fourth Schedule Notice of Intention to Repossess and a Regulation 3 Notice of Intention to Retake Possession to the Respondent on 18.11.1992 and 3.12.1992 respectively.

10. Finally, the Appellant took out this Summons against both the Respondent and the 2nd Defendant on 23.12.1993.

Law

11. Section 7(1) of the Hire Purchase Act 1967 provides:-

“In every hire-purchase agreement there shall be -

(a) an implied warranty that the hirer shall have and enjoy quiet possession of the goods;

(b) an implied condition on the part of the owner that he shall have a right to sell the goods at the time when the property is to pass;

(c) an implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party at the time when the property is to pass.“

12. In the Memorandum of Appeal, there are altogether 6 grounds of appeal but as the learned counsel for the Appellant rightly conceded that the crux of this appeal essentially centered on the issue of the Appellant’s title to the said vehicle. Hence the applicability of section 7(1)(b) of the Hire Purchase Act, 1967 becomes crucial to the determination of this case.

13. Learned counsel, Miss Jie Nyuk Choo, in her written submission comprising of a long tirade of numerous propositions and suppositions of the law need no repetition, suffice if a few pertinent points be highlighted. She contended that “the said vehicle being uncustomed goods, resulted in a defect in the title the Appellant had and the title was perfected into a goo