1. Sale of motor vehicles — Non-payment of balance purchase price — Claim for breach of contract under Sale of Goods Act 1957. (Para 4 , 5 , 6 , 7 )
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2018 MarsdenLR 205
HIGH COURT (ALOR SETAR)
HASHIM HAMZAH, J
Hatta Trading (M) Sdn Bhd – Plaintiff
Versus
Hong Seng Assembly Sdn Bhd – Defendant
CIVIL APPEAL NO 12(B)NCVC-01–01 OF 2017
Important Points
Registration of motor vehicles in a buyer's name does not create a presumption of full payment nor release the buyer from the contractual obligation to pay any outstanding balance of the purchase price under the Sale of Goods Act 1957.
Subject
Civil Law - Contract Law
Act Referred
Hire Purchase Act 1967
Limitation Act 1953: S.6
Evidence Act 1950: S.114(g)
Sale of Goods Act 1957: S.55(1)
Limitation Act 1953: S.6
Evidence Act 1950: S.114(g)
Sale of Goods Act 1957: S.55(1)
Headnote
(A) Sale of Goods Act 1957 - Section 55(1) - Hire Purchase Act 1967 - Limitation Act 1953 - Section 6 - Evidence Act 1950 - Section 114(g) - Action for breach of contract for the sale of ten motor vehicles - Seller sued for the outstanding balance of the purchase price - Buyer contended that full payment was made prior to registration and delivery - Court held that the Hire Purchase Act 1967 is inapplicable where there is no agreement between a dealer, hirer, and owner - The claim falls under Section 55(1) of the Sale of Goods Act 1957, allowing a seller to sue for the price where the property has passed to the buyer who wrongfully neglects or refuses to pay. (Paras 16-18)
(B) Appeal - Scope of review - Appellate court will not normally disturb findings of fact made by the trial court, especially on primarily factual issues, unless the decision is plainly wrong - Appellate court reviews findings of primary fact and may draw different inferences from the same facts. (Paras 9-12)
(C) Evidence Act 1950 - Section 114(g) - Adverse inference - To attract adverse inference, the party must show that the non-production of a document or statement of account was material to the case. (Paras 28-30)
(D) Motor Vehicle Registration - Registration of vehicles in the name of the buyer does not imply that full payment has been made, nor does it release the buyer from the obligation to pay the remaining balance of the purchase price. (Paras 32-34)
Facts of the case:
The seller sold ten motor vehicles to the buyer for a total purchase price of RM 1,564,788.00. The seller alleged that the buyer only paid RM 1,150,000.00, leaving an outstanding balance of RM 414,788.00. The buyer contended that full payment had been made before the vehicles were registered and delivered. The trial court allowed the seller's claim, leading to this appeal by the buyer.
Findings of Court:
The court found that the transaction was a contract of sale governed by the Sale of Goods Act 1957 and not a hire-purchase agreement. The claim was not time-barred under the Limitation Act 1953. The seller proved the total price and the partial payments on a balance of probabilities. There was no basis to invoke adverse inference against the seller, and the registration of the vehicles in the buyer's name did not prove full payment.
Issues: Whether the claim was illegal under the Hire Purchase Act 1967; whether the claim was time-barred under the Limitation Act 1953; whether the seller failed to prove the claim on a balance of probabilities; whether adverse inference should have been invoked under the Evidence Act 1950; and whether registration of vehicles in the buyer's name presumes full payment.
Ratio Decidendi: The court ruled that the registration of motor vehicles in the buyer's name does not discharge the buyer's liability to pay the remaining purchase price. Furthermore, a simple sale of goods is governed by the Sale of Goods Act 1957, and the Hire Purchase Act 1967 only applies to specific tripartite agreements between a dealer, hirer, and owner.
Result: Defendant’s appeal was dismissed with costs.
(B) Appeal - Scope of review - Appellate court will not normally disturb findings of fact made by the trial court, especially on primarily factual issues, unless the decision is plainly wrong - Appellate court reviews findings of primary fact and may draw different inferences from the same facts. (Paras 9-12)
(C) Evidence Act 1950 - Section 114(g) - Adverse inference - To attract adverse inference, the party must show that the non-production of a document or statement of account was material to the case. (Paras 28-30)
(D) Motor Vehicle Registration - Registration of vehicles in the name of the buyer does not imply that full payment has been made, nor does it release the buyer from the obligation to pay the remaining balance of the purchase price. (Paras 32-34)
Facts of the case:
The seller sold ten motor vehicles to the buyer for a total purchase price of RM 1,564,788.00. The seller alleged that the buyer only paid RM 1,150,000.00, leaving an outstanding balance of RM 414,788.00. The buyer contended that full payment had been made before the vehicles were registered and delivered. The trial court allowed the seller's claim, leading to this appeal by the buyer.
Findings of Court:
The court found that the transaction was a contract of sale governed by the Sale of Goods Act 1957 and not a hire-purchase agreement. The claim was not time-barred under the Limitation Act 1953. The seller proved the total price and the partial payments on a balance of probabilities. There was no basis to invoke adverse inference against the seller, and the registration of the vehicles in the buyer's name did not prove full payment.
Issues: Whether the claim was illegal under the Hire Purchase Act 1967; whether the claim was time-barred under the Limitation Act 1953; whether the seller failed to prove the claim on a balance of probabilities; whether adverse inference should have been invoked under the Evidence Act 1950; and whether registration of vehicles in the buyer's name presumes full payment.
Ratio Decidendi: The court ruled that the registration of motor vehicles in the buyer's name does not discharge the buyer's liability to pay the remaining purchase price. Furthermore, a simple sale of goods is governed by the Sale of Goods Act 1957, and the Hire Purchase Act 1967 only applies to specific tripartite agreements between a dealer, hirer, and owner.
Result: Defendant’s appeal was dismissed with costs.
Legal Category Hierarchy
Advocates:
MM Athimulan (Athimulan & Co) for the appellant.
Gunaseelan Ganesan (G Gunaseelan & Assoc) for the respondent.
MM Athimulan (Athimulan & Co) for the appellant.
Gunaseelan Ganesan (G Gunaseelan & Assoc) for the respondent.
Table of Contents
2. Legality under Hire Purchase Act 1967 — Limitation period — Burden of proof — Adverse inference under Evidence Act 1950 — Presumption of payment upon registration. (Para 14 , 15 , 19 , 23 , 26 , 31 , 32 )
3. HPA 1967 inapplicable to straight sales — Limitation period not expired — Evidence of part payment established debt — Registration of ownership does not discharge payment obligations. (Para 16 , 18 , 21 , 22 , 24 , 25 , 29 , 30 , 33 , 34 )
4. Seller may sue for price under section 55(1) Sale of Goods Act 1957 if property passed and buyer refuses payment. (Para 17 )
5. Appeal dismissed with costs. (Para 35 )
6. Does the Hire Purchase Act 1967 apply to a simple sale of motor vehicles where the buyer promises to pay after obtaining a loan?
No. The Hire Purchase Act 1967 applies to agreements between a dealer, hirer, and owner. A simple sale where the buyer refuses to pay for goods after property has passed is governed by section 55(1) of the Sale of Goods Act 1957. (Para 16 , 17 , 18 )
7. Does the registration of a motor vehicle in the buyer's name create a presumption that the purchase price has been paid in full?
No. Registration of the vehicles in the buyer's name as the owner does not mean the buyer is released from the obligation to pay the remaining balance of the purchase price. (Para 32 , 33 , 34 )
8. When is an adverse inference drawn under section 114(g) of the Evidence Act 1950?
An adverse inference is drawn when a party fails to produce evidence that is material to the case. If the evidence is not shown to be material enough to attract such an inference, the court will not invoke it. (Para 26 , 28 , 29 , 30 )
Hashim Hamzah J:
JUDGMENT
INTRODUCTION
[1]For ease of reference, the parties in the present appeal shall be referred as they were in the Sessions Court.
[2]This is an appeal by the Defendant against the decision of the learned Sessions Court Judge (“SCJ”) in allowing the Plaintiff’s claim for breach of contract.
BRIEF FACTS
[3]Briefly, the facts are as follows.
[4]The Plaintiff sold ten motor vehicles which were all registered and delivered to the Defendant. The total purchase price was RM 1,564,788.00.
[5]The Plaintiff claimed that all ten motor vehicles were registered and delivered to the Defendant upon the Defendant’s assurance and undertaking that the outstanding amount will be paid upon obtaining a loan from a bank.
[6]It was the Plaintiff’s case that the Defendant, from 28.6.2010 until 19.8.2013 only paid RM 1,150,000.00 to the Plaintiff. There was an outstanding balance of RM 414,788.00 which was still due to the Plaintiff.
[7]The Defendant, on the other hand, contended that full payment of the purchase price had already been paid to the Plaintiff prior to the registration and delivery of the ten motor vehicles. Thus, the Defendant contended that there was no debt owed to the Plaintiff.
[8]After full trial, the learned SCJ on 22.12.2016 had allowed the Plaintiff’s claim with cost. Dissatisfied with the learned SCJ’s decision, the Defendant filed this appeal.
LAW ON APPEALS
[9]It is trite law that even though an appeal is by way of a rehearing, an appellate court will not normally disturb the finding of fact made by the trial court.
[10]This is especially so when the issues raised are primarily factual issues rather than legal issues (see Huo Heng Oil Co v. Tang Tiew Yong [1984] 1 LNS 45;; Voon Jan Choo v. Lee Chie Siang & Anor
[11]The law is also clear that an appellate court may interfere if the decision of the trial court is plainly wrong (see Gan Yook Chin & Anor v. Lee Ing Chin & Ors APV Hill & Mills Sdn. Bhd. v. AQ-Pacific Wide Sdn Bhd & Anor
[12]It is also an established principle of law that an appellate court does not make any finding of fact but merely reviews the finding of primary fact made by the trial court. Different inferences however may be drawn by the appellate court based on the same facts (see Yong Nyee Fan and Sons Sdn Bhd v. Kim Guan and Co Sdn Bhd [1978] 1 LNS 244;; Eng Thye Plantation Bhd v. Lim Heng Hock & 4 Ors
[13]Bearing all these principles of law in mind, I now turn to consider the issues raised by both parties in the present case.
ISSUES
[14]In the present appeal, the issues raised by the Defendant can be summarised as follows:
a.whether the Plaintiff’s claim was illegal under the Hire Purchase Act 1967 (Revised 1978) (“HPA 1967”);
b.whether the Plaintiff’s claim was time-barred under the Limitation Act 1953 (Revised 1981) (“Limitation Act 1953”);
c.whether the Plaintiff had failed to prove its claim on the balance of probabilities;
d.whether the learned SCJ had erred in his failure to invoke adverse inference against the Plaintiff under section 114(g)Evidence Act 1950
e.whether adverse inference against the Defendant was wrongfully invoked;
f.whether the learned SCJ had erred in his failure to presume that full payment was already paid upon registration of the ten motor vehicles in the Defendant’s name.
WHETHER THE PLAINTIFF’S CLAIM WAS ILLEGAL UNDER HPA 1967
[15]It was submitted by the learned counsel for the Defendant that the Plaintiff’s claim was illegal since there was non-compliance with the HPA 1967.
[16]However, I am of the view that HPA 1967 was not applicable to the dispute between the Plaintiff and the Defendant in the present case. HPA 1967 covers a hire-purchase agreement made between a dealer, a hirer and an owner where the owner lets the said goods to the hirer who furnished payments to the dealer for the said goods. There was no such agreement in the present case.
[17]I also found that the learned SCJ had correctly made the following finding and observation that the Plaintiff’s claim against
