JUDGMENT

Chong Siew Fai J: This is an appeal by the defendant against the decision of the learned Magistrate giving judgment against the defendant for the 1st plaintiff in the sum RM10,811 with interest at 8% per annum from the date of the judgment and costs.

The case is on a sale and purchase cum a hire-purchase arrangement of a motor vehicle i.e. a van bearing registration No. KJ 8275, involving, as is more often than not, financing by a finance company.

The action was brought by the 1st plaintiff and the 2nd plaintiff against the defendant for RM15,100 and/or damages resulting in an alleged breach of the implied condition of the defendant's right to sell and to give possession and sole and exclusive use and benefit of the van in that on or about 13 May 1985 the van was seized by the Royal Customs and Excise Department, Kuching on the ground that "it is a material evidence to a customs case under investigation regarding its import". There was also a claim for interest and costs.

For the purpose of this appeal, it is convenient to refer to the 1st plaintiff as the customer, the 2nd plaintiff as the finance company, and the defendant as the dealer.

The following facts are not in dispute: 1. In the purchase of the van at RM13,500, the customer negotiated and paid the dealer a deposit RM5,500 (which, however, was disputed by the dealer whose sales credit manager DW2 said the customer paid only RM5,200). The payment of RM5,200 was supported by 2 receipts of the dealer dated 12 January 1983 and 20 January 1983 (Exh.P3 and Exh. P2) respectively. 2. The balance of the price of the van RM8,000 was financed by the finance company with whom the customer entered into a hire purchase agreement dated 24 January 1983 (Exh. P1) under which the customer agreed to pay the rent RM8,000 plus terms charges RM1,600 by 24 Rent Instalments of RM400 each. 3. The rent and terms charges of RM9,600 were fully settled by the customer to the finance company on 25 January 1985 and the registration card of the car was returned to the customer upon the settlement. 4. On 13 May 1985, the van together with the registration card was seized by the Customs & Excise Department, Kuching. 5. Immediately after the van was seized, the customer informed the dealer about the seizure and was told by DW1 that they (the dealer) had bought the vehicle from an importer. 6. On or about 7 May 1990, the Customs and Excise Department sold back the van to the customer for RM500 (Exh.P6).

In her judgment, the learned trial Magistrate dismissed the claim of the finance company on the ground that the latter having been paid by the customer all the amount under the hire-purchase agreement, had, on evidence, suffered no loss or damage. As for the customer, she held that in relation to the van there was a sale and purchase agreement, though not in writing, between the customer and the dealer. This is what she said:

(1) I do believe that there is this sale agreement entered into between the 1st plaintiff and the defendant when the defendant agreed to sell the said van to the 1st plaintiff by arranging a finance for the 1st plaintiff with the 2nd plaintiff under hire purchase agreement. The peculiarity of this arrangement of hire purchase is that the 2nd plaintiff immediately became the owner of the said van until payment fully settled by the 1st plaintiff. Then again it does not actually wiped out the sale agreement that took place between the 1st plaintiff and defendant. (Page 35 of the Appeal Record).

(2) Now, in holding that there is this sale of goods agreement between the 2 parties, ..... It is obvious that there was no written agreement ..... (Page 36 of the Appeal Record).

The learned trial Magistrate then went on to hold that there had been, on the part of the dealer, a breach of the implied warranty of having and enjoying quiet possession of the goods by reason of the seizure of the van by the Customs & Excise Department as well as a breach of the implied warranty of f