Lucy an exmodel bought a car worth RM15000000 from Syarikat

Lucy, an ex-model, bought a car worth RM150,000.00 from Syarikat Laju Sdn Bhd which was owned by Mano. Lucy entered into a hire purchase agreement with Bank Masyuk Berhad (BMB) which was guaranteed by Joseph. Lucy agreed to pay a deposit of RM 15,000.00 while the balance will be paid by instalment for 9 years.

Six months later, Lucy suffered financial problems due to lack of modelling offers having to pay for other bills. Thus, Lucy failed to pay three months instalment consecutively. Due to the failure, BMB sent its agent to repossess the car from Lucy without giving any prior notice. Lucy dissatisfied with BMB’s action and intended to take legal action.

Meanwhile, BMB also served a notice of claim to Joseph for the accrued balance. As such, Joseph would like to know his rights as a guarantor under hire-purchase agreement.

Advise Lucy and Joseph in pursuant to the provisions of the Hire Purchase Act 1967 and relevant cases.

Solution

In this case the issue is that Syarikat Laju Sdn Bhd has right to repossess the car or not. In general conditions if the owner did not get the installments and hirer breach the agreement because of any obligation, then under hire-purchase agreement owner has the right to repossession of the commodity. But here the owner did not send the prior notice.

Section 16 of Hire Purchase Act 1967 says that the owner first has to send a notice to warn the hirer about the repossession. The owner have sent his agent without sending any notice so it is a clear breach as to the requirement of the law