6.
7 REPOSSESSION BY OWNER
The Hire-Purchase Act 1967 lays down various restrictions on the power of the owner when
recovering possession:
Notices must be given to the hirer when goods are to be repossessed –section 16
After repossession the owner must not sell or dispose of the goods for 21 days –section
17
Hirer’s rights and immunities when goods are repossessed –section 18
Hirer can regain possession of the goods in certain circumstance –section 19
Notice must be given to the hirer when goods are to be repossessed –section 16
If the hirer defaults in two successive payments or if he defaults in the final payment, the owner
can only repossess the goods after following certain procedures which are as follows:
a) He must serve on the hirer a notice in writing of his intention to retake possession;
b) The period fixed by the notice must not be less than 21 days;
c) The owner must personally deliver to the hirer document acknowledging receipt of the
goods. If the hirer was not present at that time, the owner must send him, immediately
after taking possession of the goods, a document acknowledging receipt of the goods.
The document must contain a description of goods and the date, time and place at which
the owner took possession of it;and
d) The owner must serve on the hirer and guarantors, if any, a notice in writing in the form
set out in the Fifth Schedule of the said Act, within 21 days after he has taken possession
of the goods. The owner cannot sell or dispose of the goods without the written consent
of the hirer until the expiration of 21 days after the date of service of the said notice –
section 16. The owner must comply with the requirements of section 16, aforementioned.
However, the first two requirements may be dispensed with if the owner can prove that
there are reasonable grounds for believing that the goods would be removed or concealed
by the hirer contrary to the provision of the agreement –Pang Brother Motor Sdn Bhd v
Lee Aik Seng.
PANG BROTHER MOTOR SDN BHD V LEE AIK SENG
Facts: A car was taken by the respondent on hire-purchase with the appellant. The respondent
failed to pay the installments due and the appellant issued a notice under section 16(1).
Issues: Whether the notice under section 16(1) was in facts served.
Held: Section 16 clearly specifies that the period before which thee seizure can take place shall
be not less than 21 days after the service of the notice. However, the date specified in the notice
was 21 days short of the statutory minimum and the notice was therefore bad in law even if
served and its effect was therefore null and void. Appeal dismissed.
Section 16(A) futher provides that where a hirer is deceased, an owner shall not exercise any
power of taking possession of goods comprised in a hire-purchase agreement arising out of any
breach of the agreement relating to the payment of installment unless there have been four
successive defaults of payments.
Section 16A provides that a hirer who returns goods comprised in a hire-purchase
agreement within 21 days after the service on him of the notice in the form set out in the Fourth
Schedule shall not be liable to pay:
a) the cost of repossession;
b) the cost incidentalto taking possession;and
c) the cost of storage
After repossessionthe owner must not sell or dispose of the goods for 21 days- section 17
The hirer can regain possession of the goods if within 21 days after giving notice to the pursuant
to section 18(1)(a), the hirer does the following:
Pays or tenders to the owner any amount due by the hirer under the hire-purchase
agreement in respect of thee period of hiring up to the date of payment or tender;
Remedies any breach of the agreement or pays or tenders to the owner the costs and
expenses reasonably and actually incurred by the owner in doing any act, matter, or thing
necessary to remedy the breach; and
Pays or tenders to the owner the reasonable costs and expenses of the owner of and
incidental to his taking possession of the goods and of his returning them to the hirer
(section 19(1)).
Section19(2) provides that where goods are returned to the hirer pursuant to the subjection (1)
above and any breach of the hire-purchase agreement has not been remedied, the owner has no
right arising out of breachto take possession of the goods unless:
By notice in writing given to the hirer at the time of the return of the goods he specifies
the breach and requires it to be remedied;and
The hirer fails within 21 days or within the time specified in the notice(whichever is the
longer) after receiving the notice to remedy the breach.
In contrast,for hire-purchase contracts not governed by the Hire-Purchase Act, the owner can
proceed to recover the hire-purchase facility in the usual way.
