PUBLIC ISLAMIC BANK BERHAD v EDWIN CASSIAN A/L NAGAPPAN @ MARIE

Case Significance

A Court of Appeal ruling that leave to repossess under section 16(1A) of the Hire-Purchase Act 1967 may be sought ex parte, the hirer's right to be heard being preserved by the later Fourth Schedule notice.

This Court of Appeal decision concerns the procedure a hire-purchase owner must follow before repossessing goods where the hirer has paid a substantial part of the price. The appellant, a bank, had obtained leave of court under section 16(1A) of the Hire-Purchase Act 1967 to issue the statutory notices necessary to commence repossession after the hirer defaulted on two consecutive instalments. Because more than 75% of the cash price had been paid, section 16(1A) requires the owner to obtain the court's leave — an additional safeguard beyond the ordinary Fourth Schedule notice under section 16(1) — before it may repossess.

The procedural history ran through three courts: the Magistrate dismissed the hirer's application to set aside the leave; the High Court allowed the hirer's appeal and set the leave aside; and the bank appealed to the Court of Appeal. The central questions were whether an application for leave under section 16(1A) must be made inter partes or may be made ex parte, and what the purpose of the leave requirement is. The Court of Appeal held that section 16(1A) is essentially a procedural safeguard designed to verify that the statutory conditions for repossession — in particular the payment of more than 75% of the price and the qualifying default — have been met, the only material difference from section 16(1) being the level of payment reached. The hirer's right to be heard, engaging the principle of audi alteram partem, is preserved by the subsequent issuance of the Fourth Schedule notice, so an ex parte application for leave does not offend natural justice.

The Court of Appeal allowed the bank's appeal, set aside the decision of the High Court and reinstated the decision of the Magistrate, making no order as to costs because the respondent, since adjudged a bankrupt, was absent from the hearing. The judgment clarifies that leave under section 16(1A) may properly be sought ex parte.