Tony wished to purchase a

sewing machine on hire-

purchase. He entered Yap
Electrical
Goods Store and expressed
this wish to Mamat, a
salesman. Mamat showed
Tony a sewing
machine. At the same time, a
clothes drier which was on
display nearby, caught Tony's
attention. On seeing Tony's
interest in the clothes drier,
Mamat pointed at it and said:
"That's a good buy. It's
economical to use and can dry
5 kilos of clothes in 1 hour."
On hearing this, Tony
informed Mamat that he would
take the clothes drier as well as
the sewing machine on hire-
purchase terms.
Recently, Tony won the first
prize in a singing competition
and received a sewing machine
as a prize. Since he now has
two sewing machines in the
house, Tony wished to assign
the
sewing machine that was on
hire-purchase with Yap
Electrical Goods Store to his
friend, Sidhu. Tony informed
Yap Electrical Goods Store
about the assignment to
Sidhu and was told that
consent would be given
provided he paid RM400 to
Yap
Electrical Goods Store.
Advise Tony.
Tony wished to purchase a sewing machine on hire-purchase. He entered Yap Electrical Goods Store
and expressed this wish to Mamat, a salesman. Mamat showed Tony a sewing machine. At the same
time, a clothes drier which was on display nearby, caught Tony’s attention. On seeing Tony's interest
in the clothes drier, Mamat pointed at it and said: "That's a good buy. It's economical to use and can
dry 5 kilos of clothes in 1 hour." On hearing this, Tony informed Mamat that he would take the
clothes drier as well as the sewing machine on hire-purchase terms.

Recently, Tony won the first prize in a singing competition and received a sewing machine as a prize.
Since he now has two sewing machines in the house, Tony wished to assign the sewing machine that
was on hire-purchase with Yap Electrical Goods Store to his friend, Sidhu. Tony informed Yap
Electrical Goods Store about the assignment to Sidhu and was told that consent would be given
provided he paid RM400 to Yap Electrical Goods Store.

Advise Tony.
 The issue is whether Tony have the right of assignment of his sewing machine under hire-
purchase with Yap Electrical Goods to his friend, Sidhu.

In this situation, Tony is a hirer who has taken goods, a sewing machine and a clothes drier,
from the owner, Yap Electrical Goods Store, and agreed to take those goods under a hire purchase
terms as prescribed under Section 2 of the Hire-Purchase Act 1967. Sewing machines and clothes
driers are considered consumer goods, under Section 1 of the First Schedule of the Hire-Purchase
Act 1967. As such, by virtue of the same provision, both Tony and Yap Electrical Goods Store possess
rights and liabilities as prescribed by the Hire-Purchase

Accordingly, one such rights of a hirer under the (HPA) is the right to assignment as
prescribed under Section 12.32 Section 12(1) prescribes for the right of hirer to assignment whereas
Section 12(4) prescribes the right of owner. Hence, Section 12(1) prescribes the hirer rights of
assignment of the right, title and interest with the consent of the owner or without his consent if
such consent is unreasonably withheld. Whereas, Section 12(4) prescribes the owner with the right
to determine the form of assignment that the hirer should comply with and to impose reasonable
costs incurred as to the preparation of the assignment and stamping of assignment. Section 12(4)
also prescribes that the owner could withheld consent until the assignee agree to be made to be
personally liable to pay any unpaid instalments remaining and to perform and observe all other
stipulations and conditions of the hire-purchase agreement during the residue of the term. This is in
short, means to indemnify the hirer in respects of those liabilities.

However, such reasons given by the owner to restrict consent of assignment of hirer must
be reasonable in pursuant to that, if the hirer feel that his consent had been unreasonably withheld
by the owner, he may apply to the High Court for and order declaring that the consent for
assignment had been unreasonably withheld as prescribed by Section 12(3). What is said to be
unreasonably withheld is when, the owner requires payment or other consideration for consent to
be given [Section 12(2)] and/or when the owner requires other or additional guarantors when the
same guarantors have agreed to guarantee the assignee’s obligations Section 12(5).

In this case, Tony have the rights to assignment as per Section 12(1) with consent of the
owner. Although Yap Electrical Goods Store have the right to impose conditions prior to giving
consent as per Section 12(4), such condition must be reasonable as. In accordance with Section12(4)
(b), Yap Electrical goods could only require Tony to pay a reasonable cost for the stamping or
registering the assignment agreement. A payment of RM 400.00 is not deemed to be reasonable as
it is far beyond what is a reasonable cost for stamping or registering the assignment agreement. As
such, under Section 34(g), the condition imposed by Yap Seng Electrical Goods Store is ultra vires the
HPA 1976, and thus void and have no effect. Tony could invoke Section 12(3) and go to the High
Court to seek an order declaring his consent was unreasonably withheld.

To summarize, Tony could take action against Yap Electrical Goods Store for unreasonable
imposition of payment and unreasonable withholding of consent of assignment under Section 12(2).
He could invoke Section 12(3) to get consent to assign his sewing machine to his friend, Sidhu.