Paul Raj A/L Davis v Mercedes-Benz Services Malaysia Sdn. Bhd. (BA-12ANCC-25-11/2024)

These are appeals from the Session Court Judge’s (SCJ) decision allowing the Respondent’s/Plaintiff applications for summary judgment under Order 14 of the Rules of Court 2012 (ROC) and a striking out order of the Appellant’s/Defendant counterclaim pursuant to Order 18 Rule 19 of the ROC.

Both appeals were heard together, and after hearing the parties and perusing the Appeal Records, I dismissed both appeals with costs of RM5000.

Appellant now appealed to the Court of Appeal, and below are my reasons.

Respondent’s claim against Appellant is for breach of the Hire Purchase Agreement (HPA) in relation to a vehicle, Mercedes-Benz, registration number BNW 203 (the said vehicle). Appellant failed to pay the monthly instalment as stipulated in the HPA, resulting in outstanding arrears of RM282,049.31.

The Respondent demanded the sum, but it was not settled by the Appellant, resulting in the termination of the HPA on 23.11.2023. The Respondent issued a 4th Schedule Notice and a Reminder 4th Schedule Notice pursuant to section 16 of the HP Act to repossess the vehicle. To date, the Respondent has not been able to repossess the vehicle, nor has the Appellant surrendered it to the Respondent or their agent.

The Respondent initiated an action on 6.5.2024 at Ampang Session Court to recover the amount in arrears. In objecting to the Respondent’s claim, Appellant counterclaimed that the HPA is void ab initio due to the non-compliance with the provisions of the Hire Purchase Act 1967 (HP Act) and sought a declaration that the HPA is null and void and demanded reimbursement of RM184,637.62 to be returned to the Appellant.

Respondent filed a summary judgment application on 28.5.2025 for the payment of RM282,049.31 together with interest, which was allowed on 18.10.2024 by the SCJ. It was granted on the premise that the Appellant had no meritorious defence or triable issues to be ventilated in a full trial.

On the same day, an application to strike out the Appellant’s counterclaim was also heard, which was allowed by the SCJ for failure to disclose reasonable cause of action, vexatious, prejudice and an abuse of court process. Issues in this Appeal

Whether the Appellant had raised arguable and substantive issues regarding the non-compliance with the HP Act, section 4 1(b)(ii) and section 5(1) and whether the Appellant is entitled to reimbursement of the payment made under a void contract.

Section 4(1)(b) of the HP Act mandates the service of two written statements before the execution of the HPA, that is, the written statement under Part I and Part II of the Second Schedule, signed by both the dealer and the financier.

Appellant submits that failure to comply with these requirements renders the agreement void ab initio as per section 4(4) of the HP Act.

Appellant further alleged that the written statement was served on the same day the HPA was signed, thereby undermining the intent of the statutory provisions that require service before the agreement is entered into.

On the above issue, the SCJ found that the Appellant had signed and received the written statement on 24.8.2024, thus the requirement under section 4(1) of the HP Act has been complied with by the Respondent.

Appellant was adamant that he was not served with the written statement before signing the HP agreement.

Whilst Appellant is relying on section 4(1)(b)(ii) of the HP Act, the Respondent submitted that the transaction was in accordance with section 4(1)(a) instead, as the negotiation leading to the signing of the HPA did not involve the dealer.

I reproduce both sections below for ease of reference. Sections 4(1)(a) and 4(b)(i) and (ii) provides:

“Requirements relating to hire-purchase agreements

Before any hire-purchase agreement is entered into in respect of any goods—

in a case where negotiations leading to the making of the hire-purchase agreement is carried out by any person who would be the owner under the hire-purchase agreement to be entered into, or by any person, other than the dealer, acting on his behalf, such person shall serve on the intending hirer a written statement duly completed and signed by him in accordance with the form set out in

in a case where negotiations leading to the making of the hire-purchase agreement is carried out by a dealer, such dealer shall—

serve on the intending hirer a written statement duly completed and signed by him in accordance with the form set out in Part I of the Second Schedule; and

(ii) at any time after the service of the written statement referred to in subparagraph (i) but before the hire-purchase agreement is entered into, serve on the intending hirer a written statement duly completed and signed both by him and the prospective owner in accordance with the form set out in Part II of the Second Schedule.

I am of the view that dealings with the dealer, if any, were only in relation to the sale and purchase of the vehicle, and that the dealer apparently played no significant role in the financing aspect of the vehicle. The tax invoice referred to by the Appellant was merely details regarding the sale and purchase. I agree with the Respondent that it does not involve the financing aspect of the vehicle. In signing the HPA, the parties were the Respondent, as financier, and the Appellant, as the hirer. The dealer has no mandate or power to act, let alone negotiate, on behalf of the Respondent regarding the hire purchase financing or the HPA.

Therefore, I am inclined to agree with the Respondent that section 4(1)(a) is applicable in this relationship between Appellant and Respondent, as the Appellant had signed the written statement in Part I of the Second Schedule as required under section 4(1)(a) of the HP Act.

In support of the above, it was submitted that the Appellant’s obligations relating to the payments are determined by the Respondent based on the standardised terms on the purchase price and tenure of the hire purchase, of which the dealer has no power to negotiate or change these particulars on behalf of the Respondent.

As such, the contemporaneous evidence showed that the dealer was only involved in selling the vehicle to the Appellant, who later obtained financing from the Respondent to purchase the vehicle. Hence, the reliance on section 4(1)(b) is an afterthought by the Appellant.

It is imperative to note that the Appellant had paid up to RM184,637.62 and conveniently enjoyed the usage of the vehicle from the date of purchase. In an attempt to evade his obligations, the Appellant should not now be allowed to argue that the HPA is void for non-compliance with the Act. Again, this conduct is clearly an afterthought by the Appellant.

The Appellant further states that the HPA was not in accordance with section 5(1) of the HP Act, as the HPA was not served on or delivered to the Appellant within 21 days. In this regard, I find that the SCJ was right to rely on averments in the affidavit that the HPA was served on the Defendant at the Defendant’s last known address, in compliance with the requirements of the HPA and section 5(1) of the HP Act.

Hence, the SCJ was correct to find that both issues raised above are not triable.

On the issue of entitlement for reimbursement of the money paid as the HPA was submitted to be void, the SCJ found that the HPA is a good and enforceable contract, and the Appellant had the advantage of using the vehicle for years without any complaint; therefore, she was of the opinion that this issue is, again, an afterthought.

I am of the view that the above findings are correct and do not warrant any intervention from this Court. Allowing such trivial allegations and contentions merely to escape liability for the arrears and to profit from the reimbursement of a vehicle used by the Appellant would set an unhealthy precedent. Even if the assertion were true (that the HPA was not in accordance with the HP Act), the Appellant would have knowingly used the vehicle wrongfully himself. I agree with the Respondent that such conduct is wholly unconscionable and inequitable.

Premised on the above, I find that the SCJ did not misdirect herself in her decision to allow the summary judgment and to order the striking out of the Appellant’s counterclaim. The alleged issues raised are not triable issues, and the counterclaim was frivolous, vexatious, and an abuse of court process.

Therefore, this appeal is hereby dismissed with costs of RM5000 for both appeals, subject to the allocator. The decision of the SCJ is affirmed. Dated this: 21st November 2025 ~signed~ (NOOR HAYATI BINTI HAJI MAT) JUDGE HIGH COURT OF MALAYA SHAH ALAM, SELANGOR For the Appellant : Zaitul Naziah binti Mohd Soib Messrs Andrew Davis & Co. For the Respondent :