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Case Review: Banking
Summary of some of the decisions made by the Mediators on some of the complaints received by FMB.
This summary is for information only and should not be used for other purpose. [Previous]………[Next]
HIRE PURCHASE (Case reference no : 6(5)-185)
Mr. B the hirer disposed of a vehicle financed under XYZ Finance to Mr. C, a used car dealer. He signed all documents to effect the transfer of the vehicle and handed the original Registration Card and Authorization Letter. He was paid the difference between the outstanding loan as stated in the Settlement Statement issued by XYZ Finance and the Sale Price.
Mr. B sold the vehicle to Mr. C at a price of RM26,800/-. Mr. B gave all documents to effect the transfer of vehicle, Mr. B's authorization to the dealer to settle the loan with XYZ Finance and an original printout of the settlement statement issued by XYZ Finance dated 11/01/05 for settlement on or before 31/01/05. Mr. C checked the vehicle, the registration card and verified with the relevant authorities on the existence of the vehicle and owner and of any outstanding summons. On the same day, he called XYZ Finance to verify the settlement amount. The staff of the finance company confirmed that the settlement amount payable on or before 31/01/05 was RM5,000/- as stated in the settlement statement.
Mr. C arranged for the sale of vehicle. On 28/01/05 Mr. C called XYZ Finance to make settlement and was informed that the settlement amount was RM27,000/- as the cheque of RM22,000/- paid to the account on 11/01/05 was returned on 14/01/05.
An inquiry was held to mediate the dispute.
The settlement statement issued by XYZ Finance merely states that the settlement amount payable on or before 31/01/05 was RM5,000/-. There was a notation stating that if payment was not received on or before the date stipulated, a new computation shall apply. The statement did not indicate that the amount payable is subject to clearance of cheques in floats. The finance company chose to treat the cheque payment as cash and the payment was treated as good even before clearance of the cheque. The right to amend the settlement statement is preserved if there is notation in the settlement statement that the amount stated is subject to clearance of cheque(s) in floats. This would clearly inform any one dealing and relying on the documents to be warned of the amount appearing therein.
XYZ Finance must accept RM5,000/- from Mr. C and release the documents to effect the transfer of vehicle as per the settlement statement issued by it.
Award accordingly.
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