Question

following to the default payment, assume that the new accountant of apex bhd, mr anuar refused to return the packaging machine as he stated that his company has possessed the packaging machine from the day of acquisition and that the ownership belongs to his company. discuss on the appropriateness of mr anuar’s action.

Answer 1

Conditions:

• There was a default in payment.
• Payment was pertaining to either hire under a hire purchase agreement or Instalment scheme (not specified)
• Possession currently is with the defaulter.
• Defaulter's accountant reluctant to give possession of asset to seller/financer.

Thus if the assets are purchased under 'Hire purchase' agreement, the ownership lies in the hands of the seller/finances and not Apex BHd. Thus they can rightfully repossess the asset for default in payment. Hence, actions of Mr Anuar is totally incorrect.

On the other hand, if the asset is acquired under an installment scheme agreement, the ownership is transfered at the time of sale to Apex Bhd. Any default in payment, the seller/financer can only sue for such payments or modify the interest rates or chearg penal amounts to the seller and has no rights to repossess the goods as these are owned by the buyer. Thus here Mr Anuar actions are correct.