Can a buyer of a car sue a dealer for selling a defective car?
ONG SIEW HWA V UMW TOYOTA MOTOR SDN BHD  MLJU 673
- Ong Siew Hwa (“OSH”) had purchased a new car from UMW Toyota Motor Sdn Bhd (“Toyota”) which was partly financed by Toyota Capital Malaysia Sdn Bhd (“Toyota Capital”).
- When buying the car OSH paid a sum of RM71,706.54 to Toyota. And OSH took out a financing in the sum of RM80,000.00 from Toyota Capital under a Hire Purchase Agreement.
- A hire purchase agreement was executed between OSH and Toyota Capital and the car was delivered to OSH.
- Soon after it was discovered that the car was defective and attempts at resolving the mechanical problems of the car were not successful and problems persisted.
- OSH sued both Toyota and Toyota Capital for amongst others, the termination of the contract of sale of the car and the return of the purchase price of the car.
- The High Court dismissed OSH’s claim against Toyota but allowed his claim against Toyota Capital on the grounds that Toyota Capital was a “supplier” under the Consumer Protection Act 1999 (“CPA”) and held it to be liable to OSH under section 32 of the CPA for breach of the implied term of acceptable quality.
- Toyota Capital appealed to the Court of Appeal and the Court of Appeal allowed Toyota Capital’s appeal against the decision of the High Court on the ground that OSH did not plead his case properly in his Statement of Claim. It was a technical decision.
- OSH also appealed against the decision of the High Court which dismissed his claim against Toyota. The High Court held that the Hire Purchase Agreement superseded any agreement that he may have had with Toyota and as such Toyota technically fell out of the way.
- The Court of Appeal agreed with the High Court.
- OSH then appealed to the Federal Court.
FEDERAL COURT DECISION – APPEAL DISMISSED!
- The Federal Court confirmed that any contractual relationship between Toyota and OSH is superseded by the subsequent hire purchase agreement with the Financier and as such OSH will have no claim against Toyota.
- OSH could not sue Toyota for the defective car.
- The Federal Court clarified that the Consumer Protection Act does not apply to make Toyota liable to OSH and is merely supplemental in nature to the Hire Purchase Act 1967.