Support For More Secure Title To Motor Vehicles

Press, Volume XCV, Issue 28260, 24 April 1957, Page 17

Support For More Secure Title To Motor Vehicles

Support for the enactment of a bill to give a more secure title to motor-vehicles was given yesterday by the Dominion legal conference, after a paper by Mr Ralph L. Ziman (Auckland). A motor-vehicle was within the definition of “goods” in the Sale of Goods Act, 1908, and it followed that where there was a contract for the sale of a specific motor-vehicle the property in it was transferred to the buyer at such time as the parties to the contract intended it to be transferred, said Mr Ziman.

Notwithstanding the simplicity of the procedure under that act, cases in which frauds occurred by reason of the facilities for transfer were comparatively few, he said. In contrast with the care-fully-evolved system under the Sale of Goods Act was the growth of the practice of “hire purchase” and its latest development, the “customary hire-purchase agreement,” sanctioned by the Chattels Transfer Act, 1924. Thousands of motor-vehicles—-many of them of substantial value —were sold each year under “customary hire-purchase agreement.” The purchaser in each case obtained possession of the vehicle and was registered as, and reputed to be, the owner of it; he had paid only a portion of the

price and the unpaid vendor remained the legal owner of the vehicle. Praise for Trade “It speaks well for the motor trade in general that the system rarely gives rise to difficulty regarding titles to new vehicles,” said Mr Ziman. “It is usually with used motor-vehicles that the trouble arises. “A person having agreed to buy a motor-vehicle under a ‘customary hire-purchase agreement’ suddenly decides to dispose of it, either by sale or in exchange, and is tempted to overlook the fact that he is not entitled to do so. An innocent purchaser from such person may obtain possession of the vehicle, pay the full price and become registered as ‘owner’ in good faith; the original vendor is nevertheless entitled to retake possession of the vehicle, leaving the innocent purchaser without remedy except the right (frequently worthless) of action against the person who committed the fraud,” said Mr Ziman.

Under the bill approved by the New Zealand Law Society, on any disposal of a motor-vehicle notice would be given to the registrar—and entered on the register and on the certificate of registration —as to whether the proposal was an absolute transfer, a hire-purchase agreement or a bailment. Particulars would also be entered of completion of purchase under hire-purchase agreements, mortgages and discharges thereof. A purchaser from the “registered owner” of a vehicle would thus be able to learn whether such “registered owner” was the owner within the ordinary legal meaning of that term, or merely a purchaser under a hire-pur-chase agreement, or a bailee under a bailment. Ideal Plan The ideal plan, said Mr Ziman, would be to convert the system of registration into a system of registration of title, on the analogy of the system of registration of ships and the system derived from it of registration of title to land commonly called the “Torrens” or “land transfer” system. If that course were adopted, an innocent purchaser could rely on the register, but there would be practical difficulties in adoption of that plan. Because of the number of motor-vehicles now in New Zealand, the establishment of such a registry would need a very large and highly-skilled staff to operate it. Supporting Mr Ziman, Mr Nigel Wilson said he trusted the conference would agree with him that the bill had been well thought out and that its enactment would mark the achievement of a great service by the profession in the public interest. He urged the legal leaders to be of good courage and not to agree to any obstruction or whittling-away of its provisions in official quarters.