Hire-purchase agreements for the hire of three lorries were entered into by Transag, a haulier, between January and May 1991. The price for the three lorries was andpound;177,333, with down payments totalling andpound;69,333 and the balance (for each vehicle) due by 36 monthly payments of andpound;1000. Transag went into administrative receivership in November 1993, when only about andpound;14,000 remained to be paid and the lorries were worth about andpound;67,000. The agreements were in standard form with provision for termination by the owner after a default, which included receivership. Provisions for termination, included return of the vehicles to the owner and an immediate liability for outstanding instalments; and ‘If the hirer (having duly observed and performed all the terms and conditions of this agreement whether expressed or implied, and having paid all sums due under this agreement) shall pay to the owner the sum of andpound;5 the hiring thereby constituted shall determine and the hirer shall become the absolute owner of the goods but until such time the goods shall remain the sole property of the owner and the hirer shall be a mere bailee thereof.’ Transag requested relief from forfeiture.
Held: The case was ‘one of those rare cases’ where it would be right for the court to exercise its discretion and grant relief on terms that the outstanding instalments were to be paid within seven days. A hirer might be given given equitable relief in respect of its proprietary rights despite its receivership. The court should look at the extent of financial defaults, the extent of any disproportionate loss which would be incurred for either owner or hirer, and any substantial windfall profit which might accrue to the owner.
Knox J
Ind Summary 31-Jan-1994, Times 15-Jan-2004, [1994] 2 BCLC 88
England and Wales
Citing:
Cited – BICC plc v Burndy Corp CA 1985
. .
Cited – Goker (Ali) v NSW Bank CA 23-May-1990
In the case of a hire purchase agreement, the court has a power to grant relief from forfeiture, but will not normally exercise that power unless there is no real prejudice to the owner of the goods. . .
Cited by:
Applied – On Demand Information Plc and Another v Michael Gerson (Finance) Plc and Another CA 19-Sep-2000
The power to grant relief from forfeiture in finance leases was real, but ceased to be available after property repossessed by the finance company had been contracted for sale by the applicants. The application for relief was in its nature, an . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Contract
Updated: 09 January 2022; Ref: scu.89974