Hire-purchase legislation

Press, Volume CXI, Issue 32715, 18 September 1971, Page 2

Hire-purchase legislation

(N.Z. Press Association) WELLINGTON, September 17. The Hire Purchase Bin was the first real step towards what should be a thorough and early revision of the commercial law as it dealt with sales and loans, the Minister of Police (Mr Thomson) said today.

Moving the second reading of the bill on behalf of the Minister of Justice (Mr Riddiford), Mr Thomson said it represented a substantial improvement on the present law.

The bill was concerned with retail instalment sales where the purchaser received possession of the goods but not the ownership of them before the price was paid. It was characteristic of a hirepurchase agreement or a conditional sale that it embodied

in one transaction both a sale and a loan. Commonly, he said there were three parties involved—the buyer, the seller, and the financier—and any legislation had to take into account the interests of all three. There was an increasing recognition that the difference between the legal rules applying to the various types of financial retail purchases was unreal and unsatisfactory both to commerce and to the consumer, Mr Thomson said. The present bill replaced the only existing legislation on the subject of hire purchase—the Hire Purchase Agreements Act, 1939. The broad aims of the bill were to facilitate honest business while preventing abuse, and to achieve as fair a balance as possible between the various parties. It did not place any obstacles in the way of honest trading. Mr Thomson said the bill set out to: Ensure that proper information was available as to the nature and cost of

the transaction and the terms of payment. Ensure that the goods would answer to a reasonable standard of fitness and would be enjoyed without interference by third parties. Provide a fair and workable scheme for the case where the purchaser fell into default with his payments. Prohibit or restrict certain objectionable types of provision that occasionally were seen in hirepurchase agreements and that represented an abuse of his bargaining powers by the seller.

FORM OF AGREEMENT The first part of the bill contained provisions relating to the form of the agreement, its contents and who might sign it, Mr Thomson said. The next dealt with the terms to be implied in hirepurchase agreements and the extent to which they would bind the various parties in-

eluding a finance company that took an assignment of the vendor’s interest.

Other clauses provided statutory rights for purchasers, such as being entitled to a copy of the agreement and a statement of position from time to time. “DUE FOR OVERHAUL” Hire-purchase law was due for overhaul, said the Leader of the Opposition (Mr Kirk); However, he could not see why it left the creation of credit and the continuation of credit in the hands of nonbanking sources. Much hire purchase already was financed by bank credit The purchaser might not be able to get bank credit but the retailer could. The banking service should move into direct service to the public. The Parliamentary Undersecretary to the Minister of Education (Mr Gair) said the legislation had been carefully prepared and thoroughly reviewed. The interests of the consumer were being enhanced by it, he said.