"HIRE-PURCHASE" DEALS

Evening Post, Volume CIX, Issue 120, 25 May 1925, Page 16

"HIRE-PURCHASE" DEALS

SOLICITORS' OPINIONS

In the Supreme Court at Christ-church last week, Mr. Justice Adams referred to litigation arising out of hire-and-pur-chase agreements. A case was being heard,iu which a charge of false pretences was made against a middle-aged woman, a cook, who obtained a sewing machine from a firm on the deferred payment system, and sold it to another woman before she had made the last payment. Her plea was that as the agreement was not read or explained to her, and as she was not given a copy, she did not understand it, and believed that the machine was her property, although she had not completed the purchase. The jury acquitted her after a short retirement.

His Honour said that where business firms were constantly dealing with poor people, more or less ignorant, and where forms for hiro-andipurchase were used, care should be taken by the sellers to see that purchasers understood the terms of the transactions. Signatures should not be taken to documents unless the terms wore made quite clear. It was a question for the Legislature whether members of the public who were unable to protect themselves because of lack of education should not be protected by law.

Interviewed on the matter by s representative of the Christchnreh "Press," Mr. W. J. Hunter saij that he respectfully agreed with tho remarks of his Honour as lo tho importance of seeing that persons signing bailments understood the nature of the documents in question, and particularly that the property of which they are taking possession is not theirs but remains tho property of the seller until a certain time. With regard to his Honour's suggestion that the matter of protecting ignorant persons signing bailments might be a question for the Legislature to consider, Mr. Hunter said that the only effective way lie could see of attaining that end would be to require that all bailments should be executed before a solicitor, who should certify that the persons signing understood the nature of the documents in question. This would be similar to tho statutory provision dealing with settlement of claims under the Workers' Compensation Act, which renders a settlement invalid unless the person claiming compensation has had independent medical and legal advice prior to accepting such, settlement, the practice being to obtain a certificate from a solicitor to that effect prior to the settlement taking place. In view, however, of the fact that-bailments are so numerous and often deal with articles of comparatively small value, he was of opinion that it would be undesirable to put persons signing bailments to the expense of 'obtaining such, certificates. - BAILMENTS EST GENERAL USE. Another prominent Christchnrch solicitor referred to claims under tho Workers' Compensation Act, saying that probably thousands of" bailments were signed as against every receipt under the Act. Compensation claims were numerous, but bailments had now come into general use: He considered that the uneducated public and the public generally would soon get to know the principle involved in such matters. Now that bailments. had come into general use there was no reason why there should be any. exceptions. So much property was now bought and sold on the" time-payment system, which was no more or less than under the bailment system, that it would be intolerable if each bailment had to be read over and explained by a Magistrate, J.P., or solicitor, and execution witnessed by him. The only way to get over the difficulty was to take tho same course as in the recent case. Magistrates' Courts and juries in criminal and civil cases should disregard the element of bailment in all case 3 where it was not proved beyond all reasonable doubt that tho document had been fully explained by some credible person who ■ also witnessed the execution of the document.

Mr. F. S. Wilding said: "The hiring ;.'f goods on the instalment system with an option of purchase is the simplest and most inexpensive form of security. Such an arrangement is a benefit to both seller and buyer. As a rule they are prepared by the parties without recourse to solicitors. But such an arrangement is not a sufficient security to tho seller in many cases; and the seller's rights may be lost to as against an execution creditor or in the case of tho hirer's bankruptcy in certain cases. While the public desire to continue to do business on the credit system, it would cause hardship if the existing law was altered."