HIRE PURCHASE SYSTEM

Northern Advocate, 7 November 1931, Page 7

HIRE PURCHASE SYSTEM

NEW LEGISLATION PROVISIONS EXPLAINED. STATUS OF FINANCE CORPORATION. (Per Press Association.—Copyright.) WELLINGTON, This Day. Moving the second reading of the Chattels Transfer Amendment Bill in the House of Representatives .yesterday, the Hon. W. Downie Stewart, Minister of Finance, said the chattels referred to w’ere all kinds commonly bought on the hire purchase system. For the purpose of financing hire purchase transactions, a trade usage had developed by which the price of the chattel was paid to the manufacturer or dealer by a finance corporation established for that purpose, and a hire purchase agreement was then made between the conditional purchaser and the finance corporation. It had been recently decided by the Court of Appeal that such corporations were not dealers within the meaning of the Chattels Transfer Act, and their agreements, although of precisely the same character as ordinary hire purchase agreement, were not entitled to the benefit conferred by the measure. The chief of such benefits was that these agreements did not require to be registered as bills of sale or other instruments. The purpose of the present bill was to establish as law what, prior to the decision of the Court of Appeal, had been understood to be the legal position.

The Leader of the Opposition, Mr H. E. Holland, asked whether any protection could he afforded to purchasers who might have paid up to three quarters of the price of a motor car, and who temporarily were unable to continue payments, owing to the present financial conditions. Mr J. T. Hogan (Independent, Rangitikei) drew attention to the widespread growth of the hire purchase system. He said it was time Parliament took the matter up in the interests of weak-minded people who could not see the difficulties into which the system was liable to lead them. He suggested that, during the recess, the Minister should go Jinto the question of the registration of hire purchase agreements, if the sum involved exceeded a certain amount.

Replying to Mr Hogan and other members, Mr Stewart said the question. of registration was worth investigation, and (he would bring it under the notice of the Minister of Industries and Commerce. He could say off-hand whether it would be possible under the Mortgagors Relief Act to protect purchasers who had paid off the greater part of the amount owing. He would look into the question and see whether the Act could be modified to meet the views expressed by Mr Holland. If this could be done a provision would be inserted in the Mortgagors Relief Amendment Bill, which was not yet quite ready. The bill was read a second time, put through the remaining stages and passed.