Moveable Transactions (Scotland) Act 2023

55 Acquisition in good faith of motor vehicles

(1) Subsections (2) to (4) apply where—

(a) there is a sale agreement (including a conditional sale agreement) or a hire-purchase agreement in respect of a motor vehicle,

(b) the motor vehicle is encumbered property under a statutory pledge,

(c) at the time of entering into the agreement, the purchaser or hirer is not a person carrying on a business described in section 29(2) of the Hire-Purchase Act 1964, and

(d) the purchaser or hirer is, at that time, in good faith.

(2) On the motor vehicle being transferred to the purchaser or hirer in accordance with the agreement, that person acquires it unencumbered by the statutory pledge despite the consent mentioned in section 51(2) not having been obtained.

(3) And the statutory pledge is not to be enforced against the motor vehicle before the motor vehicle is transferred to the purchaser or hirer in accordance with the agreement.

(4) But if the transferor is, at the time the agreement is entered into, a person carrying on a business described in section 29(2) of the Hire-Purchase Act 1964, the secured creditor is entitled to receive from the transferor the lesser of—

(a) the amount outstanding in respect of the secured obligation, and

(b) the amount received, or to be received, by the transferor in respect of the acquisition.

(5) Where the secured creditor receives a sum under subsection (4)—

(a) the provider’s liability to the secured creditor under the secured obligation is reduced by the same amount, but

(b) the transferor has a right of relief against the provider in respect of the sum.

(6) For the purposes of subsection (1)(d), a purchaser or hirer is not to be taken to be other than in good faith by reason only of the statutory pledge having been registered.

(7) In this section, “conditional sale agreement”, “hire-purchase agreement” and “motor vehicle” have the meanings given by section 29(1) of the Hire-Purchase Act 1964.

(8) The Scottish Ministers may by regulations specify classes of motor vehicles to which subsections (1) to (7) do not apply.

(9) Regulations under subsection (8) may modify sections 53 and 54 to provide that either or both of those sections do not apply to some or all of the classes of motor vehicle specified under subsection (8).