After this Mr Choden decides he needs a new car, He attends a car fair in order to buy one and sees a Lexus motor vehicle that he likes, He contracts with the seller, Fraser, to buy it for $20,000.

He and Fraser agree on all the terms including agreeing that Mr Choden will pick up the car from Frasers home on Monday night at which time Mr Choden will pay for the car in full. This is upon the condition however that Fraser obtains a new warrant of fitness for the car.

Fraser takes the For sale sign off the car and drives it home, stopping at his mechanics garage on the way to obtain a warrant of fitness. He parks it at home on Saturday afternoon. He locks it securely and sets the alarm. That night the car is broken into by thieves who disconnect the alarm. They take the car to a workshop on the other side of Auckland and break it down for spare parts which they sell.

The police investigate but are unable to find the thieves. In the course of their enquiries however the police discover that the thieves have sold the car stereo to the local second hand store. The manager of the store had no idea that the stereo was stolen when he paid for it.

Fraser tells Mr Choden that he is still liable to pay the sale price of the car despite the loss.

QUESTION FIVE: (Total: 15 marks. 540 words maximum)

(i) Discuss who is the owner of the Lexus, who is at risk for the loss of the Lexus, and whether Mr Choden is liable for payment of the purchase price.

(10 marks. 360 words maximum)

(ii) Explain what kind of property the car stereo is and who is its true owner.

(5 marks. 180 words maximum)