Mr Liu entered into an agreement to buy a second-hand car from Mr Feng at a price of RMB 5

0,000 yuan. After the conclusion of the agreement, Mr Liu paid the price and Feng delivered the car to Mr Liu. The two parties, however, did not register the sale of the car. Following the sale Mr Liu took the car to a repair shop to repair the air conditioner. After the completion of the repair and on the way home, a fire accident occurred due to the defect of the air conditioner and caused serious damage to the car.

Mr Liu returned to the repair shop claiming compensation for the defect of the air conditioner. The repair shop insisted that it was not liable for the fire accident and the resulting damage to the car. In addition, after retrieval of the data from the local vehicles registration centre, the repair shop found that the registered owner of the car was still Mr Feng, not Mr Liu. Under such a situation it refused to discuss the dispute any more with Mr Liu, on the ground that he was not a legitimate owner of the car. When Mr Liu asked Mr Feng to negotiate with the repair shop, Mr Feng was reluctant to do so on the ground that the transaction between them was over since he had duly delivered the car to Mr Liu.

Required:

Answer the following questions in accordance with the relevant provisions of the Property Law, and give your reasons for your answer:

(a) state the rule as to the passing of ownership for a car as a kind of movables, and the effect of the agreement between the two parties; (4 marks)

(b) state who should be the legitimate owner of the car; (4 marks)

(c) state whether the repair shop should be liable for the damaged car if the fire was caused by the defect of the air conditioner. (2 marks)