Palu v Australia and New Zealand Bank [2013] FJCA 11; Miscellaneous 19.2011 (8 February 2013)

IN THE COURT OF APPEAL
CIVIL JURISDICTION

MISCELLANEOUS NO. 19 OF 2011
(High Court HBC 34 of 2010)

BETWEEN:

MACIU TAMANI PALU
aka MACIU TAMANIBOLA PALU
Appellant

AND:

AUSTRALIA AND NEW ZEALAND BANK
Respondent

Coram : Calanchini AP

Counsel : Mr A. Rayawa for the Appellant
Ms B Narayan for the Respondent

Date of Hearing : 25 July, 21 September, 15 October,
19 October, 29 October and 28 November 2012

Date of Judgment : 8 February 2013

DECISION

[1]. This is an application by the Appellant for Leave to appeal out of time. The application was brought by summons filed on 24 May 2011 and was supported by an affidavit sworn by the Appellant on 24 May 2011.

[2]. An earlier application brought by motion filed 20 December 2011 sought a stay order from this Court in respect of orders made by the learned High Court Judge on 19 April 2011.

[3]. Under section 20 (1) of the Court of Appeal Act Cap 12 a single judge of the Court has jurisdiction to exercise the powers of the Court to, amongst other things, (i) extend the time for appealing and (ii) stay execution of any order or judgment.

[4]. As a result in respect of the earlier application for a stay of execution, I order that the Notice of Motion be struck out pursuant to Rule 26 (3). Rule 26 (3) provides that where there is concurrent jurisdiction exercisable by both the Court of Appeal and the court below, any application that is subject to that concurrent jurisdiction must first be made in the court below. Under Rule 34, this Court and the court below are granted concurrent jurisdiction in respect of an application for stay.

[5]. Putting to one side any issue raised by Rule 27, I propose to rule on the merits of the Appellant's application for an extension of time to file a notice of appeal against an interlocutory judgment of the High Court handed down on 19 April 2011.

[6]. The learned judge dismissed Maciu Palu's application for injunctive relief seeking to restrain the Australia and New Zealand Bank from exercising its mortgagee's right of sale in default of payments due under a mortgage granted by the Bank to Palu.

[7]. The interlocutory judgment of the learned High Court judge and the Appellant's proposed grounds of appeal are both exhibited to the affidavit sworn by the Appellant in support of his application.

[8]. Relying on the decision of this Court in Strategic Nominees Ltd –v- Gulf Investments (Fiji) Limited (unreported civil appeal ABU 39 of 2009 delivered 10 March 2011) the learned Judge concluded that the right of a mortgagee to re-enter to exercise a power of sale over the mortgaged property does not constitute an infringement of the mortgagor's proprietary rights. As a result there was no basis for considering any of the issues that might otherwise be considered relevant to the granting of injunctive relief under the principles set out in American Cyanamid Ltd –v- Ethicon Ltd [1975] UKHL 1; [1975] 1 All ER 504. In addition, relying on Inglis –v- Commonwealth Trading Bank of Australia (1972) 126 CLR 161 the learned Judge concluded that any claim that the Appellant as a mortgagor debtor might have for damages (or compensation) or for any equitable set-off against a mortgagee does not affect and will not prevent a mortgagee exercising his powers under the mortgage where there is default by the debtor.

[9]. Apart from dismissing the Appellant's application the learned judge ordered the Appellant to pay costs to the Respondent in the sum of $500.00 within four weeks from the date of the judgment.

[10]. The proposed grounds of appeal are

"1. That the Learned Judge A. L. B. Brito-Mutunayagam erred in law in fact in dismissing the Appellant's motion and claims without first considering relevant facts and issues regarding the Appellant's compensation claims but confined particularly on the Respondent's argument on mortgagee sale issue and thereby diverting from the question of compensation claims on the demolision of building structure the origin of the Appellant's claims.

2. That the Court failed on all occasions to consider the Appellant's application on the relevant demolition issues in the whole claims.

3. That the Court failed to properly assess its findings on the proper and final mortgage figures owing under the mortgage."

[11]. The factors which are normally taken into account in deciding whether to grant an extension of time were conveniently discussed by Byrne JA in Mokosoi Products Fiji Ltd –v- Pure Fiji Export Limited (unreported ABU 17/2008 delivered 7 September 2009). At page 10 of the unreported decision Byrne JA stated:

"In Bahadur Ali and Ors v. Ilaitia Boila and Chirk Yam and Ors, Civil Appeal No. ABU0030 of 2002 Reddy, P then President of Court of Appeal said at p7 -

"The power to extend the time for appeal is discretionary, and has to be exercised judicially, having regard to established principles (see Hart v Air Pacific Limited, Civil Appeal No. 23 of 1983). The onus is on the Appellants to satisfy the Court, that in the circumstances, justice of the case requires that they be given the opportunity to attack the Order ....and the judgment......The following factors are normally taken into account in deciding whether to grant an extension of time-

1. the length of delay
   
2. reasons for delay
   
3. the chances of the appeal succeeding if time is extended
   
4. prejudice to the respondent. "(my emphasis)
   

More recently, this Court has taken a much stricter approach to applications for leave to extend the time to appeal. In Vimal Construction and Joinery Works Ltd v. Vinod Patel and Company Ltd (2008) FJCA 98; the Court of which I was a member said at paragraph 15, signaling the new stricter approach, at para [15]-

"[15] ......in 2008 litigants should not assume that leave will be given to bring or maintain appeals or other applications where those appeals or applications are out of time unless there are clear and cogent reasons for doing so. A contention as to incompetence of legal advises will rarely be sufficient and, where it is, evidence "in the nature of flagrant or serious incompetence (R v Birks (1990) NSWLR 677) is required."

[12]. In relation to the length of the delay, the decision was pronounced on 19 April 2011. Under Rule 16 of the Court of Appeal Rules, the Appellant was required to lodge his appeal within 21 days thereafter or by 10 May 2011. The application for an extension of time was filed on 24 May 2011 and as a result the delay was 14 days.

[13]. The reasons given for the delay were not adequately explained in the Appellant's supporting affidavit. Counsel for the Appellant assisted the Court in his written submissions by explaining that the Appellant had no funds to instruct Counsel to prepare the appeal. Counsel also explained that he was appearing "de bono" for the Appellant but had only recently become involved in the proceedings.

[14]. Although the delay is not excessive and the reasons for the delay may be understandable, there are other factors which must be considered. The third factor is the chances of the appeal succeeding. This factor should be read as meaning whether the chances of success provide a sufficiently clear and cogent reason for granting leave.

[15]. The Appellant raises many issues as to why he should be granted leave to appeal out of time. However it must be said that they are matters that are more relevant to the Appellant's proceedings in the court below in which he is claiming damages and/or compensation. The issues raised by the Appellant do not seek to challenge the validity of the mortgage agreement itself. The issues raised by the Appellant relate more to allegations of misconduct by the mortgagee bank during the course of the mortgage.

[16]. The Appellant raises an issue that there is a dispute as to the amount owing under the mortgage. Both the decision of this Court in Strategic Nominees Limited (supra) and the decision of the High Court of Australia in the Inglis decision (supra) are authority for the proposition that nothing short of payment either to the mortgagee or by way of payment into Court of the amount sworn by the mortgagee as due and owing under the mortgage will be sufficient for a court to restrain the exercise by a mortgagee of rights under the mortgage. If, ultimately, it is established that the dispute as to the amount owing is to be resolved in favour of the mortgagor, then repayment (with interest) will be due to the mortgagor by the mortgagee.

[17]. The reason for this approach was set out clearly by Marshall JA in Strategic Nominees Limited (supra) at page 6 of the unreported decision. In summary Marshall JA explained the rationale in this way. The basis upon which the mortgagee required a bank loan subject to security has failed. The mortgagor has defaulted. It is clear that there was little or no prospect of the monies due under the mortgage being paid into court. In this case the amount sworn to be owing under the mortgage as at 27 May 2011 was $133,083.45. The mortgagor Appellant clearly does not have the means to bring that sum into court. Whatever may be the merits of the Appellant's action in the court below, none of the issues raised by the Appellant would have justified the learned Judge restraining the use of the power of sale.

[18]. In his submissions before me Counsel for the Appellant referred to the decision of the Court of Appeal in Cuckmere Brick Co. Ltd and Another –v- Mutual Finance Ltd [1971] 1 Ch 949 with particular reference to the comments of Salmon LJ at page 966. In my judgment that decision is authority for the proposition that there may exist a duty on the part of a mortgagee to take reasonable care to obtain whatever is the true market value of the mortgaged property at the time the mortgagee chooses to sell it and that in breach of such a duty there may exist a claim in damages for the benefit of the mortgagor. It is certainly not authority for the proposition that an alleged breach of such a duty is grounds for a court restraining a mortgagee from exercising its rights including the right of sale, under the mortgage.

[19]. Although this Court, in considering an application for leave to appeal out of time, should not delve into the merits of the proposed appeal, it is necessary to examine those grounds in some detail to determine whether or not any of them are likely to succeed if time is extended. The Court does not readily shut the door on an appeal that arguably has reasonable prospects of success.

[20]. However, in this case I have concluded that the grounds of appeal would not succeed. In my judgment there are no reasonable prospects of any of the three grounds of appeal succeeding. I also consider that any appeal would prejudice the Respondent by further delaying the sale of the property and for which a purchaser has been identified. There would be further unreasonable delay and expenses.

[21]. For all of the above reasons the application for an extension of time is rejected and dismissed. The Appellant is ordered to pay costs which I fix at $2000.00 to the Respondent within 28 days from the date of this decision.

Hon. Mr Justice W.D. Calanchini
Acting President