Mr. Khan states that on the 4th of May 1he Plaintiff came to his office where he explained to her ther that he had received instructions
from the Second Defendant to prepare the Third Party Mortgage and that he fully explained to the Plaintiff the purpose for which
that mortgage was being requested of her.
He says that he explained to the Plaintiff in the Hindustani language the meaning and effect of the proposed Third Party Mortgage.
He brought to her particular attention the provision of the proposed mortgage that on any default made by the Company in payment
of moneys due and owing by it to the Second Defendant a demand would be made on the Plaintiff by the Second Defendant to pay the
sum of $100,000.00 plus interest and charges or any balance thereof and that if the Plaintiff failed to pay the amount on demand
by the Second Defendant, the Second Defendant would put the Plaintiff's property up for Mortgagee Sale and the Plaintiff would run
the risk of losing the property.
Mr. Khan says that he further explained to the Plaintiff that there was no obligation r to give the proposed Thir Third Party Mortgage
if she did not wish to do so and he advised her to seek independent legal advice if she wished.
According to Mr. Khan the Plaintiff informed him that she fully understood her obligations under the proposed mortgage and the risk
she would be taking if she executed it. He says the Plaintiff further informed him that she was willing to execute the mortgage for
the purposes already stated.
Mr. Khan then says that his firm prepared a transfer of the property from the Plaintifher capacity as the Adminisministratrix of the
Estate of her late husband to her personal name and that the transfer document was signed by the Plaintiff in Mr. Khan's presence
after he explained the contents of it to her in Hindustani language and she appeared fully to understand its meaning and effect.
Mr. Khan then annexed to his affidavit various documents and records signed by the Piff consisting of Letters oers of Administration
No. 24173 together with Oath of Administratrix, Administration Bond and Affidavit of Justification of Sureties all of which show
that they were filed in person by the Plaintiff and that she had also extracted in person the Letters of Administration.
The other documents signed by the Plaintiff were a Transmission by Death and Application toDirector of Lands for ConseConsent to Transfer
of the property to the Plaintiff in her personal capacity. There is also a Letter of Consent from the Director of Lands dated 13th
December 2988 giving consent to the Plaintiff for the transfer of the property into her name in her personal capacity.
The affidavit of Zia Ullah Khan denies various allegations made by the Plaintiff and says thabelieves the Plaintiff knew knew what
she was encumbering and to whom as a result not only of the advice of Mr. Mohammed Afzal Khan but also through meetings with her
and correspondence from her received by the Second Defendant.
Mr. Khan states that The Bure (Fiimited went into Receivership on or about 11th January 1995 and the Plaintiff visited the Sthe Second
Defendant a few days later to request it to refrain from proceeding under its mortgage. He says that at no stage of the meeting did
the Plaintiff indicate that she was unaware of the content of the mortgage or the reason why it had been taken.
He then says that the Plaintiff opened a savaccount on 30th January 1995 with the Second Defendant on t on the understanding that
further moneys would be deposited in it to reduce the debt of the Company.
Mr. Khan then exhibits to his affidavit a copy of the first page of the Plaintiff's pass book which she left with the Second Defendant
for retention in April 1995 and a letter from the Plaintiff to the Second Defendant dated 7th April 1995 irrevocably authorising
the bank to debit at any time her account with any amount that might be required to adjust the overdraft.
On 13th June 1995 according to Mr. Khan the Plaintiff wrote to the bank authorising it to transfer $16,900.00 from her savings account
to the credit of the Company.
Also exhibited is an alleged copy letter from the Plaintiff to the bank dated 29th August promising the Second Defendefendant more
payments and requesting that her property not be put on Mortgagee Sale.
Zia Ullah Khan also ds that on 4th October 1995 the Plaintiff's son one Jagendra Sharma also opened an account wunt with the Second
Defendant so as to persuade the bank not to proceed with the Mortgagee Sale and deposited the sum of $17,00.00 and a further sum
of $8,000.00 two days later in the Company account.
Mr. Khan complains that the Plaintiff has failed to disclose all the above material facts to the C
Viren Kapadia swore an affidavit on 7th March 1996 stating that the Plaintiff executed a Third Party Mortgage in his presence at his
office in Suva in favour of the Second Defendant for moneys advanced by the Second Defendant to The Bure (Fiji) Limited. Mr. Kapadia
says that he clearly explained to her the terms and conditions of the mortgage and the reason why the mortgage was being taken. He
vehemently denies the allegations of the Plaintiff that he did not explain to her the terms and conditions of the mortgage.
An Affidavit in Reply to those filed on behalf of the Second Defendant was sworn by the Plaintiff on the 25th of June 1996 in which
she denies that the contents of the mortgage were explained to her as claimed by Mr. Kapadia. She also says that Mohammed Afzal Khan
did not sufficiently explain to her the true nature of the documents which she signed and that no one explained to her that she was
giving a mortgage over Crown Lease 1199 to secure loans to the First Defendant.
I note here that the Plaintiff does nny any of the allegations made by both Khans as to her goin going to the bank after the Company
went into Receivership, opening an account with the Second Defendant, transferring money from this account to the Company's account,
writing to the bank twice about the account, mentioning that her son also opened an account and finally that she signed a transfer.
It is these non-disclosures wthe Second Defendant says must result in the injunction being dissolved.
It is not in dispute that the legal principles applicable are contained in American Cyanamid Co. v. Ethicon Ltd. Ltd. [1975] UKHL 1; (1975) A.C. 396 in regard to the grant or refusal of an injunction and that Mason A.C.J. said in Castlemaine Tooheys Ltd. v. South Australia [1986] HCA 58; (1986) 161 CLR 148 that the American Cyanamid test that there must be first a serious question to be tried is the correct test to be applied at least in the majority of cases.
The Plaintiff here says that there is a serious question to be tried and also says that she will suffer irreparable injury for which
damages will not be an adequate compensation if the injunction is dissolved. The Plaintiff says that her only asset is at risk and
that she is presently occupying it. If the injunction is dissolved she will be out of house and home and this would mean that third
parties would acquire indefeasible rights once the bank exercises its powers of sale under mortgage.
Counsr the Plaintiff referred me to the decision of Mr. Justice Fatiaki in National Bank of F of Fiji v. Hussein Civil Action No. 0331 of 1994, unreported ruling of 13th April 1995 in support of his contention that the injunction here should
not be dissolved. That case is different from the present in that an unsuccessful Defendant sought a stay of execution pending an
appeal to the Court of Appeal and in granting the stay His Lordship followed Linotype - Hell Finance Ltd. v. Baker (1992) 4 ALL E.R. 887 which held that when an unsuccessful Defendant seeks a stay of execution pending an appeal to the Court of Appeal, it is a legitimate
ground for granting the application that the Defendant is able to satisfy the Court that without a stay of execution he will be ruined
and that he has an appeal which has some prospect of success.
With respect to the Plaintiff's submissions they ignoose of the Second Defendant that the Plaintiff failed to dito disclose material
facts to Lyons J. before he granted the injunction. It is trite law that if there is any material non-disclosure the Court on this
alone will dissolve an interim injunction. As long ago as 1888 in the Republic of Peru v. Dreyfus and Company 55 L.T.R. 802 at 803 Kay J. said:
""
Later in Thomas A. Edison Ltd. v. Bullock [1912] HCA 72; (1912) 15 C.L.R. 679 Isaacs J. said:
"Uberrima fis required, and the party inducing the Court to act in the the absence of the other party, fails in his obligation unless
he supplies the place of the absent party to the extent of bringing forward all the material facts which that party would presumably
have brought forward in his defence to that application. Unless that is done, the implied condition upon which the Court acts in
forming its judgment is unfulfilled and the order so obtained must almost invariably fall."
Even more to the point in tesent case seems to me to be the judgment of the Full Court of the High Court of Australia alia in Inglis and Another v. Commonwealth Trading Bank of Australia (1972) 126 C.L.R. 161, affirming the decision of Walsh J.
There the Court held that as a generle an injunction will not be granted restraining a mortgagetgagee from exercising powers conferred
by a mortgage and, in particular, a power of sale unless the amount of the mortgage debt, if this is not in dispute, is paid or unless,
if the amount is disputed, the amount claimed by the mortgagee is paid into the Court. On appeal Barwick C.J. with whom Menzies J.
and Gibbs J. agreed said on pp. 168 and 169:
"I have not heard anything, nor been referred to any authority, which causes me in the least to doubt the correctness of the refusal
of Walsh J. to grant the interlocutory injunction sought by the appellant or the reasons which he gave for that refusal. I find no
need to discuss the arguments offered, and the authorities referred to, by the appellant. Such of them as were relevant are sufficiently
answered in his Honour's reasons.
The case falls fairly, in my opinion, within the general rule applicable when it is sought to restrain the exercise by a mortgagee
of his rights under the mortgage instrument. Failing payment into court of the amount sworn by the mortgagee as due and owing under
the mortgage, no restraint should be placed by order upon the exercise of the respondent mortgagee's rights under the mortgage."
Finally I will quote part of the judgment of T.A. Gresson J. in Uniteples' Organisation (World Wrld Wide) Inc. v. Rakino Farms Limited (No. 1) (1964) N.Z.L.R. 737 at p.738 who said:
In my on had the Plaintiff disclosed the matters mentioned in the two Khans affidavits it is more more than likely that Lyons J. would
not have granted the interim injunction. Obviously the Plaintiff succeeded in persuading Lyons J. that prima facie she was an innocent and ignorant victim of circumstances beyond her control and therefore worth at least interim relief. The picture
which now emerges from the affidavits of the two Khans is quite different and I have no doubt that the Plaintiff should as a matter
of law have disclosed those matters to the Judge. Unless the parties reach some compromise and the Second Defendant proceeds with
its power of sale, presumably the Plaintiff will have to leave her property. This no doubt will be regrettable but it is not necessarily
the end for the Plaintiff. The Second Defendant is a substantial bank and should the Plaintiff succeed eventually against it (as
opposed to the First Defendant or the bank's solicitor), the Second Defendant would be able to pay damages with which the Plaintiff
could easily purchase another property. For this reason I do not agree that damages would not be an adequate remedy although the
Plaintiff may well have to move and set up house again in different premises.
For the reasons I have enumerated njunction granted by Lyons J. on 7th February 1996 can no longer be allowed to stand and I nd I
therefore dissolve it. I have fixed the hearing of the substantive action for the 15th and 16th of October next. I therefore order
that costs of this application be in the cause.
JOHN E. BYRNE
JUDGE
Cases referred to in Judgment:
American Cyanamid Co. hicon Ltd. [1975] UKHL 1; (1975) A.C. 396. 396.
Castlemaine Tooheys Ltd. v. South Australia [1986] HCA 58; (1986) 161 CLR 148.
Thomas A. Edison Ltd. v. Bullock [1912] HCA 72; (1912) 15 CLR 679.
Inglis and Another v. Commonwealth Trading Bank of Australia (1972) 126 CLR 161.
National Bank of Fiji v. Hussein Civil Action No. 0331 of 1994 - unreported ruling of Fatiaki J. of 13th April 1995.
Republic of Peru v. Dreyfus and Company 55 LTR 802.
United Peoples' Organisation (World Wide) Inc. v. Rakino Farms Limited (No. 1) (1964) NZLR 737.
The following additional cases were mentioned in argument:
Avon Finance v. Bridgern> (1985) 2 ALL E.R. 281.
Bank of New Zealand v. Anil Kumar & Another FCA Civil Appeal No. 54 of 1986.
Clark Boyce v. Mouat (1994) 1 A.C. 428.
Jones v. Matthie (1847) 16 L.J. CH 405.
Re South Downs Packers Pty Ltd. (1984) 2 Qd.R. 559.
Property Law Act Cap. 130.
Hbc0256d.96s
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/fj/cases/FJHC/1996/29.html
