Reddy v National Bank of Fiji [1997] FJHC 251; Hbc0008D.97l (19 November 1997)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0008/97L

BETWEEN:

RAJENDRA REDDY & OTHERS
PLAINTIFF

AND:

NATIONAL BANK OF FIJI & OTHERS
DEFENDANT

Dr Sahu Khan for the Plaintiff
Mr Young for the Defendants

Date of Hearing: 15th August 1997
Date of Ruling: 19th November 1997

RULING

This matter was heard before me on the 15th August 1997. I called for written submissions which subsequently came to hand. The Written Submissions are most comprehensive.

On the 10th January 1997, the Plaintiff issued proceedings against the Defendant. The principal cause of action centres around the estate of the late SUBRAMANI REDDY who passed away on the 13th May 1969. He died intestate. The 3rd Defendant, the Public Trustee, was appointed the Administrator of his estate. The Plaintiffs claimed to be beneficiaries of this estate.

The estate consisted of land described and contained in Native Lease 4/11/1971. This land comprises an area of over 16 acres. As best as I am able to ascertain, the 1st Plaintiff, RAJENDRA REDDY, lives on the said land with his family and is solely dependent on the land for his income. The 1^st Plaintiff RAJENDRA REDDY has five children aged between 6 months and 17 years (as at 10th January 1997). Obviously these children were born well after the death of their grandfather SUBRAMANI REDDY.

The next fact I am appraised of is that on the 29^th July 1991 the Public Trustee applied to the Native Land Trust Board (NLTB) for consent to mortgage the said land to the 1st Defendant (The Bank) for a principal sum of $9,000.00. The mortgage was signed by the Public Trustee on the 6th January 1992 consent was given pursuant to Section 12 of the Native Land Trust Act (The Act) on or about the 29th May 1992. There was an earlier consent given on or about the 1st August 1991 which was conditional upon registration of the mortgage in the Registrar of Titles office on or before the 30th October 1991. There is some confusion in the evidence before me as to when the mortgage was actually registered particularly when one reads the Affidavit of Mr SEETO sworn for and on behalf of the Defendant. I would have hoped to have been given more precise evidence of this but this was not the case. In any event the mortgage (now No. 4697) was either lodged or registered on the 3rd February 1992 or perhaps some later date. As I say I am given no precise evidence of this.

I am also informed that the amount owing under the said mortgage was, as at 9th January 1997, $11, 845.91 accruing at $4.92 per day.

I am also told that the 2nd Defendant (the Asset Management Bank) have taken over the said mortgage. This was done, it is pleaded, pursuant to a statute and, I gather from the media, in the course of reconstituting the bank. I suppose it is reasonable that I take judicial notice of this. I am not told if there has been a transfer of the mortgage from the Bank to the Asset Management Bank, nor in fact if any such transfer is needed.

I am also told that the Asset bank had advertised a mortgagee sale of the subject property.

These are the facts as appeared from the material on file before me.

It is useful that I set out the material. It is as follows:-

The Writ of Summons filed the 10^th January 1997.

The Originating Summons filed on the 10^th January 1997.

The Affidavit of 2^nd Plaintiff SARAS WATI filed on the 10^th January 1997.

The Statement of Defence of the 2^nd Defendant filed on the 15^th May 1997.

The Affidavit of T. SEETO filed on the 25^th June 1997.

Summons by the 1^st and 2^nd Defendants filed on the 25^th June 1997.

In the Originating Summons of 10^th January 1997, the Plaintiff sought injunctive relief against the Bank and Asset Management Bank from proceeding with the mortgagee sale.

On the 10^th January 1997 I granted ex parte injunctive relief.

On the 24^th January 1997 I extended the ex parte relief until further order. The matter was adjourned pending hearing on an inter partes basis.

On the 21^st February 1997, the matter was further adjourned to a later date subject to negotiations taking place and the parties attempting to settle the matter.

It appears that these negotiations did not bear fruit. The summons on the 25th June 1997 seeks to have that injunctive relief dissolved.

I now turn to consider the matters raised in the Summons. I have been presented with exhaustive written submission. As to matters of law, I found them most helpful. As to matters of fact, I must confess to being somewhat in the dark and the submissions in this aspect, do not enlighten me at all.

Before proceeding further, it is prudent to point out what I understand are the legal issues claimed to support the Plaintiff's application. They appear to me that, as it is alleged:-

(i) The monies secured under the mortgage were not advanced prior to the receipt of the Native Land Trust Board consent;

(ii) That the Public Trustee was either not authorised or was not empowered to mortgage the said land;

(iii) That the consent when first given on the 1st August 1991 was said to be conditional on the registration of the Bill of Mortgage with the Registrar of Titles by the 31st October 1991. This registration was effected, at least it appears on the papers, on or about the 3rd February 1992. It is claimed by the Bank that the time for compliance with the condition was, either by extension or renewal, advanced to the 28th August 1992.

As to matters of fact, I must say there are several areas where evidence is non-existent or entirely unsatisfactory. For example:- The Plaintiff gives no background on why the loan was applied for. Surely it could not be that the Public Trustee applied for the loan for its own purpose. One imagines then that the funds when advanced, were put to use by some person, presumably the 1st Plaintiff RAJENDRA REDDY. However, there is no evidence of this. I would have thought this would have been a most material point.

I note for example paragraph 9 page 3 of the submissions for the Defendant, state that there was some agreement between the Plaintiff and the Defendant in respect of sugarcane grown on the land.

In paragraph 2 of page 2 of the Plaintiff's submissions in reply, reference is made to the said paragraph 9 and to the lack of evidence. I would have thought this criticism by the Plaintiff to be of a little weight for it was the Plaintiff's clear obligation to acquaint the Court with the full circumstances surrounding the loan. As it is, the evidence suggests that the Public Trustee merely "plucked" the loan out of the air.

Again, although the allegation is made that the Public Trustee had no power to grant a Mortgage to the 1st Defendant, no evidence is led as to how this came about. Where were the factual circumstances underpinning the actions of the Public Trustee, as Administrator of the estate, in making application for the loan, subsequent consent and the signing of the mortgage? Did some person with the Plaintiff's "camp" instigate this action? I simply do not know and yet I would have thought it a very basic matter that such circumstances and the facts supporting these allegations be put before the Court.

I am not assisted at all by the pleadings. The declaration sought in paragraph (b) of the Plaintiff's Statement of Claim (Prayer for Relief) is made without any particularity at all.

If the Plaintiff's case, per medium of the Affidavit of Ms WATI, is lacking in essential evidentiary material, the same can be said of Mr SEETO's Affidavit in Reply.

Paragraph 8 of Mr SEETO's Affidavit speaks of an application for consent on or about the 7th May 1992 (called the second application). I question - Where is a copy of it? Was it in fact a second application or was it an application for an extension of conditions of consent pursuant perhaps to Section 16 of the Subsidiary Legislation to the Native Land Trust Act?

In all I must express my dissatisfaction as to the presentation of evidence in this matter. It seems clear to me that the parties have either deliberately or carelessly lost focus in this matter and rather then present precise details of material facts, have preferred the scatter gun approach of generalities. If parties persist in such an imprecise approach, the danger is that a Court may be left with the impression that a "snow job" is being undertaken.

In this matter, whilst I express my dissatisfaction with the evidence, I do not propose to have it weigh against either party, for both are as culpable. One would expect a better performance in the future. After all, the parties come seeking equitable relief on serious matter. The expectation, thus, is that all the cards are laid on the table.

In spite of the lack of what I consider essential evidence (or because of it) I have no option but to decide this issue on the general principles expounded in AMERICAN CYANAMIDE CO. -v- ETHICON [1975] UKHL 1; [1975] 1 ALL ER 504. I might say in passing that the evidence (or lack of it) hints at a more individualistic approach, but to do so would call for some wide presumptions to be made. In the absence of any evidence supporting these presumptions, I am not prepared to proceed on that basis. I thus will proceed to decide on this matter on the general principles.

On reading the submissions of Counsel, I am prepared to accept there is an issue to be tried. The lack of precise evidence causes me to have some doubt as to the seriousness of this issue, but, on balance, I feel I must give the Plaintiff the benefit and accept such issues as serious. There is, at least on the material, questions to be asked and litigated concerning the timing of the consent and the advancement of the money.

As to the question of damages being an adequate remedy should the Plaintiff be successful, I lean towards the Defendant in this respect.

I have read the submission 11(a) and (b) of the Defendant's submission and I am afraid I disagree with it.

I accept the land forms the 1st Plaintiff's sole source of income but that of itself does not preclude an accurate assessment of damages. Again I am called upon to assume that the 1st Plaintiff keeps records of income from which calculation can be made.

Further, there is no evidence that the other beneficiaries draw any income from the land. Is rent paid? Is there some arrangement to share any profit? What is the full extent of the arrangements concerning the 1st Plaintiff's occupancy of the land? It would have been helpful to have some detail of these matters. Unfortunately, without these details, I find it impossible to support the Plaintiff on his submission.

As the evidence stands before me, the land is an asset of the estate. If sold and the Bank or the Asset Bank are found liable, damages are (at least on what is before me) limited to the value of the land. I would consider that a very easy exercise to calculate such loss.

I am not convinced that I should extend the injunction because these supposedly "economic times" mean the Defendant may not get the best price. How do I know that? There is nothing before me except the bare assertion in submissions. I note the consent application lists the term of the lease as 20 years from the 1st January 1981. Is this a renewal period under ALTA? Is this an original term to which an automatic renewal would apply? Or does that mean that the lease runs out in four and half years and would be of little value any way unless further renewed again?

Unfortunately, I am in no position to adjudicate on the effect of the mortgagee sale now on the value of the land - particularly in these times of uncertainty with ALTA. I cannot accept the Plaintiff's submissions on this point in the absence of further evidence.

I find I must fall back on the time worn argument in such cases as this - the damages can be easily assessed; such will be adequate compensation to the successful Plaintiff and as the Defendants are Banks and there is no evidence to the contrary, it has to be accepted that they have a capacity to pay.

In such circumstances, when I consider the damages should be adequate compensation, I have no alternative but to dissolve the injunction.

I do so order.

I order the Plaintiff pay the Defendant's costs which I summarily assess at $200.00.

JOHN D. LYONS
JUDGE

HBC0008D.97L