NBF Asset Management Bank v United Marine Ltd [2000] FJHC 104; Hbc0234j.2000s (27 September 2000)

Fiji Islands - NBF Asset Management Bank v United Marine Ltd - Pacific Law Materials

IN THE HIGH COURT OF FIJI

(AT SUVA)

ass=MsoNormal alal align=center style="text-align: center; margin-top: 1; margin-bottom: 1"> CIVIL ACTION NO. HBC 234 OF 2000

Between:

NBF ASSET MANAGEMENT BANK

Plaintiff

UNITED MARINE LIMITED

Defendant

T. Seeto for taintiff

S.V. Coutts for the Defendant

JUDGMENT

ass=MsoNormal stal style="tlign: justify; margin-top: 1; margin-bottom: 1"> On 4 April 1995 United Investments Lrtgaged its interest in Crown Lease 2304 to the Plaintiff iiff in consideration of loans made or to be made either to United Investments Ltd (the mortgagor) or to Donald Pickering and Sons Enterprises Ltd. A copy of the mortgage is Annexure B to the supporting affidavit of Laisenia Takala filed on 12 May 00.

According to paragraph 6 of Mr. Takala’s affidavit the amount advanc the mortgagor totalled $36d $365,000 which sum has increased to $3,618,613 by reason of the mortgagor’s failure to make repayments.

These proceedings (as is clear from the supporting affidavit and from Mr. Seeto’s written submission filed on 11 August 00) are brought pursuant to Order 88 of the High Court Rules. Order 88 r (1) (d) applies the Order to an action for the delivery of possession to a mortgagee by any person alleged to be in possession of the property. The Plaintiff says that the Defendant (which it must carefully be noted is not the same company as the mortgagor) is in fact in possession of the premises in question.

On 12 July 00 Donald Thomas Pickering, a director both of the mortgagor and the Defendant filed an affidavit in answer. Although Mr. Pickering admits the existence of the mortgage and also admits that the defendant is in actual possession of the premises, default is denied as is the Plaintiff’s right to possession of the property.

In my view tance taken by the mortgagor creates a real difficulty for the Plaintiff since if the PlainPlaintiff has any right to possession of the property that right must arise under the mortgage.

In the case where a mortgagor is no longer in possessiothe mortgaged property and there is a possibility of the mohe mortgagor’s interests being adversely affected by the possession proceedings the mortgagor should be made a party (see Temperance Permanent Benefit Building Society v. Nevitt [1940] 3 All ER 237; Martins Bank v. Kavanagh [1948] 2 All ER 448 and Alliance Building Society v. Shave [1952] 1 Ch. 581).

While I am not able to rule on the Plaintiff’s claim against the mortgagor, the mortgagor not being a party to this action but having made it clear that it will dispute the claim, I can nevertheless rule on Mr. Pickering’s claim advanced both on behalf of the mortgagor and the Defendant that the Defendant has a right to possession of the premises by reason of a 15 year lease. Mr. Pickering says the lease was granted by the mortgagor to the Defendant on 11 November 1994, and a copy is attached to his supplementary affidavit filed on 24 August 00.

The first difficulty faced by the mortgagor is that it is setlaw that a mortgagor cannotannot set up against his mortgagee the title of a third person, in this case the Defendant (see Doe d. Bristowe v. Pegge (1785) 1 Term Rep. 758).

Secondly, while a lease by a mortgagor granted before the creaof the mortgage may in prin principle be binding on the mortgagee (Moss v. Gallimore (1779) 1 Doug. KB 279, 283) there is no mention of any existing lease in the mortgage document as is required by its first paragraph.

Thirdly the leasied on is in breach of clause 6 of the mortgage document.

Finally, the lease is unregistered (see Annexure A . Laisenia Takala’s supporting affidavit) and is accordingldingly invalid as against the mortgagee by reason of section 55 of the Land Transfer Act (Cap. 131).

In my view the Defendant’s attempt to deny the mortgagee the right to possession bancing the tenancy fails anls and under paragraph 3 of the prayer of the Originating Summons I grant a declaration to that effect. For reasons already given I decline to make an order for possession of the premises in favour of the Plaintiff as against the mortgagor in these proceedings.

M.D. Scott

Judge

27 Sepr 00

HBC0234J.00S