Chand v Australia and New Zealand Banking Group Ltd [2002] FJHC 215; HBC0018d.2002b (19 July 2002)

IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION

CIVIL ACTION NO. HBC0018 OF 2002

Between:

PARMOD CHAND
s/o Vishnu Prasad
Plaintiff

and

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED
Defendant

Mr. A. Kohli for Plaintiff
Ms. B. Narayan for Defendant

DECISION

This is the plaintiff=s application by way of motion dated 13 March 2002 for an injunction restraining the defendant from further advertising for sale, selling or dealing with the property contained in Certificate of Title No. 12841 in any manner whatsoever until the final determination of this action upon the grounds contained in the affidavit of the plaintiff filed herein.

An interim injunction on an ex parte motion was granted on 14 March 2002.

The motion was returnable for 23 April 2002. The application is opposed by the defendant by an Affidavit in Reply of Sunil Kalyan, the Manager of the Asset Management Unit of the defendant Bank in Suva.

On the returnable date Mr. Kohli for the plaintiff stated that the amount will be paid off by 21 May 2002. Mr. Kohli wanted to file an Affidavit in Reply to Summons for dissolution of interim injunction. He was allowed 14 days to do so and the matter was adjourned to 21 May 2002 for argument. An Affidavit in Reply was filed on 15 May 2002 and the matter was heard on 22 May 2002 at Labasa.

Mr. Kohli argued that the plaintiff relying on the representation made by the defendant brought his arrears up-to-date on loan No. 2 relating to the property comprised in CT. No. 12841. He says that the correspondence between the parties speak for themselves. He wants the injunction to continue until the trial of the action.

Miss Narayan vigorously opposed the application and is seeking dissolution of the interim injunction granted herein.

She submitted that there is no serious question to be tried and that this application is frivolous and vexatious. She says that the plaintiff does not deny the debt but merely asserts that he is arranging payment of same. He has made no attempt to clear the debt despite promises to do so. In fact he only brought the arrears up-to-date just before making this application.

Miss Narayan stated that the plaintiff has come to Court three times seeking injunction in respect of the same debt and property. This she says is an abuse of the process of the Court. The learned counsel submits that the interim order for injunction ought to be dissolved. She says damages is an adequate remedy and the defendant is capable of paying it if one is awarded.

Consideration of the issue

I have carefully considered the arguments put forward by both counsel. The contents of all the affidavits have also been considered.

The plaintiff has made a number of allegations against the defendant. Not all of these allegations are contained in the Writ of Summons herein; some of these are made for the first time in the affidavits. The defendant denies them all.

On the affidavit evidence before me, I am not satisfied that the defendant as mortgagee made representation as alleged thereby allowing the plaintiff to bring his arrears up-to-date and so long as he keeps up with his instalment payment no action will be taken under the mortgage. It is a matter of comment that after the interim injunction was granted on 14 March 2002, on the returnable day of the motion for injunction i.e. 23 April 2002, the learned counsel for the plaintiff stated that the amount under the mortgage will be paid off by 21 May 2002. So the matter was adjourned for that date.

When the case was called in the High Court at Labasa the plaintiff did not keep to his undertaking but instead sought time to file an Affidavit in Reply to the defendant=s summons to dissolve the interim injunction. In that affidavit in Reply he made allegations of representation etc. In other words there was no intention on the part of the plaintiff to make any payment. His undertaking to pay was merely an excuse to get more time to prolong his own agony as long as he could lest the defendant exercises its power of sale under the mortgage. One must come to Court with clean hands.

On the principles governing the granting of injunction the leading case is American Cyanamid Co v Ethicon Ltd (1975) 1 All E.R and as it was said in that case that the Court must be satisfied that the plaintiff=s claim is not frivolous and vexatious. In other words, there is a serious question to be tried; and if that is the case then the question becomes a matter of the >balance of convenience=.

I find that on the affidavit evidence, there is no serious question to be tried. No doubt the plaintiff made attempts in the past to obtain injunctions in respect of the same property but has eventually been unsuccessful. There is no dispute as to the debt under the mortgage. The plaintiff=s bone of contention is that since he was allowed to bring his arrears of payment up-to-date he should not be proceeded against under the mortgage. The defendant denies that there was any such arrangement. Looking at the whole of the evidence before me I find that this application is frivolous when the plaintiff knew very well he could not keep to his undertaking to pay by 21 May 2002. If one cannot keep to that promise to pay then one should not give false hope and a sense of security.

The plaintiff has not satisfied me in law that he is entitled to an injunction which he is seeking. If the plaintiff succeeds in this action he will be entitled to damages which the defendant as a bank is able to pay.

Hence for the plaintiff damages as a remedy is sufficient. Therefore, on a balance of convenience the granting of injunction is not appropriate on the facts before me so as to prevent the defendant as mortgagee exercising its power of sale.

There have to be strong grounds for interfering with a mortgagee=s power of sale. The following passage from the judgment of Court of Appeal in Westpac Banking Corporation Ltd v Adi Mahesh Prasad (Civil Appeal No. ABU0027 of 1997S at p7 is pertinent:

AAuthorities to be referred to show that it is an extremely serious step to interfere with the exercise of a mortgagee=s power of sale. The authorities show that it is quite unusual to grant an interlocutory injunction, let alone an ex parte injunction, to restrain the power of the mortgagee except in very special circumstances.@

It is further stated in Prasad (supra)

AWe add that, if in any case, whether it be a case involving a restraint on a mortgagee=s power of sale or a different kind of case, the Court sees fit to grant an ex parte injunction, the matter should be adjourned for no longer than a day or so. A period of six weeks, which was the period in this case, was far too long.@ (bold for emphasis)

I might as well mention here that it is a well settled law that the Court will not interfere with the Mortgagee=s power of sale unless the mortgagee pays the full mortgage amount into Court [vide Inglis and Another v Commonwealth Trading Bank of Australia (1972) 126 C.L.R. 161 and Ramesh Bhai Maisuria & Usha Ben Maisuria v Australia and New Zealand Banking Group Limited (Civil Action No. 299 of 2001). This proposition was stated as follows in Inglis (supra) at 164:

>A general rule has long been established, in relation to applications to restrain the exercise by a mortgagee of power of sale given by a mortgage and in particular the exercise of a power of sale, that such an injunction will not be granted unless the amount of the mortgage debt, if this be not in dispute, be paid, or unless, if the amount be disputed, the amount claimed by the mortgagee be paid into Court.

The rule, as it affects the exercise by a mortgagee of the power of sale, is stated in the following terms in Halsbury Laws of England 3rd Edition Volume 27, p.301:

AThe mortgagee will not be restrained from exercising his power of sale because the amount due is in dispute, or because the mortgagor has commenced a redemption action, or because the mortgagor objects to the manner in which the sale is being arranged. He will be restrained however, if the mortgagor pays the amount claimed into court, that is, the amount which the mortgagee swears to be due to him...@=

Here the plaintiff has not only been falling in arrears of instalment payment but failed to pay off the full amount despite his undertaking to pay by 21 May 2002.

All that the plaintiff/mortgagor wants is that the defendant/mortgagee should not be allowed to proceed to sale particularly when he is up-to-date with his payments. He has not stated, however, how he is going to meet his future payments.

In these circumstances how can the defendant be restrained from exercising its powers of sale. As was said by Megarry J in Shepard Homes Ltd v Sandham (1971) Ch 340 that the ACourt must feel a high degree of assurance that at the trial it will appear that the injunction was rightly granted@ before the Court will interfere with the security document bearing in mind of course that at this stage Athe court is not justified in embarking upon anything resembling a trial of the action upon conflicting affidavits in order to evaluate the strength of either party=s case pertaining to grant of interlocutory injunction (Footnote to the Supreme Court Practice 1979 29/1/11).@

In the outcome, for these reasons particularly the plaintiff=s own conduct in constantly making defaults in his payment under the mortgage and not keeping to his promises and undertaking despite accommodation having been extended to him, the defendant as a Bank/mortgagee is entitled to terminate its banker and customer relationship with the plaintiff. Hence the plaintiff is not entitled to an extension of the interim injunction granted herein and it has to be refused.

In conclusion I refer to the following passage from the judgment of Megaw J in Hubbard & Anor v Vosper & Another (1972) 2 WLR 389 at 397 which I consider pertinent on the facts and circumstances of this case and to be taken into consideration:

AOne can really imagine a case in which the plaintiff appears to have a 75% chance of establishing his claim, but in which the damage to the defendant from the granting of the interlocutory injunction, if the 25% defence proved to be right, would be so great compared with the triviality of the damage to the plaintiff if he is refused the injunction, that an interlocutory injunction should be refused. To my mind, it is impossible and unworkable to lay down different standards in relation to different issues, which fall to be considered in an application for an interlocutory injunction. Each case must be decided on a basis of fairness, justice and common sense in relation to the whole issues of fact and law and which are relevant to the particular case.@

The interim injunction is therefore dissolved with costs against the plaintiff in the sum of $400.00.

D. Pathik
Judge

At Suva
19 July 2002