NBF Asset Management Bank v Vere [2003] FJHC 27; Hbc0323j.2001s (10 November 2003)

IN THE HIGH COURT OF FIJI
(AT SUVA)

CIVIL ACTION NO. HBC 323 OF 2001S

Between:

NBF ASSET MANAGEMENT BANK
Plaintiff

and

NAIPOTE VERE
First Defendant

and

ESITA TAKAYAWA VERE
Second Defendant

T. Seeto for the Plaintiff
D.P. Sharma for the Defendants

JUDGMENT

These are proceedings for possession of land brought by a mortgagee (the Bank) against the mortgagors pursuant to the provisions of Order 88 of the High Court Rules.

In the supporting affidavit filed on 18 July 2001 by Laisenia Takala it was averred that under mortgage 272309 granted over Lot 1 Princes Road, Dilkusha, Nausori, a sum of $52,161.95 was due and that there were repayment arrears of $5,877.35. It was further deposed that on 29 March 2000 the Bank demanded repayment of the sum due but that the Defendants had not complied with the demand.

In paragraph 20 of a second affidavit filed on behalf of the Bank on 16 January 2001 Sera Bulavakarua averred that the Bank (presumably in reliance on the terms of the mortgage and Sections 77 and 79 of the Property Law Act (Cap 130)) had exercised its powers of sale. According to Mrs. Bulavakarua the property was advertised for sale on four occasions. The highest offer which was received was $30,000 and on 5 January 2000 this offer was accepted. Unfortunately the purchaser did not complete. The property was again advertised and on 16 October 2000 an offer of $28,000 was accepted from Mrs. Tariko Elo (Exhibit C).

In a very lengthy affidavit filed on 25 October 2001 the first Defendant who was then representing himself and his wife, the second Defendant, made a number of allegations against the Bank. He claimed that the property was worth much more then the Bank obtained from the sale. He also claimed that the Bank had treated him unfairly. While admitting being indebted to the Bank the Defendant denied owing the sum claimed. In a second affidavit filed on 20 February 2002 the first Defendant queried the “lawfulness” of the sale to Mrs. Elo. He suggested that the mortgage was subject to the provisions of the Consumer Credit Act 1999. He admitted arrears under the mortgage but averred that he had advised the Bank that he would be able to repay the loan in October 2000 when he would become entitled to the full benefit of his FNPF contributions. In these circumstances the Defendant prayed:

“that the Court dismiss the Plaintiff’s summons and that the Defendants be allowed to reduce their mortgage with the funds from FNPF and continue monthly payments thereafter.”

On 25 March 2003 Mr. Seeto filed comprehensive written submissions on behalf of the Bank. On 3 April Mr. Sharma who was by now representing the Defendants filed helpful written submission in answer. Mr. Seeto replied on 15 July.

In my opinion it is not necessary to deal with all the many arguments raised and countered since I take the view that two primary considerations are in fact determinative of the Defendants’ answer to the Bank’s application.

The first is that the High Court of Fiji has for many years followed and accepted as good law the principle that failing payment into Court of the whole sum owed under the mortgage a mortgagee will not be restrained from exercising its powers under the mortgage (see also Westpac Banking Corporation Limited v. Adi Mahesh Prasad (1999) 45 FLR 1). In the present case nothing has been paid into Court or has been offered by the Defendants.

Secondly, Property and Bloodstock Limited v. Emerton [1968] 1 Ch. 94 is authority for the proposition that a contract of sale entered into by a mortgagee exercising its powers of sale, whether conditional or unconditional, extinguishes the mortgagor’s right of redemption.

In my opinion the Defendants’ former property has been sold. There is nothing left to redeem. There are no mortgagees powers left to restrain. I agree with Singh J that the Consumer Credit Act 1999 has no application to mortgages granted before the commencement date of the Act (see ANZ Bank v. Kumar HBC 301/02). There is no further legal basis on which the Defendants can remain in possession of this property.

The Plaintiff’s application is granted. There will be an order for possession in 28 days.

M.D. Scott
Judge

10 November 2003.