Housing Authority v Raju [2008] FJHC 366; HBC071.2008 (19 December 2008)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 071 of 2008

Between:

HOUSING AUTHORITY
Plaintiff

And:

DEO RAJ RAJU
KANTA ARMOGAM RAJU aka KANTA RAJU
Defendants

Before: Master Udit

Counsel: Mr. V. Maharaj & Ms. A. Maharaj for the Plaintiff
Defendant In Person

Date of Hearing: 18th November, 2008
Date of Decision: 19th December, 2008

DECISION
Setting aside – Order 88 Action – Order made in default of appearance)

Introduction

[1] On 23rd June, 2008 the defendant filed an application to set aside a judgement granted on 21st which was perfected on 29th April, 2008. In addition in the interim the defendant sought and was granted a stay of the execution of the aforementioned order until the final hearing and determination of this application.

[2] On 21st April, 2008 I granted an order against the defendant in his absence to deliver to the plaintiff vacant possession of all that piece and parcel of land situated in the District of Naitasiri in the Province of Viti Levu comprised and described in Native Lease No. 396904 being Lot 7 on Deposited Plan No. 7454 together with all improvements thereon. An additional order was granted on an application by the plaintiff to discontinue this action against the then Second defendant Kanta Armogam Raju aka Kanta Raju.

[3] The application is vigorously opposed by the plaintiff.

Documents

[4] The plaintiff relies on the following documents:-

(a) Originating Summons filed on 11th March, 2008.

(b) Affidavit in Support of the Originating Summons of Jagdish Prasad sworn and filed on 11th March, 2008.

(c) Affidavit of service filed on 19th March, 2008.

(d) Notice of Appointment to hear Originating Summons filed on 28th April, 2008.

(e) Affidavit of Service of Sailosi Dau sworn on 7th and filed on 8th April, 2008.

(f) Sealed Order of this Court made on 21st April, 2008 perfected on 22nd April, 2008.

(g) Affidavit of Service of Sailosi Dau sworn on 9th and filed on 14th May, 2008.

(h) Praecipe for the issue of Writ of Possession filed on 3rd June, 2008.

(i) An application for leave to issue Writ of Possession filed on 3rd June, 2008.

(j) Affidavit in reply of Sisilia Rakesa sworn on 3rd and filed on 4th July, 2008.

[5] The plaintiff relies on the following documents:-

(a) Acknowledgement of service filed on 28th March, 2008.

(b) Notice of Motion to set-aside default judgment filed on 23rd June, 2008 which is the Motion listed for hearing before me.

(c) Affidavit in support of the Notice of Motion to set-aside default judgment concurrently filed on 23rd June, 2008.

(d) Order of this Court granted on 24th and perfected on 25th June, 2008.

(e) Affidavit in reply of the defendant sworn and filed on 18th July, 2008.

Background Facts

[6] The defendant, Deo Raj Raju, after a matrimonial acrimony is in a precarious position. The matrimonial home is dispossessed by the plaintiff as the Mortgagee. Deo Raj Raju was married to Kanta Raju (who was incidentally the second defendant in this action). Due to some differences, the wife sought dissolution of the marriage which was granted by the Family Court at Suva on 20th November, 2003. The Court further ordered that "Decree Nisi be granted and Degree Absolute issued at the expiry of 28 days from today. Maintenance of $25.00 per child per fortnight that is $12.50 per week with effect from 1st December, 2003. Custody of children namely Rupantri Nandinita Raju born on 17th September, 1985, Emmanuel Anand Raju born on 31st May, 1991 and Nathaniel Asish Raju born on 27th March, 1998 be granted to the Petitioner with reasonable excess to the respondent. Forfeiting $9,000-00 payment of Housing Authority home."

(Refer to the order of the family course)

[7] After marriage the plaintiff and Kanta Raju purchased the subject property. It was purchased on 13th May, 1996 of which Deo Raj Raju became the sole proprietor. It was mortgaged back to the Housing Authority. From the affidavits filed, it appears that they wanted to build a house for which they needed more funds. Housing Authority was willing to assist but probably that required evidence of ability to repay or service the mortgage. On 27th June, 1997, to meet the Authority’s requirements there was a partial transfer of one undivided half share in the property to Kanta Raju, now the plaintiff’s former wife. The transfer or partial surrender was registered on 27th June, 1997. Simultaneously, a mortgage in favour of the Authority was also registered. The plaintiff and Kanta Raju are the mortgagors noted in the mortgage instrument. After 1997 the parties continued to make regular payments to the Housing Authority until 1st November, 2004. Due to the matrimonial dispute the repayments were stopped. However, I will reiterate that the personal difference between the plaintiff and his former wife was not a matter for consideration by the mortgagee, which only required regular repayment of the loan sum.

[8] The defendant does not deny that he defaulted in the mortgage repayment. His explanation is that after the dissolution of the marriage, the former wife had wanted to surrender for his benefit her half share of the property. Since she had not done so, he had difficulty in organising re-finance for the property. He submitted that he was in the process of seeking re-finance from other lending institutes but for the former wife’s inaction the institutes were hesitant to grant a loan. Even though the property was co-jointly owned by his former wife, at no point in time was Housing Authority threatening to exercise its power as a mortgagee as a direct consequence of the dissolution of the marriage. In other words, it implies that if the defendant had continued to make repayments to the Housing Authority, during the period which he was attempting to settle the matrimonial dispute, the Authority would not have intervened to realise the security. Undoubtedly, even though he may have succeeded in re-financing the property by another lending institute, the fact still remains that he would have had to make repayments. His position would not have changed at all in so far as mortgage repayment is concerned.

Mortgagee’s exercise of power

[9] The Originating Summons is filed pursuant to Order 88 of the High Court Rules 1988. It is a mortgagee’s action to recover vacant possession of the said mortgaged property; Order 88, Rule 1(1) (d). The application is supported by an affidavit of Jagdish Prasad. The deponent is the Board Secretary and Manager Corporate Governance of the plaintiff.

[10] Presently the defendant and Kanta Raju are still the registered proprietors. The property was improved by the construction of a single storey three bedroom concrete dwelling house with a lounge, kitchen, shower and all other appurtenances. Presently, the defendant is residing in the said property. Kant Raju after dissolution of the marriage vacated the premises.

[11] The Authority advanced the loan to the defendant on 9th June, 1995 in the sum of $10,035-30 at an interest rate of 11.5%. Initially the monthly repayment was $62-45, subject to adjustment with the variation in the interest. Next on 30th April, 1997 the defendant requested for a further loan of $25,133-44 to construct a three bedroom dwelling house. In order to be eligible for further loan the First defendant had to include the Second defendant as a joint owner of the said property. The necessary conveyance was done at the behest of the Authority. After paying the requisite deposit of $6,311-00 on 20th November, 1996, the defendant transferred $9,051-00 from the Fiji National Provident Funds to the Authority. It was undeniably received by the Authority on 12th August, 1997. On 9th May, 1997 the plaintiff secured a mortgage for the payment of the advances by way of a mortgage.

[12] The mortgage is in a standard form usually issued by the Authority. During the hearing, I specifically sought from the plaintiff as to whether he had any particular objection pertaining to the validity of the mortgage. He replied that the mortgage is a valid instrument and he has no such objection. In that regard I do not need to delve into the details of the mortgage, save to say that a certified true copy of the mortgage is annexed to the affidavit of Jagdish Prasad marked as "annexure B".

[13] After the matrimonial dispute the defendant concedes that he had stopped repayments to Housing Authority prompting the Authority to issue demand notice dated 13th September, 2004. He was given 30 days to pay the mortgage sum of $61,937-84. The notice annexed to the affidavit of Jagdish Prasad states:

"Your account has been in arrears for sometime. You are now required to pay the amount shown below plus $10.00 cost within 30 days of the service of this notice. If payment in full is not received, the Housing Authority will take action to terminate your interest over the property without further notice to you. (Partial payments will be received without prejudice). In that event you will be required to quit the property and give vacant possession. If necessary, the Authority will enforce its right of entry or forfeiture by legal action.

Yours faithfully

for Chief Executive".

There is a table disclosing the "repayment and arrears" in the notice which for the purposes of this action discloses:-

"(a) Payment required $61,937-84

(b) arrears $669-20."

The demand notice was duly served to the defendant on 13th September 2004 by one Raju Prasad who filed an affidavit of proof of service.

[14] The defendant did not pay heed to the notice. Nor did he pay the debt as demanded which prompted the plaintiff to exercise its right to realise the security by placing the subject properly on a mortgagee sale. The ‘mortgagee sale’ advertisement appeared in the newspaper on 2nd and 6th of April, 2005 and thereafter again on 7th and 9th of June, 2007.

[15] Since the advance was given, the defendant in total only paid a sum of $19,886-80. This accounts for the payments from the 4th day of March, 1997 to 1st day of November, 2004. A full statement of account is annexed to the Affidavit of Jagdish Chand marked as "annexure E."

[16] The Authority claims that the defendants were from the beginning inconsistent with the repayments. As a result, a large sum of arrears had accumulated. At the time of the mortgagee sale the arrears had accumulated to $34,194-40.

[17] A number of responses were received from prospective buyers. Ultimately the Authority decided to sell the property to one Sanjay Kumar Narayan. In order to effect the finalisation of the settlement of the sale to the new purchaser the plaintiff now seeks vacant possession of the property. To effect that a notice requiring vacant possession of the property was given on 24th August, 2007 to the defendant. He was given 1 month there from to vacate the property. He refused to vacate the property. As a consequence, this present action was filed.

Granting of Order on 21st April, 2004

[18] This action was commenced by an ordinary Originating Summons. In accordance with the High Court rules the defendant was required to return an acknowledgement of service within 14 days of the service of the Originating Summons; Order 12, rules 2 and 8. The defendant duly complied with the same. Thereafter the plaintiff had to wait for a month before listing the Originating Summons for hearing.

[19] The Originating Summons procedure under Order 88 is governed by Order 28 of the High Court Rules 1988. Pursuant to Order 88, Rule 2(4) "Where a defendant who has acknowledged service wishes to adduce affidavit evidence he must within 28 days after service on him of the copies of the plaintiff’s affidavit evidence under paragraph 5 file his own affidavit evidence and serve copies thereof on the plaintiff and on any other defendant who is affected thereby". The mandatory affidavits which are required to be filed under the Originating Summons procedure are the supporting and answering affidavits. The plaintiff has liberty to file a reply to the answering affidavit. No further affidavit is permissible under the rules except with the leave of the Court.

[20] The defendant did not file an answering affidavit as required by the Rules. The notice of appointment to hear Originating Summons was filed on 28th March and returnable on 21st April, 2008. On 21st April 2008 Mr. Chandra appeared for the plaintiff. Kanta Raju appeared in her own right as the Second Defendant. There was no appearance for the defendant, Deo Raj Raju. Initially the matter was called at 9.30 a.m. when Mr Chandra decided to discontinue the action against the Second Defendant. This was because Kanta Raju was no longer living in the house. I granted leave to Mr. Chandra to discontinue the action against the Second Defendant. Since then the Second Defendant ceased to be a party. Thereafter, I had the matter stood down to secure the appearance of Deo Raj Raju, despite Mr Chandra’s application for an order in terms of the Originating Summons be made.

[21] The matter was again called at 10.30 am. I enquired from Mr Chandra as to whether the original copies of the mortgage instrument was available for the purposes of the hearing as required by Order 88, Rule 3(2). Mr Chandra submitted that the copy was not available with him. Despite that, he sought the Order based on the non-appearance of the defendant. He stressed that the application is uncontested. Undoubtedly, he said that the Authority keeps in its possession a huge number of mortgage instruments. All are duplicate copies of the mortgage, as the original copy remains in custody, power and control of the Registrar of Titles.

[22] Before acceding to Mr Chandra’s application, I required the Clerk to call Deo Raj Raju. Again there was no appearance of. Being convinced of the non-appearance, I granted the order in terms of the Originating Summons. Also the failure to file an answering affidavit as required by O. 28, rule 8(4) the action became truly uncontested. The Order granted states:

"1. Leave is granted to discontinue the action against the Second defendant.

2. The first defendant do deliver to the plaintiff vacant possession of all that piece or parcel of land situated in the District of Naitasiri in the Province of Viti Levu comprised and described in Native Lease No. 396904 being Lot 7 on deposit plan No. 74541 located at the Tiri Road, Nadawa, together with all improvements thereon, as charged by the defendants to the plaintiff by mortgage No. 426075 dated the 9th day of May 1997 to secure payment therein mention;

3. That the defendants, their servant’s agents be restrained from interfering with the improvement on the said property in any manner whatsoever so as to deplete its value."

[23] The Order was later served to the first defendant on 9th May, 2008. He did not take any action until after 3rd June, 2008. Almost a month later the plaintiff issued a Writ of Possession. It was not until the Writ of Possession was in the process of being executed that prompted the filing of the current application. It is vehemently opposed by the plaintiff. Primarily, the objection is that there is no merits in setting aside the order.

Consideration of the Application

[24] There is no provision under Order 88 to set aside a judgment made in the absence of a party. Order 88 is a mortgagee’s action. The mortgagee may bring an action by a writ or Originating Summons. Depending on the nature of the originating process, the other Rules of the High Court Rules 1988 do apply pro tanto. In this particular case the Originating Summons procedure was adopted. The procedure for Originating Summons is provided for in Order 28 of the High Court Rules 1988. Under Order 28, rule 5, the Court is vested with the power to vacate an order made in the absence of a party. The rule for the material parts reads as follows:

The court by whom an originating summons is heard may, if the liability of the defendant to the plaintiff in respect of any claim made by the plaintiff is established but where the court makes an order under this paragraph against the defendant who does not appear at the hearing, the order may be varied or revoked by subsequent order of the court on such terms as he thinks just."

(emphasis added)

[25] Furthermore by virtue of Order 28, rule 1, Order 32, rule 5 applies to all proceedings relating to Originating Summons as it applies to other Summonses. Order 32, rule 5 essentially relates to proceedings which takes place in the absence of one or more parties. For the sake of completeness, I will reproduce the Rule:-

"5–(1) Where any party to a summons fails to attend on the first to any presumed hearing thereof, the Court may proceed in his absence if, having regard to the nature of the application, it thinks it expedient so to do.

(2) Before proceeding in the absence of any party the Court may require to be satisfied with the summons or, as the case may, notice of the time appointed for the resumed hearing was duly served on that party.

(3) Where the Court hearing a summons proceeded in the absence of a party that provided any Order made on the hearing has not been perfected, the Court if satisfied that its just to do so may re hear the summons.

(4) Where an application made by a summon has been dismissed without a hearing by reason of failure of the party who took out the summons to attend the hearing, the Court, if satisfied that it is just to do so, may allow the summons to be distort to the list."

(emphasis added)

[26] I was satisfied the summons was duly served to the defendant. To that end, an affidavit of service is also filed. Actually the defendant acknowledged the service of the writ. On that basis, I proceeded to hear application in the absence of the defendant. The Notice of Appointment to hear Originating Summons noticeably stated:-

"...you attend in person or by barrister and solicitor. If you fail to attend, such orders will be made as the Court may think just and expedient."

At all times the defendant was made aware of the consequences of non-appearance.

Do I have the jurisdiction to set-aside the Order?

[27] Pursuant to Order 28, rule 5(1) and Order 32, rule 5(3) the Court has an unfettered discretion to set aside any order made under Order 88 in the absence of a party. In that regard the application is appropriately filed.

[28] The principles for setting aside an Order made in default of an appearance of a party, pleading or affidavit either in Originating Summons or any other Summons is the same as a writ action. The principles are:-

(a) The defaulting party must explain the reasons for the absence or non appearance.

(b) The defaulting party must explain the delay if any of the making of the application to set aside the order made in default.

(c) The defendant must show a defence which has a real prospect of success and carry some degree of conviction. It must have a realistic as opposed to a fanciful prospect of success. A supporting affidavit disclosing the condescending particulars of a meritorious defence must be file; Wearsmart Textiles Limited v. General Machinery Hire Limited & Another Civil Appeal ABU No. 0030/1997S per Tikaram P, Casey JA, Dillon JA

(d) The prejudice which may be caused to the plaintiff if the default judgment were to be set-aside.

I will consider each of these in turn.

(a) The reasons for non appearance

[29] The defendant explained the reason for non appearance in a detailed affidavit. He states that on 21st April, 2008 he was within the precincts of the Government Buildings. Whilst on the way to the Court, Kanta Raju became an obstacle to his attendance in Court due to some maintenance issue in the Family Court. She had issued an application to secure payment of monies which the first defendant had settled but not paid.

[30] That may be an explicable reason for his non-appearance. However, as stated earlier, (reading from the transcript of the records) I did not granted the order on the first call of the summons. There was a lapse in excess of one hour over which the matter was stood down. Despite that the defendant failed to appear. In any event if I were to accept the reasons, it does not on its own entitle the defendant to have the default judgment set aside. The other factors must also be considered

(b) Delay

[31] It is enigmatic that the defendant did not file the application until the writ of possession was issued. The order was made on 21st April, 2008. Having accepted the explanation for non-appearance that the plaintiff was in the Court precincts on 21st April, 2008, he ought to have cross-checked with the registry as to what had transpired in the case. Admittedly, he became aware of the default judgment on the same day.

[32] Next, he was served a sealed order on 9th May, 2008. Yet he did nothing regarding the order. This prompted the plaintiff to issue the writ of possession, which was the appropriate course to take. The present application was trigged by the writ of possession. It was filed on 23rd June, 2008. That is a delay of two months.

[33] There is no explanation offered by the defendant for the delay in making this application. In view of the seriousness of the orders granted, I fail to understand the reason as to why the defendant did not act promptly. Accordingly, I hold that the defendant has failed to cogently explain the reasons for the delay.

(c) Merits of the application

[34] This is an Order 88 action by the mortgagee to recover possession of the property. In order to succeed the plaintiff is required to comply with the said Order and the rules.

[35] In Australia & New Zealand Banking Group –v- Shanti Lal Civil Action No. 265/1990 His Lordship Mr Justice Jayratne on the application on Order 88 procedure at page 7 of the judgment held:-

"Order 88 of the High Court Rules only deal with actions relating to mortgages. It gives mortgagees the right to claim possession without being the registered proprietor with or without foreclosures. To that extent Order 88 is available to him. Nothing can inhibit him from utilising Order 88."

(emphasis added)

[36] An elaborate procedure is prescribed for filing and determination of an action under this Order. For a plaintiff to succeed, s/he must comply with the requirements of the Order in particular those prescribed by rules 2, (3), (4), (5), (6), and (7). I have read the submissions and affidavits filed on behalf of the plaintiff. Save for one issue, the plaintiff has complied with all the other requirement of the rules.

[37] The particular rule which was not strictly complied with was the production of the mortgage instrument during the hearing of the action. Order 88, rule 3(2) state:-

"The affidavit must exhibit a true copy of the mortgage and the original mortgage must be produced at the hearing of the summons."

(emphasis added)

A satisfied true copy of the mortgage is exhibited to the affidavit of Jagdish Chand. However the original (which is the duplicate copy kept by the mortgagee) was not produced during the hearing. I enquired from Mr Maharaj whether the non production of the original copy would make the order irregular. Mr Maharaj submitted that this was not sought by the Court during the hearing. Obviously, he was unaware of what had transpired on the day of the hearing. The transcript for the day was read back to Mr Maharaj. Mr Maharaj had no option but to concede that the issue was raised by me during the hearing.

[38] I sought submissions of the defendant on this point. The defendant being a lay person submitted that he does not have any issues regarding the validity of the mortgage. He did not insist that the non-compliance of the rules should make the Order irregular. In fact, he waived any ensuing procedural irregularity.

[39] A similar situation was encountered by His Lordship Mr Justice Jayratne in Shanti Lal –v- Bank of New Zealand (Supra). Likewise His Lordship Mr Justice Fatiaki also dealt with this issue in National Bank of Fiji –v- Abdul Kadir Hussain Civil Action No. 033/1994. His Lordship held that although the strict requirements of the Rules was not complied with, the court still had the jurisdiction to hear, grant or dismiss an Order 88 action. In view of the decided cases, I do not hold that the order granted on 21st April, 2008 was irregular for the failure to produce original copy of the mortgage at time the order was made. In any event, the defendant waived any such irregularity. Furthermore he conceded that the mortgage was a valid and enforceable instrument.

However, in future Counsel appearing for a mortgagee must pay specific heed to the requirements of the Rules. The Rules are there to be obeyed.

[40] Furthermore, there is no dispute that the defendant defaulted in repayment of the loan. Section 77 of the Property Law Act permits the mortgagee to demand money, where the mortgagor defaults in payment. Section 77 states:-

"If default is made in payment of the mortgage money or part thereof, all in the performance or observance of any covenant expressed in any mortgage or in this Act declared to be implied in any mortgage, and such default is continued for one month or for such other period of time as is in such mortgage for that purpose expressly fixed, the mortgagee may serve on the mortgagor notice in writing to pay the mortgage money or to perform and observe the covenant therein expressed or implied, as case may be."

Furthermore pursuant to Section 79 of the Property Law Act, a mortgagee may proceed to a sale of a mortgaged property where the default continues after the lapse of one month from the date of service of the demand notice.

[41] In this particular case the requirements of Section 77 is complied with. No payment was made to the Authority. It rightly proceeded with the mortgagee sale. Since November, 2004 until the property was put for mortgagee sale, the second time in 2007, the defendant admitted to non-payment of any monies at all.

[42] As required by the rules the affidavit of Jagdish Chandra sets out in detail the account of repayments, defaults, the demand notices, the re-payment requirements and the money due under the mortgage. In addition, a notice for vacant possession was duly served to the defendant as required by Order 88, rule 3(4).

[43] The defendant submitted that he is ready and willing to settle the debt sum with the Authority. I asked him whether he had ready and available funds which can possibly be deposited in Court. He responded by saying that he does not have any such funds readily available but would look for the same from the financing institutes. Whilst the application for setting aside was pending I directed the defendant to specifically seek funding from other institutes. He had time for the same before the hearing and determination of the application. There is no evidence before the Court that he made attempts to secure funds from any financial institute. There is nothing at all by way of affidavit evidence or otherwise before this Court to show that a particular financial institute is ready and willing to settle the Housing Authority’s loan. Having considered the defendants’ inability to obtain funds, I do not see any merit in allowing any further time to pay the mortgage sum.

[44] One matter which does concern this Court, is that the Housing Authority listed the name of the defendant with a Debt Bureau. He told the Court that due to the listing he was unable to secure funds. There is no direct evidence of any financial institute declining to lend funds because of that listing. However if that were the case then certainly the Authority must act with responsibility when demanding repayment of total mortgage sum. A mortgagor may have certain financial difficulties, which may only be for a temporary period. However, he can should be allowed to make alternative arrangements with other lending institutes, which may have greater lending flexibility. Lending institutes in that regard should not use the Bureau to sabotage any borrower’s right to redeem a mortgage by making it impossible for the mortgagor to secure advances from other financial institutes. When names are given to the Bureau lending institutes take a very cautious approach. In registering names with the Bureau, such authorities should take extreme precaution and not by using the dominant position to emasculate a weaker party from securing the property being sold by a mortgagee sale. This does not necessarily apply only to Housing Authority but to all other lending institutes. Names to the Bureau may only be given where every effort to recover money has failed and the debt remains due and owing. Preferable stage would be after the security is realised and the balance of the debt is established by a court judgment. Of course in saying so I am not suggesting that the listing of name with a Debt Bureau is legal or otherwise. That was not for my determination.

[45] Based on the evidence before me I am satisfied that the order made on 21st April was regular. The prerequisite to granting of the orders were all fulfilled. Therefore the application for setting aside ought to be dismissed, which I so order.

[46] There is another matter which I would like to refer to. The first defendant has been filing numerous actions in Court. In the affidavit in reply by the Authority filed on 4th July 2008 a summary of all these cases is provided. These actions are Civil Action Nos. 604/2005, 71/2007and 157/2008. Of these cases, 604/2005 is dismissed. Likewise civil action No. 411/2007 was struck-out on 30th November, 2007. In the present action, I have already granted an order for vacant possession. For that reason this action is also finalised except for the current pending application. There is another action which is pending before Madam Justice Scutt.

[47] In particular I would like to refer to is No. 604/2005. It was filed by the plaintiff to restrain the Housing Authority from disposing the property by a mortgagee sale when it first place the property for sale in 2005. That application was dismissed by His Lordship Mr Justice Singh due to the defendant’s non appearance. Thereafter he sought to appeal against that decision which was dismissed at a cost of $1000-00.

[48] In civil action No. 411/2007 the defendant sought an injunction to restrain the Housing Authority from selling the property in 2007. The Authority filed an application to strike out the action. On 30th November, 2007 His Lordship Mr Justice Singh struck out the action wholly with cost in the sum of $1,000-00. This latter action is material to this case.

[49] That action specifically was to restrain the present sale by the Housing Authority. His Lordship Mr Justice Singh dismissed the application on the well established principles of Inglis –v- Common Wealth Training Bank of Australia (1972) 126 CLR 161. In that case Barwick CJ in dismissing an appeal from a decision dismissing an application for interim injunction restraining a mortgagee sale, said: "

"the case falls fairly, in my opinion, within the general rule applicable when it is set to restrain the exercise by a mortgagee of his right under the mortgage instrument. Failing payment into Court of the amount shown by the mortgagee as due and owing another mortgage no restrains be placed by order upon exercise of the respondent’s mortgagee’s right under the mortgagee."

[50] The principle has been unreservedly adopted and applied in this country in numerous cases; Rauzia Zaweed Mohammed –v- ANZ Banking Group Limited [1984] 30 FLR 136 at 140.

[51] In view of His Lordship Mr Justice Singh’s order dismissing the application for restraining the Authority from selling the property, it has been sold to Sanjay Kumar. However the defendant is still living in the property and refuses to give vacant possession. He now has no right to occupy the said property.

[52] The plaintiff submitted that he still intends to redeem the property. The law is trite in that once a mortgage property is sold by virtue of a mortgagee sale the mortgagor loses the equity of redemption. The intending purchaser takes the property without any encumbrance. In Naipote Vere and Esita Takayawa Vere–v- NBF Asset Management Bank Civil Appeal No. ABU 0069/2003 the Court of Appeal said the following in relation to the equity of redemption:-

"The law, which applies in this case, is well settled. Section 72(l) of the Property Law Act Cap. 130 provide:

"A mortgagor is entitled to redeem the mortgaged property at any time before the same has been actually sold by the mortgagee under his power of sale, on payment of all moneys due and owing under the mortgage at the time of payment."

That the acceptance of a tender gives rise to a contract was noted in Halsbury’s Laws of England (Vol. 4, 4th edition) where it is said, citing Wimshurst v. Deeley [1845] EngR 1219; (1845) 2 CB 253; Thorn v. Public Works Commissioners [1863] EngR 401; (1863) 32 Beav 490 and Tancred, Arrel & Co v. Steel Co. of Scotland [1890] UKLawRpAC 9; (1890) 15 App Cas 125 that:

"The unconditional acceptance of a tender gives rise to a contract."

.......................................

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Further, as the Trial Judge noted, it was held in Property and Bloodstock Limited v. Emerton (1968) 1 Ch 94 that the entry into a contract for sale, by a mortgagee exercising a power of sale, whether conditional or unconditional, extinguishes the mortgagor’s right of redemption, so long as the contract was still subsisting."

(emphasis added)

[53] Finally I refer to Section 79 of the Property Law Act which provides the follows:-

"Where a transfer is made in purported exercise of the power of the sale conferred by this Act, the title of the transfer’s shall not be impeachable on the ground that no court had a reason to authorise the sale or that due notice was not given or that the power was otherwise improperly or irregularly exercised, but any person ........... by any unauthorised or improper or irregular exercise of the power shall have its remedy damages against the person exercise the power."

(emphasis added)

[54] In that regard the plaintiffs recourse if any now lay in damages against the Authority.

Conclusion

[55] Having considered all the circumstances of this case, I have come to a firm conclusion that the Order granted on 21st April, 2008 should not be set aside. No useful purpose will be served by setting aside the Order since the defendant cannot redeem the property. He will have to give vacant possession. Therefore, the application is dismissed with costs in the sum of $550-00 to the plaintiff. The plaintiff may execute the writ of possession without any undue delay.

Accordingly so ordered.

J. J. Udit
Master of the High Court

19th December 2008