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National Bank of Fiji Ltd v Tabuya [2010] FJHC 264; HBC373.2009 (22 July 2010)

IN THE HIGH COURT OF FIJI AT SUVA
CIVIL JURISDICTION


CIVIL ACTION NUMBER: HBC 373 OF 2009.


BETWEEN:


NATIONAL BANK OF FIJI LIMITED
PLAINTIFF


AND:


WILISONI TABUYA
RAVESA TABUYA
DEFENDANTS


Appearances: Mr. Devanesh Sharma And Mr. R. Nand for the Plaintiff.
Mr. S. Valenitabua for the defendants.


Date/Place of Hearing: Monday, 15th February, 2010 and Friday 19th February, 2010 at Suva.
Date/Place of Judgment: Thursday, 22nd July, 2010 at Suva.


Judgment of: The Hon. Justice Anjala Wati.


JUDGMENT


MORTGAGE ACTION- entire debt under mortgage called up-mortgagors defaulted in payment of the debt-mortgagee sold the property-settlement awaited as mortgagee needs to give buyer vacant possession-application for vacant possession made with which an order restraining the mortgagors from interfering with the improvements on the property was sought –once property is sold, a mortgagors right to redeem the debt is extinguished and thus they have no right to remain in occupation of the property-they must grant vacant possession and not interfere with the property to protect the interest of the mortgagee-application for vacant possession and injunction granted with costs to mortgagee.


ADJOURNMENT – application made by mortgagor's counsel for one adjournment which was granted-further application for an adjournment made -principles governing adjournment discussed-application for adjournment determined on the principles- further adjournment refused.


Legislation:


High Court Rules, 1988.
Property Law Act, Cap. 130.


Cases referred to:


Goldenwest Enterprises Ltd. v. Timoci Pautogo FJCA 3; ABU0038.2005 (3 March 2008).
Piggott Construction v. United Brotherhood (1974) 39 DLR (3d) 311 (Sask. CA).
Naipote Vere and Esita Takayawa Vere and NBF Asset Management Bank Civil Appeal No. ABU0069 of 2003S.
Property and Bloodstock Limited v. Emerton [1968] 1 Ch. 94.


Case Background


  1. The plaintiff has by an originating summons filed on the 11th day of November, 2009 brought a mortgage action against the defendants. The orders sought in the summons are:-
  2. The application is supported by an affidavit filed on the same day as the originating summons.
  3. The defendants were served with the originating summons, the affidavit in support and an acknowledgment of service on the 23rd day of November, 2009.
  4. The defendants did not file any acknowledgment of service or any affidavit in opposition.
  5. On the 11th day of December, 2009 the plaintiff filed a notice of appointment to hear the originating summons. The date of 15th February, 2010 was assigned for hearing of the originating summons.
  6. Both the defendants were served with the notice of appointment to hear originating summons.
  7. On the hearing date only the first named defendant Wilisoni Tabuya appeared in Court. The Court explained to him that the hearing would be conducted by oral arguments and that the first named defendant had to present his argument after the plaintiff. The first named defendant indicated that he understood the court procedure and was ready for the hearing.
  8. After the plaintiff's counsel Mr. D. Sharma presented his case, the first named defendant indicated that he wanted a lawyer to represent him. The matter was then adjourned to the 19th day of July for the hearing to continue and time was given to the first named defendant to consult a counsel. The matter was adjourned to the 19th day of February, 2010 for continuation of the hearing.
  9. On the 19th day of February, 2010, Mr. S. Valenitabua applied for the hearing date to be vacated and that he be allowed time to file affidavit in response to the application.
  10. The application for adjournment was made on the following basis:-
    1. Upon receiving instructions to represent the defendants, the file was perused and it was then apparent that no affidavit in reply was filed.
    2. Since receiving the instructions, Mr. Valentiabua could not file any affidavit in reply so he does not have any facts to rely on to be able to present his case.
  11. The application for an adjournment was strongly opposed by Mr. D. Sharma on the following basis:-
    1. There was enough time for Mr. Valenitabua to file his response since his instructions form the first day of hearing which was the 15th day of February, 2010.
    2. The affidavit that was filed in support is not an extensive document. It contains only 12 clauses and the defendants counsel could have easily responded to the affidavit but they have failed due to their own laxity. In any event the time for filing of the affidavits has expired under the rules. If the application was opposed then the defendants should have taken the matter seriously and filed an affidavit in opposition.
    1. There is already a sale on foot that needs to be proceeded with and the delay may be detrimental to the plaintiff if they lose the sale.
  12. On the same day of the 19th day of February, 2010 I refused an application for an adjournment and directed Mr. Valenitabua to present his case. Mr. Valenitabua indicated to the court that he did not wish to make any submissions.
  13. My ruling on the adjournment is incorporated in this judgment for Order 88 relief.

Plaintiff's Affidavit in Support


  1. The following contentions were made through the affidavit in support:-
    1. The defendants are the registered proprietors of all that property comprised and described in Native Lease No. 20922 – Tacirua Plains Subdivision, Stage 4, Lot 120 as shown on Lot 8 on SO.1671 situated at 79 Rokosawa Road, Tacirua Plains Stage 4, Suva together with improvements thereon under Order 88 of the High Court Rules 1998. A copy of the certificate of title was attached to the affidavit.
    2. Erected on the said property is a concrete wood and iron dwelling house which is presently occupied by the defendants.
    1. The plaintiff advanced to the defendants a sum of $77, 150.00 on or about the 30th day of December, 2005 at the interest rate of 5.20 % per annum for the first 12 months and thereafter 8.25 % per annum variable.
    1. The defendants were required to make monthly payments of $706.00 for a period of 25 years.
    2. The amount of instalment in arrears as at the date of issue of the originating summons and the date of the affidavit was $5,768.00.
    3. The amount due and owing under the mortgage as at the date of the issue of the originating summons and the date of the affidavit was $76,766.95. Interest accrues on this amount at the rate of $19.40 per day.
    4. By mortgage registration number 587768 entered into between the parties, the property was charged to secure repayment to bank of all the loans, advances, charges, interest and other financial accommodation made by the bank to the defendants from time to time and on conditions contained in the mortgage between the parties. A copy of the mortgage was attached to the affidavit.
    5. The mortgage allows the bank to sell the said property in the event the defendants as mortgagor's defaulted under the terms of the mortgage.
    6. The defendant's defaulted in their repayments under the mortgage and on the 12th day of August 2009 the bank issued default notices against the defendants; both notices were attached to the affidavit.
    7. The defendants failed to rectify the default within the time frame set out under the demand or at any material time thereafter and the bank therefore exercised its powers of sale under the mortgage and advertised the property for sale.
    8. On the 23rd day of September, 2009, the bank caused a notice to quit to be issued and served against the defendants. A copy of the said notice was annexed to the affidavit.
    1. To the best of the banks knowledge, the defendants are currently occupying the property.
    1. On the 28th day of September, 2009, the defendants wrote to the banks solicitors, a copy of the letter was attached to the affidavit. The Bank replied to this letter on the 6th day of October, 2009. A copy of the reply from the bank was also attached to the affidavit.
    2. The defendants are refusing to give vacant possession of the said property which refusal is interfering and prejudicing the bank's rights as mortgagee.
    3. It is believed that the defendants may remove and/or damage valuable attachments which form part of the improvements to the said property since they have refused to vacate the said property voluntarily and they have refused to co-operate with the bank's request for vacant possession.

Plaintiff's Submission


  1. Mr. D. Sharma basically relied on his affidavit but further stated that the property has been sold and that the buyer is patiently waiting for settlement and then to move in the property. The plaintiff has entered into a valid contract of sale and as such the defendants' right to redeem the debt is extinguished.
  2. It was further stated that no affidavit in opposition has been filed under the rules and there is no basis on which the application is challenged.

The Law


  1. I have heard two applications, one for an adjournment of a part-heard matter and the other was the plaintiff's application which was brought under Order 88 of the High Court Rules, 1988.
  2. The law on adjournment will be apparent from my judgment later.
  3. Mortgage Actions are governed by Order 88 of the High Court Rules, 1988.
  4. By virtue of order 88 Rule 1 (1) (d), an application for delivery of possession (whether before or after foreclosure or without foreclosure) to the mortgagee by the mortgagor or by any other person who is alleged to be in possession of the property can be made.
  5. Order 88 Rule 3 mandates that an affidavit in support of an originating summons seeking an action for possession must comply with certain rules. The rules that the plaintiff's affidavit in support must comply with in this case are:-
    1. The affidavit must exhibit a true copy of the mortgage: Order 88 Rule 3(2).
    2. The original mortgage or, in the case of a registered charge, the charge certificate must be produced at the hearing of the summons: Order 88 Rule 3 (2).
    1. The affidavit must show the circumstances under which the right to possession arises and, except where the Court in any case or class otherwise directs, the state of account between the mortgagor and mortgagee with particulars of the amount of the advance, the amount of periodic payments required to be made, the amount of any interest or instalments in arrears at the date of the issue of the originating summons and at the date of the affidavit, and the amount remaining due under the mortgage: Order 88 Rule 3 (3).
    1. The affidavit must give particulars of every person who to the best of the plaintiff's knowledge is in possession of the mortgaged property: Order 88 Rule 3 (4).
  6. In this matter the defendants had failed to acknowledge service of the originating summons. In this situation, the High Court Rules, 1988 casts certain onus on the plaintiff which must be discharged before the mortgage action is heard by the court. I must state the onus as stated in the rules and later assess whether that has been complied with or not.
  7. Not less than 4 clear days before the day fixed for the first hearing of the originating summons the plaintiff must serve on the defendant a copy of the notice of appointment for hearing and a copy of the affidavit in support: Order 88 Rule 2 (2).
  8. Where the plaintiff claims delivery of possession there must be indorsed on the outside fold of the affidavit serviced on the defendant a notice informing the defendant that the plaintiff intends at the hearing to apply for an order to deliver up to the plaintiff possession of the mortgage property: Order 88 Rule 2(3).
  9. The above rules are mandatory and must be complied with. I now turn to the most important aspect of the judgment.

The Determination


On Adjournment


  1. The defendants were served with the originating summons application on the 23rd day of November, 2009. The hearing of the matter took place after almost three months. From the date of service until the date of hearing, the defendants did not care to file their response at any time. Even when they were served with the notice of appointment of hearing they did not file or attempt to file any documents in support of their case.
  2. On the day of the hearing, the court gave the first named defendant time to consult a lawyer but he insisted that his case be heard. The matter was then heard. When the court called upon the first named defendant to present his case, he then just sought time to find the money to pay the arrears. The court then advised him that the nature of the application was not seeking mortgage repayments but delivery of vacant possession after the property was sold to another bona fide purchaser and that he had to present his case outlining the reasons why the orders should not be granted. The first named defendant then sought time to consult a lawyer. Seeing that he was unrepresented the court gave him time to consult a solicitor and present his case at 12.00pm of the same day. The first named defendant appeared at 12.00pm and advised that he had engaged Mr. S. Valenitabua for his case and that he would be in court but there was no sign of Mr. Valenitabua. The matter was then adjourned to the 19th day of February, 2010 to allow the defendants to bring their counsel to court and present the case on their behalf.
  3. Until the 19th day of February, 2010 Mr. Valenitabua did not file any affidavits on behalf of the defendants and on the day just sought an adjournment. He also refused to present his case on the grounds that he has no facts to rely on.
  4. The default notice dated the 12th day of November, 2009 was served on both the defendants to pay up the arrears under the mortgage. There was failure by the defendants to pay the arrears after which the plaintiff by a notice to quit dated the 23rd day of September, 2009 required the defendants to deliver vacant possession of the subject property.
  5. The defendants responded to the notice to quit in the following terms:-

"1. The seven days notice given to us to vacate the property which we cannot.


  1. Your client did not serve us with any notice of one calendar month before.
  2. The property as advertised in the newspaper for mortgage sale it was a shock for a family because none demand notice was served to us in person by your client.
  3. We do not want to loose our two dream house in which we did pay payments to your clients. There is a room for dialogue where we all parties sit and sort out this matter to help the all parties.
  4. We do not want any person to enter our property and vacate our family member in both properties Suva and Nadi.
  5. After having a legal advice from our legal advisor please be informed without a proper court order we do not want our family member to be vacated and or not to be disturbed with our three meal on the table.
  6. We do not want to loose the property and the money we have spent in the payment to your client. We want to pay instalment payments to your client and than continue in normal payment.
  7. We appoint Super Security Service to guard our both properties which has been called for mortgage sale. The security will give service to ensure our family to be safe and not disturbed by anyone.
  8. We will be reporting shortly to legal authorities to ensure that we have legal rights in our property..."
  9. From the defendants response the following is apparent:-
    1. They had knowledge that the property was advertised for sale.
    2. They appreciated the consequences of their default under the mortgage in that they would lose their house.
    1. They had the benefit of legal advise.
    1. They had refused to give vacant possession and had hired security to protect their interest.
  10. Even well before the commencement of the legal action, the defendants knew that they had to give up vacant possession as the property was already advertised for sale and that they were asked by the bank in very certain terms to give vacant possession. The defendants knew that they could lose out on their dream house and yet they treated this matter with a "could not care less" attitude.
  11. They failed to file any response to the case when they were served. They showed no interest but laxity in dealing with the matter. The defendants have been sleeping on their rights to protect their property and only have come to court to ask for an adjournment in the very last minute.
  12. The power to adjourn or refuse to adjourn a proceeding is within the discretion of the Court hearing the matter. The exercise of the discretion however is a judicial act.
  13. The principles governing the discretion of the court on whether to grant or refuse an adjournment was set out in the case of Goldenwest Enterprises Ltd. v. Timoci Pautogo FJCA 3; ABU0038.2005 (3 March 2008), where the Court of Appeal of Fiji said as follows:-

"...if refusal to grant an adjournment amounts to denial of a fair hearing and hence denial of natural justice or procedural fairness, or where a refusal to adjourn would cause definite and irreparable harm to the party seeking it, an adjournment should be granted.... An objecting party is compensated by costs-unless the adjournment would cause irreparable damage to it....a court must weigh up the competing interest and consequences ...there is, however, a requirement that there be no "fault on the part of the party seeking the adjournment: Piggott Construction v. United Brotherhood (1974) 39 DLR (3d) 311 (Sask. CA)."


  1. I can only find faults with the defendants for gross neglect and failure to file the affidavits in opposition and preparing for hearing to oppose the orders sought. The defendants have also treated this matter with no seriousness like I have said before. After they were served with the default notice and the notice to quit, they should have made arrangements with the mortgagees to resolve their problem. It is now too late in the day, if I may say, to come to court and ask for time for payment as indicated by the first named defendant on the first day. I will later elaborate on why I say it is too late in the day for the defendants to ask for time to repay the debt.
  2. The plaintiff is not being paid the debt and the interest on the arrears accumulates. Under the mortgage the entire debt is now due and owing and interest on the entire debt is also accruing. They also can not apply the purchasers monies to the account to minimise the loss that the bank is suffering as the settlement of the transaction is still pending due to the occupation of the property by the defendants.
  3. The defendants will of course move out of the property and lose their "dream house" as they have termed it but unfortunately they have themselves to blame for the situation they would be in if they lose their house. I would expect that if one is told that he or she will lose the rights over their property, the person would act urgently and do his best to try and retain the property. I have seen no action on the defendant's part except that they wrote to the bank making some proposals for instalment payments and hiring a security to protect their property, which is not any actual or constructive step in trying to deal with the issue given the stage the mortgagee was at in terms of exercising its rights under the mortgage.
  4. I must also say that in light of the sale transaction having progressed so far, I do not see a possible defence that could save the defendants from the orders that are sought. I will deliberate on this more at the appropriate stage of my judgment.
  5. The defendants have been given time and opportunity under the rules and by the court to present their case. They have failed and failed grossly to make use of the opportunity given by the court when they were accorded a fair hearing. I had on the date of the final hearing come to the conclusion that all the delay in the matter was caused by omission to file affidavits on time and presenting the case on time. That delay must be laid at the defendant's door. These delays were going to affect the plaintiff in an irreparable way in that the plaintiff will lose out on the buyer if they do not settle the transaction of sale and purchase on time with the new buyer.
  6. It is on the above basis that an adjournment of the matter was refused. I had indicated to the counsels that the full reasons for refusing the adjournment would be reflected in the substantive judgment. I have discharged that onus and I now turn to determine the substantive application for the relief's prayed for.

On Order 88 Reliefs


  1. All the mandatory requirements of Order 88 Rule 2 and 3 have been met by the plaintiff.
  2. The defendants have not presented any reason to the court as to why the orders should not be made. However from the letter of response by the defendants in respect of the notice to quit and vacant possession and from the first named defendant's oral submission on the first day of the hearing, I gather that the defendants wish to pay the arrears and continue to pay the instalments.
  3. The plaintiff has called up the entire debt under the mortgage and is not interested in getting any part payments. They have also exercised their powers to sell the property and are waiting for the requisite vacant possession orders to effect settlement with the new buyer.
  4. Since the plaintiff has sold the property, the defendants' right to redeem the mortgaged property has been extinguished and as such they have absolutely no right to remain on the property.
  5. Section 72(1) of the Property Law Act Cap. 130 states that " 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 the payment"
  6. The case of Property and Bloodstock Limited v. Emerton [1968] 1 Ch. 94 also recognises that a mortgagee's right to redeem is extinguished once a contract of sale has been entered into by the mortgagee. As the property is sold there is nothing left to redeem.
  7. The plaintiff has exercised its powers of sale under the mortgage. It now needs to realise the proceeds of the same and to do that it must give vacant possession to the buyer. They are entitled to an order for ejectment. It was said in the case of Naipote Vere and Esita Takayawa Vere and NBF Asset Management Bank Civil Appeal No. ABU0069 of 2003S:-

"...The Respondent was not bound to accept offers to reduce the arrears, or to accept a sum of money which may have partially reduced the balance of the debt after it was called up. It was entitled to require payment of the full amount which was due and secured by the mortgage, and failing that, to sell the property and to commence proceedings in ejectment..."


(underlining is mine for emphasis)


  1. The plaintiff is also seeking an order that the defendants be restrained from interfering with the improvements on the property. I see no impediment to the rights of the defendants if an order is granted to secure the improvements on the property. The defendants no longer have any rights of occupation and as such they should not deplete the value of the assets. The assets now belong to the plaintiff and they have the rights to ask the court to preserve the status quo.
  2. Finally, on the issue of costs, I must say that there is absolutely no basis on which this action could have been successfully defended given the circumstances in that a new buyer has now purchased the property and is waiting for settlement. The right of redemption has extinguished.
  3. The plaintiff had to bring this action to court as the defendants have demonstrated by their action and conduct that they would not give up vacant possession. They had even hired a security officer to guard the place to ensure that they are not evicted from the property. The defendants also advised the plaintiff that the property would not be vacated without an order of the court. Given the situation created by the defendants, the plaintiff had to come to court. The plaintiff must therefore be paid the costs of the proceedings and I think that summary assessment of the costs will be justified.
  4. The plaintiff had to file an application and the affidavit stating the need and the reasons for the orders sought. When the defendant took no action on the application they had to move the court for hearing of the matter. The plaintiff's counsel also had to present the argument in court setting out the basis on which the application is made and why the orders would be granted. The matter was also adjourned to allow the defendant's time to engage a counsel to argue the case for them. The plaintiff's counsel had patiently appeared on the second day of the hearing. All the filing and the appearances in court has put the plaintiff to incur more cost which could have been avoided.
  5. On the above basis I am of the judgment that costs in the sum of $1000 would be justifiable in the circumstances.

Final Orders


  1. For the above reasons, I order as follows:-
    1. Costs to the plaintiff in the sum of $1,000.
  2. Orders Accordingly.

ANJALA WATI
Judge
22.07.2010

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