Housing Authority v Nakuta [2011] FJHC 268; HBC96.2010L (17 May 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 096 of 2010L

BETWEEN :

HOUSING AUTHORITY
a body corporate duly constituted under the provisions of the Housing Act and having its Head Office at Valelevu.
PLAINTIFF

AND :

LIVAI NAKUTA
of Lot 14 on DP 7279, Tavakubu, Lautoka.
DEFENDANT

FINAL JUDGMENT

Judgment of : Ms Dias Wickramasinghe J.

Counsel : Mr Anu Patel for the Plaintiff
: Ms Q Vokanavanua for the Defendant

Solicitors : Messrs S B Patel & Company for the Plaintiff
Iqbal Khan & Associates for the Defendant

Date of Judgment : 17 May 2011

Key words:
High Court Rules O 88 r 1 sub rule (1) (d), mortgage action, vacant possession

INTRODUCTION

[1] This is an application by the plaintiff as mortgagee, under O 88 r. 1 sub rule 1 (d) of the High Court Rules, for vacant possession of Lease No. 397635 Lot 14 DP. 7279. (leasehold property)

[2] The Originating Summons dated 11 May 2010, was supported by the affidavit of Jagdish Prasad of the same date. The defendant filed an affidavit in reply on 11 June 2010. Jagdish Prasad responded to the said affidavit in reply by his affidavit dated 26 August 2010.

[3] On the direction of this Court, the parties filed written submissions, in addition to the hearing held on 12 May 2011.

BACKGROUND FACTS

[4] The plaintiff is a statutory authority incorporated under the Housing Act. The defendant is the registered proprietor of the leasehold property executed between the parties in Lease No. 397635. (Lease is annexed marked 'A' to the affidavit of Jagdish Prasad).

[5] By mortgage dated 20 February 1995 executed between the plaintiff and the defendant, the said leasehold property was charged to secure all repayments to the plaintiff. (Mortgage is annexed marked 'B' to the affidavit of Jagdish Prasad)

[6] The defendant fell into arrears of payment of the lease rentals, and the plaintiff served a Notice of Demand dated 22 December 2005 claiming $34,535.60 from the defendant. (Notice is annexed marked 'C' to the affidavit of Jagdish Prasad) Thereafter, the plaintiff had advertised the said leasehold property by way of mortgagee sale and the leased property has now been sold to Anareta Tubetaba Cobu and Petero Batuvudi. The mortgagee sale is not in issue in the present action.

[7] The plaintiff claims that, it is obliged to give vacant possession to the new owners. Accordingly, a Notice to Quit dated 16 February 2010 had been served on the defendant requesting vacant possession. (Notice to Quit is annexed marked 'D' to the affidavit of Jagdish Prasad).

[8] The defendant refuses to vacate the premises and asserts that after four years of occupying the leased property, he had found cracks appearing on the walls and floor of his dwelling, which is now in a dilapidated condition. He further attaches several communications he had sent to the plaintiff narrating the poor workmanship. (Copies of the letters dated 24 October 2003, 9 November 2004 and 24 November 2004 were annexed marked LN1, LN2 and LN3 respectively to the affidavit in opposition of the defendant). In addition, he submits a report of Engineering Minds Limited, marked LN4. The defendant also asserts that despite his numerous visits to the plaintiff's office on the issue, no action was taken to rectify the damages. The defendant says he was misled by the plaintiff and/or its employees in purchasing the said property by misrepresenting that the property was well built.

[9] Mr Jagdish Prasad, refutes this position and deposes in his affidavit that the defendant as the first buyer of the leased property, where he had purchased it on 29 August 1994. He further submits that the complaint of defects were received from the defendant after 10 years in occupancy; however upon receiving the complaint, an inspection had been carried out immediately on 28 September 2004, which revealed that the dilapidated condition of the property was due to 'wear and tear' and not poor workmanship as alleged by the Plaintiff.

[10] Mr Jagdish Prasad also states that prior to the inspection stated above, cyclone Gavin occurred in June 1997 and the defendant lodged a cyclone claim with the plaintiff for $63.86 on 24 July 1997 for the damage caused by the said cyclone. He states that, even in the said claim the defendant had failed to report the sign of cracks in the wall. Copies of the cyclone Gavin claim form, the plaintiff's memorandum, and letter of 24 July 1997 from the defendant were annexed marked "A", "B" and "C" respectively to the affidavit in response of Jagdish Prasad.

[11] The defendant admits the debt, execution of the mortgage, entering into Lease No. 397635, receiving the Demand Notice and the Quit Notice. At paragraph 6 of his affidavit, he admits that he stopped making payments as the plaintiff failed to rectify the defects in his dwelling. At paragraph 7 of the affidavit, he admits that he was aware of the paper advertisement in the newspapers on 22 and 26 November 2008, where plaintiff was taking steps to sell the leased property by mortgagee sale.

[12] The defendant states that the plaintiff and or its employees misled him in purchasing the said property. The defendant thus states that he had shown sufficient cause, which merits the dismissal of the plaintiff's Originating Summons. The defendant also drew the attention of the court to the unreported case of Gurudayal Singh v Shiu Raj, Fiji Court of Appeal (Civil Jurisdiction) Civil Appeal No. 44 of 1982 - 30 November 1982. Although the counsel agreed to provide a copy of the case to both court and the plaintiff, this court was not provided with a copy.

LEGAL MATRIX

[13] Order 88, r. 1 provides:

(1) This Order applies to any action (whether begun by writ or originating summons) by a mortgagee or by any other person having the right to foreclose or redeem any mortgage, being an action in which there is a claim for any of the following reliefs, namely –

(a)

(d) delivery of possession (whether before or after foreclosure or without foreclosure) to the mortgagee by the mortgagor or by any other person who is or is alleged to be in possession of the property.

(2) In this Order, "mortgage" includes a legal and an equitable mortgage and a legal and an equitable charge, and references to a mortgagor, a mortgagee and mortgaged property shall be construed accordingly.

(3) An action to which this Order applies is referred to in this Order as a mortgage action.

(4) These Rules apply to mortgage actions subject to the following provisions of this Order.

[14] Order 88, r. 2 provides:

• (1) Where in a mortgage action begun by originating summons, being an action in which the plaintiff is the mortgagee and claims delivery of possession or the payment of moneys secured by the mortgage or both, any defendant fails to acknowledge service of the originating summons, the following provisions of this rule shall apply, and any references in those provisions to the defendant shall be construed as references to any such defendant.
  

This rule shall not be taken as affecting Order 28, rule 4, in so far as it requires any document to be served on, or notice given to, a defendant who has acknowledged service of the originating summons in the action.

(2) 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 the hearing and a copy of the affidavit in support of the summons.

(3) Where the plaintiff claims delivery of possession there must be indorsed on the outside fold of the copy of the affidavit serviced (sic) on the defendant a notice informing the defendant that the plaintiff intends at the hearing to apply for an order to the defendant to deliver up to the plaintiff possession of the mortgaged property and for such other relief (if any) claimed by the originating summons as the plaintiff intends to apply for at the hearing.

(4) Where the hearing is adjourned, then, subject to any directions given by the Court, the plaintiff must serve notice of the appointment for the adjourned hearing, together with a copy of any further affidavit intended to be used at that hearing, on the defendant not less than 2 clear days before the day fixed for the hearing.

A copy of any affidavit served under this paragraph must be indorsed in accordance with paragraph (3).

(5) Service under paragraph (2) or (4), and the manner in which it was effected, may be proved by a certificate signed by the plaintiff, if he sues in person, and otherwise by his barrister and solicitor. The certificate may be indorsed on the affidavit in support of the summons, or as the case may be, on any further affidavit intended to be used at an adjourned hearing.

Order 88, r. 3 provides:

(1) The affidavit in support of the originating summons by which an action to which this rule applies is begun must comply with the following provisions of this rule.

This rule applies to a mortgage action begun by originating summons in which the plaintiff is the mortgagee and claims delivery of possession or payment of moneys secured by the mortgage or both.

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

(3) Where the plaintiff claims deliver of possession 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 the account between the mortgagor and mortgagee with particulars of –

(a) the amount of the advance,
(b) the amount of the periodic payments required to be made,
(c) the amount of any interest or instalments in arrear at the date of issue of the originating summons and at the date of the affidavit, and
(d) the amount remaining due under the mortgage.

(4) Where the plaintiff claims delivery of possession, the affidavit must give particulars of every person who to the best of the plaintiff's knowledge is in possession of the mortgaged property.

[15] The original mortgage was produced in court in terms of O. 88 r. 3(2)

[16] As said earlier, the defendant admits the debt. At the hearing, the counsel specially informed court that she is not objecting to any irregularities of the plaintiff's application. The court thus determines that the defendant has waived its rights to object to procedural irregularities of the plaintiff's action; especially non-compliance of specific provisions of the Order, a defence that was otherwise available to the defendant.

[17] The only defence that was offered to this court was that, after four years of occupancy, cracks had appeared in the walls and now the dwelling is in a dilapidated condition; complains were not heeded to, therefore the defendant arbitrarily stopped payment of the leased rentals.

[18] In my mind, this is not an acceptable legal defence. It is a well-rooted principle that parties must 'comply and then complain'. The defendant had failed to initiate any of the legal remedies available to him such as moving court for damages, specific performance etc if he was misled into purchasing the house. Instead, he simply continued to live in the alleged dilapidated dwelling without paying lease rental. Without objections, the defendant admits the debt as deposed to by Mr Prasad. The leased property is now sold. The defendant permitted the mortgagee sale to proceed without objection or exerting his legal rights. The new owners are deprived of physical possession of the property despite having ownership. The defendant concedes the procedural correctness of the plaintiff's application. For the foregoing reasons I do not see any merit, not to order vacant possession.

COSTS

[19] The plaintiff seeks $5,000.00 costs on a solicitor/client basis (indemnity costs) on the premise that the defendant and/or its solicitors knew or ought to have known that the defence was legally unsustainable. Mr Anu Patel, counsel for the defendant states that $5,000.00 is arrived at considering the plaintiff had engaged its solicitor to prepare the application herein and engaged counsel of some years standing, to research the application and to make written submissions to court and photocopying of cases. This he claims is 19 hours of work at $300.00 per hour, which amounts to $5,000.00.

[20] I have already considered the legal basis of awarding indemnity costs in the case of Rishi Ritesh Chand v Josaia Rayawa et al HBC No. 134 of 2002L dated 26 April 2006. Having considered the legal principles stated therein, I am of the view that this is not a fit case for indemnity basis. Mr Anu Patel informed me that inhouse lawyers prepared the pleadings. The case was called on three occasions before the Master and on the fourth day before me to fix the matter for hearing on 12 May 2011. Accordingly, I summarily assess costs as $600.00.

[21] ORDERS

1. The defendant to handover vacant possession on or before 30 June 2011.
2. $600 costs to be paid by the defendant to the plaintiff within 7 days hereof.
   

............................................................
Ms D. Dias Wickramasinghe
Judge