Nair v Prasad [2011] FJHC 522; Civil Action 331.2010 (14 September 2011)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. 331 of 2010

BETWEEN:

SHALENDRA NAIR (f/n Narayan Nair) and LALITA NAIR (f/n Apoji Rao) of Verata Nausori, Taxi Driver and Receptionist respectively
PLAINTIFF

AND:

CHANDAN PRASAD of 23 Malima Street, Nabua, Suva, Businessman.
1ST DEFENDANT

AND:

WESTPAC BANKING CORPORATION, a registered Bank having its head office in 73 Gordon Street, Suva
2ND DEFENDANT

BEFORE: MASTER DEEPTHI AMARATUNGA
COUNSELS: Mr Sunil Kumar for the Plaintiff
Mr V. Maharaj for the 1st Defendant
Mr K. Singh for the 2nd Defendant

DATE OF HEARING: 13th July, 2011
DATE OF RULING: 14th September, 2011

RULING

1. INTRODUCTION
   

1. The Plaintiff has filed this writ of summons against the 1st and 2nd Defendants who are the purchaser of the land from a mortgagee sale and the Bank (mortgagee) who exercised the rights under the mortgage, respectively. Plaintiff is alleging fraud and misrepresentation against the 1st Defendant and collusion for that against 2nd Defendant. The Plaintiff has not disclosed that he has filed an action by way of originating summons against the same Defendants on the same allegation and that action is still pending in this court before a judge for an order in respect of injunction to restrain any dealing with the property and it also sought for nullification of sale on fraud and misrepresentation. The Defendants state that non-disclosure and filing of two actions by way of originating summons and also by way of writ of summons in respect of same issue is an abuse of process and this matter should be struck off in terms of Order 18 rule18 1 (a) and (d)
   

2. FACTS
   

2. The Plaintiff has mortgaged the property in issue, where he resides, to the 2nd Defendant Bank and had obtained a loan and has defaulted the said loan.
   
3. The Plaintiff has admitted that he defaulted the loan for more than six months, in his affidavit in support that was filed in the HBC 236 of 2010 and again in this action in the statement of claim, more specifically in paragraphs 21 -28.
   
4. The Plaintiff has admitted that this was not the first default and on previous a occasion the bank had has allowed him to pay the loan by extending the time period.
   
5. The Plaintiff in his statement of claim state that since he was in financial difficulty he asked for financial assistance from the 1st Defendant and also granted an opportunity to the 1st Defendant to look in to the loan account.
   
6. The Plaintiff is alleging fraud and the particulars of the fraud is summarized as follows:
   
   1. Using private and confidential information parted by the Plaintiffs to his own benefit.
      
   2. That the 1st Defendant instead of bailing them out of the financial difficulties kept on promising to advance the Plaintiff's money and delaying so that tender closes and could buy property.
      
   100. Submitting dated tender on the last day so that the 2ndDefendant could accept the tender.
        
   4. Encouraging the loan payments so that the outstanding loan is reduced in order for him to purchase at much lower price.
      
   5. Failing to inform the Plaintiffs that he has also submitted the tender for their property.
      
7. The 2nd Defendant, the mortgagee bank was made a party on an allegation of collusion for the alleged fraud and accordingly it is particularized as follows:
   
   1. Accepted tender submitted on the last which was lower than the highest tender.
      
   2. Accepting and selling the property at a lower tender.
      
   100. Releasing private and confidential information to the 1st Defendant.
        
   4. Failing to act in the best interest of the Plaintiff's being fiduciary relation.
      
8. The Plaintiff is seeking to set aside mortgagee on the ground of fraud or alternatively seeking a damage of $120,000.00.
   
9. The 2nd Defendant Bank has by its letter dated 18th June, 2010 has issued a 'notice to quit' to the Plaintiff and also indicated the property has been transferred to the 1st Defendant in the mortgagee sale.
   
10. The Plaintiff filed an originating summons in HBC 236 of 2010 seeking:
    
    1. That the Defendants be restrained from selling, dissipating or in any dealing with the said property until the hearing and determination of the case.
       
    2. That purported sale by the Defendantsbe nullified on grounds of fraud and misrepresentation.
       
11. It is clear that the reliefs sought by the Plaintiff in this action as well as in HBC 236 of 2010 are the same. The Plaintiff has filed the HBC 236 of 2010 by way of originating summons and had sought an interim relief for injunction against the Bank from proceeding with the mortgagee sale and in the same originating summons the Plaintiff has sought to nullify the mortgagee sale.
    

100. LAW AND ANALYSIS
     

12. It is common ground that 2nd Defendant has granted a loan to the Plaintiff and the Plaintiff has defaulted it for more than 6 months. The Plaintiff was granted an opportunity to settle the overdue loan installments but was unable to do so.
    
13. The mortgagee exercised its powers under the mortgage and sold the property to the 1st Defendant, but the Plaintiff has so far more than a year is preventing the 1st Defendant from obtaining possession of the premises that he bought in the mortgagee sale.
    
14. The Plaintiff first attempted to obtain an injunction to prevent the sale by filing an action through originating process and in the said action he also paid for nullification of sale. That action is still pending before a judge and while it is pending in court again the Plaintiff filed the present action again seeking nullification of the mortgagee sale or alternatively damages, by way of a writ against the same parties. In the present action there is no mention of even the pending action.
    
15. It is clear that the Plaintiff has filed two actions in relation to same issue against the same defendants seeking nullification of the mortgagee sale. The main difference lies in the procedure adopted by the Plaintiff. The first action is by way of origination process and the present action is filed by way of a writ of summons.
    
16. It is clear that Plaintiff who admitted default of the loan for 6 months was unable to settle the debt though the bank has granted them opportunity to do so and now the Plaintiff is trying to stifle the rights of the mortgagee and the present purchaser by filing cases in court of law and so far he has filed two cases on the same facts and on the same cause of action on against the same Defendants. The Plaintiff who decided to come to court by way of originating process, seeking even an interim relief by way of injunction, without withdrawing or mentioning that case which is pending before the court, has filed the present action against the same parties on the same transaction alleging the misrepresentation and fraud (the same allegation that was based on originating summons) seeking nullification for the mortgage sale.
    
17. It is noteworthy that the earlier action which is still pending also alleged fraud and misrepresentation against the 1st and 2nd Defendants of this case. It is evident the alleged cause of action against the 1st and 2nd Defendants are the same in both originating process as well as in the present writ.
    
18. In affidavit in reply to strike out application the Plaintiff state "I will go to any extend to save my property" and this bold statement is self-explanatory for the reason to file two actions without mentioning the pending action.
    
19. In Supreme Court Practice (1988) (White Book) at p 324 18/19/17 under the heading "Abuse of the Process of the Court" states as follows:
    

'It is an abuse of the process of the Court to raise in subsequent proceedings matters which could and should have been litigated in earlier proceedings' (Yat Tung Investment Co Ltd V DaoHeng Bank Ltd [1975]A.C581)

20. The Plaintiff in his affidavit in reply to this strike out application at paragraph 8 stated as follows:
    

'I have used all my life's saving to buy land and construct a dwelling house(sic) as our own only place of aboard(sic) and I will go to any extend to save my property.'

21. The Plaintiff state that he will resort to any means to remain in possession of the premises in issue and that is evident from his action of filing two cases without even mentioning the earlier action on the same alleged cause of action against the same Defendants.
    
22. The above paragraph and the conduct of the Plaintiff amply demonstrate the intention of the Plaintiff and he had clearly abused the process of the court to remain in possession of the premises even after the mortgagee sale and transfer of the property to the 1st Defendant, depriving the purchaser of its enjoyment for more than one year merely because of the two pending actions that are before this court.
    
23. From the above mention case of Yat Tung Investment Co Ltd V Dao Heng Bank Ltd [1975] A.C581) it is clear that a party is precluded from instituting a fresh action even to litigate the issues which were not raised in an earlier action and if it is done that is considered as an abuse of process. In the present action which was filed by way of writ of summons the allegation of fraud and misrepresentation were leveled against the 1st and 2nd Defendants and the same allegations were made in the identical manner against the same parties in the earlier action. The alleged cause of action in both cases are the same and the parties are also identical and the difference is that the earlier one is by way of originating summons and this action is by way of writ.
    
24. It is clear from the above mentioned quotation form the White Book (1988) that the plaintiff is abusing the court process, in order to delay and or prevent the purchaser from enjoying the property.
    

No Reasonable Cause of Action Disclosed in the statement of Claim.

25. Without prejudice to the said legal position where the statement of claim will have to be struck out for abuse of process, I will examine the allegations of the plaintiff to find out whether there is reasonable cause of action for the plaintiff. The principle allegation is fraud as particularized in the statement of claim and it is against the present owner (1st Defendant) of the property who obtained it from the mortgagee sale.
    
26. The main allegation is that since the Plaintiff allowed the bank to show the balance of his loan to the 1st Defendant, that he had utilized that knowledge to obtain the property from the mortgagee sale. The Plaintiff admits that he sought some financial assistance from the 1st Defendant several times prior to alleged incident and in all instances he had helped the Plaintiff with financial assistance. So, a prudent person who had lent money to the Plaintiff on the same loan repeatedly would not take his word and it is reasonable to request to look at the loan balance before granting any further financial assistance.
    
27. Admittedly, the loan account balance was shown by the bank on the request of the Plaintiff, but the 1st Defendant did not grant money in the present instance. The 1st Defendant is at liberty to grant financial assistance to the Plaintiff, or to refuse it irrespective of whether he perused the loan account or not as it was shown with Plaintiff's consent. The Plaintiff cannot rely on fraud under the circumstances as he has shown the loan balance in his own accord.
    
28. The Plaintiff also alleges fraud against the 1st Defendant and state since on earlier occasions the Defendant has granted financial assistance for the loan, that the outstanding loan balance got reduces thus the 1st Defendant was able to settle the remaining loan balance with lesser amount of money. What the Plaintiff has forgotten is that he had enjoyed the property while payments were being made in earlier occasions and 1st Defendant never enjoyed the property though he granted some financial assistance upon the request. This is clearly not a ground of fraud and even on the merits the Plaintiff would fail.
    
29. In White Book at p324 it stated that when the action is doomed to fail, it may be dismissed as being an abuse of the process of the Court Domer v Gulf Oil (Great Britain) (1975)119 s.J392.
    
30. In Fiji High Court in Shaw v Fiji Development Bank [2008] FJHC 362 HBC70.2008 (22 July 2008) it was quoted the case of Reed v New Zeland Trotting Conference [1948] 1LZ LR 8 at pg 9 the New Zealand Court of Appeal said " the justification for the extreme step of staying a prosecution or striking out a statement of claim is that the court is obliged to do so in order to prevent the abuse of its process". The Plaintiff has clearly abused the process to remain in the property even after mortgagee sale was completed and the land was transferred to 1st Defendant. Not only that the 1st Defendant was prevented from the enjoyment of his property, but he as well as the bank were further put in to inconvenience by filing this action which is clearly an abuse since there is already another action pending in this court. The Plaintiff did not even mention about the pending action in the statement of claim. So the Defendants were unnecessarily inconvenienced incurring legal cost.
    

4. CONCLUSION
   

31. The Plaintiff has filed this action for alleged identical cause of action against the identical parties in HBC 236 of 2010. That action is still pending and it is originating process and without mentioning the pending action he has file this writ and has abused the process of the court to remain in possession of the premises. That alone is sufficient to come to a conclusion that the court process is abused. Without prejudiced to that, I have discussed the merits of the statement of the claim and has also decided that the Plaintiff's action is 'doomed to fail' on the alleged fraud and misrepresentation against the 1st Defendant. Since the 2nd Defendant's involvement is collusion if the claims against the 1st Defendant fail, the collusion will necessarily fail. The Plaintiff's action is accordingly struck off. Considering the circumstances of this case I grant indemnity cost against the Plaintiff for both Defendants and I will hear the parties before I decide on an amount to determine the actual cost incurred to 1st and 2nd Defendants.
    

The Court Orders as follows:

1. The Plaintiff's writ of summons is struck off;
   
2. The Defendants are awarded indemnity cost;
   

100. Indemnity cost to be determined by the court;
     

4. The amount of the indemnity cost to be determined after submissions of actual costs of the Defendants to court.
   

Dated at Suva this 14th Day of September, 2011.

Mr D. Amaratunga
Acting Master of the High Court
Suva