Fiji Public Service Credit Union v Tuifagalele [2012] FJHC 1427; HBC86.2012 (29 October 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 86 of 2012

BETWEEN:

FIJI PUBLIC SERVICE CREDIT UNION
a duly incorporated Credit Union under the Credit Union Act [Cap 251] having its registered office at 11 Goodenough Street, Suva.
PLAINTIFF

AND:

AKAPUSI TUIFAGALELE
of Lot 23 Nacagilevu Crescent, Stage 4, Cunningham Road, Suva, unemployed.
DEFENDANT

BEFORE : Master Deepthi Amaratunga

COUNSEL : Mr. Singh R and Ms. Nabalarua A.C.L.N for the Plaintiff

Mr. S.Fa for the Defendant

Date of Hearing : 26th October, 2012

Date of Ruling : 29th October, 2012

SUMMARY JUDGMENT

1. INTRODUCTION
   

1. The Plaintiff who was a member of the Plaintiff's board obtained loans from time to time without settling the previous loans and outstanding loan balance increased exponentially and he resigned from the Plaintiff's board on 14th May, 2009 when his outstanding loan balance was over $54,000 and indicated that he would settle the balance, but for past three years no significant payment was made and the present action was filed to recover the outstanding balance. The Defendant only state that he had paid the debt without any proof of payment. The burden of proof is with the Plaintiff and the loan was 'on demand' in terms of clause 12 of the loan conditions and the Plaintiff has failed to produce any such demand and this application for summary judgment cannot sustain without the proof of such demand. The Defendant had denied such demand in the statement of defence and also in the affidavit in opposition. Neither party addressed this issue of demand and the absence of any evidence to the proof of the demand, but I cannot grant summary judgment when the relevant demand is not produced either in affidavit in support or in the affidavit in reply to the affidavit in opposition, though it was not raised or pointed out by the counsel for the Defendant since the demand is not admitted.
   

2. FACTS
   

2. The Plaintiff, Fiji Public Service Credit Union at all material times was and is a body corporate duly registered as a Credit Union under the Credit Union Act [Cap 251] having its registered office at 11 Goodenough Street, Suva. By virtue of its registration it has a perpetual succession and the capacity to sue and be sued. At all material times the objectives of the Plaintiff were and are to:
   
   • (a) Promote thrift among its members.
   • (b) Receive the savings of its members either as payments on shares or as deposits; and
   • (c) Make loans to members exclusively for provident or productive purposes.
     
3. The mission of the plaintiff is linked to its establishment. It was a union registered for all public servants to voluntarily join. The public servants were free to join the union by subscribing to it. The members had to pay a subscription and on a periodic basis authorize deductions at source of certain monies from their salaries and wages to be held shares in the union. The shares in return could have been used as security to take advances from the union, but in the case of Defendant who was a member of the board of directors of the Plaintiff the loan outstanding was more than ten fold of the value of the shares!
   
4. It is not in dispute that the Defendant at all material times was a duly subscribed member of the Plaintiff and also a member of the board of the Plaintiff for a considerable time and that he resigned on his own accord from the board on 14th May, 2009 after thanking the same.
   
5. It is not in dispute that the Defendant, in his capacity as a subscribed members, and also when he was a director of the Plaintiff had from time to time applied for loans and advances from the Plaintiff. The Plaintiff at the request of the Defendant lent monies to the Defendant in various sums, which monies the Defendant agreed to repay to the Plaintiff in accordance with and pursuant to the terms and conditions stipulated in the Credit Contracts and Loans Application Agreements entered into between the parties.
   
6. In the ordinary process of the application and the grant of loans, the Defendant also sought and was granted loans on numerous occasions to the Plaintiff. Each application for a loan is to be made in writing. In case of the defendant it is contained as evidenced by various Credit Contracts and Loan Application Agreements made between and signed on behalf of the Plaintiff and by the Defendant.
   
7. The material terms and conditions stipulated in the Credit Contracts and Loan Application Agreements are:
   
   1. That all approved loan applications are subject to a non-refundable loan establishment fee applied in accordance with the stipulated scale;
      
   2. That all loans are repayable on demand but unless and until demanded are repayable in accordance with the repayment term agreed or reviewed; (see clause 12 of the annexed 3 to the affidavit in support)
      
   100. That the interest rate to be charged on outstanding amount is at one (1%) per cent per month calculated on the reducing balance for that months pursuant to Section 52 of the Credit Union Act (Cap 251);
        
   4. That the Plaintiff has a first lien of the Defendant's "savings" for the unpaid balance of the loan; and
      
   5. That the unpaid balance of loan are immediately due and payable of the Defendant ceased to be a member of the Plaintiff or the employer for some good reason stops regular deductions from salary or under the covenants of the mortgage of Bill of Sale.
      
8. The Defendant in the Statement of Defence and the Answering Affidavit admits that he was a member of the Plaintiff. In addition, he had borrowed monies from the Plaintiff from time to time, but denies any such demand for loan outstanding which is the vital element in the creation of cause of action stated in the statement of claim.
   

100. LAW AND ANALYSIS
     

9. The law relating to summary judgment is contained in Order 14 of the High Court Rules of 1988 and it states as follows
   

'1(1) Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has given notice of intention to defend the action, the plaintiff may, on the ground that that defendant has no deface to a claim included in the writ, or to a particular part of such a claim, or has no deface to such a acclaim or part except as to the amount of any damages claimed, apply to the Court for judgment against that defendant.

(2).....

(3).....

2(1) An application under rule 1 must be made by summons supported by an affidavit verifying the facts on which the claim or the part of a claim to which the application relates is based and stating that in the deponent's belief there is not defence to that claim or part, as the case may be or no defence except as to the amount of any damages claimed.

(2) Unless the Court otherwise directs, an affidavit for the purposes of this rule may contain statements of information or belief with the sources and grounds thereof.

(3) The summons, a copy of the affidavit in support and of any exhibits referred to therein must be served on the defendant not less than 10 clear days before the return day.

3(1) Unless on the hearing of an application under rule 1, either the Court dismisses the application or the defendant satisfies the Court with respect to the claim, or the part of a claim, to which the application relates that there is an issue or question in dispute which out to be tried or that there ought for some other reason to be a trial of that claim or part, the Court may give such judgment for the plaintiff against that defendant on that claim or part, the Court may give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed.

(2) The Court may be order, and subject to such conditions, if any as may be just stay execution of any judgment given against a defendant under this rule a until after that trial of any counterclaim made or raised by the defendant in the action.

10. Carpenters Fiji Ltd v Joes Farm Produce Ltd [2006] FJCA 60; ABU0019U.2006S (10 November 2006) the Court of Appeal of Fiji quoted the White Book of 1999 and stated in the paragraph [22] as follows
    

"Summary Judgment Principles

[21] Here it is timely to state some of the well established principles relating to the entry of summary judgment:

(a) The purpose of 0.14 is to enable a plaintiff to obtain summary judgment without trial if he can prove his claim clearly and if the defendant is unable to set up, a bona fide defence or raise an issue against the claim which ought to be tried.

(b) The defendant may show cause against a plaintiff's claim on the merits e.g. that he has a good defence to the claim on the merits or there is a dispute as to the facts which ought to be tried or there is a difficult point of law involved.

(c) It is generally incumbent on a defendant resisting summary judgment, to file an affidavit which deals specifically with the plaintiff's claim and affidavit and states clearly and precisely what the defence is and what facts are relied on to support it.

(d) Set off, which is a monetary cross claim for a debt due from the plaintiff, is a defence. A defendant is entitled to unconditional leave to defend up to the amount of the set off claimed. If there is a set off at all, each claim goes against the other and either extinguishes or reduces it Hanak v. Green (1958) 2 QB 9 at page 29 per Sellers LJ.

(e) Likewise where a defendant sets up a bona fide counter claim arising out of the same subject matter of the action, and connected with the grounds of defence, the order should not be for judgment on the claim subject to a stay of execution pending the trial of the counter claim but should be for unconditional leave to defend, even if the defendant admits whole or part of the claim. Morgan and Son Ltd v. S. Martin Johnson Co (1949) 1 KB 107 (CA).

See 1991 The Supreme Practice Vol 1 especially at pages 146,147,152 and 322." (emphasis is mine)

11. So, it is pertinent to note that even in an action for recovery of debt to a Plaintiff statement of the sum as the debt owe to them is not sufficient proof as required in the provisions contained in Order 14 rule 2 (1) and the burden of proving the claim clearly rests fairly and squarely on the Plaintiff and the Plaintiff in this action has not done so in the affidavits and supporting evidence before me the paramount consideration is the accrual of the cause of action to the Plaintiff and the proof of demand is sine qua non when it is denied in the statement of defence as well as in the affidavit in opposition to this summons.
    
12. The counsel of the Defendant did not point out the said defect at the hearing, but it is this should not absolve the Plaintiff of its burden of proof. In an 'on demand' loan the accrual of cause of action does not incur till a demand is made. The Defendant had denied any such demand. Paragraph 10 of the statement of claim as well as the paragraph 13 of the affidavit in support were denied by the Defendant. In the circumstances the Plaintiff should have produced such evidence of proof that the money was demanded from the Defendant, and in the absence of that this application for summary judgment cannot sustain.
    
13. In the case of Dominion Finance Limited v Sddio Faizal Koya Civil Action No HBC 193 of 2009 decided on 20th August, 2010 which was relied by the Plaintiff, Master Anare at paragraph 14 stated as follows:
    

'The Plaintiff must prove each claim clearly and to satisfy the Court that the defendant has no defence which has any realistic prospect of success. Once the Plaintiff establishes his or her claim, the evidential and persuasive burden then shifts to the defendant who must adduce affidavit evidence dealing specifically with the plaintiffs claim and also stating clearly what the defence is and what facts he or she relies on to resist the entry of summary judgment (see Magan Lal brothers Ltd v L.B. Masters & Company Civil Appeal No 31/84 and Carpenters Fiji ltd v Joes Farm Produce Ltd; see also comments of Thomas J in Hibiscus Shopping Town Pty Ltd v Woolworths Ltd (1993) FLR 106 at 109" (emphasis is added)

14. The absence of proof of demand is fatal to this application. The application for summary judgment is dismissed. Considering the circumstance I will not award any cost.
    

4. FINAL ORDERS
   

1. The summons for summary judgment is struck off.
2. No costs.
   

Dated at Suva this 29th day of October, 2012.

..............................................
Master Deepthi Amaratunga
High Court, Suva