Nair v Prasad [2012] FJHC 905; Civil Action 331.2010 (29 February 2012)

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. R. P. Singh for the Plaintiff
Mr. V. Maharaj of M C Lawyers for the1st Defendant
Mr. K. Singh for the 2nd Defendant.

Date of Hearing : 17th February, 2012
Date of Ruling : 29th February, 2012

Summary Judgment

1. INTRODUCTION
   

1. The Plaintiff filed this action against 1st and 2nd Defendants seeking to set aside the mortgagee sale to the 1st Defendant by the 2nd Defendant. Plaintiff admits that he defaulted payments to the 2nd Defendant, but allege fraud and collusion on the part of Defendants. Already in the originating summons that the Plaintiff filed against the Defendants it was held that no fraud or misrepresentation has occurred. The Plaintiff cannot proceed with this action any more with that finding, but without prejudice to the said contention I have analysed the facts in this decision. Before the delivery of the judgment by the judge, I have also struck off the statement of claim of the Plaintiff and has also held that this action of Plaintiff as an abuse of process and ordered indemnity costs to the Defendants. Now the 1st Defendant is seeking summary judgment for vacant possession and mense profit.
   

2. LAW AND ANALYSIS
   

2. The alleged fraud and or collusion was that 2nd Defendant, with the approval of the Plaintiff has divulged the details of the loan account of the Plaintiff, to the 1st Defendant and the property was not sold to the highest bidder (as opposed to highest price), but the Bank settled the sale after two unsuccessful mortgagee sales after advertising the mortgagee sale for not less than 6 occassions in local newspapers giving widest publicity as possible. The Plaintiff is unable to state the highest price or any person who had offered a higher price than the 1st Defendant.
   
3. The last of the said mortgagee sale advertisement appeared on 5th September 2009. The settlement was done six months after the said second mortgagee sale, on 10th June, 2010, being unable to secure a price acceptable to the bank. So no financial loss to the Plaintiff and the Plaintiff was unable to provide evidence of any body who offered a price higher than the price accepted by the Bank. Even if there was a financial loss that cannot vitiate the mortgagee sale. There is no obligation under the law to sell the property to the highest bidder as the Bank as a prudent financial institution it not in the position of a trustee as held in Warner v Jacob [1882] UKLawRpCh 61; (20 Ch.D 220,224) as referred in Warring (Lord) v London and Manchester Assurance Company Limited, and others [1935] 1 Ch 310 at 319. The Plaintiff state that 1st Defendant has bailed out the Plaintiff several times when he was unable to meet the loan payments and on that basis the said account details were divulged by the bank with the consent of the Plaintiff, but the 1st Defendant has not bailed out from the defaulting loan instead proceeded to purchase the property in mortgagee sale. The 1st Defendant sought a strike out of the writ of summons and I have granted the strike out of writ as well as indemnity cost.
   
4. The 1st Defendant has counter claimed against the Plaintiff for vacant possession of the property and has also sought mense profit of $450 per month.
   
5. The 1st Defendant has filed this summons seeking summary judgment for the counter claim and strike out of the Plaintiff's Defence to counterclaim.
   
6. The said summons were made in terms of Order 18 rule 18(1) (a) and (d) and Order 14 of the High Court Rules of 1988
   
7. 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. (emphasis is added)

8. It is a preliminary requirement that the Plaintiff has to file the application for summary judgment, supported by an affidavit verifying the facts on which the claim or the part of a claim to which the application relates and as regards to the mense profit of $450 per mensum the affidavit in support of the 1st Defendant state as follows
   

'[6] I am advised and verily believe that in the year 2009 some months prior to mortgagee sale by the second Defendant the Plaintiffs had rented out the subject property to a school teacher at a monthly rental of $450. Accordingly my claim for mense profit at the rate of $450 per month is based on rental value determined by the Plaintiffs.'

9. The 1st Defendant's abovementioned paragraph is based on a belief and he has not mentioned the source of the information though he stated that he was advised and to his belief the facts were stated in the paragraph.
   
10. The Plaintiff has not admitted the said averments, and Master Udit in Jai Mati v Naqsheen Begaum HBC 177 of 2007 in awarding vacant possession has awarded mesne profits, but it was awarded with consent and at paragraph 16 stated as follows
    

'.....After considering Mr. O' Driscoll's submission, Mr. Maharaj (who did not wanted to prolong this matter) acceded to the rent as proposed in the sum of $370.'

11. This is the only authority I was submitted at the hearing by the 1st Defendant and neither party filed any written submissions, the only issue that was raised by the counsel for the Plaintiff is that already there is an appeal filed against my decision to strike out, but for that the counsel for the 1st Defendant state that it has been abandoned due to lack of diligence by the Plaintiff appellant . I cannot verify these facts but since there is no stay order and considering the circumstances of the case where the buyer of the mortgagee sale is deprived of the possession by the Plaintiff, I do not think that I should not proceed with the summons in the absence of any stay order not to proceed with this action.
    
12. I have also found that filing of this writ action itself as an abuse of process, by which the Plaintiff is depriving the legal owner of the property the possession and it is clear this is a delaying tactic hence I have already ordered indemnity cost against the Plaintiff.
    
13. In the counter claim there is no mention of the commencement of the mense profit and there is no agreement as to the amount as in the said case by the parties hence mense profit cannot be awarded in the circumstances.
    
14. The principles contained in the summary judgment are summarized in the Supreme Court Rules of 1999 as follows
    

At Page 163 14/1/2

'that the purpose of O 14 is to enable a Plaintiff to obtain a quick judgment where there is plainly no defence to the claim. If the defendant's only suggested defence is a point of law and the court can see at once that the point is misconceived.'

P 164

'Moreover, there is no reason why O.14 may not be employed in and action for a declaration where the case is clear, e.g a declaration as to proprietary rights or ...'

'If a party obtains all necessary relief by interlocutory order, a claim for costs only may be pursued under O.14 (Danesfield Securities v Somuga & City Equities (1996) The Times, December 31)

15. In Alan Fredric Frazer Vs Doglas Hamislton Walker [1967] A.C 569 it was held that as the reigistered proprietor of a title to the interest in respect of which the appellant was registered, was immune form adverse claims and the indefeasibility being central in the system of registration. The 1st Defendant having obtained the transfer of the property is entitled to the rights derived from the registered property.
    
16. The 1st Defendant is the registered proprietor and he attains all the attributes of the title registered in terms of the Land Transfer Act, only subject to the provisions in the Land Transfer Act, which specifies the fraud as the exception. The High Court Judge has already found that there was no fraud in this transfer of property. Without prejudice to that I give the following reasoning.
    
17. The Plaintiff has alleged fraud and collusion, but whether any person can allege fraud and or collusion and deprive the registered proprietor its rights has to be determined.
    
18. The alleged fraud and collusion is particularised in the statement of claim and the very same facts were alleged in the affidavit in opposition to this summons for summary judgment and striking out of the defence to the counter claim.
    
19. They are summarized as follows
    
    1. The 2nd Defendant Bank has allowed the 1st Defendant to obtain particulars of the loan account of the Plaintiff, with the request of the Plaintiff.
       
    2. The bank offered the property to the 1st Defendant who was not the highest bidder.
       
    100. The 2nd Defendant bank colluded with the 1st Defendant fraudulently.
         
20. The 2nd Defendant bank has advertised the said property on not less than six different occassions in local newspapers giving it a widest possible publicity and this fact alone is sufficient to show that there was no collusion or bad faith in relation to the 2nd Defendant's action as regard to obtain the best price for the mortgaged property. The 2nd Defendant Bank has not opted to file any affidavit evidence, tough it was represented by a counsel, but when perusing the Statement of Defence filed by the 2nd Defendant it seems that there were two mortgagee sales and the last of the paper advertisement appeared on 5th September, 2009. The sale to the 1st Defendant happened on 10th June, 2010. This is some 9 months after the advertisement of the second mortgagee sale. These facts amply demonstrate that the 2nd Defendant was trying its best to obtain the best price for the property, as a prudent financier.
    
21. In Warring (Lord) v London and Manchester Assurance Company Limited, and others [1935] 1 Ch 310 at 319 it was held
    

" ..... a mortgagee is strictly speaking not a trustee of the power of sale . It is a power given to him for his own benefit, to enable him the better to realize his debt. If he exercises it bona fide for that purpose, without corruption or collusion with the purchasers, the Court will not interfere even though the sale be very disadvantageous, unless indeed the price is so low as in itself to be evidence of fraud."

Further at p 319

".....the Yorkshire Company is willing to advance on mortgage an amount larger than that of the purchase money, which implies, presumably, that the value which the Yorkshire Company puts upon the property must also be considerably larger. I do not consider, however, that in itself is evidence of fraud. In my judgment there must be something far beyond the mere fact of under-value.

So, the Plaintiff' contention fails even if he is able to prove that there was another offer higher than the price paid by the 1st Defendant. The Plaintiff neither quoted a bid higher than the sale price nor a person's name who has offered a higher price in the mortgagee sale. There was no evidence or allegation that the price was so low that fraud is presumed ipso facto.

22. In the case of Warner v Jacob [1881] Ch D Vol XX 220 at p 222 it was stated Kay J held as follows
    

'Lord Cottendham, who, in Jones v Matthie, is reported as having said, "Such a power as this may, not doubt, be used for purposes of oppression, but when conferred it must be remembered that it is so by a bargain between one party and the other, and it is for the party who borrows to consider whether he is not giving too large a power to him with whom he is dealing. If the power is exercised for fraudulent purpose this Court will interfere, and as in other cases, if the party actually deposits in Court the amount due, it will not allow the power to be exercised at all."

23. The Plaintiff has not deposited the amount that it owed to the Bank to the court in this writ of summons. He has not done it in the originating summons that was struck off but conveniently selected a general statement in paragraph 32 of the said judgment (HBC 236 of 2010) which stated 'It must be emphasized that if an action is based on fraud, it has to be instituted by way of writ of summons, which shows that the procedure followed by the Plaintiff in instituting this action itself is wrong in law and cannot be maintained.'
    
24. In the same judgment (HBC 236 of 2010) after considering the facts and circumstances at paragraph 38 stated as follows
    

' 38. Upon consideration the above, I conclude that no fraud or misrepresentation occurred when the property was transferred to the 2nd Defendant by the 1st Defendant, and hence there is no serious question to be tried.' (In the said originating summons the 1st defendant was the bank and 2nd Defendant is the purchaser-1st Defendant in present action)

25. I do not think I should venture more on this issue as the Judge in no uncertain terms have come to a finding that there was no fraud or misrepresentation in the transaction between 1st and 2nd Defendant as regards to this sale of property and that decision has not been appealed (neither party informed me of this decision being appealed) and High Court will be bound by that finding of fact and it is nothing but a waste of time to allow the Plaintiff to abuse the due process of law any more.
    
26. Without the proof of fraud the Plaintiff would not be able to prove any collusion and both would invariably fail. Since the High Court has already decided that there was no fraud the 1st Defendant's title to the property is indefeasible and all the attributes of the indemnity in Land Transfer Act should be conferred to it. The right to possession is a primary right of an owner and this summary judgment for vacant possession will invariably derive from the title in the absence of fraud.
    
27. So, either on the finding of the Judge, or on the reasons given in this decision as well as in my previous ruling on strike out of this writ, it is clear that Plaintiff's defence to the counter claim of the 1st Defendant is a 'sham' defence and should be struck out. The Plaintiff has deprived the 1st Defendant from enjoying the fruits of the property it purchased from the 2nd Defendant after payment of consideration for more than 1½ years, by filing one case after another without divulging the pending action, and also seeking injunctive relief. All those applications have faced the inevitable ending with costs being awarded to the Defendants.
    

100. THE CONCLUSION
     

28. In the circumstances it is evident the Plaintiff, even after the High Court Judge has decided that there was no fraud in this dealing, without appealing that decision, still he desire to continue this action alleging fraud, because it enjoys the fruits of the property, by not allowing the possession to the rightful owner-1st Defendant. This is clearly an abuse of process and the summary judgment for the counter claim for vacant possession of the 1st Defendant, is appropriate remedy to prevent any more loss and or damage to the 1st Defendant. The summons for summary judgment on the counter claim of the 1st Defendant for vacant possession is granted and considering the actions of the Plaintiff which is clearly an abuse of process I would also grant indemnity cost for this application to both Defendants. After I hear both sides upon the submissions of actual costs, invoices etc the indemnity cost will be ascertained.
    
29. I am not inclined to award any mense profit to the 1st Defendant, for the reasons given earlier in this decision.
    

4. FINAL ORDERS
   

1. The summary judgment is granted for the 1st Defendant on his counter claim. [i.e That the Plaintiffs be ordered to give immediate vacant possession to the First Defendant of all that property more particularly described as certificate of title no 30575 lot 17 on Deposited Plan No 126]
   

b. The summary judgment for mense profit is refused.

c. The Defendants are granted indemnity cost against the Plaintiff.

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

Mr. Deepthi Amaratunga
Master of the High Court
Suva