Prasad v NBF Asset Management Bank [2017] FJHC 966; Civil Case 65 of 2016 (15 September 2017)

IN THE HIGH COURT OF FIJI
AT LABASA
CIVIL JURISDICTION

Civil Action No. HBC 65 of 2016

BETWEEN : VINESH PRASAD and MUNESH PRASAD

PLAINTIFFS

AND : NBF ASSET MANAGEMENT BANK
1^st DEFENDANT

AND : RAJESH PRASAD and USHA PRASADboth of Savusavu, Businessman and Domestic Duties respectively.

2^nd DEFENDANTS

Appearances : MIQ Lawyers for the Plaintiffs
Messrs Jamnadas & Associates for 1^st Defendant
Maqbool & Co. for 2^nd Defendants

RULING

Introduction

1. The Plaintiffs are brothers who, by virtue of a probate granted on 15 September 2016, are executors and trustees of their father Kamal Prasad’s (the deceased’s) estate. They bring this application pursuant to section 43 of the Banking Act, seeking leave to institute civil proceedings against the NBF Asset Management Bank (the Bank).
   
2. Vinesh Prasad who is the 1^st Plaintiff has deposed affidavits in support of the application. The Defendants filed answering affidavits and whilst the Plaintiffs replied to the 1^st Defendant’s affidavit, no reply was made to the 2^nd Defendants’ objections.
   

The law

3. Section 43 (1) (a) of the Banking Act precludes the commencement or continuation of any action or proceedings against a licensed financial institution which has been declared to be under controllership. The 1^st Defendant Bank was declared under controllership on 1^st April 2007, a declaration which was gazetted on 1^st May 2007 and which remains in force.
   
4. Parties wishing to institute or continue proceedings against the Bank for the purpose of determining whether any right or liability exists, may only do so with the leave of the controller, or the High Court, first obtained. (Section 43 (2) Banking Act)
   

Analysis

5. The issue for the Court’s determination is whether leave should be granted to the Plaintiffs to institute proceedings against the Bank. Factors relevant to a decision as to whether leave ought to be granted are not exhaustive, but some of these were identified by Udit M inNBF Asset Management BankCivil Action No. HBC 543 of 2004, summarised in Lagan v National Bank of Fiji Civil Action No. 313 of 2009 by Wati J as:
   

(a) The strength of the applicant's case. It must be considered in light of the rights or liabilities which the proceeding or action is set to determine.

(b) The seriousness of the issue to be determined by an action or proceeding.

(c) Whether judicial determination of the issues in the action is necessary for the controllership and/or for the determination of the issue at large between the parties.

(d) Delay in commencing or continuing an action or proceeding.

(e) Whether the issue is likely to be resolved in the ordinary course of controllership.

(f) Whether the applicant's right to have a claim determined by an impartial tribunal is likely to be defeated at the conclusion of the controllership, especially if the institution is to be wound-up.

(g) Whether the litigation may impede the prompt and efficient execution of the Controller's statutory duty. This must be considered in conjunction with para (c) above.

6. The 2^nd Defendants raise a preliminary objection against the form and substance of the application which has been brought by way of notice of motion. The Plaintiff did not reply to this affidavit.
   
7. On more than one occasion recently, this Court has commented on the consequences of the failure to reply to an allegation or issue raised in an affidavit. It is settled that the failure to contradict an issue, or reply specifically to a material allegation in an affidavit, is treated as an acceptance or admission of the said issue or allegation.
   
8. Said Blackburn J in Dawkins v Prince Edward of Saxe Weimar [1875]-76] [1876] UKLawRpKQB 51; 1 QBD 499 at 501, of the failure of the plaintiff there to reply to the defendants’ affidavits:
   

Upon that I can come to no conclusion, except that the defendants’ affidavits are strictly true, and are admitted to be strictly true.

9. Here, the Plaintiffs have not replied to the 2^nd Defendants’ allegation that the form and substance of their application is defective. The failure so to do is tantamount to an admission of the allegation. (See also Prakash v Chandra Civil Appeal No. ABU 0037/1985; Naqarase v Public Trustee[1994] 40 FLR 215)
   
10. The Bank did not raise objection with the form of the application, though it vigorously opposed it on a number of other grounds, including the form and contents of the 1^st Plaintiff’s affidavits. Notwithstanding the absence of an objection from the Bank on the form of the application, I consider that the Court is entitled to consider this in deciding the application.
    
11. Order 5 Rule 1 of the High Court Rules provides that civil proceedings may be instituted by writ, originating summons, originating motion or petition. The present proceedings are brought under section 43 of the Banking Act and being proceedings in pursuance of the provisions of an Act, Order 5 Rule 3 requires that the application be made by way of originating summons unless the Act or the High Court Rules state otherwise.Thus Order 5 Rule 3 says:
    

Proceedings by which an application is to be made to the High Court or a judge thereof under any Act must be begun by originating summons except where by these Rules or by or under any Act the application in question is expressly required or authorised to be made by some other means.

12. I note that a similar application by Munesh under s. 43 of the Banking Act in Prasad v NBF Asset Management Bank Miscellaneous Action No. 01 of 2012, was struck out for this very reason, that he had brought the application by way of notice of motion when he ought to have done so by originating summons. Of the non-compliance there with the Rules in respect of the originating procedure, the Master stated:
    

It is clear that a notice of motio is 0;is not one of the four (4) originating processes in which an action can be begun under the rules as referred to in Or rule 1. If it was an originating process albeit an incorrect one it can be cured by the Cohe Court. This is because the Court cannot wholly set aside any proceedings or originating process on the ground that the proceedings were required by the Rules to be begun by an originating process other than the one employed (Order 2 rule 1(3).

13. In Tadrau v Fiji National Provident Fund Civil Action No. 380 of 2008, the Plaintiffshad instituted proceedings by way of originating summons and subsequently made an application under s. 43 Banking Act to make the NBF Asset Management Bank a party to the action, or to continue the action against it. One of the objections by the Bank was that the Plaintiffs had followed the wrong procedure by coming by way of originating summons. The Court, referring to Order 28 Rule 9 of the Rules (which provides that if, in a cause or matter begun by originating summons, it appears to the court that the proceedings should, for any reason, be continued as if begun by writ, it may order the proceedings to continue as if so begun), refused this ground of objection.
    
14. In the instant case, the Plaintiffs have not chosen an originating procedure under the Rules and have instead come by way of notice of motion. I have considered whether the error can be cured under Order 2 Rule 1 (3) which provides:
    

The Court shall not wholly set aside any proceedings or the writ or other originating process by which they were begun on the ground that the proceedings were required by any of these Rules to be begun by an originating process other than the one employed.

15. In my opinion, the error in coming (again) by notice of motion which is not an originating procedure, is fundamental and cannot be cured under Order 2 Rule 1 (3) above. In Prasad v NBF Asset Management Bank (supra), the Master held:
    

Hence using one of the four originating procedure in initiating an action is a fundamental requirement of the rules. Therefore the notice of motion
l0;filed by the applicant as the originating procedure is a failure of a fundamental kind and this court does not have the power to cure it. A notice of moti60;is i>is only appropriate in applications where there is a pending action. It is fundamental in that it goes to the root of the procedure required...

16. For the reasons given above,Ihold that the application is a nullity and must be struck out.
    
17. Order
    1. The application is struck out.
    2. Costs for the Defendants, summarily assessed in the sum of $1000 for the 1^st Defendant, and $1000 for the 2^nd Defendants.
       

Dated at Labasa this 15^th day of September 2017.

S.F. Bull
Acting Master