Bank of Baroda v Chute [2021] FJHC 403; HBC315.2020 (31 December 2021)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No. HBC 315 of 2020

BETWEEN: BANK OF BARODA a body corporate duly incorporate in India, having its Head Office at Mandvi, Baroda, India and duly registered in Fiji under the Companies Act 2015 and having its registered office at 86-88 Marks Street, Suva, Fiji.

PLAINTIFF

A N D: ROSAILA CHUTE of Lots 2 and 3 Matamakita Subdivision, Isa Lei Road, Lami, Businesswomen.

DEFENDANT

Counsel : Plaintiff: Ms. K. Singh
: Defendant: Ms. L. Jackson
Date of Hearing : 30.12.2021
Date of Judgment : 31.12.2021

JUDGMENT

INTRODUCTION

1. Plaintiff filed this ‘mortgagee action’^[1] in terms of Order 88 rule 1 of High Court Rules 1988(HCR) seeking vacant possession of property described in Native Lease No 16044 (The Property)Plaintiff is mortgagee and mortgagor was a legal entity which had defaulted payments under mortgage. Accordingly Plaintiff demanded the entire debt. Since the debt was not settled proceed to mortgagee sale. Defendant was informed of the situation and a notice to quit was issued on 10.7.2020. Plaintiff is required to fulfill the mandatory requirements contained in Order 88 of HCR. Mortgagee is elevated to a position to seek vacant possession, upon fulfilment of mandatory provisions. Plaintiff had not complied with two mandatory requirement contained in Order 88 of HCR. They are Order 88 rule 2(3) of HCR and Order 88 rule 3 (2) of HCR. Defendant was not the mortgagor and in such an instance the importance Order 88 rule 2(3) and Order 88 rule 3(2) are paramount. Plaintiff’s application is struck off in limine.
   
2. Plaintiff had instituted this action on 21.10.2021 in terms of Order 88 of HCR, and had appeared before Master several instances, without hearing.
   
3. On 13.12.2021, Master had allocated this matter to me as there was an action filed by Defendant against Plaintiff alleging fraud and also seeking injunctive relief. The application for injunctive relief was heard and fixed for judgment.
   
4. Accordingly the matter was fixed for hearing on 30.12.2021.
   

ANALYSIS

5. ORDER 88 rule 1 of HCR relates to mortgagee actions and it is applicable to originating summons as well as writ of summon. The most popular method is the originating summons.
   
6. Order 88 rule 1 of HCR states

“Application and interpretation (O.88, r.1)

1.-(1) This Order applies to any action (whether begun by writ or originating summons) by a mortgagee or mortgagor or by any 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) payment of moneys secured by the mortgage,

(b) sale of the mortgaged property,

(c) foreclosure,

(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,

(e) redemption,

(f) reconveyance of the property or its release from the security,

(g) delivery of possession by the mortgagee.

(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 by this Order(emphasis is mine)

7. Plaintiff had instituted this action as mortgagee. Defendant is the occupier of the property and alleges that the mortgage was obtained through fraud. Defendant’s position was that mortgage was obtained by fraud, hence no benefit from that should arise to the Plaintiff. The alleged fraud was regarding a memorial on the title which had not complied with provisions contained in Section 24 of Land Transfer act 1971 and a letter written by Plaintiff’s solicitors to allow mortgage to be registered. By operation of law a memorial that had not complied with requirements of Section 24 of Land Transfer Ac 1971 cannot be considered a ‘memorial’ in terms Land Transfer Act 1971.
   
8. Plaintiff as mortgagee had institution this action irrespective of Defendant’s purported fraud. I used the word purported as there was nothing to prevent Plaintiff’s mortgage being registered on the title of the Property irrespective of actions of the solicitor of Plaintiff, at that time.
   
9. Defendant was awarded a sum, in lieu of transfer of proprietary rights, in the Property, in terms of Family Law Act 2003.
   
10. The Property was owned by Rosewood Ltd in 1994 and was subject to few mortgages and finally it was transferred to Organic Earth (Fiji) Ltd in 2015. By that time Defendant had obtained a divorce from her husband. So an application in terms of Section 160 of Family Law Act 2003, for an order relating all properties of Defendant and her ex-husband was made.
    
11. This application concluded with, property distribution in terms of Family Law Act 2003 ordered with a fixed amount being awarded for all properties. This sum was not paid to Defendant.
    
12. Plaintiff had instituted this action by way of originating summons seeking eviction of Defendant for the default of the mortgagor. Plaintiff is legally obliged to comply with mandatory provision in Order 88 rule 2(3) of HCR.
    
13. When a Plaintiff elects to proceed in terms of originating summons for a ‘mortgagee action’ there are mandatory requirements to be fulfilled. These are contained in Order 88 rule 2 of HCR which reads.

Order 88 rule 2(3) HCR states

“(3) Where the plaintiff claims delivery of possession there must be indorsed on the outside fold of the copy of the affidavit serviced 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” (emphasis added)

14. Plaintiff had not complied with this requirement. This is a mandatory requirement as word ‘must’ was used to emphasize the mandatory nature. Word ‘must’ in English, can be given its usual, interpretation which impose strict compliance.
    
15. The reason why such provisions were made mandatory can be deduced from the summary nature and rights of the occupants who need not be mortgagors. Such an order for eviction by mortgagee can be obtained quickly, though this action had taken more than one year.
    
16. So the speed of relief which is a paramount consideration in terms of originating summons in terms of Order 88 of HCR is a reason for strict compliance of Order 88 rule 2(3) of HCR.
    
17. Non compliance of mandatory requirement, made the proceedings in terms of Order 88 a nullity.
    
18. Plaintiff as mortgagee can bring ‘mortgagee action’ by way of originating summons only if mandatory provisions were complied. This mandatory requirements may be excused, if it was impossible to perform. This has no application to Order 88 rule 2(3) of HCR, but can be applied for Order 88 rule 3(2) of HCR in an appropriate circumstances. In such a situation is sine qua non for Plaintiff to state why and how it was impossible to comply with mandatory requirement. Without such reason a mandatory provision needs strict compliance.
    
19. Non-compliance of such mandatory requirement, was fatal to this action instituted by way of originating summons for summary recovery of possession. So the action is struck off.
    
20. Apart from this mandatory provision at the hearing Plaintiff failed to comply with the requirement contained in Order 88 rule 3(2) which reads

“(2) The affidavit must exhibit a true copy of the mortgage and the original mortgage or, in the case of a registered charge, the charge certificate must be produced at the hearing of the summons’

21. Learned counsel did not produce original mortgage at the hearing, too. Though this could have been cured by adjournment with cost to Plaintiff, this was not an avenue considering fatal irregularity that goes to the root of the institution of this action by way of originating summons.
    
22. Counsel for Plaintiff produced a decision of Master who had relied on two High Court decisions to accept a certified copy of title as compliance of Order 88 rule 3(2). The two high Court decisions which Master relied were Australia and New Zealand Banking Group Ltd v. Kumar [2003] FJHC 326; HBC0307.2002 (1 January) and Wati v Pillay [2009] FJHC 102; Civil Action No 310.2008 (7 April 2009).009). The ratio of both decisions did not allow non-compliance of Order 88 rule 3(2) but interpreted that ‘original mortgage’ to include a duplicate copy made at the same time when original was made. This was obviously not the ‘original mortgage’ filed in this action. Counsel did not produce any document other than this filed copy at hearing. This is not the practice that was reiterated in Australia and New Zealand Banking Group Ltd v. Kumar (supra). This decision was also applied in Wati V Pillay (supra). So, both these decisions cannot be misapplied to give a mandatory requirement as declaratory.

CONCLUSION

23. Originating summons filed by mortgagee, is struck off in limine for non-compliance of Order 88 rule 2(3) and Order 88 rule 3(2). Considering circumstances of this case no cost awarded.
    

FINAL ORDERS

1. Originating summons filed on 21.10.2020 struck off.
2. No costs.
   

Dated at Suva this 31^st day of December, 2021.

.....................................

Justice Deepthi Amaratunga

High Court, Suva

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^[1] Order 88 rule 1 of HCR