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Kildi v Finance Corporation Ltd (trading as FINCORP) [2022] PGNC 319; N9815 (10 August 2022)

N9815

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS NO. 1195 OF 2018 (CC2)


BETWEEN
TOM KILDI
Plaintiff


AND
FINANCE CORPORATION LIMITED
trading as FINCORP
Defendant


Waigani: Shepherd, J
2019: 6th May
2022: 10th August


CONTRACTS – loan agreement between customer and licensed financial institution – Sections 4 and 5 of Fairness of Transactions Act 1993 – Court’s statutory power of review of loan transaction under the Act – sufficiency of pleadings – Sections 7 and 8 of Fairness of Transactions Act 1993 – mediation a pre-condition for review – whether the loan transaction was not genuinely mutual or was manifestly unfair to plaintiff – effect of post-loan decline in value of local property market – whether customer entitled to relief under Fairness of Transactions Act 1993.


Cases Cited:


Augerea v Bank of South Pacific Ltd (2007) SC869
Aviso v Bank of South Pacific Ltd (2016) N6518
Bank of South Pacific Ltd v Tingke (2014) SC1355
Central Bank of PNG v Tugiau (2009) SC1013
Nae Ltd v Curtain Bros PNG Ltd (2015) SC1620
Papua New Guinea Banking Corporation v Tole (2002) SC694


Counsel:


Solomon Wanis, for the Plaintiff
Goiye Gileng, for the Defendant


DECISION


10th August, 2022


  1. SHEPHERD J: The plaintiff, Tom Kildi, seeks a judicial declaration that his loan and mortgage agreements with the defendant are unfair and therefore unenforceable and that those agreements should be cancelled pursuant to the Fairness of Transactions Act 1993. By his statement of claim Mr Kildi has also sought consequential orders that the property the subject of his primary mortgage to the defendant should be sold for not less than K1.7million, of which Mr Kildi claims that K980,000 from the proceeds of sale should be paid to the defendant, with the balance to be paid to Mr Kildi.

BACKGROUND AND RELEVANT FACTS


  1. Mr Kildi holds a Bachelor’s degree in Business Administration from the Divine Word University. He was formerly employed by the PNG Ports Corporation as its Contract Manager-Operations, earning an annual remuneration package of K187,990.
  2. When employed with the PNG Ports Corporation, Mr Kildi negotiated a bank loan from the Bank of South Pacific Limited (BSP) which was secured by a mortgage to BSP over a residential State leasehold property which Mr Kildi owned at Jabiru Drive, Erima, National Capital District. The legal description of this property is Allotment 14 Section 115, Hohola, NCD being all the land described in State Residence Lease Volume 120 Folio 66 (the Property). Mr Kildi’s mortgage to BSP was registered against the State Lease on 13 April 2012.
  3. In early 2017 Mr Kildi, while still employed with PNG Ports Corporation, fell into arrears with his mortgage to BSP. He attempted to sell the Property but was unable to do so. As at May 2017 Mr Kildi owed BSP a balance of K707,648 under his mortgage.
  4. Mr Kildi, with the knowledge of BSP, approached the defendant (FinCorp) in March 2017 and successfully negotiated to obtain a loan from FinCorp to refinance his mortgage debt to BSP.
  5. It was agreed that FinCorp would advance by way of loan to Mr Kildi the principal sum of K980,000, primary security for the loan to be a registered mortgage over the Property in favour of FinCorp following the discharge of Mr Kildi’s mortgage to BSP.
  6. On 5 May 2017 Mr Kildi executed, among other documents, a loan agreement for the principal sum of K980,000, a mortgage agreement over the Property in favour of FinCorp as mortgagee as security for the loan and several acknowledgements in connection with the loan documentation (the loan transaction documents).
  7. The purpose of the loan from FinCorp was to enable Mr Kildi to repay his mortgage debt to BSP, to renovate the residential building on the Property at Erima to increase its rental potential and to purchase a 26-seater Toyota bus from Ela Motors which Mr Kildi intended would augment his ability to service his monthly loan repayments to FinCorp.
  8. The loan amount of K980,000 from FinCorp was drawn down on 5 May 2017. Mr Kildi authorised and directed FinCorp in writing to pay this amount as follows:
  9. Prior to FinCorp’s approval of the loan of K980,000, FinCorp had engaged the services of registered valuer Thomas Lokoloko of Tol Valuers Ltd to undertake a market valuation of the Property for mortgage security purposes.
  10. Mr Lokoloko’s valuation report assessed the market value of the Property as at 22 March 2017 to be K1,729,000. This amount comprised estimated land value of K209,000 and residential improvements on the Property said by Mr Lokoloko to be worth K1,520,000. According to Mr Lokoloko’s valuation report, the main building on the land at that time comprised a 4-bedroom residence on the upper floor and 2 x 2-bedroom units on the ground floor.
  11. On settlement of FinCorp’s loan advance of K980,000 to Mr Kildi on 5 May 2017, Mr Kildi repaid all monies he owed to BSP. Mr Kildi then applied K174,950 of the loan monies from FinCorp to purchase the brand new 26-seater PMV bus from Ela Motors. After payment of insurance premiums and FinCorp’s loan establishment fee, the remaining balance of K53,118.50 was paid into Mr Kildi’s account with Westpac Bank and earmarked for Mr Kildi’s renovation project for the Property.
  12. On 9 May 2017 FinCorp registered the Toyota bus as a collateral security with the Investment Promotion Authority’s Personal Property Security Register under the Personal Property Security Act 2011, which was then in a transitional stage following that Act’s repeal of the Instruments Act Chapter 256. As a precaution, on 18 May 2017 FinCorp also registered the bus as collateral security for its loan of K980,000 to Mr Kildi by way of a bill of sale with the National Court’s Chattel/Security Register under the repealed Instruments Act.
  13. Mr Kildi’s loan from FinCorp was scheduled to be repaid over a period of 15 years by 180 monthly payments of K14,234.13 each. The term of the loan commenced on 5 May 2017 and was due to finish on 5 May 2032.
  14. In or about September 2017, just 4 months after the loan was drawn down on 5 May 2017, Mr Kildi could not fully meet his monthly loan repayments of K14,234.13. Mr Kildi’s loan account with FinCorp fell into arrears. This was because Mr Kildi had no tenants to occupy the Property and therefore no rental income. Furthermore, the income which Mr Kildi did derive from operating the new PMV bus purchased from Ela Motors in May 2017 was insufficient to meet his monthly loan repayments to FinCorp. Mr Kildi’s income situation then dramatically worsened when his employment at PNG Ports Corporation was unexpectedly terminated early on 17 October 2017.
  15. Mr Kildi then tried to seek other avenues or means to generate money to pay the increasing arrears of his loan to FinCorp, but he was unsuccessful in that regard.
  16. Unbeknown to FinCorp at the time, Mr Kildi in breach of his contractual obligations to FinCorp sold the Toyota bus to a third party on 29 October 2017 for K120,000. Mr Kildi says that he used the proceeds of sale of the bus to pay K70,000 to FinCorp on account of his loan repayments. He used the remaining K50,000 to set up a small bakery at a site at 9-Mile, National Capital District. Mr Kildi asserts that the bakery subsequently failed because FinCorp refused to assist his request to restructure the loan by providing additional funds so that he could expand his fledgling bakery operations.
  17. In February 2018 Mr Kildi ceased paying anything at all to FinCorp in reduction of his loan account. Serious default occurred under Mr Kildi’s loan transaction documents.
  18. On 28 March 2018 Mr Kildi wrote to FinCorp and advised that he was without employment and that as two of his tenants had vacated the Property, he therefore had no rental income. He stated in his letter that he had set up a bakery two weeks previous and that he expected to make sufficient money in two to three months’ time from his bakery to be able to service his loan from FinCorp. He requested FinCorp to “forgo the arrears shown on my statement in order for me to have a clean record on my file”.
  19. FinCorp did not agree to write-off the arrears which had accumulated under Mr Kildi’s loan. By letter dated 18 May 2018 FinCorp made demand of Mr Kildi that he attend to immediate payment of arrears of K28,668.28 which had at that juncture accrued under the loan transaction documentation. The letter of demand gave forewarning that if payment of those arrears was not received within 14 days, FinCorp would take possession of the mortgaged assets and would take whatever legal action was required to fully satisfy the demand.
  20. By letter dated 8 June 2018 Fincorp notified Mr Kildi that it intended to repossess the Property and the Toyota bus as the arrears were still outstanding. FinCorp was unaware at the time that Mr Kildi had already sold the Toyota bus back in September 2017.
  21. On 5 July 2018 Mr Kildi had a meeting at FinCorp’s office with the company’s Chief Asset Management Officer Adam Hughes to discuss FinCorp’s letter of 8 June 2018. According to Mr Hughes, Mr Kildi admitted at that meeting that he had sold the Toyota bus. Mr Hughes says that he told Mr Kildi at that meeting that FinCorp would have to sell the Property to defray the arrears of loan owing by Mr Kildi and that this would be done after FinCorp had obtained an updated market appraisal of value of the Property from Ray White Real Estate. Mr Hughes says that Mr Kildi agreed at that meeting to this course of action.
  22. On 21 August 2018 Mr Hughes and his colleague Donna Uma, Asset Manager-Commercial at FinCorp, met with Mr Kildi on site at the Property and conducted an inspection preparatory to FinCorp’s marketing of the Property for sale.
  23. On 2 September 2018 Mr Kildi reluctantly gave vacant possession of the Property to FinCorp for marketing for sale by handing the keys to the Property to Mr Hughes and Ms Uma. Mr Kildi’s daughter had previously been occupying one of the unrented units on the ground floor of the house. Fincorp arranged for security guards from The Corps to provide security for the Property as from 2 September 2018.
  24. Mr Hughes then proceeded to obtain a market value appraisal in respect of the Property from Mr Jack Slaney, General Manager of Properties at Ray White Real Estate. By email dated 12 September 2018, Mr Slaney advised Mr Hughes that in his opinion Mr Kildi’s residential property at Erima would at that point in time sell on “as is” basis for somewhere between K630,000 to K680,000, at an initial list price of K700,000. This appraisal of market value of the Property as at September 2018 was more than K1million below the market value of the Property which had been assessed at K1,729,000 in registered valuer Mr Lokoloko’s valuation report as at 22 March 2017 which FinCorp had obtained 18 months before.
  25. On 27 September 2018 FinCorp by its Asset Manager-Commercial Ms Uma gave notice to Mr Kildi by email that the Property was now listed for sale with Ray White Real Estate at a sale price of K700,000.
  26. Mr Kildi was also informed by Ms Uma on 27 September 2018 that if the Property were to be sold at K700,000 and the proceeds of sale applied in reduction of Mr Kildi’s loan account with FinCorp, the balance of the loan then remaining would be K1,862,138.26, with penalty interest continuing to accrue until the whole of that balance and accruing penalty interest had been paid.
  27. Mr Kildi was horrified at being notified there had been the apparent drop in market value of the Property of more than K1million between March 2017 and September 2018. By a further series of emails on 27 September 2018 with Ms Uma, Mr Kildi protested the sale of the Property at a list price of only K700,000 as this meant that if the Property were to be sold at that amount, Mr Kildi would still owe more than K1.8million on his loan from Fincorp which he had absolutely no means of paying. Mr Kildi said that he would consult his lawyer, to which Ms Uma replied: “Do what you think is in your best interest”.

THIS PROCEEDING


  1. Mr Kildi commenced this proceeding WS No. 1195 of 2018 on legal advice on 4 October 2018. The principal relief sought by Mr Kildi in his statement of claim is for this Court to invoke its power of judicial review to declare void and cancel Mr Kildi’s loan arrangements with FinCorp under the Fairness of Transactions Act 1993.
  2. On 12 October 2017, after an inter partes hearing, an interim injunction was granted on the application of Mr Kildi whereby FinCorp as mortgagee was restrained, pending further order of the Court, from entering into any arrangement for the sale of the Property without the consent of Mr Kildi. Both FinCorp and Mr Kildi were directed by that interim injunction to obtain from certified practising valuer’s further valuations of the Property using comparative analysis with similar properties to enable the parties to come to agreement on the then true current market value of the Property.
  3. Term 5 of the interim injunction of 12 October 2017 provided as follows:

“5. A primary purpose of today’s adjournment is to enable the parties, pending the return of this matter before the Court on Friday 23 November 2018 at 2.00 pm, to have meaningful negotiations pursuant to s.7(2) of the Fairness of Transactions Act 1993 to endeavour to reach agreement as to:

(a) the actual sale price of the Property to an interested purchaser; or
(b) the reserve price to be fixed for any sale of the Property by public auction; or
(c) the estimated true market value of the Property below which the Property should not be sold or disposed of by the Defendant exercising its powers of sale as mortgagee.”
  1. Prior to the return of the interim injunction before the Court on 23 November 2018, an affidavit sworn by Mr Kildi that morning was filed by his lawyers. Annexed to Mr Kildi’s affidavit was a valuation report from the Valuer-General for Papua New Guinea, Gabriel Michael, ML. The Valuer-General certified in his valuation report that, in his opinion, the current fair market value of the Property as at 22 November 2018 was K1,630,000. However, the Valuer-General’s valuation report gave no analysis of recent market values and sale prices obtained for similar properties. The Valuer-General’s valuation report simply gave the legal description of the Property, details of the construction of 2 x 2-bedroom units and 1 x 4-bedroom residence on the Property and some general remarks that the Property is located “in an area dominated by medium to high cost residences”.
  2. When the matter returned before the Court at 2.00 pm on the afternoon of 23 November 2018, counsel for FinCorp informed the Court that three valuers who FinCorp had engaged to conduct market valuation appraisals of the Property had yet to furnish their valuation reports. The proceedings were therefore adjourned by the Court to 17 December 2018 at 9.30 am to enable FinCorp to file and serve an affidavit by 28 November 2018 annexing the three valuation reports it had requested. The interim order issued on 23 November 2018 also directed all valuers appointed by FinCorp to attend a meeting with Valuer-General Mr Michael no later than 7 December 2018 for the purpose of agreement being reached, if possible, on a minimum market value of the Property “below which the Property should not be sold to an interested but not anxious buyer”. Mr Kildi, a representative of FinCorp and the parties’ respective counsel were directed by the Court to attend that meeting with the valuers, with FinCorp’s counsel to record the meeting by way of minutes to be certified correct by Mr Kildi’s counsel, the minutes to be attached to an affidavit to be filed for FinCorp by 14 December 2018. The interim injunction issued on 12 October 2018 was ordered to continue in full force until final determination of this proceeding or until further order of the Court.
  3. The additional three valuation reports which FinCorp was ordered on 23 November 2018 to obtain are attached to the affidavit of FinCorp’s Mr Hughes, sworn and filed on 28 November 2018.
  4. The first of the valuation reports annexed to Mr Hughes’ affidavit is from registered urban valuer Arthur Ugup who certified that the Property had a market value as at 24 October 2018 of K917,000. Mr Ugup referred to sales of 3 similar properties in 2012 and 2013, but no recent sales figures were given.
  5. The second valuation report annexed to Mr Hughes’ affidavit was prepared by registered valuer Kaluwin Potuan of The Professional Valuers of PNG Ltd. Mr Potuan stated in his valuation report that he had assessed the fair market value of the Property for sale purposes as being K860,000 as at 22 October 2018. This valuation was reduced by Mr Potuan to K645,000 if the Property had to be disposed of by “forced sale”. Mr Potuan’s valuation report contains sales figures for 9 properties said to be similar to Mr Kildi’s Property, with a date range of those sales figures from February 2013 to March 2016.
  6. The third valuation report annexed to Mr Hughes’ affidavit came from certified practicing valuer William P. Ovasuru of Rubeem Valuations Ltd. Mr Ovasuru assessed the market value of the Property to be K900,000 as at 17 October 2018. As evidence of that value, Mr Ovasuru relied in his valuation report on sales figures having a date range from April 2016 to July 2018 for 5 properties situated nowhere near the suburb of Erima.
  7. The meeting which was directed by the interlocutory order of 23 November 2018 to be held by the valuers, the parties and the parties’ respective counsel was conducted at the ADR Centre of the National Court at Waigani on 4 December 2018 commencing at 9.30 am. The minutes of that hour-long meeting are annexure “A” to the affidavit of FinCorp’s Manager-Legal, Michael Wapi, which was sworn 13 December 2018 and filed 14 December 2018. The minutes indicate that the meeting was attended by Mr Kildi, his lawyer Solomon Wanis, Valuer-General Mr Michael, FinCorp’s representative Mr Hughes, FinCorp’s in-house lawyer Mr Wapi, and three of FinCorp’s appointed valuers, namely Jeremy Aisa from the Department of Lands & Physical Planning, Mr Ugup from L.J. Hooker Real Estate and Mr Ovasuru of Rubeem Valuations Ltd. Absent from the meeting, but with his apologies, was Mr Potuan of The Professional Valuers of PNG Ltd, who was the remaining valuer engaged by FinCorp to prepare a market appraisal for the Property.
  8. The minutes indicate that at the mediation meeting held on 4 December 2018, valuers Mr Ugup and Mr Ovasuru maintained that there had been “a sharp decline in the market forces and that the value of the properties had dramatically dropped by about 40% in the last 24 months.” Against this, Valuer-General Mr Michael contended that there had been a drop in value but not as dramatic as that advanced by Mr Ugup and Mr Ovasuru. The minutes show that after further discussion on the state of market forces, all four valuers present at the mediation meeting agreed and accepted that the Property should be sold at K1.2million.
  9. This case returned before the Court on 17 December 2018 and was adjourned to 19 December 2018. Based on the outcome of the meeting held on 4 December 2018 and the three valuation reports attached to Mr Hughes’ affidavit filed on 18 December 2018, FinCorp as mortgagee in possession was ordered on 19 December 2018 to cause a pro-active advertising campaign for the sale of the Property to be conducted during January 2019, the Property to be advertised by FinCorp with appropriate photography in the Post-Courier and National newspapers and by internet on-line media at a sale figure not less than K1,300,000 but in no event to be sold for less than K1,200,000 as per the consensus on market value reached by the parties’ respective valuers at their meeting on 4 December 2018. The Order of 19 December 2018 required that all offers received by FinCorp for the Property had to be conveyed to Mr Kildi’s counsel within 24 hours of each offer and that Mr Kildi was at liberty to introduce potential purchasers to the Property, with FinCorp to give access to the Property for inspection by potential purchasers by appointment at reasonable times. On this basis, that part of the interim injunction of 12 October 2018 which restrained FinCorp from selling the Property was dissolved. The proceeding was adjourned to 6 February 2019 for further interlocutory directions and orders.
  10. FinCorp complied with the Order of 19 December 2018 by advertising the Property for sale in the Post-Courier on 10 January 2019 and in the National newspaper on 15 January 2019. Copies of the relevant advertisements are attached to the affidavit of Mr Hughes sworn and filed 5 February 2019.
  11. On 6 February 2019 the case was adjourned to 25 February 2019.
  12. On 19 February 2019 a notice of change of lawyers was filed for FinCorp. Mr Goiye Gileng of Gileng & Co, Lawyers gave notice that he had been appointed to represent FinCorp in place of FinCorp’s Legal Division.
  13. On 19 February 2019 Gileng & Co. also filed a notice of motion seeking leave of the Court to file FinCorp’s defence and cross-claim out of time. The notice of motion was supported by an affidavit from FinCorp’s Manager-Legal, Mr Wapi, who deposed that he had not filed a defence to Mr Kildi’s writ of summons and statement of claim within time as he had been too preoccupied with dealing with issues arising from the interim injunction and the interpretation and application of the Personal Property Security Act 2011 to the collateral securities which FinCorp had taken over the Toyota bus paid for from the proceeds of the loan advance to Mr Kildi on 5 May 2017.
  14. When the case returned before the Court on 25 February 2019, FinCorp’s motion seeking leave for its defence and cross-claim to be filed out of time was not opposed by counsel for Mr Kildi. The Court granted FinCorp’s motion by extending the time for FinCorp to file and serve its defence and cross-claim to 1 March 2019. FinCorp was also directed by that order to file and serve by 19 March 2019 an affidavit from Mr Hughes giving a report to the Court as to the steps taken by FinCorp to pro-actively market the property for sale, provided that the Property could now be advertised for sale at a figure of not less than K1.1million, and that pending further order of the Court the minimum price at which the Property could now be sold was reduced to K900,000, this reduced figure having been agreed to by Mr Kildi in paragraph 8 of an affidavit sworn by him on 11 February 2019 and filed the same day. The case was adjourned to 20 March 2019 for further directions and interim orders.
  15. FinCorp duly complied with the interlocutory order of 25 February 2019. By its defence and cross-claim filed on 27 February 2019, FinCorp denied that Mr Kildi was coerced into signing the Loan Agreement, the Mortgage Agreement and related security documents. FinCorp pleaded, among others, that Mr Kildi’s statement of claim disclosed no cause of action known at law. In addition, FinCorp’s cross-claim alleged that Mr Kildi had sold the Toyota bus to a third party without FinCorp’s knowledge or approval in breach of the terms of the collateral security documents registered under the provisions of the Personal Property Security Act 2011. FinCorp accordingly sought judicial declarations by its cross-claim to the effect that Mr Kildi’s sale of the bus to the third party was void and that the bus was the property of FinCorp. In the alternative, FinCorp sought an order that Mr Kildi account to FinCorp for the proceeds of the sale of the bus, to be paid to FinCorp.
  16. When the case resumed before the Court on 20 March 2019, counsel for FinCorp, Mr Gileng, referred the Court to an affidavit of Mr Hughes which had been sworn and filed on 18 March 2019 and which contained Mr Hughes’ report to the Court regarding the further steps which FinCorp had taken earlier that month to advertise the Property for sale at not less than K900,000:

Mr Gileng informed the Court that no sale of the Property had eventuated at K900,000 as at 20 March 2019, despite FinCorp’s advertising campaign.


  1. On 20 March 2019 the Court ordered the parties to settle a statement of agreed and disputed facts and issues for trial (the Statement). FinCorp was directed to file and serve the Statement, duly certified correct by respective counsel, 5 April 2019. The case was adjourned to 12 April 2019 for further directions and interim orders
  2. The parties’ Statement, duly signed by Mr Wanis for Mr Kildi and by Mr Gileng for FinCorp, was filed by Gileng & Co on 5 April 2019.
  3. On 12 April 2019 the Court ordered that the case proceed to substantive trial on 6 May 2019, the trial to be by way of affidavit evidence subject to each party’s right of cross-examination. Additional pre-trial directions were made by the Court on that occasion.
  4. The trial of all substantive issues in this case was conducted by me on 6 May 2019. Mr Wanis appeared as counsel for Mr Kildi. Mr Gileng appeared as counsel for FinCorp. At the outset of the trial, Mr Gileng gave notice that FinCorp would not be pursuing its cross-claim against Mr Kildi. The issues which therefore remained for the Court to determine at trial were the issues raised by Mr Kildi’s statement of claim and by FinCorp’s defence. On completion of tender of the affidavit evidence for both parties, I heard submissions from each counsel and then reserved the Court’s decision for delivery on a date to be notified by the Registry.
  5. However, while delivery of the Court’s reserved decision was still pending, on 14 May 2020, in the midst of the Covid-19 pandemic crisis which Papua New Guinea was then experiencing, a notice of motion was filed by Gileng & Co whereby orders were sought that FinCorp be allowed to sell the Property to the IPI Group of Companies for the sum of K800,000. FinCorp’s notice of motion was accompanied by an affidavit from Mr Hughes sworn on 29 April 2020 in which Mr Hughes deposed to the effect that although FinCorp had, subsequent to the trial on 4 May 2019, continued to aggressively advertise the Property for sale at K900,00 through the mainstream media and on the internet, there had been no offers from any prospective buyers to purchase the Property at the advertised figure of K900,000. However, Mr Hughes deposed in his affidavit that FinCorp had recently received an offer from the IPI Group of Companies to purchase the Property for K800,000. This offer was conveyed by a letter of offer dated 9 April 2020 which had come from Ray White Real Estate, a copy of which letter is annexure “F” to Mr Hughes’ affidavit.
  6. Mr Hughes stated in paragraph 21 of his affidavit of 29 April 2020:

“21. FinCorp would like to accept the offer [of K800,000] as this offer represents the best option in light of the depressed property market prior to the corona virus pandemic. With the corona virus now, it will be difficult to obtain a similar or better offer soon or even in the next six (6) or twelve (12) months. Whilst we wait, the costs of security, maintenance, interest and default interest will continue to rise and increase.”


  1. FinCorp’s motion came on for hearing on 21 May 2020, during a period of partial lockdown by the Court due to the Covid-19 pandemic. In view of the urgency of the matters deposed to by Mr Hughes in his affidavit of 29 April 2020, on 22 May 2020 the Court granted FinCorp’s motion, the Court having been notified by counsel at that hearing that certain “without prejudice” settlement negotiations between FinCorp and Mr Kildi had proved unsuccessful. On 22 May 2020 the Court therefore varied the earlier interlocutory orders made on 19 December 2018 and 25 February 2019 such that FinCorp was now permitted by the Court to sell the Property to the IPI Group of Companies for K800,000. The Court further ordered on 22 May 2020 that the net proceeds of the sale to the IPI Group of Companies were on settlement of the sale to be immediately paid by FinCorp into the Registrar of the National Court’s Trust Account pending delivery of the Court’s reserved decision on the substantive trial heard on 6 May 2019.
  2. During the course of my preparation of this decision, my associate contacted Mr Gileng by email on 27 June 2022, copied to Mr Wanis, and enquired if the sale of the Property by FinCorp to the IPI Group of Companies for K800,000, as approved by the Court on 22 May 2020, had in fact eventuated. Mr Gileng replied to my associate by email on 28 June 2022, copied to Mr Wanis, and advised to the effect that FinCorp had not been able to proceed with the sale of the Property because the IPI Group of Companies had been unable to progress its proposed purchase of the Property due to the shut-down of the Porgera mine. The Property has thus continued to be unsold and remains with FinCorp as mortgagee in possession down to the present time pending the delivery of this decision.

THE CLAIM


  1. Mr Kildi in his statement of claim has sought to invoke the jurisdiction of the Court to review his loan transaction with FinCorp under the Fairness of Transactions Act 1993.
  2. The prayer for relief in Mr Kildi’s statement of claim seeks a judicial declaration by the Court that the subject loan transaction documents are unfair and unenforceable by operation of the Fairness of Transactions Act 1993. Mr Kildi seeks consequential orders that the loan should be cancelled and that the Property be sold on certain conditions. The full text of Mr Kildi’s prayer for relief is set out below:

“And the Plaintiff prays to this Honourable Court for the following relief(s):

(1) The Court declares that the entire loan and mortgage agreement is unfair and is thereby unenforceable pursuant to the purpose of Fairness of Transactions Act 1993.
(2) The loan be cancelled and that the Defendant, in consultation with the Plaintiff sells the mortgaged property at K1.7million or more as it deems appropriate and recovers its K980,000.00 only and the balance of K720,000.00 or more, if any, be paid to Mr Kildi.
(3) All costs of conveyancing (including but not limited to charges, surcharges, any bank fees, insurance and stamp duty) shall be met by a new buyer as a condition of sale and these costs must not in any way affect Mr Kildi’s entitlements.
(4) If the Plaintiff secures a buyer for the Property, the Defendant should give that buyer priority.
(5) That the Defendant is not to sell the property for less than K1.7million.
(6) All other rights of the Defendant as mortgagee be suspended except to sell the property and recover its advanced money only.
(7) The costs of this proceeding be paid by the Defendant.”

ISSUES


  1. Having perused the parties’ Statement and having heard the parties’ evidence and the submissions made by counsel for each party, I consider that the pleadings as presented in this case raise the following issues:

CONSIDERATION


Issue 1: Does Mr Kildi’s statement of claim plead sufficient cause to invoke the Court’s power of review of his loan transactions with FinCorp pursuant to the Fairness of Transactions Act 1993?

  1. In Papua New Guinea, the law views the relationship of banker and customer from the perspective of debtor and creditor. The relationship is regulated by the English common law principles of contract and tort which were adopted by Papua New Guinea at Independence on 16 September 1975 and also by the Fairness of Transactions Act 1993 which came into operation on 25 September 1998.
  2. Section 4 of the Fairness of Transactions Act introduces a statutory concept of fairness which prevails when the Act is invoked. The full text of Section 4 is set out hereunder:
    1. Fairness
      • (1) For the purposes of this Act, the concept of fairness relates to the principle of the just and equitable distribution to and among parties to a transaction of the rights, privileges, advantages, benefits and duties, obligations and disadvantages of the transaction in proportion and relative to a party’s standing in or contribution to the transaction, and according to business principles and practices appertaining to the particular transaction in question and the provisions of this Act shall be ready liberally and applied accordingly.
      • (2) In accordance with the general tenor and purposes of this Act as stated in Section 1 and Subsection (1) of this section, but without departing drastically from the rule of law of right to contract, in determining the fairness or otherwise of a transaction, the circumstances of the parties existing before, at and after the entering into of the transaction shall be taken into account.
  3. However, Section 4 of the Fairness of Transactions Act does not create a cause of action which did not exist in common law. In Aviso v Bank of South Pacific Ltd (2016) N6518 Cannings J said this at paragraphs 21, 23 and 24:

“Section 4 does not create a cause of action. In fact none of the provisions of the Fairness of Transactions Act create a discrete cause of action or actionable wrong that is capable of being enforced by the Court (BSP Ltd v Robert Tingke (2014) SC1355; Paul Pilimbo Pora v Dean Hull (2012) N4936).


The Act operates in two main ways. One way is by creating a procedure by which a party to a transaction can make application to the National Court to review the transaction. This is done under Section 5(1) of the Act ...

...

The other way the Act operates is by evincing the legislative policy, set out in its long title as:

Being an Act relating to the effect of certain transactions, to ensure that they operate fairly without causing undue harm to, or imposing too great a burden on, any person, and in such a way that no person suffers unduly because he is economically weaker than, or is otherwise disadvantaged in relation to, another person.

That legislative policy can be drawn upon by the courts in the interpretation of contracts and other legal documents. The Supreme Court held in Rage Augerea v Bank of South Pacific Ltd (2007) SC869 and Pija Grannies Ltd v Rural Development Bank Ltd (2011) SC 1327 that an implied term of many standard banking transactions is that the bank has a duty to be fair to its customer. That principal was put into effect in the first of Mr Aviso’s cases against the bank, in which I stated:

“Banks have a duty to be fair to their customers, especially to those who are in a relatively weak economic position. This is a statutory duty enforceable under the Fairness of Transactions Act 1993 (Negiso Investments Ltd v PNGBD (2003) N2439.” ”


  1. As observed by Cannings J in the Asivo case, a party can avail itself of Section 5(1) of the Fairness of Transactions Act when applying to the National Court to review a transaction. Section 5(1) of the Act outlines the circumstances when the National Court, the Supreme Court and certain tribunals have a statutory power of review of commercial transactions.

Section 5(1) provides:


5. Review of transactions, grounds etc

(1) A transaction to which this Act applies may be reviewed by a court on the application of any party, if the Court is satisfied that the transaction was not genuinely mutual or was manifestly unfair to a party.


  1. The jurisdiction given to the Court under Section 5(1) of the Fairness of Transactions Act to review a particular transaction can therefore be invoked by a plaintiff if the Court can be satisfied that the transaction:
  2. FinCorp has submitted that Mr Kildi’s pleadings do not adequately support a case for judicial review under the Fairness of Transactions Act and that the case should be dismissed at the outset on this threshold issue.
  3. The law on pleadings in our jurisdiction is well settled. As was said by the Supreme Court in Papua New Guinea Banking Corporation v Tole (2002) SC694 (Amet CJ, Sheehan J, Kandakasi J as he then was), pleadings and particulars have the object or functions of:
    1. furnishing a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it;
    2. defining the issues for decision in the litigation thereby enabling the relevance and admissibility of evidence to be determined at the trial; and
    3. giving a defendant an understanding of a plaintiff’s claim in aid of the defendant’s right to make a payment into court.
  4. In the present case, the question at this juncture is: Did Mr Kildi sufficiently plead a foundation for the Court to consider whether it should invoke its jurisdiction to review Mr Kildi’s loan transactions with Fin Corp?

  1. FinCorp argues that settled procedural law on pleadings requires that Mr Kildi should have set out in his statement of claim the facts and particulars why the subject loan transactions were not genuinely mutual or why they were manifestly unfair to Mr Kildi. FinCorp submits that the Court cannot receive evidence and grant relief under the Fairness of Transactions Act in this suit because Mr Kildi is said to have failed to properly plead succinctly the matters required under Section 5 of the Act to warrant the Court invoking its power of review.
  2. FinCorp contends that Mr Kildi was obliged under the procedural law of pleadings to fully particularise in his statement of claim why he alleges there was lack of opportunity to review the transaction documents, why he felt intimidated and why he alleges that there was unequal bargaining power.
  3. In support of its primary submission that Mr Kildi’s pleadings have failed to lay the foundation for the relief Mr Kildi is seeking under the Fairness of Transactions Act, FinCorp relies on observations made in Central Bank of PNG v Tugiau (2009) SC1013 (Kirriwom J, Kandakasi J as he then was, Batari J) where the Supreme Court said:

“ In this case, the plaintiff did not plead with any particularity his claim of having suffered stress, anxiety and loss of reputation in the Bank and amongst his peers. He only pleaded in the prayer for relief “damages for psychological effects, stress, embarrassment, shame, defamation of his good reputation and character”. That was no pleading at all. The law is clear that foundation must be laid in the pleadings to properly ground any prayer for relief. Without any such pleadings there can be no award.”


  1. In my view, this passage does not assist FinCorp. In the present case, Mr Kildi has, I consider, alleged sufficient matters in his statement of claim, prior to his prayer for relief, to put FinCorp on notice of the matters on which Mr Kildi intends to rely in support of his claim for the Court to invoke its review powers under the Fairness of Transactions Act. Reproduced hereunder are paras. 18 and 19 of Mr Kildi’s statement of claim:

“18. At the time of signing the loan agreement and the mortgage agreement the Plaintiff was never provided time enough for him to consult a financial industry expert or a lawyer of his choice to go through these documents for independent judgement on the interest rates and the conditions.

19. On the 5th May 2017 when the Plaintiff entered the Defendant’s office, he was given few minutes to read through and sign the contract documents.

19.1 There were two people in the room waiting for the Plaintiff to sign the land and mortgage agreements.

19.2 There are two separate contracts of the loan and the mortgage and also an offer letter that formed part of these agreements.

19.3 The Plaintiff could not go through all these technical documents within an hour or even a day.

19.4 The presence of these two people was intimidating and the Plaintiff could not read nor understand what was in the agreement and he signed as he did not want them to keep waiting.

19.5 The Plaintiff had no choice at all to bargain as he felt powerless.”
  1. Whilst I consider that Mr Kildi should have structured his statement of claim to specifically plead matters under the headings of “transaction not genuinely mutual” and/or “transaction manifestly unfair” for the purposes of s.5(1) of the Fairness of Transactions Act, it is clear from his statement of claim that he did at least plead matters which address the statutory criteria. Mr Kildi’s statement of claim filed on 4 October 2018 is lengthy. It comprises 45 paragraphs of pleading, inclusive of Mr Kildi’s prayer for relief.
  2. FinCorp’s’ defence, which was filed on 27 February 2019 with leave of the Court, contains 29 well drafted comprehensive paragraphs in answer to each of the matters pleaded in Mr Kildi’s statement of claim.
  3. In Nae Ltd v Curtain Bros PNG Ltd (2015) SC1620 (Injia CJ, Collier & Polume-Kiele JJ) said at para. 30:

“...the pleadings constitute the case of the plaintiff, and they must be such that the defendant is properly put on notice of the case against it. In circumstances where there is doubt, disparity or confusion in the pleadings, a proper course is amendment of those pleadings.”


  1. I note that in the present case, at no time prior to trial did FinCorp seek to prompt Mr Kildi to amend his pleadings, nor did FinCorp take any steps to apply for summary dismissal of the proceedings under O.12 r. 40 of the National Court Rules on the grounds that no reasonable cause of action had been disclosed, nor did FinCorp apply for procedural orders under O.8 r.36(1) of the National Court Rules for Mr Kildi to furnish further and better particulars of his pleadings.
  2. I accordingly find that FinCorp was sufficiently informed by Mr Kildi’s statement of claim of the nature of the case which the company had to meet, as distinguished from the mode of proof of Mr Kildi’s case. FinCorp was not confused by Mr Kildi’s pleadings and it was not taken by surprise at trial. FinCorp was enabled by Mr Kildi’s statement of claim to know what evidence the company needed to adduce to respond to Mr Kildi’s case.
  3. For these reasons I reject FinCorp’s submission that Mr Kildi’s statement of claim did not plead sufficient cause to invoke the Court’s power of review of Mr Kildi’s loan transactions with FinCorp under the Fairness of Transactions Act. Issue 1 is resolved in favour of Mr Kildi.
  4. I pass now to Issue 2, which is consideration by the Court as to whether the Court should, in the particular circumstances presented by this case, proceed to exercise in favour of Mr Kildi its power of review available under the Fairness of Transactions Act.

Issue 2:
Should the loan transactions which Mr Kildi entered into with FinCorp be judicially declared to be unfair and unenforceable under the Fairness of Transactions Act 1993?
Mediation – a precondition before the Court can exercise its power of review under the Act


  1. An essential pre-condition for the Court exercising its power of review under the Fairness of Transactions Act is compliance with sections 7 and 8, which require the parties to attempt mediation of their dispute. The Court can only proceed to review, in accordance with the Act, a contentious transaction after mediation has been attempted but has failed. Sections 7 and 8 of the Act relevantly provide:

7. Mediation

(1) In all proceedings under this Act, a Court shall in the first instance, attempt to arrive at an amicable settlement that conforms with the primary object of this Act and only after a mediated order has failed the Court may proceed to exercise its jurisdiction under Section 8.

(2) The Court may adjourn any proceedings for such time as it thinks fit if it is of the opinion that the parties are likely to reach a settlement.

...

(3) If a mediated settlement in accordance with Subsection (1) is arrived at, the Court shall include it in an order which shall be enforceable in that Court or another Court of competent jurisdiction.

8. Judicial Orders

(1) If in the opinion of the Court, an attempt at a mediated settlement of any proceedings in accordance with Section 7 has failed or, in the case of an adjournment under Section 7(2), there is no real likelihood of such settlement being arrived at with a reasonable time, the Court shall proceed to review the matter and make such order between the parties as it thinks conforms with Section 4.
(2) Where a party has entered into a transaction in good faith and in reliance on the terms and conditions of the transaction has substantially altered his position and the Court, having regard to all possible implications in respect of the parties and any other persons, is of the opinion that it would be unjust or inequitable to grant relief by way of an order under Subsection (1), it may refuse to grant, wholly or in part, any relief applied for under this Act.
  1. In the present case, the pre-conditions of Section 7 have been met. As noted earlier in this decision, on 12 October 2018 the Court granted an interim injunction which restrained FinCorp from selling the Property without the consent of Mr Kildi. The Court adjourned the case to 23 November 2018 and FinCorp and Mr Kildi were directed by the interim injunction to obtain further valuations of the Property using comparative analysis with similar properties. Term 5 of the interim injunction of 12 October 2018 stated that the purpose of the adjournment was so that the parties could “have meaningful negotiations pursuant to s.7(2) of the Fairness of Transactions Act” in their endeavours to arrive at an estimated true market value of the Property below which the Property should not be sold by FinCorp exercising its power of sale as mortgagee.
  2. The parties cooperated with the Court’s order of 12 October 2018. Following further adjournments on 23 November 2018 and 17 December 2018, the parties returned to Court on 19 December 2018 and informed the Court through their counsel that the parties’ respective valuers had agreed at a mediation meeting held on 4 December 2018 that the Property should not be sold below K1.2million. FinCorp was then ordered by the Court on 19 December 2018 to embark on a pro-active advertising campaign during January 2019 to test the market to see if the Property could be sold at an advertised price of K1.3 million, but in no event less than K1.2million.
  3. When the case returned before the Court on 25 February 2019, FinCorp’s counsel reported that the advertising campaign for the sale of the Property conducted by Ray White Real Estate on instructions from FinCorp during January 2019 and early February 2019 had not been successful. No potential purchasers had expressed any interest in the Property at its advertised sale price of K1.3 million. On 25 February 2019 FinCorp was therefore ordered by the Court to continue to market the Property for sale, but this time the advertised sale price was to be reduced to K1.1million, with further leeway to negotiate a sale price downwards to a minimum figure of K900,000, below which the Property could not be sold. Mr Kildi, by his affidavit sworn and filed on 11 February 2019, agreed that the Property could be sold by FinCorp at not less than K900,000 if a purchaser could be found.
  4. On resumption of the case before the Court on 20 March 2019, FinCorp’s counsel, after referring to Mr Hughes’ affidavit sworn on 18 March 2019, informed the Court that despite FinCorp’s continuing advertising campaign, the Property was still unsold. There had been no interest at all by potential buyers to purchase the Property at the further reduced sale price of K900,000. Both Mr Kildi and FinCorp therefore wanted the case to proceed to trial because although mediation had initially been successful, it had become obvious that the local property market conditions had seriously deteriorated and that the sale figure of K1.2 million agreed by the parties and their respective valuers at the mediation held on 4 December 2017 for the sale of the Property was no longer realistic.
  5. Further procedural orders were made by the Court on 20 March 2019 and the case came on for trial on all issues on 6 May 2019. On completion of the trial, I reserved the Court’s decision and adjourned the case to a date to be notified by the Registry.
  6. As previously noted, in April 2020, while this reserved decision was still pending, FinCorp received an offer from the IPI Group of Companies to purchase the Property for K800,000. FinCorp conveyed that offer to Mr Kildi’s counsel for Mr Kildi’s approval, together with certain “without prejudice” terms of settlement. Mr Kildi declined to accept the offered terms of settlement. FinCorp then applied to the Court on 21 May 2020, at a time when the Court was in partial lock-down due to the Covid-19 pandemic, for an order that FinCorp be authorised by the Court to sell the Property to the IPI Group of Companies for the offered sum of K800,000. On hearing from both parties, I granted FinCorp’s application on condition that the net proceeds of sale of the Property to the IPI Group of Companies were, on settlement of the sale, to be paid into the Registrar of the National Court’s Trust Account pending delivery of the Court’s reserved decision following the substantive trial heard on 6 May 2019.
  7. What then transpired was unfortunate. During the course of my preparation of this decision, on 27 June 2022 I directed my associate to contact counsel for FinCorp and enquire if FinCorp’s sale of the Property to the IPI Group of Companies at K800,000 had in fact eventuated. Counsel for FinCorp informed my associate by email on 28 June 2022, copied to Mr Kildi’s counsel, that the Property had not been sold as the IPI Group of Companies had not been able to proceed with its intended purchase of the Property due to the intervening shut-down of the Porgera Mine. The Property has thus continued to be unsold, even at K800,000. The Property has remained under the control of FinCorp as mortgagee in possession pending the delivery of this decision.
  8. In short, the evidence has established that the parties’ mediation of this matter, ordered under s.7 of the Fairness of Transactions Act, was initially successful in that the parties did manage to reach agreement on 4 December 2017 that the property should not be sold for less than K1.2million. However the parties’ mediated agreement in this regard was frustrated by adverse market conditions which continued through to the date of trial, by which time there had still been no potential buyer of the property, even at the agreed reduced price of K900,000. I consider that given this fact situation, it is appropriate that the Court should consider the mediation to have ultimately failed because there was no reasonable likelihood as at date of trial on 6 May 2020 that the Property could thereafter soon be sold at K1.2million, let alone at the reduced sale price of K900,000 agreed to by Mr Kildi. I therefore now exercise the Court’s mandate under Section 8(1) of the Fairness of Transactions Act to proceed to review the loan transactions complained of by Mr Kildi.

Review of Mr Kildi’s loan transactions with FinCorp


  1. Section 5(2) of the Act provides criteria which can apply when the Court, in its discretion, is determining whether to make findings under Section 5(1) that a transaction should be deemed not to be genuinely mutual or that the transaction should be deemed to be manifestly unfair. Section 5(2) provides:

5(2) Without limiting the generality of Subsection (1), unless the Court is satisfied that the transaction was entered into on an equal footing in all material respects, a transaction shall be deemed not to be genuinely mutual or manifestly unfair if a party to the transaction shows—

(a) that he did not understand the transaction and no genuine effort was made to explain its terms to him prior to entering into the transaction; or

(b) the other party was in such a predominant position (whether economically, socially, personally or otherwise), that an ordinary person with the background of the complainant was not likely to exercise a true freedom of choice in relation to the transaction; or

(c) that the other party had or should have had at the time of entering into the transaction or immediately thereafter information affecting the fairness of the transaction which was not disclosed to the complainant; or

(d) that he was mistaken in or had miscalculated the likely consequences of the mistake or miscalculation to such an extent adverse to his interests that he could not reasonably be held responsible for such consequences.


  1. I now apply the criteria in Section 5(2) of the Act to the circumstances of this case.
  2. As to Section 5(2)(a), I pose these questions: Has Mr Kildi satisfactorily explained why he did not understand the loan transaction documents? Is it true that that no genuine effort was made by FinCorp to explain the loan conditions to him or at least give him opportunity to obtain independent professional advice prior to him entering into the loan transaction documents?
  3. Mr Kildi has pleaded in para. 3 of his statement of claim that he holds a Bachelor’s degree in Business Administration from Divine Word University.
  4. Mr Kildi’s own evidence is that he was formerly employed by the PNG Ports Corporation for many years, and that as from 21 July 2015 until 17 October 2017 he was the Corporation’s Contract Manager-Operations in charge of overseeing the management and operational activities of the Corporation’s Motukea port facilities in Fairfax Harbour, Port Moresby. In that capacity Mr Kildi was earning a substantial remuneration package of K187,990 per annum, with additional benefits that included provision of medical insurance cover for himself and his dependents as well as an operational motor vehicle for work purposes. Mr Kildi’s contract of employment with the Corporation stipulated that it was for a term of 3 years which commenced on 21 July 2015. Mr Kildi’s contract of employment was therefore not due to expire in the ordinary course of events until July 2018, although it is relevant that clause 11.1 of the contract stated to the effect that either party could terminate Mr Kildi’s employment contract early by giving three months’ notice in writing to the other party.
  5. Mr Kildi’s employment with the PNG Ports Corporation came to an abrupt end when the Corporation suddenly terminated Mr Kildi’s services by letter from the Corporation’s Managing Director dated 17 October 2017. The letter from the Managing Director stated that the termination was with immediate effect and was made by the Corporation pursuant to clause 11.1 of Mr Kildi’s employment contract which, as mentioned above, allowed for either party to give to the other three months’ notice of early termination. Mr Kildi had not anticipated this early termination of his employment. The termination did, however, come with generous terms in that the Corporation’s Managing Director said in his letter of 17 October 2017 that Mr Kildi would receive, among other payments on termination of his employment, three months’ pay in lieu of notice, a loyalty bonus, a 10% ex gratia bonus and a “golden handshake” of K5,000.
  6. Much earlier in his career, Mr Kildi had purchased the Property the subject of this litigation in or about 2001. A fully legible copy of the title to the Property, State Lease Volume 120 Folio 66, is contained in the valuation report of registered valuer Mr Potuan, which is annexure “B” to the affidavit of Adam Hughes filed on 28 November 2018. A perusal of that copy of the title indicates that Mr Kildi became the registered proprietor of the Property on 14 November 2001 subject to mortgage registered no. S.26528 to the Papua New Guinea Banking Corporation. Entries against the title show that Mr Kildi then re-financed his mortgage to the Papua New Guinea Banking Corporation and entered into a fresh mortgage over the Property with Westpac Bank-PNG-Ltd, namely mortgage no. S.40100 registered against the title on 11 October 2005. Mr Kildi re-financed his mortgage debt several further times, as is evidenced by mortgage no. S.45640 in favour of Home Finance Company Ltd registered on 16 July 2007 and then mortgage no. S.60215 in favour of Bank of South Pacific Ltd registered on 17 April 2012. A discharge of each prior mortgage was in each case registered when replaced by a subsequent mortgage.
  7. This chronology of Mr Kildi’s refinancing of his mortgage debt over the Property clearly demonstrates that by the time Mr Kildi entered into his loan transactions with FinCorp in May 2017, he had already mortgaged the Property on four earlier occasions to four completely different mortgagees. Mr Kildi was no stranger to mortgage documentation, nor was he unfamiliar with the processes of loan refinancing by registered banks and financial institutions.
  8. Mr Kildi deposed early on in this case that when he was still employed with the PNG Ports Corporation, he purchased another residential property at Gerehu, National Capital District, which was financed by his mortgage to BSP over his subject Property at Erima in 2012. When he was still with PNG Ports Corporation, Mr Kildi fell into arrears with his mortgage to BSP and defaulted. At some point in 2016 or early 2017 Mr Kildi sold his property at Gerehu and applied the net proceeds of that sale in reduction of his mortgage debt to BSP, but that still left an amount of arrears of K707,648 owing by Mr Kildi to BSP in early 2017. This explains Mr Kildi’s approach to FinCorp in March 2017 whereby he sought to refinance his mortgage to BSP, which approach was made by Mr Kildi more than 7 months prior to termination of his employment with PNG Ports Corporation on 17 October 2017.
  9. Mr Kildi gives very little explanation in his affidavit evidence as to what transpired between his first approach to FinCorp in March 2017 in his efforts to refinance his mortgage debt to BSP and his subsequent signing of the loan transaction documents at FinCorp’s office on 5 May 2017. He merely says in his affidavit material that after he sold his Gerehu property and paid the proceeds in reduction of his mortgage with BSP, he needed to refinance his mortgage debt to BSP. It was at this point, March 2017 according to FinCorp’s’ evidence, that Mr Kildi commenced his loan refinance negotiations with FinCorp.
  10. The loan negotiation phase of Mr Kildi’s dealings with FinCorp is recounted in detail in the affidavit material of Mr Hughes, FinCorp’s Chief Asset Manager. Mr Hughes deposes in paras 5, 6, 7 and 8 of his affidavit sworn on 18 February 2019 as follows:

“5. In or about 17 March 2017, Mr Kildi approached FinCorp for a loan to refinance his loan with Bank of South Pacific Limited (“BSP”) and an additional loan to purchase a bus to conduct PMV business. Mr Kildi was in desperate need of a loan to repay his BSP Loan as he was in default.

  1. During the course of the negotiations, it was agreed FinCorp will provide a loan in the sum of K980,000.00 to enable him (1) refinance his loan with BSP (2) purchase a PMV bus, and (3) pay for incidentals such as insurance for the property and the bus and loan establishment fees.
  2. On 5 May 2017, FinCorp and Mr Kildi executed a Loan Agreement which contained amongst others, the following terms:

(a) Amount of Advance: K980,000.0

(b) Advance date: 5/05/2017

(c) Pay BSP K707,648 directly to refinance plaintiff’s current loan;

(d) Pay K174,950 to Ela Motors for a brand new 26 Seater Coaster Bus;

(e) K17,752.50 being insurance cover for the bus to Sunrise Assurance Brokers Limited:

(f) K8,711.00 to Sunrise Assurance Brokers Limited being insurance to cover for the [subject] property;

(g) K53,118.50 to Mr Kildi’s personal account with Westpac Bank-PNG-Limited to assist him finance [for] renovation [of the Property] and to purchase brown and white goods for the [P]roperty, subject of mortgage; and

(h) K17,820.00 for loan establishment fees.

8. The terms and conditions of the loan were discussed and reduced into the Loan Agreement dated 5 May 2018 referred to in “Annexure A” to my (Adam Hughes) affidavit sworn on 17 December 2018 and filed 18 December 2018 which I seek leave to refer to and rely upon. In fact, the discussion about the loan took place over a period of more than one (1) month since Mr Kildi came to see us at FinCorp for loan in March 2017.”


  1. It is noteworthy that none of Mr Hughes contentions in his affidavit sworn on 18 February 2019 regarding the negotiation phase of Mr Kildi’s dealings with FinCorp were disputed by Mr Kildi at trial. Those negotiations commenced in mid-March 2017 and were concluded when Mr Kildi attended at FinCorp’s office on 5 May 2017 to sign the loan transaction documents, by which time Mr Kildi had already agreed in advance with FinCorp that the drawdown of the whole of the loan finance of K980,000 was to be in the amounts set out in para. 7 of Mr Hughes’ affidavit. It would have come as no surprise to Mr Kildi when he attended at FinCorp’s office on 5 May 2017 that an amount of K17,820 for loan establishment fees, an amount he now disputes as being unreasonable, was to be one of the amounts payable by Mr Kildi to FinCorp on settlement of the payout of the mortgage advance. Mr Kildi had in fact already agreed to payment of that amount before he walked in the door to FinCorp’s office on 5 May 2017.
  2. As to what occurred on 5 May 2017 when Mr Kildi attended at FinCorp’s office to sign the loan transaction documents, Mr Kildi asserts in his pleadings and in his affidavit material that:
  3. Against this, FinCorp’s Mr Hughes deposes in para. 9 of his affidavit sworn on 18 February 2019:

“9. It is not correct to say Mr Kildi did not understand the contents of the Loan Agreement before he signed off on it. He is a highly educated man and has read the terms and conditions of the Loan Agreement before he signed it. If he did not, he never asked to defer signing so that he can get legal advice or have time to read it before signing. It was reasonably expected or assumed that he understood as he was a man with university qualification in accounting and business management with wealth of practical experience in big corporate organisations such as PNG Ports Corporation Limited. Annexed hereto and marked “AHI” and “AH2” are true copies of Acknowledgements he signed confirming that he had read the Loan Agreement, Mortgage and the security documents relating to the property and the bus under the Personal Property Security Act 2011 (the “PPSA”) before [he] signed off on them.”


  1. Annexure “AHI” to Mr Hughes’ affidavit is a document bearing the undisputed signature of Mr Kildi. The document is headed “Acknowledgement”. It is dated 5 May 2017. Relevant extracts from the Acknowledgement are set out below:

“ACKNOWLEDGEMENT


I am the customer or director/s of the company referred to in the attached Term Loan document between FinCorp and TOM KILDI dated May 5, 2017.

I hereby acknowledge that a representative of FinCorp has explained to me the terms of the transaction. I acknowledge and understand the following:

(a) that I am entering into a term loan transaction in respect of the goods referred to in the said document as the borrower.
(b) that I must make monthly payments to FinCorp in accordance with the attached document, and that if I fail or refuse to make a payment on time (or otherwise breach the agreement) FinCorp may exercise its rights including (but not limited to) taking possession of the property and/or the goods.
(c) That default interest is payable in respect of overdue payment that may become or remain liable to pay money even after FinCorp has retaken possession of the [property] and/or goods.
(d) I believe that I have the financial ability to meet my obligation under the attached agreement now, and for the duration of the agreement.
(e) I believe that all the circumstances in this transaction are fair and that I am entering into the transaction by choice and of my own free will.
(f) I confirm that I am aware that I could take the attached document (and this document) to a lawyer (or other such person of my choosing) for advise before signing either of them.

[emphasis added]


  1. I observe that each of the subparagraphs (a) to (g) in the above Acknowledgement has, in the left-hand side margin, a text box in which the handwritten initials “TK” are clearly visible, indicating that Mr Kildi placed his initials in each of those 7 boxes as further acknowledgement that his attention had been specifically directed towards the content in each of those subparagraphs (a) to (g) before he signed the Acknowledgement.
  2. Annexure “AH2” to Mr Hughes’ affidavit is an Acknowledgement signed by Mr Kildi, also dated 5 May 2017, in respect of Mr Kildi’s Bill of Sale over the Toyota bus in favour of FinCorp. The remainder of that document is, however, in exactly the same terms as Mr Kildi’s Acknowledgement in respect of the primary term loan documentation which is Annexure “AH1” to Mr Hughes’ affidavit, including text boxes initialled by Mr Kildi alongside identical subparagraphs (a) to (g).
  3. This means that Mr Kildi signed an Acknowledgment not only once, but twice, stating that, in his own belief, all of the circumstances of his loan transactions with FinCorp were in his opinion fair, that he was entering into the transactions by choice and of his own free will and that he had been given the opportunity by FinCorp to take all of the loan transaction documents and the two Acknowledgements before signing them to a lawyer or other person of his choosing for advice.
  4. I accordingly accept Mr Hughes’ version of what occurred when Mr Kildi attended at FinCorp’s’ office on 5 May 2017. Even if Mr Kildi had not sighted the actual loan transaction documents prior to when he fronted up at FinCorp’s’ office on 5 May 2017 to sign them, Mr Kildi should not have signed the two Acknowledgements, his mortgage over the Property and the other loan agreements comprising the loan transaction documents if he was at all concerned that he did not understand their content, or if they had not been fully explained to him, or the consequences which would flow in the event of his default or if he felt he was being intimidated by the presence of two of FinCorp’s’ employees into signing any of those documents. Mr Kildi is not a naïve and uneducated village person. He is a university graduate with a degree in Business Administration. His very employment position when he was with PNG Ports Corporation was that of contracts manager for Motukea Port, which is one of the larger ports in Papua New Guinea dealing with international and domestic shipping on a daily basis.
  5. I find that the reality of the situation is that when Mr Kildi attended at the office of FinCorp on 5 May 2017, he was so eager to acquire the Toyota bus from Ela Motors that day and to discharge his indebtedness to BSP that he simply accepted all of the loan transaction documents without query because the essential terms and conditions had previously been agreed by him in his negotiations with FinCorp . Mr Kildi knew, or ought reasonably to have known, that if he disagreed with or was uncomfortable with the signing of the two very clearly expressed Acknowledgements, then he should never signed them on 5 May 2017. By signing the Acknowledgements, Mr Kildi did so at his own peril. He had every opportunity by reason of the two Acknowledgements he was asked to sign to simply ask to defer settlement of the advance of the loan monies totalling K980,000 that day for several more days or perhaps a week so that he could take the two Acknowledgements and all of the loan transaction documentation to a commercial lawyer or accountant who could independently explain to him any technical aspects of which Mr Kildi, despite being a seasoned contracts administrator at PNG Ports Corporation himself, may have been unsure.
  6. I find that Mr Kildi did not direct his mind to querying anything that could have been of concern to him in the loan transaction documentation that was presented to him at FinCorp’s’ office on 5 May 2017. If Mr Kildi had truly harboured any such concerns, alarm bells would have started to ring in his mind when he commenced reading the loan transaction documentation and the Acknowledgements. Instead, Mr Kildi by his own admission was determined that settlement of the loan advance from FinCorp should proceed on 5 May 2017. He wanted nothing to delay that settlement, least of all to defer settlement of the drawdown of the loan to a future date.
  7. Mr Kildi’s counsel, when seeking to justify Mr Kildi’s actions in not insisting on a deferral of settlement of the mortgage advance on 5 May 2017 so that Mr Kildi could obtain independent professional advice, has referred the Court to Augerea v Bank of South Pacific Ltd (2007) SC869 (Salika J and Kandakasi J as they then were, Jalina J) where the Supreme Court upheld an appeal against summary dismissal by the National Court of the Augereas’ case against the Bank and where issues relating to the Fairness of Transactions Act had arisen. However, the facts in that case can readily be distinguished from the circumstances of Mr Kildi in the present case. In Augerea, the plaintiffs were customers of the Bank who had no previous experience of mortgage transactions. When upholding the Augereas’ appeal from summary dismissal of their claim against the Bank, the Supreme Court observed that no evidence had been adduced by the Bank at trial that the Augereas were told by the Bank that they should have independent legal advice on the terms of the mortgage loan before acceptance of those terms.
  8. In the present case, Mr Kildi had already decided when he signed the two Acknowledgements on 5 May 2017 that he did not want to defer settlement to obtain independent legal or accounting advice on technicalities in connection with the structuring of the loan, or advice on the consequences of default and default interest rates or advice on FinCorp’s entitlement or otherwise to charge an establishment fee of K17,820 - which establishment fee Mr Kildi had in any event already agreed in his prior negotiations with FinCorp was to be paid by him on settlement of the mortgage advance.
  9. The fact that Mr Kildi, as a highly educated contracts manager in his own right, went ahead and signed the Acknowledgements on 5 May 2017 with full knowledge of their contents, and ticked alongside every box, runs counter to his post-event allegations that he was given no real opportunity to understand the loan transaction documentation and that no genuine effort was made by FinCorp to explain its terms to him before he signed that documentation. Section 5(2)(a) of the Act does not apply to the facts of this case.
  10. As to s.5(2)(b), I pose the question: Was FinCorp in such a predominant economic position that an ordinary person with the background of Mr Kildi was not likely to exercise a true freedom of choice in relation to the loan transaction documents?

  1. This was not the first time Mr Kildi had entered into mortgage and loan financing arrangements with a registered bank or financial institution. Unlike the plaintiffs in the Augerea case, Mr Kildi was not a newcomer to obtaining loan finance over the Property. Mr Kildi had done so on not less than four prior occasions; initially with the PNGBC when he purchased the Property in 2001, then with Westpac in 2005, then with Home Finance Company Ltd in 2007 and then with BSP in 2012.
  2. I find it disingenuous for Mr Kildi to now assert that the circumstances surrounding his execution of the loan transaction documents at FinCorp’s office on 5 May 2017 were such that the transaction was at that point not genuinely mutual within the meaning of s.5(1) of the Fairness of Transactions Act due to an alleged imbalance of power between himself and FinCorp and because he felt intimidated by the presence of two employees of the Bank who were waiting for him to sign.
  3. Mr Kildi had been fully involved in the negotiations of the mortgage advance from FinCorp. He already knew the essential terms and conditions in advance of his attendance at FinCorp’s office on 5 May 2017. He was given opportunity by FinCorp on 5 May 2017 to take the loan transaction documents and Acknowledgements away and to obtain independent legal and accounting advice before committing himself to the terms and conditions of the mortgage advance. He chose not to do so. He thereby waived his right to take that precautionary step after having categorically stated on the two Acknowledgements that a representative of FinCorp had explained to him the terms of the loan transaction documents. By those Acknowledgements, Mr Kildi expressly stated that:
  4. These Acknowledgements bearing Mr Kildi’s multiple initials and his signature are indicative that Mr Kildi, being an eminently qualified business-oriented person, did not feel when he signed them that he was powerless or that he had no option but to agree to a perceived power imbalance on the part of a financial institution such as FinCorp. The signed Acknowledgements dispel any submission that Mr Kildi felt coerced or intimidated into signing loan transaction documentation which was not genuinely mutual or was manifestly unfair to him.
  5. Even if Mr Kildi had misled FinCorp when he signed the two Acknowledgements by falsely acknowledging that that he had been offered the opportunity to obtain independent legal advice or professional advice regarding the loan transaction documents, it is well settled law that in the absence of vitiating factors, a person who accepts the content of a written document by signing that document is bound by all of the terms of that document, whether or not he has read them: Bank of South Pacific Ltd v Tingke (2014) SC1355 (Salika DCJ as he then was, Manuhu, Collier JJ) at para. 13.
  6. I accordingly find that the criteria provided in Section 5(2)(b) of the Act regarding power imbalance does not apply to the circumstances of this case.
  7. As to Section 5(2)(c) of the Act, I pose the question: Did FinCorp have, or should it have had, any information affecting the fairness of the loan transactions documents which was not disclosed to Mr Kildi at the time or shortly after the parties entered into the loan transaction documents on 5 May 2017?
  8. There was no evidence adduced at trial by Mr Kildi or by FinCorp which suggested that FinCorp had any information of the nature contemplated by Section 5(2)(c). It is obvious that when preparing the loan transaction documentation, FinCorp relied on title and property development information furnished to it by Mr Kildi during the negotiation stage of the loan approval process. Fincorp also relied on the valuation report in respect of the Property which FinCorp had commissioned from registered valuer Mr Lokoloko of Tol Valuers Ltd who had valued the Property at K1,729,000 as at 22 March 2017 comprising a land value of K209,000 with improvements assessed at K1,520,000.
  9. The evidence shows that the information which, post-execution of the loan transaction documents, did come to FinCorp’s attention which was adverse to Mr Kildi’s interests came much later. This was the updated market value appraisal of the Property which FinCorp obtained from Mr Slaney of Ray White Real Estate on 12 September 2018. This was 16 months after the loan had been drawn down on 5 May 2017 and was given at a time when Mr Kildi’s loan account with FinCorp was in serious default. Mr Slaney gave an appraisal of the Property having a market value as at September 2018 of somewhere in the range of K630,000 to K680,000. This was why Mr Slaney recommended to FinCorp that the Property should be listed for sale at that juncture at K700,000.
  10. There can be no doubt that Mr Slaney’s market value appraisal of the Property as at September 2018 was information which affected the viability of the loan transaction documents, at least in the sense that it materially diminished by more than K1million what Mr Kildi could reasonably have expected the Property to have sold for in the event of his default in 2018. However Mr Slaney’s market value appraisal correspondingly reduced FinCorp’s security interest in the Property by exactly the same amount. Had Mr Kildi and FinCorp each known back in May 2017 when both parties entered into the loan transaction documents that the property market for Port Moresby, and in particular property values for the suburb of Erima, could have incurred such a rapid downturn, it is highly unlikely that FinCorp would ever have agreed to Mr Kildi’s refinancing proposals back in March 2017 when Mr Kildi was seeking a loan of K980,000. No bank or financial institution will prudently lend more than the distress value of assets offered by a potential borrower as security for a loan.
  11. However, Mr Slaney’s market value appraisal in September 2018 was not information affecting the fairness of the loan transaction documentation which Mr Kildi or FinCorp could conceivably ever have had access to whether before or immediately after that documentation was signed on 5 May 2017. That information did not surface until 16 months later the loan monies were drawn down. Section 5(2)(c) of the Act therefore has no application to the circumstances of this case.
  12. As to Section 5(2)(d) of the Act, I pose the question: Was Mr Kildi mistaken or had he miscalculated the likely consequences of his mistake or miscalculation to such an extent adverse to his interests that he could not reasonably be held responsible for those consequences?
  13. The answer to this question is provided by the same or similar factors as apply to the preceding response to Section 5(2)(c). When Mr Kildi was negotiating with FinCorp for his loan of K980,000 in March 2017 and April 2017, both he and Fincorp were satisfied that the Property at that time had a probable market value of at least K1.7million based on the valuation report dated 22 March 2017 which Fincorp had obtained from registered valuer Mr Lokoloko of Tol Valuers Ltd. Neither Mr Kildi or FinCorp had any foreknowledge or cause at that point in time to anticipate any drastic drop in residential property market values in Port Moresby, and especially in the suburb of Erima.
  14. Therefore Mr Kildi was not mistaken nor did he make a miscalculation when his loan negotiations with Fincorp in March 2017 and April 2017 were based on the Property having a market value of at least K1.7million. Nor was any mistake or miscalculation made by Fincorp with regard to the market value of the Property when Mr Kildi and Fincorp executed the loan transaction documents on 5 May 2017. Both Mr Kildi and FinCorp considered that the loan of K980,000 was well secured by the Property, which was thought at that time to have a market value of at least K1.7million, with additional security being provided by the security interest given by Mr Kildi to FinCorp over the brand new Toyota bus being purchased from Ela Motors at a cost of K174,950.
  15. In retrospect it is clear that the subsequent consequences of the mutual reliance which Mr Kildi and Fincorp had placed on Mr Lokoloko’s valuation report when the loan transaction documents came into force in May 2017 were not, by the latter half of 2018, engendered by any mistake or miscalculation on the part of Mr Kildi or of Fincorp when the loan advance was made. Those consequences, which were very much adverse to the interests of both Mr Kildi and FinCorp, did not become apparent until Mr Kildi’s personal financial circumstances had become so reduced in the latter half of 2017 and then almost non-existent during 2018 that Mr Kildi was no longer able to service his monthly loan payments and his loan account had fell into serious default. By September 2018 property market forces in Port Moresby had undergone such an unforeseen reversal that Mr Kildi’s major asset, the Property at Erima, had, according to the market appraisal of Mr Slaney of Ray White Real Estate, incurred at least K1million in value wiped off when compared with its market value of K1,729,000 only 18 months before in March 2017.
  16. There is no evidence before the Court to suggest that either Mr Kildi or Fincorp had any reasonable cause in May 2017 to suspect that the property market in Port Moresby was about to undergo the major reversal which it did in the months ahead. Therefore the factors highlighted in Section 5(2)(d) of the Act have no application to the fact situation presented in this case.

CONCLUSION


  1. I unreservedly accept that when Mr Kildi commenced this suit in October 2018, he had every reason to be aggrieved in his own mind that Fincorp was about to market the Property for sale at K700,000. Mr Kildi had been informed by FinCorp’s Asset Manager-Commercial on 27 September 2018 that even if the Property were to be sold for that vastly reduced value and the proceeds of sale applied against his arrears, the balance of his loan which he owed to FinCorp would still be more than K1.8 million, with penalty interest continuing to accrue until the loan was repaid in full. Mr Kildi was staring in the face of bankruptcy. Mr Kildi was appalled that FinCorp was asserting that the estimated market value of the Property had fallen by more than K1million in the space of only 18 months from over K1.7million in March 2017 to a mere K700,000 by September 2018.
  2. When this proceeding was instituted in October 2018, the Court was equally concerned for Mr Kildi. On the first return of the matter before the Court on 12 October 2018, there was no evidence before the Court at that juncture that any slump had occurred in the market value of Mr Kildi’s main asset, the Property at Erima. This is why the Court issued the interim injunction of 12 October 2018 which required Fincorp and Mr Kildi to mediate their dispute under s.7(2) of the Act after each had obtained independent valuations of the market value of the Property.
  3. On 23 November 2018 the parties’ valuers were ordered to meet with the parties and agree on a minimum market value of the Property below which the Property should not be sold “to an interested but not anxious buyer”.
  4. On 19 December 2018 the Court issued orders whereby Fincorp was ordered to embark on a pro-active advertising campaign to sell the Property at a list price of K1.3million, on condition that if any sale were to eventuate, the sale could not be less than K1.2million, this being the market value of the Property which had been agreed at a meeting of the parties’ respective valuers held by the valuers with the parties at the ADR Centre of the National Court on 4 December 2018.
  5. On 25 January 2019 FinCorp was ordered by the Court to file an affidavit by 19 March 2019 reporting on the status of the sale of the Property and the steps Fincorp had taken by that latter date to market the Property for sale, but this time the Court’s order allowed Fincorp to list the Property for sale at K1.1million, with any resulting sale to be for not less than K900,000, this lower amount of K900,000 having already been agreed to by Mr Kildi in his affidavit filed on 11 February 2019.
  6. Despite FinCorp’s advertising campaign referred to in the affidavit of FinCorp’s Mr Hughes filed 18 March 2019, which involved the advertising of the Property in the Post-Courier and National newspapers, on internet websites for Ray White Real Estate and another real estate company called Haus Ples and on Facebook, there had at that time still been no interest in the Property from prospective buyers at the further reduced list price of K900,000.
  7. When the case returned before the Court on 20 March 2019, the parties wanted the case to proceed to trial. Directions to progress the case to trial were made. The trial was conducted on 6 May 2019 and decision reserved. At that point Fincorp continued to be injuncted from not selling the Property below K900,000.
  8. While this decision was still pending, on 21 May 2020 Fincorp applied for, and was granted, an order that it be permitted by the Court to sell the Property to the IPI Group of Companies for K800,000. As it has transpired, that sale did not eventuate as the IPI Group of Companies was caught up in the aftermath of the 2020 shutdown of the Porgera mine. The Property continues to remain unsold by Fincorp as mortgagee in possession.
  9. Given the compelling nature of the evidence which has emerged in this case which has given credence to FinCorp’s reappraisal of the market value of the Property as at September 2018 as being in the vicinity of K700,000, and given that Mr Kildi himself agreed in his affidavit sworn on 11 February 2019 that the Property could be sold by FinCorp at K900,000 and not at K1.7million, I am satisfied that FinCorp did not act unfairly when it notified Mr Kildi on 27 September 2018 that it intended to market the Property for sale at K700,000 in the exercise of its contractual powers under the loan transaction documents. The Property is still unsold at that amount, there having been little or no market interest in the Property, possibly because of factors relating to the suburb of Erima itself.
  10. In conclusion, I refer to the statutory purpose of the Fairness of Transactions Act. Section 1 of the Act provides:
    1. Purpose of Act

The purposes of this Act are to—

(a) Ensure the overall fairness of any transactions which—
(i) is entered into between parties in circumstances where one party is for reasons of economic or other advantage predominant and the other side is not able to exercise a free choice;
(ii) for one reason or another, without attaching any evil design or bad faith, appears to be manifestly unfair or not to be genuinely mutual; and

138. On an overall assessment of the evidence in this case I am not satisfied that Mr Kildi has established, on the civil standard of proof on balance of probabilities, that the loan transaction documents executed by Mr Kildi and FinCorp on 5 May 2017 were manifestly unfair to Mr Kildi or that they were not genuinely mutual. I am similarly not satisfied that the post-execution circumstances which have prevailed in respect of the unforseen depreciation in the value of the Property were caused by any fault on the part of FinCorp. Mr Kildi and FinCorp have each sustained very substantial losses as a result of the loan transaction documents, but those losses have been incurred because of vagaries in the property market conditions in Port Moresby, not because of any power imbalance between the parties or because of any evil design or bad faith on the part of FinCorp.


  1. Given the above, I am not satisfied that Mr Kildi has proved to the requisite civil standard that FinCorp was unfair in its business dealings with him such that the Court should exercise its power of review in his favour under the Fairness of Transactions Act. I am also not satisfied after perusal of the parties’ loan transaction documents and a consideration of the pleadings, evidence and submissions that Mr Kildi is entitled to any of the relief claimed by him in his statement of claim. There is therefore no utility in addressing Issue 3. This proceeding should be dismissed.
  2. I have also considered the matter of costs. As I have found that Mr Kildi’s reasons for commencing this suit were understandable at the time, but that the diminution in the value of the Property has been vindicated by the evidence adduced in this case, I am concerned that Mr Kildi should not be further financially burdened by the making of an award of party-party costs against him. The relative economic positions of the parties do not warrant such a costs order being made. The parties are to each bear their own costs of this proceeding.

Order


  1. The formal order of the Court is as follows:

Judgment accordingly.
_______________________________________________________________
Solomon Wanis Lawyers: Lawyers for the Plaintiff
Gileng & Co. Lawyers: Lawyers for the Defendant

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