Development Bank of Solomon Islands v Poloso [2001] SBHC 68; HC-CC 071 of 2001 (21 September 2001)

IN THE HIGHT OF SOLOMON ISLANDS

ass="Mss="MsoNormal" align="center" style="text-align: center; margin-top: 1; margin-bottom: 1"> Civil Case No of 2001

class="MsoNoMsoNormal" align="center" style="text-align: center; margin-top: 1; margin-bottom: 1"> DEMENT BANK OF SOLOMON ISLANDS

v

ass="Mss="MsoNormal" align="center" style="text-align: center; margin-top: 1; margin-bottom: 1"> MR SAMSON POLOSO AND

MRS MARY POLOSO

(T/A - TESTIMONY MOTEL LIMITED)

High of Solomon Islands

Before: Frank O. Kabui, J.

Hearing 18th September 2001

Judgment: 21st September 2001

Mr G.itoa for the Plaintiff

Mr Nori for the Defendant

JUDGMENT

By Summons filed on d on 26^th June 2001, the Plaintiff seeks the following order -

1. The Plaintiff' have leave to enter judgment hereiinst the Defendants in the the sum of SBD 488,311.34 together with interest thereon at the rate of sixteen percent (14%) per annum from 31st March 2001 up to and including the date of payment and costs;

3. No tender is to be accepted without thet the further leave of a Judge in Chambers;

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4. The Defendants immediately deliver to the Plaintiff' vacant possession of the property in Parcel Number 191 - 015 - 52;

p class="Mss="MsoNormal" style="margin-left: 36.0pt; margin-top: 1; margin-bottom: 1"> 5. The Defendants, their servants, agents, invitees, licensees or others enterentering the land in Parcel Number 191 - 015 - 52 under the Defendants' authority forthwith vacate the same and forthwith remove all their chattels from the same;

6. The Defendants, their servants, agents, invitees, lees or others entering the the land in Parcel Number 191 - 015 - 52 under the Defendants' authority be permanently restrained from entering the said land;

7. The Honiara City Police mmander and all Police Officers under his direction forthwirthwith upon receipt of any order made pursuant to orders 4, 5 and 6 hereof shall attend and enforce as is reasonably necessary for such purpose upon request by the Plaintiff or its solicitor;

8. The Defendants pay the Plffs costs of and in connection with this action including ting this application;

9. Such further orders or other order as this Honourable Court shall deem meet.

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The Facts

The Plaintiff is the Development Bank of Solomon Islands (the DBSI). The Defen between 7th April 19il 1989 and 29^th, March 1994 obtained six loans from the DBSI in different amounts. The first loan was $110,000.00. The term of that loan was 10 years to be repaid by a monthly instalment of $1,700.00. The interest rate was 14% per annum on reducing balance. However, the DBSI reserved the right to revise and review the interest rate during the term of that loan. The second loan was $28,230.00. The term of that loan was 3 years with a monthly repayment instalment of $980.00. The interest rate was 14% on reducing balance reserving the right to revise and review the interest rate by the DBSI. The third loan was $30,585.00. The term of the loan was 5 years. Repayment monthly instalment was $3,300.00 amortised. The interest rate was 14% on reducing balance. At this stage, the Defendant's total commitment to the DBSI stood at $142,867.00. The fourth loan was $40,000.00. The term of the loan was 10 years. Repayment arrangement per month was $3,000.00. The interest rate was 14% at the discretion of the DBSI. The fifth loan was $12,000.00 thus increasing the total loan commitment to $198,321.00. The term of the loan was 10 years with an interest rate of 14% on a reducing balance variable at the DBSI's discretion. The sixth loan was $25,000.00. The term of the loan was 8 years. The interest rate was 14% variable at the discretion of the DBSI. The repayment instalment per month was $4,610.00. The Defendants had not paid their loans in full and by 31St March 2001, the Defendants owed the DBSI $448,311.34 with interest.

The Plaintiff’s Writ of Summons and Statement of Claim

The Plaintiffs Writ was filed on 10th May 2001. It was not indorsed. It was served on 14th May 2001. The Defendanendants entered an appearance on 21St May 2001. The Plaintiff filed an Amended Writ on 20^,th, June 2001. It was served on the Defendants on 21St June 2001. The Defendants entered an appearance on 10th June 2001. This date is clearly ante - dated. It might have been a mistake. Apart from that, appearance was clearly entered by the Defendants to this action.

The Plaintiffs applicaby Summons for Orders of the Court

p class="MsoNoMsoNormal" style="margin-top: 1; margin-bottom: 1"> The Plaintiff is seeking relief under Order 14(1)(a) of the High Courtil Procedure) Rules 1964 (t64 (the High Court Rules). Whilst the Writ of Summons is in the general form, its nature appears to be that of a specially indorsed Writ though it is not indorsed. This was not challenged by the Defendants. The contents of the affidavits filed in support of the application are not strictly in the manner required by Order 14(1)(a) of the High Court Rules. That is to say, verification of the cause of action, the amount claimed and the belief that there is no defence to the Plaintiff’s action. These are the matters to be covered in an affidavit. They have not, in my view, been properly covered in the affidavit of Mr Ne'e filed on 26th June 2001. Again, these defects were not objected by Counsel for the Defendants Mr Nori. Counsel for the DBSI, Mr Fa'aitoa had made it clear that this application was being made under Order 14(1)(a) of the High Court Rules. The Defendants filed their defence on 18th June 2001. The defence is that the Defendants had paid $294,235.00 being sufficient discharge of all the loans. This position is based upon the argument that the use of compound interest by the DBSI had increased the principal instead of reducing it. That is to say, the use of compound interest had not been part of the terms of the loans as agreed by the parties and so the Defendants do dispute liability as to the sum of $448,411.34. The Defendants did not file any affidavits but their Counsel Mr Nori, pointed out that a defence was already apparent upon the materials before the Court, as borne out by the Defendants' formal defence filed on 18th June 2001. There is clearly a dispute as to facts. (see Jones v Stone [1894] UKLawRpAC 2; [1894] AC 122). There may well be elements of the law of contract also to be considered in determining what the true facts are in this case. I feel that the Defendants should be given leave to defend the Plaintiffs action. I would dismiss the Plaintiff’s application for this reason. I would grant leave for the Defendants to defend the Plaintiffs action. However, the fact is that the Defendants had filed a defence in advance of leave. I would treat the defence as having been properly filed in view of my having granted leave to defend the Plaintiff’s action. Clearly, this case is a claim for a debt or a liquidated demand in money payable by the Defendants to the Plaintiffs. As such, I would treat the affidavits filed so far by the Plaintiff and defence filed by the Defendants as the pleadings. The Defendants will be at liberty to file any affidavits, if any, within 14 days and the Plaintiff to file a reply, if any, within 7 days, thereafter. The Plaintiff will within 14 days thereafter set the action for trial. Cost will be in the cause.

F.O. Kabui

Judge