Solomon Islands National Provident Fund Board v Diamana [2003] SBHC 148; HCSI-CC 319 of 2002 (12 November 2003)

CC No 319, 2002, HC

IN THE HIGH COURT OF SOLOMON ISLANDS

Civil Case No 319 of 2002

SOLOMON ISLANDS NATIONAL PROVIDENT FUND BOARD

-v-

ALLAN DIAMANA AND FLORENCE DIAMANA

High Court of Solomon Islands
(Brown PJ)
Civil Case No 319 of 2002

Date of Hearing: 12 November 2003
Date of Judgment: 12 November 2003

B. Titiulu for the plaintiff
No appearance of defendants

Practice and Procedure – application to enter judgment in default of appearance – writ not “specially endorsed” – nature of evidence necessary to satisfy requirements of O.13 r 11 of High Court Rules.

The plaintiff, in default of appearance or defence, seeks to enter judgment against defendants who had fallen behind with their loan repayments. The summons annexed a statement of claim that pleaded the loan agreement and also the fact that a “charge” had been executed by the defendants over their land property in Honiara to secure repayment of the loan. The plaintiff seeks to proceed, reliant on documents, particularly the “loan agreement” and “charge” documents signed by the defendants. The court commented on the evidentiary requirements to be addressed when considering the terms of O.13 r 11.

Held: The signed “loan agreement” and “charge” to be registered, together with the plaintiffs statement of loan account are sufficient evidence for the purposes of satisfying the obligations of the Court set out in O 13 r 11.

Legislation considered: High Court Rules O 3 r 5, O 13, rr 3, 11

Cases Cited: Nil

Application for leave under O13 r 11 to enter judgment in default of appearance

Reasons for Decision

This application follows the plaintiff’s claim for debt arising out of the defendant’s failure to comply with a loan agreement entered into on the 13 January 1997, when the defendants also charged their interest in their residential property to secure the advance.

The writ was not “specially endorsed” in form provided for under O.3 r 5 (eg Appendix A IV No.2 of the rules) for the claim is not that of a “simple debt” envisaged by that rule.

The loan agreement includes covenants for the repayment of the principal sum and interest over a 20 year term at a variable interest rate by monthly installments and importantly for the plaintiff, the defendants had charged their interest in the fixed term estate in Honiara to cover and protect the plaintiff on default of payment. It is the plaintiff’s intention to proceed to realize the value of the real property secured by the charge by selling such property, which has necessitated this application. Had the summons been simply endorsed for a liquidated demand (whether “specially” or other wise) and the defendant had failed to appear, then, by virtue of O.13 r.3 the plaintiff may enter final judgment for the sum claimed in the writ of summons, but where (as is the case here) the plaintiff also seeks to exercise powers under a mortgage or charge in relation to real estate or land, then the courts leave is necessary before default judgment may be entered.

The defendants have defaulted in their loan repayments and the plaintiff now seeks to recover the balance of the moneys lent but unpaid.

Order 13 r.11

In any action in which the plaintiff is claiming any relief of the nature or any kind following, that is to say -

Payment of moneys secured by a mortgage or charge;

Sale;

Foreclosure;

Delivery of possession (whether before or after foreclosure) to the mortgage or person entitled to the charge by the mortgagor or person having the property subject to the charge or by any other person in, or alleged to be in possession of the property;

Redemption;

Reconveyance;

Delivery of possession by the mortgage;

no judgment shall be entered in default of appearance without leave of the Court who may require the application for leave to be supported by such evidence as might be required if relief were being sought on originating summons, and may require notice of such evidence to be given to the defendant and to such other person (if any) as the Court may think proper.

The court consequently, must address the two pre-requisites before judgment may be entered. In effect the second (the notice of such evidence) relates to the loan agreement and the “charge” (S.103 of the Land and Titles Act cap 133) and I am satisfied that the defendants had executed both the loan agreement and charge (see affidavit of Janet Kary sworn 2 May 2003, annex J K 1 and 2) so that the requirements of O 13 r11 have been satisfied to that extent, and there can be no doubt about the documents specifically relied upon by the plaintiff as entitling it to judgment for debt, and hence, to proceed against the land to recover the debt.

Leave for substituted service was given on 12 March 2003 and an affidavit of service by Hilda Aratara sworn 20 October 2003 filed, confirming service by Service Message through Solomon Islands Broadcasting Corporation.

I am satisfied that:

a) service has been effected in accordance with the previous order

b) that in evidence are the signed loan agreement, the “charge”, and details of the loan advance and repayments (annexure J K 6 to that affidavit of Janet Kary and statement of loan account exhibit “1”) sufficient for the purposes of O.13 rr 3, 11.

Order

I hereby grant leave to proceed to judgment in the absence of any appearance or defence within the time limited by the rules.

I order judgment may be entered in the sum of $220,366.53 being the outstanding principal and interest to the 30 September 2002 together with interest at the rate of 6% per annum from that date to date of judgment in the sum of $10,139.18.

The plaintiff shall have its costs of these proceedings to date.

BROWN PJ