Solomon Islands National Provident Fund Board v Sisimia [2006] SBHC 79; HCSI-CC 548 of 2004 (8 March 2006)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No: 548 of 2004

SOLOMON ISLANDS NATIONAL PROVIDENT FUND BOARD

-v-

WESLEY SISIMIA

(Mwanesalua, J.)

Hearing: 23rd February 2006
Ruling: 8th March 2006

J. Apaniai for the Plaintiff
A. Nori for the Defendant

RULING

Mwanesalua, J: This Court granted an order in favour of the Plaintiff on 5th October 2005. That was an order nisi to charge the Defendant’s fixed-term Estate in Parcel No. 191-039-643. The Order nisi is in these terms:

"1. That unless sufficient cause to the contrary be shown on 5th day of October 2005 at 10 o’clock, Parcel No. 191-039-643 shall, and it is ordered that in the mean time do, stand charged with the payment of $185,462.42 due on the Order dated 18th February 2005.

2. That the costs of this application be in the Cause."

The Defendant applied for a loan of $30,000.00 ("the first loan") from the Plaintiff on 23rd December 1991. The loan was to purchase a residential building on Lot No. 931/VI Parcel No. 191-039-61 situated at Vura in Honiara. The loan was approved on 27th January 1992. The actual amount of loan disbursement to the Defendant was $30,825.00. The loan was to be repaid within 20 years. The loan repayment was $374.00 monthly installment commencing in April 1992. On 10th February 1992, the Defendant charged Parcel No. 191-039-61 in favour of the Plaintiff as security for his first loan. This loan was fully repaid on 31st March 1999.

On 11th April 1997, the Defendant applied for a loan of $115,000.00 (second loan) from the Plaintiff to build a new dwelling house on Lot No. 2661, which the Defendant said was an extention of Lot 931 – Parcel No. 191-039-61. The Plaintiff approved the second loan on 7th May 1999. The amount actually disbursed on the second loan was $123,000.00. The loan was to be repaid within 20 years at the interest rate of 6% per annum. The Defendant failed to make regular monthly loan repayments since 1999. The Plaintiff then rescheduled repayment of the Defendant’s loan in June 2001. The balance of the Defendant’s debt then stood at $145,569.39. He was to make monthly loan repayment of $1,200.00 at the interest rate of 6% per annum as from June 2001.

The Defendant continued in failing to make regular monthly loan repayments after the rescheduling of his loan repayments. By 30th September 2004, the balance of his debt had increased to $185,462.42.

On 19th November 2004, the Plaintiff filed its Writ of Summons and Statement of Claim for the payment of the sum of $185,462.42 with interest at the rate of 6% per annum until payment and for an order for leave to sell Parcel No. 191-039-61 by tender. The Defendant was served with the Writ of Summons and the Statement of Claim on 6th December 2004. The Defendant defaulted in filling an appearance and defence to the Plaintiff’s action. The Plaintiff then obtained default judgment against the Defendant on 18th February 2005.

The Plaintiff advertised Parcel No. 191-039-61 for Sale to recover the balance of the second loan in April 2005. But the Plaintiff discovered on 17th May 2005 that the Defendant used his second loan to build the new dwelling house on Parcel No. 191-036-643, and not on Parcel No. 191-039-61 as he indicated in his loan application form. The Plaintiff then obtained the order Nisi on 5th October 2005 to charge the Fixed Term Estate in Parcel No. 191-039-643 as security for the payment of the $185,462.42 due on the Order of the Court dated 18th February 2005.

The Defendant contended that it was the understanding between himself and the Plaintiff that the Plaintiff’s registered charge over his fixed-term interest in Parcel No. 191-039-61 would remain as security for the repayment of his second loan after he repaid off his first loan on 31st March 1999.

But the Plaintiff contended that it was misled by the Defendant in believing that the Defendant would use the second loan to build the new dwelling house on part of Parcel No. 191-039-61 and not on Parcel No. 191-039-643 as was subsequently discovered by the Plaintiff. This had resulted in the Plaintiff not registering any charge over the Defendant’s fixed-term estate in Parcel No. 191-039-643 to secure the repayment of the second loan.

Decision of the Court

The Defendant fully repaid his first loan on 31st March 1999. He started to draw his second loan to build the new dwelling house on Parcel No. 191-039-643 on 10th May 1999. As on 30th September 2004, the total balance of his debt stood at $185,462.42. The interest on his debt continues to accrue at the rate of 6% per annum to date.

The Plaintiff obtained a default judgment against the defendant in the sum of $185,462.43 with interest at the rate of 6% per annum from 1st October 2004 until payment on 18th February 2005. As the judgment was not satisfied, the Plaintiff obtained a charging order to charge Parcel No. 191-039-643 for the payment of $185,462.43. This was an order nisi which prevented the Defendant dealing with that parcel.

This present proceeding is for the Defendant to Show Cause on why the Order nisi should not be made absolute. The Defendant had not been able to point to any evidence that the charge over Parcel No. 191-039-61 would remain to secure the repayment of his second loan. The charge over Parcel No. 191-039-61 was solely registered to secure the repayment of his first loan. It was not a charge to secure the repayment of his second loan. He did not transfer the charge to cover Parcel No. 191-039-643 as security for the repayment of the second loan. Parcel No. 191-039-643 on which the Defendant built the new dwelling house was a separate piece of land from Parcel No. 191-039-61.

The Defendant merely made an assertion when he said that the proceeds of the sale of Parcel No. 191-039-61 would be sufficient to settle the balance of his debt. He did not produce any valuation report to show that the proceeds of the sale of Parcel 191-039-61 would be sufficient to pay off his debt with the Plaintiff.

The Defendant did not provide any security for the repayment of his second loan. He only paid $2,690.30 towards the repayment of his second loan to date. The Plaintiff is at risk of losing the money loaned to the Defendant. The Plaintiff obtained default judgment in the sum of $185,462.43 with interest against the Defendant. The judgment debt has not been satisfied. An order nisi had been obtained by the Plaintiff to charge Parcel No. 191-039-643 with the payment of the $185,462.43 with interest. In these circumstances, I do not think that injustice would be done to the Defendant if the Order nisi is made absolute. I accordingly exercise my discretion to make the order nisi absolute.

Orders of the Court:

1. Order nisi of 5th October 2005 in favour of the Plaintiff is made absolute.
   
2. The Defendant to pay the Plaintiff’s cost of this application.
   

Francis Mwanesalua
Puisne Judge