Development Bank of Solomon Islands v Wales [2006] SBHC 83; HCSI-CC 234 of 1995 (4 May 2006)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No: 234 of 1995

DEVELOPMENT BANK OF SOLOMON ISLANDS

-v-

ROBERT FRANCIS WALES AND MIRIAM LYNN WALES

(Mwanesalua, J.)

Hearing: 9th June 2005
Judgment: 4th May 2006

A. Nori for the Plaintiff
R.F. Wales in person for the Defendants

JUDGMENT

Mwanesalua, J: By Summons filed on 24th May 2005, the Plaintiff applies for the following orders against the Defendants –

1. The Plaintiff have leave to accept the $85,000 bid from Janet Buri for the purchase of the Defendants’ Fixed Term Estate in Parcel No. 191-024-18 situated in Bokonavera, Central Honiara ("the property");

2. That the Registrar of the High Court be empowered to execute transfer documents on the property;

3. That in the event that Janet Buri fails to accept the Plaintiffs’ offer the Plaintiff be granted leave to accept the $80,000 bid from Amon Baikuke on the property;

4. That in the event that Amon Baikuke fails to accept the Plaintiffs’ offer the Plaintiff be granted leave to accept the $80,000 bid from S. Puia, Agikisuga and Tracy Puia on the property;

5. Such further and other orders and directives as the court deems just to make in the circumstances of this case; and

6. Cost of this application to be borne by the Defendants.

The Facts

The Plaintiff is the Development Bank of Solomon Islands. The Plaintiff made two loans to the Defendants. The Plaintiff registered a charge over Parcel No: 191-024-18 owned by the Defendants as security for the repayment of its loans to the Defendants. The Defendants have failed to repay the loans. On 16th August 1995, the Plaintiff filed a specially Indorsed Writ of Summons against the Defendants for the sum of $44,186.19 being due and owing by the Defendants to the Plaintiff on the loans. The Plaintiff also claimed 14% interest per annum as from 30th June 1995 until payment. Further, the Plaintiff also asked for an order for the sale of the property and directions for sale of the property.

The writ of summons was served upon the Defendants on 21st August 1995 at Honiara. The Defendants failed to enter an appearance to the writ of summons and a judgment in default of appearance was entered against them on 5th October 1995. On 8th March 1996, the Plaintiff obtained orders against the Defendants. These orders were for the Defendants to vacate the property within 60 days; that at the lapse of the 60 days period the plaintiff may seek the consent of the Commissioner of Lands to advertise the property for sale; the Plaintiff may offer the property for sale by public tender after the consent of the Commissioner of Lands is obtained and upon the closure of the tender to seek the approval of the court for the contract of sale to be made with the winning bidder. The Plaintiff tendered the property for sale in the Solomon Star on 27th and 29th April and on 4th and 6th May 2005. The tender was closed on at 4pm. on 6th of May 2005 and 8 bids were received from the members of the public in Honiara. On 9th May 2005, the Plaintiff’s Tender Committee considered the bids.

The Law

Section 171 of the Land and Titles Act (Cap.133) (the Act) states –

"(1) A charge may be enforced upon application to the High court, and not otherwise;

(2) Upon any such application, the Court may make an order –

(a) empowering the chargee or any other specified person to sell and transfer the interest charged, and providing for the manner in which the sale is to be effected and the proceeds of the sale applied;

(b) empowering the chargee or any other specified person to enter on the Land and act in all respects in the place and on behalf of the owners of the interest for a specified period, and providing for the application of any monies received by him while so acting or;

(c) vesting the interest in the chargee or any other person either absolutely or upon such terms as it thinks fit, but such order shall, subject to subsection (1), not take effect until registration thereof:

Provided that no such order shall be made in respect of a person who is not a Solomon Islander.

(3) ..................................

(4) ..................................

(5) ..................................."

The Defendants’ Case

The Defendants did not dispute their debt with the Plaintiff. However, they objected to the Plaintiff selling their property to recover the debt. They suggested that the debt be repaid by way of payment of increased monthly installments at an amount to be set by the Plaintiff.

The Plaintiffs’ Case

The Plaintiff would not reschedule delinquent loan accounts as it may have done to its clients in the past. The Defendants were treated in the same way in this case.

Decision

The Plaintiff had a registered charge over the Defendants’ property as security for repayment of loans made to them. Clause 3 of the charge allows the Plaintiff to sell the property under section 171 of the Act to satisfy the debt. The Defendants’ debt stood at $44,186.19 on 16th August 1985. By 29th April 2005, this debt had increased to $62,055.09. The suggestion by the Defendants to repay the debt at increased monthly installments was rejected by the Plaintiff as it was no longer an active and on going lending institution. As the Defendants were in difficulty in settling their debt, the Plaintiff obtained leave of the Court on 8th March 1996 to sell the Defendants’ property to satisfy the debt. On 9th May 2005, the Plaintiff offered to sell the property to the 3 highest bidders in priority order begging with the highest bidder. The highest bidder was Janet Buri. There was nothing wrong with that arrangement as the Plaintiff was vested with authority to sell the property to satisfy debt due and owing to it by the Defendants. I will grant the orders sought in terms of the summons filed by the Plaintiff on 24th May 2005. I grant the orders accordingly.

Francis Mwanesalua
Puisne Judge