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ANZ Banking Group Ltd v Latu [2023] TOLC 1; LA 7 of 2023 (12 April 2023)

IN THE LAND COURT OF TONGA
NUKU’ALOFA REGISTRY


LA 7 of 2023


BETWEEN :


ANZ BANKING GROUP LTD
Plaintiff


AND :


SIOSIUA SIONE LATU
Defendant


RULING


BEFORE: Hon. Justice P. Tupou KC


Appearances: Mrs. Dana Stephenson KC for the Plaintiff

Mrs. T Cokanasiga for the Defendant


Date of Hearing: 13 February, 2023


Date of Ruling: 11 April, 2023


Introduction


  1. This is an application by the Plaintiff for summary judgment against the Defendant’s estate, seeking orders that:
    1. the Plaintiff is lawfully entitled to vacant possession of all of the land comprised in registered lease Nos. 9871, 9129 and 8959; and
    2. the Defendant to forthwith deliver up vacant possession of the said leases; and
    1. the Defendant pay its costs.
  2. The application is supported by two affidavits, sworn and filed by Sosefo Halahingano on 19 January, 2023 and on 2 February, 2023.
  3. The application is opposed by Lisia Uaine Latu, the deceased Defendant’s widow. She consented to be appointed as representative of her late husband’s estate on 23 November, 2022, after an application by the Plaintiff to appoint her pursuant to Order 9 Rule 6 of the Supreme Court Rules.
  4. Mrs. Latu filed a sworn affidavit in support of her opposition on 31 January, 2023.

The Plaintiff’s Claim


  1. On 9 February, 2016, the Defendant granted the Plaintiff a mortgage over Lease No.8959 situated at ‘Utulau, Tongatapu as security. This was in consideration of an overdraft facility in the sum of $50,000 and home loan facility in the sum of $175,000 for a term of 5 years. Monthly principal and interest repayments were to be made at $4,109.57[1]. The mortgage on the said lease secured the total sum of $225,000[2].
  2. On 8 July, the overdraft facility was refinanced through a variation whereby the overdraft was incorporated into an existing home loan facility increasing it to $223,000 and granting a new business term loan in the sum of $700,000 for a term of 7 years. Monthly principal and interest repayments on the business loan were to be made at $12,704.87[3].
  3. The Defendant granted additional security to the Plaintiff by granting mortgages over leases 9871 situated at Kolomotu’a, Tongatapu and 9129 situated at ‘Oneata to secure the sum of $381,160.09. In addition, a general security agreement pledging all present and future property, assets and undertakings to the Plaintiff bank. The deceased Defendant’s signature on the latter document was witnessed by Mrs. Latu.[4]
  4. Both agreements described an event of default relevantly, as:

“In the event that:


(a) The borrower fails to repay the Facilities or sums payable hereunder on the due date or;
(b) The borrower commits any breach of the terms hereof or;

.................................................

then the Bank’s obligation shall cease and the Bank shall have the right to demand that the Borrower lodge with the Bank immediately full cash collateral for any contingent liabilities entered into by the Bank on behalf of the Borrower including but not limited to any Documentary Letters of Credit, Guarantees issues or contracts for the delivery of foreign exchange;

The Facilities shall be immediately repayable with interest and all amounts due to the Bank upon the Bank’s first demand.”[5]


  1. The Defendant failed to make repayments with regard to the business term loan for the months of February, March and April, 2020. In terms of the home loan he failed to make repayments for the months of January to September, 2021.
  2. On 21 July, 2021, the Plaintiff exercised its rights to call for the payment of all outstanding amounts on all of the Defendant’s loan facilities within 30 days. At that time the outstanding amount on the term loan account was $780,640.83 and the home loan account was $219,140.35 and an overdraft account was $52,109.14 (in excess of the $50,000 limit).[6]
  3. On 7 October, 2021 the outstanding balance of the home loan account was $223,953.01. The defendant made a payment of $23,919.28 reducing the balance to $200,033.73. On even date the term loan was $811,405.32. The Defendant made a payment of $171,950.13 reducing it to $639,455.19. On 24 January, 2022 he paid $45,000 towards the overdraft facility.
  4. From November, 2021 onwards the Defendant made no further payments towards any of the loan facilities. On 15 August, 2022 the Plaintiff exercised its rights and issued a section 109 notice of intention to take possession of the said leases. The 14 days expired on 16 August, 2022[7]. The Plaintiff commenced this proceeding on 3 October, 2022.

The Defence


  1. Mrs. Latu for the Defendant’s estate denied the Defendant owned the material leases. She said that lease 8959 is registered to Sunnyside Poultry and pleaded that Sunnyside Poultry was owned by a Latu Trust. In her sworn affidavit, Mrs. Latu changed that claim to say it was owned by one Sione Moimoi Latu. With regard to leases Nos. 9871 and 9129, she said they were both registered to one Samiuela Malingatolo Latu.
  2. She contended that the loan repayments of $245,000 should have discharged at least the mortgage over lease No.8959.
  3. She further insisted that the amounts secured by leases 9871 and 9129 were $38,169.09. The original deeds of leases were produced in court and she accepted that the correct amount endorsed on the said deeds, was $381,169.09. That was consistent with her own acknowledgement at paragraph 13 of her affidavit that the “intended” amount was $381,169.09.
  4. She denied that a failure to make 3 months repayment amounted to a default under the loan agreements and/or that the Plaintiff was denied access to the leases.

Principles applied to summary judgment applications


  1. The courts approach to summary judgment in Australia and New Zealand Banking Group Ltd v Toloke [2016] TOLC 1 at first instance and on appeal was recently summarised in Topui v Vea [2022] TOCL 2, by LCJ Whitten QC, as:
    1. The purpose of the rules allowing summary judgment applications to be made is to enable a Plaintiff to obtain summary judgment without trial if he can prove his claim clearly and if the Defendant is unable to set up a bona fide defence or raise an issue against the claim which ought to be tried.
    2. The onus is on the Plaintiff to establish that there is no real doubt or uncertainty as to his entitlement to summary judgment. Where the evidence is sufficient to show that there is no defence the Defendant will need to respond if the application is to be defeated.
    1. Whilst the Court will not normally seek to resolve genuine conflicts of evidence or assess the credibility of witnesses, the Court will not accept uncritically evidence that is equivocal, imprecise or inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents and other statements by the same deponent or is inherently improbable . The Court is entitled to examine and reject spurious defences or plainly contrived factual conflicts. The Court may take a robust and realistic approach when the facts warrant it.
    1. The Court will not hesitate to decide questions of law where appropriate.
    2. Common sense, flexibility and a sense of justice are required.
    3. In assessing a defence, the Court will look for appropriate particulars and a reasonable level of detailed substantiation. The Defendant is under an obligation to lay a proper foundation for the defence in the affidavits filed in support of the Notice of Opposition.
    4. In weighing these matters, the Court will take a robust approach and enter judgment even where there may be differences on certain factual matters if the lack of a tenable defence is plain on the material before the Court.
    5. The need for judicial caution in summary judgment applications has to be balanced with the appropriateness of a robust and realistic judicial attitude when that is called for by the particular facts of the case. Where a last-minute, unsubstantiated defence is raised and an adjournment would be required, a robust approach may be required for the protection of the integrity of the summary judgment process.
    6. Once the Court is satisfied that there is no defence, the Court retains a discretion to refuse summary judgment but does so in the context of the general purpose of the Court Rules which provide for the just, speedy and inexpensive determination of proceedings.
    7. However, the Court should proceed with appropriate caution bearing in mind the consequences of summary judgment for a Defendant. A Defendant should not be deprived of his right to contest a Plaintiff’s claim at trial unless his defence is so clearly untenable or has no prospect of succeeding at trial that it must fail.

Considerations

  1. At this juncture, it is important to remember, that the onus is on the Plaintiff to prove that there is no real doubt or uncertainty as to its entitlement to summary judgment. Where the evidence is sufficient to show that there is no defence, the defendant will need to respond if the application is to be defeated.
  2. Having examined the pleadings, the affidavits and material presented by the parties, I am satisfied that the Plaintiff has established that the Defendant defaulted on repayments of the said loans. The repayments made after demand, failed to discharge his indebtedness and no further payments were made by him since November, 2021. Those events constituted a default. No issue was raised with regard to any aspect of the Plaintiff’s s.109 notice. For those reasons I am satisfied that the Plaintiff is entitled to summary judgment.
  3. I now turn to the Defendant’s response. Against the denial of ownership of the leases, the Plaintiff produced a business licence showing the Defendant as the owner of Sunnyside Poultry[8]. The deeds for leases 9871 and 9126 were produced bearing the name of the Defendant as the Lessee. Mrs. Latu did not raise any objection to those documents or provide any documents to contradict the Plaintiff’s evidence.
  4. The payments made by the Defendant after the demand in July, 2021 were allocated to specific accounts[9] amounting to a total of $240,869.41. Those payments could not by any measure, clear the outstanding debt at the time.
  5. Mrs. Latu contended the payment made was $245,000. She provided no evidence to substantiate that was the correct amount to contradict the records provided by the Plaintiff. She further argued that the repayments should have been paid towards discharging the mortgage on lease 8959. Again, no evidence of instructions made for those payments to discharge the mortgage on lease 8959 or any objections to the manner in which the Plaintiff allocated the payments on 7 July, 2021 and January, 2022 was provided.
  6. Accordingly, I reject the proposition that the application is partly dismissed and the mortgage on lease 8959 be discharged.
  7. Against the assertion that leases 9871 and 9129 secured only $38,169.09, I have mentioned earlier that the original deeds of leases were produced in court and it was accepted that the correct amount endorsed on both documents was $381,169.09.
  8. The argument that 3 months default did not constitute a default is clearly contrary to the terms of the loan agreement[10], and claiming that the Plaintiff was not denied access make no sense given Mrs. Latu’s contention that the leases were not owned by the Defendant.
  9. In pausing to consider the appropriate caution required in granting a summary judgment and the consequences of it on the Defendant and all things considered, I am satisfied that none of the matters raised by the Defendant in the pleadings or affidavit, defeat the Plaintiff’s application or are worthy of trial.

Result


  1. The plaintiff's application for summary judgment is granted.
  2. The Plaintiff is entitled to vacant possession of all of the lands comprised in lease No. 9871 in the name of Siosiua Sione Latu situated at Kolomotu’a, Tongatapu, lease No. 9129 in the name of Siosiua Sione Latu situated at ‘Oneata and lease No. 8959 in the name of Sunnyside Poultry situated at ‘Utulau, Tongatapu, forthwith.
  1. The Defendant’s family, agents, invitees and any person claiming through the Defendant is to vacate the leased lands described at paragraph B above, within 14 days from the date of receiving this order.
  1. The Plaintiff is at liberty to apply for a writ of possession if these orders are not complied with.
  2. The Defendant is to pay the Plaintiff’s costs, if not agreed to be taxed by the Registrar.

P. Tupou KC

JUDGE


NUKU’ALOFA

12 April, 2023

[1] Annex A, pgs.14 – 27 of Sosefo Halahingano’s affidavit of 19 January, 2023 (affidavit 1)
[2] Annex A, pg.13 of affidavit 1, annex A, pgs.1-2 of Mr. Halahingano’s affidavit of 2 February, 2023 (affidavit 2)
[3] Annex A, pgs. 28 – 36 of affidavit 1.
[4] Annex A pgs. 37-47 of affidavit 1.
[5] Clause 9 of loan agreement, see pgs. 19 and 32 of annex A, affidavit 1
[6] Annex A, pgs. 68-69 of affidavit 1
[7] Annex A, pg.71 of affidavit 1
[8] Sosefo Halahingano’s affidavit of 19 January, 2023, annex A, pg.1
[9] Refer para.11 above
[10] Refer para.8 above

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