Bank of South Pacific Tonga Ltd v Faeamani [2024] TOLC 3; LA 3 of 2024 (25 September 2024)

IN THE LAND COURT OF TONGA
NUKU’ALOFA REGISTRY

LA 3 of 2024

BETWEEN :
BANK OF SOUTH PACIFIC TONGA LIMITED
- Plaintiff

AND :
NANCY FAEAMANI
- Defendant

RULING ON FORMAL PROOF

Before: Hon. Justice Tupou KC
Hon. Land Assessor Sinilau Toumo’ua
Appearances: Ms. Dana Stephenson KC for the Plaintiff
Nancy Faeamani in person
Date of Hearing: 25 September, 2024
Date of Ruling: 25 September, 2024

Nature of the case

1. The Plaintiff is a financial institution carrying on business as a bank (“the bank”) in Tonga. It has applied for judgment by formal proof pursuant to Order 6 Rule 1 (3) of the Land Court Rules.
   
2. The bank seeks a declaration that it is lawfully entitled to immediate possession of all that land comprised in lease No.8594 (“the land”) situated at Kolofo’ou and registered in the name of Fielea Faeamani (“Fielea”) and for orders against the Defendant to surrender up all that land contained in the relevant lease.
   
3. After service of the proceedings upon her^[1], the Defendant has not taken any steps or engaged in the proceedings. She has had notice of the hearing today and is in court.
   
4. Pursuant to Order 6 Rule 1(3) she is not allowed to be heard.
   

Facts

5. The bank called as it only witness, Ms. ‘Ana Fono, 39, credit analyst of Fasi. She had provided a written brief of evidence that she confirmed in court today.
   
6. Prior to taking up the credit analyst position Ms Fono was a Collections officer where she reviewed loans that had fallen into default and enforced securities pledged in support of those defaulting facilities. She was familiar with Fielea’s home loan under account number 2000031225 and produced the documents in the court book relevant to the Plaintiff’s claim.
   
7. On 28 September, 2015, Fielea mortgaged the land to the bank in consideration of advances amounting to $142,438.37.^[2] The mortgage was duly registered in the register of mortgages Book 7 Folio 11231 on 23 August, 2016.
   
8. In April, 2016, Fielea’s loan was varied^[3] to increase the borrowed amount to $185,509.25. The mortgage deed was appropriately varied to record the increased loan amount and registered in the register of mortgages Book 7 Folio 11231A on 12 June, 2017.
9. After cyclone Gita in 2018, customers of the bank were offered financial relief assistance^[4] by way of a 3 month repayment top-up in the amount of $1600 per month. Fielea received this assistance.
   
10. The bank registered its interest on the said lease on the Personal Property Securities Register^[5] on 25 January, 2024 with registration number 1001953321.
    
11. Fielea fell into arrears early on, then resumed payments for a time^[6].
    
12. He died on 30 April, 2021^[7].
    
13. On 14 July, 2022 letters of administration of Fielea’s estate was granted to the Defendant by the Supreme Court.
    
14. Loan repayments ceased in November 2022 to September, 2023^[8] and then ceased altogether since December, 2023^[9].
    
15. On 4 January, 2023, the bank issued a demand for the full amount in arrears which stood at $3,580.00 at the time^[10]. Ms Fono personally served the demand on the mortgaged property^[11]. No repayments were made by the Defendant in response.
    
16. By her failure to settle the arrears as demanded, the bank claims that the Defendant was in default for the purposes of section 109 of the Land Act.
    
17. Section 109 provides as follows:
    

"In the event of the mortgagee taking possession of the lands mortgaged following default by the mortgagor of any of the obligations to the mortgagee set out in the mortgage deed or in any other document lodged with the Minister in terms of the next succeeding section the mortgagee shall give notification both to the mortgagor and the Minister of his intention to take possession of the lands mortgaged and may thereafter take possession at any time after the expiry of 14 days from the date of said notification.”

18. On 19 June 2023 the bank served the Defendant with a section 109 notice^[12]. The notice was personally served by Ms Fono on the Defendant on even date. The Defendant has made no response but has remained on the land.
    
19. We accept Ms. Fono’s evidence and we are satisfied that the Plaintiff has proved on the balance of probabilities that:
    
    1. Fielea mortgaged his Lease No.8594 to the bank for total advances of $185,509.25;

b) that Fielea and/or his estate defaulted under the said mortage;

c) that a demand to remedy the default was served on the Defendant;

d) that no payments were made in response;

5. that a notice to enter and take possession under s.109 of the Land Act was issued and served on the Defendant and Minister of Lands; and
6. the Defendant have not made any further repayments since December, 2023 in continual default, while she has remained on the land.
   

Result

1. Accordingly, it is declared that the Plaintiff bank is entitled to possession of all the land comprised in lease 8594 situated at Kolofo’ou and registered in the name of Fielea Faeamani.
   
2. Nancy Faeamani and all persons claiming through her are to forthwith surrender up and grant vacant possession of the said lease to the bank in 28 days.
   

100. The Defendant shall pay the Plaintiff's costs to be taxed, if not agreed.
     

P. Tupou KC
J U D G E

NUKU’ALOFA: 25 September, 2024

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^[1] Refer to pg.65 of the court book
^[2] pages 14-28 of the court book contain duly signed application and memorandum of mortgage, pgs. 10-13 contain the Lease with the mortgage and variation endorsed at pg.13
^[3] letter offer is produced at pgs.29 – 35
^[4] refer pgs.36-37
^[5] refer pg.38
^[6] refer pg.42- 1^st repayment of $1,600 due on 30 April, 2016 was missed, loan repayments for the months of May, June and July that year were not met in full.
^[7] see pg.61
^[8] refer pg.pg.59
^[9] refer pg.60
^[10] See pg.63
^[11] As permitted by clause 30 of the memorandum of mortgage
^[12] See pg.64