Home
| Databases
| WorldLII
| Search
| Feedback
Supreme Court of Tonga |
IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU’ALOFA REGISTRY
NO.C.877/00
BETWEEN:
BANK OF TONGA
Plaintiff;
AND:
1. LEAKONA MALOLO
2. ‘ANA MALOLO
Defendants.
BEFORE THE HON. JUSTICE FORD
Counsel: Mrs Tapueluelu for the plaintiff.
Date of Chamber’s hearing: 2 May 2002
Dates of Ruling: 6 May 2002.
RULING
In 1995 the defendants borrowed almost $17,500 from the plaintiff Bank for the purpose of refinancing and payment of debts and other incidentals. The defendants defaulted in their monthly repayments and in October 2000 the plaintiff issued proceedings to recover the balance owing. At that stage, the defendants had moved to New Zealand and were living in Mangere, South Auckland. The plaintiff obtained an order for service out of the jurisdiction and in due course the pleadings were served on the defendants at their New Zealand address. The defendants failed to file any defence and, apart from making one additional payment of $500, to all intents and purposes they ignored the court proceedings.
The plaintiff Bank then applied for and was granted judgment in default in the sum of $13,896.45. The plaintiff also obtained an order from the court which required the defendants to deliver up their dwelling house at Pahu, Tongatapu, to the plaintiff. The dwelling house had been charged as security under the loan agreement. The defendants made no attempt to comply with the court order.
The plaintiff next attempted to take possession of the dwelling house and served a "notice to vacate" on the occupier, a Mr Gavin Peacock. In an affidavit filed subsequently, the plaintiff’s legal officer deposed that Mr Peacock has, "repeatedly refused to vacate the premises".
That is the position which has now been reached. The plaintiff seeks an order from the court enabling it to obtain possession of the dwelling house but, as counsel puts it, the Bank finds itself in a kind of "Catch-22" situation because the available remedies provided for in the Supreme Court Rules do not appear to adequately cover the case where a mortgagee seeks to execute an order for delivery over a dwelling house.
I heard counsel in Chambers. The application has, necessarily, been dealt with on an ex parte basis and so I have not had the advantage of hearing argument from the other side. I accept, however, that it is unsatisfactory to reach the point where a judgment creditor is unable to execute its judgment, seemingly, because of some deficiency in the court rules.
The relevant rules dealing with enforcement of judgments and orders are set out in Order 26 of the Supreme Court rules. Order 26 Rule 1 provides that a judgment or order for the payment of money may be enforced by a writ of distress, garnishee proceedings, the appointment of a receiver, a charging order or, in certain circumstances, by an order of committal.
None of those remedies is entirely appropriate, however, to a situation where a judgment creditor is seeking to enforce an order for delivery against a dwelling house. A writ of distress, for example, which at first sight may appear adequate, specifically exempts a debtor's house from seizure.
Order 26. Rule 2 then provides that an order for delivery of goods may be enforced by (a) a writ of delivery or, in certain circumstances, by (b) an order of committal. The reference to "delivery of goods" is significant because it has been judicially determined that, because of the unique nature of land ownership in the Kingdom, houses do not accrete to the land but they are severable and are properly described as "goods" -see the Court of Appeal decision in Kolo v Bank of Tonga (unreported), judgment dated 7 August 1998.
I suspect that the categorisation of a dwellinghouse as "goods" may be quite unique to the Kingdom. In Lavery v Pursell Ch D. 39, 508 Chitty J held that in England the correct description of a standing dwelling house is a "hereditament" and it does not become a chattel until such time it is pulled down so that it can be sold as building materials.
In all events, there is a very practical difficulty in enforcing a writ of delivery against a dwelling house. The writ, following the prescribed wording in the rules would require the police officer in charge of the nearest police station to seize the dwelling house and "deliver it to a convenient place where it may be collected" by the Bank. Given the obvious difficulties in moving any type of dwelling house, the concept is totally impractical and, in any event, the prescribed form for a writ of delivery in the court rules then goes on to specifically exempt the debtor's dwelling house.
The second option in the rules for enforcing an order for delivery is an order of committal. Admittedly, the threat of such an order may be sufficient to encourage a judgment debtor to deliver up possession of his dwellinghouse but if the threat does not bring about the desired result then it will be small consolation to the judgment creditor to know that his debtor is languishing in prison. The threat is also unlikely to work if the debtor is overseas and the house is occupied by his extended family. Moreover the courts have a natural reluctance to order committal for contempt of court in civil proceedings. As is stated in the Supreme Court Practice (1991) 52/1/3:
“It is a general principle that process by way of contempt should not be lightly employed, and not in aid of a civil remedy where some other method of achieving justice is available.”
What remedy then is a judgment creditor left with? What the Bank really seeks is a writ of possession enabling it to take legal possession of the defendants' house. The Land Court Rules provide that an order for possession of land may be enforced by a writ of possession but the prescribed form for such a writ specifically exempts houses from seizure. There is no similar provision in the Supreme Court Rules providing for writs of possession.
Given the fact that the demarcation between titles to land and dwelling houses in the Kingdom has been authoritatively clarified only in relatively recent years (the Kolo decision is dated 7 August 1998) I do not find the omission of any reference to writs of possession in the Supreme Court Rules altogether surprising. I suspect that when the Supreme Court and Land Court Rules were draughted back in 1991, the draughtsman simply adopted the equivalent procedural provisions in the English Supreme Court Practice and proceeded on the basis that, as in England, houses accrete to the land. Hence, so the thinking would have run, there was no point in providing for writs of possession in the Supreme Court Rules because only the Land Court would have been concerned with claims to possession of land and houses.
Following on from there, in order to preserve the unique constitutional hereditary entitlements in force in the Kingdom, the draughtsman of the rules would have wanted to ensure that a judgment creditor could not circumvent the Land Act provisions and claim title to the land itself by seizing the house thereon which had been secured for a debt. Hence, houses were specifically exempted from the prescribed form of writ of possession.
My summation may be astray but, at this point, I cannot see any other obvious legal reason for specifically exempting houses from seizure under distress warrants and writs of possession. In commercial terms, one of the effects of the omission in relation to writs of possession, in particular, is that a house owner in the Kingdom would probably effectively be precluded from ever using his home as security for a loan. It would be surprising indeed if that had been the draughtsman's intention but a lending Bank is unlikely to be very interested in advancing loan money over the security of a dwelling house which was protected from seizure in the event of default.
Whatever the historical reasoning for the exemption of dwelling houses, the point is that the legal situation regarding the status of houses and title to land has now been clarified by the courts. With hindsight, it would seem that it was never really necessary in the first place for writs of possession issued by the Land Court to specifically exempt houses because they were never part of the Land Court's jurisdiction. The jurisdiction of the Land Court is, and always has been, confined to cases concerning titles to land and houses do not accrete to the land.
If my analysis of the situation is correct, and I freely acknowledge that I have only heard one side of the case, then there is currently a gap in our court rules. The lacuna has resulted from an important clarification of the law in the Kingdom since the rules were draughted. If the law had been certain at the time the rules were draughted then I have no doubt that the draughtsman would have made provision in the Supreme Court Rules, and not just the Land Court Rules for a writ of possession. The Supreme Court Rules would have provided for a writ of possession as a means of executing a judgment for delivery of a dwelling house.
If I am wrong in my analysis as to the likely reasons for the gap in the Supreme Court Rules, the point still remains that the rules do not provide an appropriate remedy for a creditor seeking to execute a delivery order. The Court of Appeal in the Kolo case accepted that a judgment creditor could obtain an order for delivery. Under the rules as they stand, however, it is not possible to execute such an order against a dwelling house by the next logical legal step which would be a writ of delivery. The prescribed form for a writ of delivery specifically exempts houses.
In those circumstances, I see no reason why Rule 2 (2) of the Supreme Court Rules should not come into play. That provision states:
"Where there is no provision in these rules the rules of procedure for the time being in England shall apply."
In the Kolo case, the Court of Appeal referred to two paragraphs from Halsbury, vol 32, which it said:
". . . indicate that the appropriate mode of procedure on the part of the equitable mortgagee who desires to enforce his security is to seek a court order."
The Court went on to hold that an order for delivery of a dwelinghouse was an appropriate court order.
One of the references to Halsbury (para 673) referred to the decision in Barclays Bank Ltd v Bird [1954] Ch 274 where the court granted an equitable mortgagee an order for possession over a dwellinghouse. In England, an order for possession is enforced by a writ of possession. The English authorities make it plain that writs of possession can be issued to execute orders for possession of houses as well as the land and there are numerous cases cited in Halsbury and other texts recording such instances.
The Supreme Court Practice (1999 ed.) states, for example, (45/3/3):
"In relation to a dwellinghouse, whether it is a protected tenancy or not, the plaintiff may not enter into possession himself, even peaceably, and he can only enter into possession under a writ of possession."
The reality facing equitable mortgagees in the Kingdom at the present time, however, is that, while there is provision in the Land Court Rules allowing for writs of possession to be taken out to enforce judgments in respect of land, there is no equivalent procedure available in the Supreme Court Rules for executing delivery orders over houses. In the context, I see no significant distinction between the order for delivery considered by the Court of Appeal in the Kolo case and an order for possession.
I am aware that in his judgment in this Court in Bank of Tonga v Kolo [1995] Tonga L R 168, Hampton CJ held that the English law of procedure could not be invoked because, as His Honour put it, “it cannot be said that there is a lack of procedure in this area which could be filled by resort to the law of England." His Honour suggested that the remedy probably lay in a mortgagee Bank proceeding by way of judgment for delivery of goods and then writ of delivery rather than by way of judgment for a monetary sum. That, however, is the course which the plaintiff has followed in the present case. It has obtained an order for delivery of the defendants' dwellinghouse but it now finds that it cannot execute the order for delivery by taking out a writ of delivery because the prescribed form specifically exempts houses.
The other option of applying for an order for committal is unlikely to have any appeal to the plaintiff Bank as the defendants are residing overseas. Moreover, even if it was possible to enforce a committal order, it does not automatically follow that the incarceration of the debtors would enable the Bank to realize on its security over the dwellinghouse.
With respect, therefore, to His Honour's observations, which were noted by the Court of Appeal but not considered in any depth, it seems to me that there is indeed a lack of procedure in the area and, in the circumstances, it appears appropriate to call in aid the English writ of possession procedure, modified as may be necessary to exclude any reference to the land itself apart from what may be required to identify the location of the dwellinghouse in any particular case.
Until such time, therefore, as the issue can be fully considered and determined in inter partes proceedings, this Court, in the case of a judgment creditor seeking to execute a delivery order over a dwellinghouse, is prepared to accept and act upon an application for a writ of possession in the English format modified to the extent necessary to make it relevant to the situation pertaining in the Kingdom.
NUKU'ALOFA: 6 MAY 2002
JUDGE
PacLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.paclii.org/to/cases/TOSC/2002/17.html