Barclays Bank Int Ltd v Societe Huilerie des Nouvelles Hebrides [1984] VULawRp 8; [1980-1994] Van LR 88 (9 March 1984)

[1980-1994] Van LR 88

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU

Civil Case No. 167 of 1983

BETWEEN:

BARCLAYS BANK INT. LTD
Plaintiff

AND:

SOCIÉTÉ HUILERIE des N.H.
Defendant

Coram: Chief Justice Cooke

Counsel: M. Leder for Defendant

JUDGMENT

[FRENCH LAW - Deed of Mortgage - Force Majeure]

The Bank granted a loan to the Defendant Company. The debt owing on the 22nd August 1983 was VT 110,955,455. The Defendant mortgaged his business equipment to secure the repayment of the loan. There is on the Court file a deed of mortgage on the moveable furniture and equipment used for operation of the oil mill, between the parties to secure an overdraft of twenty million + 14% interest per annum. The mortgagee is permitted to exercise over the mortgaged property the rights and privileges conferred by the French Act of the 17th March 1909.

The balance owing is made up of a current account of VT 92,862,354 and loan account of VT 18,093,101.

The amount owing is not in dispute but the Defendant contends he is not directly liable in respect of the loan and bases his defence on force majeure. The Defendant contends that the oil was burnt down during the Rebellion in Santo. Maitre Leder, counsel who appeared for the Bank, submitted that the defence of force majeure may have been possible if an application was made to the Court for judgment when the Rebellion was taking place but that today there is no rebellion and such cannot be used for a defence. He further submitted that in order to involve force majeure, there must be a situation where performance is impossible. This is not so here as certain equipment still remains on the land and the Defendant will in due course be paid compensation for the destruction of the oil mill. The Bank has a lien over the tanks remaining on the land and can execute that lien even now. If the Custom owners will not release the tanks, then they must compensate the Bank. The tanks may be rusty but if the Bank wishes to possess them in such condition by virtue of their lien, then in my opinion they may do so.

It is an accepted fact that when a person specifically undertakes an absolute obligation, he cannot claim to be absolved from liability by the fact that his failure to perform the obligation is due to the occurrence of an event over which he has no control. The Defendant knew there was political trouble in Santo. He could easily have prevented the burning of his oil mill if he had employed a few watchmen to look after the mill. He did not do so, therefore he is liable. It is a different matter if something unforeseen has happened, but what did happen was always a possibility and no precautions were taken by the Defendant to protect his interests.

In my opinion the Bank is entitled to the repayment of their loan from whatever sources available. There are rusty tanks on the land over which they possess a lien under French Law, which still applies by virtue of Article 93(2) of the Constitution. They are also entitled to whatever compensation the Defendant receives for the destruction of the oil mill. Accordingly, I give judgment for the Bank for the sum of VT110,955,455 to be recovered from any compensation payable to the Defendant for the destruction of the oil mill and I further rule that the lien of the Bank over the rusty oil tanks under French law is still valid. Costs granted to the Bank.

9 March 1984

FREDERICK G. COOKE
CHIEF JUSTICE