Westpac Banking Corporation v Shem [1998] VUSC 20; Civil Case 091 of 1994 (16 June 1998)

IN THE SUPREME COURT OF
THE REPUBLIC OF VANUATU

CIVIL JURISDICTION

Civil Case No. 91 of 1994

BETW>BETWEEN:

WESTPAC BANKING CORPORATION
Plaintiff/Judgment Creditor

Ap>

SHADRACK SHEM
Firb>First Defendant/Judgment Debtor

AND:

MAVEA PRIVATE SCHOOL
Second Defendant

Coram: Mr. Just Justice Oliver A. SAKSAK
William Lory-Clerk of the Court

Counsel: Mr. Mark Hurley of George Vasaris & Co. forPlaintiff
Mr. Shadrack Shem in person without lega legal representation.

REASONS FOR ORDERS

The Piff proceeded against inst the Judgment Debtor by way of a summons issued pursuant to Order 54, Rule 10 and Order 57, Rule 7 of the High Court (Civil Procedure) Rules 1964. Order 54, Rule 10 reads:

"Sales in execution of judgments shall be made under the direction of the Sheriff, and shall be conducted according to such orders, if any, as the Court may on the application of any parties concerned, and such sales shall be made by public auction:

Provided that it shall be competent to the Court to authorize the sale to be made in such other manner as it may deem advisable. Any Order relating to sale may be made at the time of issuing writ of execution or afterwards."

Order 57, Rule 7 reads:

"Every summons, not being an originating summons to which an appearance is required to be entered, shall be served two clear days before the return thereof, unless in any case it shall be otherwise ordered:

Provided that in case of summonses for time only, the summons may be served on the day previous to the return thereof."

The summons was filed on 24^th June 1997. A Notice of Hearing dated 9^th September 1997 and filed on 17^th October 1997 was issued by the solicitors for the Plaintiff returnable for Monday 27^th October 1997 at 10 o’clock in the morning. An affidavit of service was filed by Elsie Horne dated 09^th October 1997 and filed 17^th October 1997. The Court was told that the hearing on the date allocated was vacated due to the unavailability of a Judge in Luganville. The case was relisted for 11^th June 1998 and a Notice of Hearing dated 04^th May 1998 was issued out of the Court Registry to that effect. The Judgment Debtor attended Court without legal representation.

On hearing the Application the Plaintiff relied upon the affidavit of Mr. Douglas George Ashburner and the annexures thereto sworn on 5^th June 1997 and filed on 24^th June 1997 in which Mr. Ashburner deposed to the following facts–

1. On 17^th August 1994 the Plaintiff obtained Judgment and an Order for costs against the First Defendant. The Judgment and Order were annexed.
2. On 11^th December 1995 a Writ of Sequestration was issued by the Court. A copy of the Writ was annexed.
3. To date no monies have been realized to satisfy the Judgment and Order for costs.
4. The First Defendant is the registered lessee of land title No.03/0181/026. A copy of the Lease was annexed.
5. On information and reasonable belief the First Defendant was prepared to accept VT1,500,000 from a Mr. Karl George but the sale did not proceed.
6. A sale agreement had been executed by a Mr. Daniel Tuku in respect to the sale of the property. A copy of the sale agreement was annexed.
7. The First Defendant has refused to execute the sale agreement and will not vacate the property unless ordered to do so by the Court.

Mr. Hurley tendered certified copy of Statement of Account showing the amounts outstanding against the First Defendant as at 11^th June 1998 showing as follows:

(1)First Loan – Initial amount = VT500,000.
With Interest to 11^th June 1998 = VT1,080,352.

(2) Second Loan - Initial amount = VT300,000.
With Interest to 11^th June 1998 = VT339,926.

The total loan outstanding from the first Defendant as at 11^th June 1998 is VT1,420,278.

Mr. Hurley submitted that the orders sought by the Plaintiff were necessary to provide a practical solution to a long outstanding judgment debt, and in view of the fact that the First Defendant has refused to execute the Sale Agreement, it was appropriate to seek Orders from the Court ordering specific performance. He submitted that the Court had power to execute all necessary instruments to effect the sale if or where a defendant fails, refuses and/or neglects to sign any or all necessary instruments to that effect. Counsel for the Plaintiff submitted that this is possible under Order 45 Rule 29. I agree with this submission.

Mr. Shem the First Defendant spoke for himself in Court. He made written submissions in the form of a statement which he divides into several parts. Firstly he provides his personal particulars and family details.

Secondly he makes submissions in relation to Civil Case No. 91 of 1994. He admits two unsecured loans from the Plaintiff which are still outstanding. The amounts were VT500,000 for the first loan and VT300,000 for the second loan. He states his reasons for obtaining the loans and he states his reasons for non-repayment. None of those reasons provide any defence or excuse why the First Defendant has not and should not repay all moneys loaned to him. He admits the loans were made in good faith and that he was liable to pay back the principal plus interest.

Thirdly the First Defendant submits some complaints against the Court Registry which he submits were the primary cause of him not filing a defence to the original Writ of Summons. He tendered to the Court his letter of 4^th October 1994 setting out his concerns. This letter is marked Exhibit C. Mr. Hurley objected to the letter being admitted on the grounds that they were irrelevant. I accepted that submission and ruled that the letter of 4^th October 1994 was not admissible. There is nothing in that letter showing a defence to the amounts of loans made to him as First Defendant. He was making known his complaints about some procedural matters which do not afford him any defence as to the claim in question.

The First Defendant further tendered a letter dated 13^th October 1994 as Exhibit B. Again Mr. Hurley objected to the admissibility of the letter and I accepted his submission and refused the letter being admitted. This letter is written by a Judge. The second paragraph of the letter reads as follows:

"The effect of this is that I have stayed (stopped) the Judgment and will take your letter as an application to set aside the Judgment. A formal hearing will have to take place in respect of this. It will be necessary for you to contact Mrs. Lini Leo in relation to this."

With the greatest of respect, this was highly inappropriate for a Judge to do. It was not possible to have stayed a judgment on receipt of a letter by a defendant without first having a formal hearing at which the Plaintiff would have had the opportunity of appearing and making submissions in respect thereto. This did not happen and it has never happened. The last sentence of the letter states clearly that any further action was subject to the First Defendant making further contacts with Mrs. Lini Leo. The First Defendant produced no evidence that he had contacted Mrs. Lini Leo to take further action. That being so I rule that these letters were irrelevant and would not admit them.

Fourthly the First Defendant raises the issue of a Caution which the Plaintiff has had in place over the relevant land title. He submitted that the Plaintiff was contravening international human rights law when they applied for a caution. This argument is baseless. On the Plaintiff’s evidence it is clear that First Defendant is the registered proprietor of a lease on Title No. 03/0181/026. The First Defendant does not dispute this. That being so, the Plaintiff has a right or license under section 93(c) of the Land Leases Act [CAP. 163] to lodge a caution. The caution is necessary to stop the First Defendant from dealing with the title without the knowledge of the Plaintiff. The Plaintiff Bank claims a right affecting the registered interest in the property for the purpose of securing the long outstanding loans. I am satisfied that the caution was properly lodged and that it is properly and legally in place.

Fifthly in regard to the Sale Agreement the First Defendant submits that the draft agreement was prepared by the Plaintiff’s counsel and that he did not agree to it being made. He submits that the Agreement was made without his consent and therefore he refuses to sign it with a Mr. Daniel Tuku and submits eight reasons as follows:

1. That the Agreement was prepared without his consent as owner of Land Title No. 03/0181/0126.
2. That he does not understand what is in the Agreement except for the price which is VT1, 500,000.
3. That the price stated in the agreement is too low compared to the estimated market value submitted by Tropical Real Estate.
4. That the price of VT1,500,000 would not be sufficient to discharge all outstanding accounts against him.
5. That the Agreement made was not made in compliance with procedures concerning sale of land within urban area.
6. That the Judgement and Order of 17^th August 1994 were in relation to money outstanding and not property and therefore the action is not proper.
7. That the loans taken were not secured by mortgage over property and therefore it was inappropriate to proceed in the way it has.
8. That he never told a Mr. Karl George to sell his property at VT1,500,000 as it is stated in the affidavit of Mr. Ashburner. His deal is VT3,000,000 but unfortunately this deal has fallen through in view of the Plaintiff’s caution.

These reasons are not sufficiently good reasons.

They are designed by the First Defendant to escape from a liability which he has freely admitted on page 1 of his statement. He submitted a copy of the estimated value by Tropical Real Estates as Exhibit ‘F’ which states the estimated value at VT4,945,000.

This is not signed and on Mr. Hurley’s objection I refuse admissibility of the valuation.

He tendered a Note from Mr. Karl George of 7^th June 1998 which reads:

"TO WHOM IT MAY CONCERN

This is to confirm (sic) that Mr. Shem called during the month of May 1997 and negotiated to sell a block of land at Luganville for VT3 million.

Thanks.

Signed: Karl George."

Mr. Hurley did not object to this letter but he submitted that there is nothing in it that prevented the sale for a price below VT3 million. I agree with that submission. It is implied from the word "negotiated". VT3 million was a negotiable price and not an agreed price. It would have been very much different if the Note confirmed that it was "agreed" that the sale price was VT3 million. But that was not the case. It is therefore an unreasonable excuse or reason.

The First Defendant did not produce any sworn evidence either by himself or his witnesses therefore there is no evidence of his other debts from the National Provident Fund. Similarly there is no evidence concerning the procedures for sale of land within the Municipal Area before the Court. The reasons given in paragraphs 4 and 5 are therefore unacceptable by the Court.

As to the reasons in paragraphs 7 and 8 the Plaintiff does not have any other viable alternative but to proceed in the way they have done. When the loans were first obtained by the First Defendant, he had no registerable interest whatsoever. That is why the loans were unsecured. When the First Defendant registered his lease dated 11^th July 1996 on 2^nd September 1996 he had a registerable interest which, if he had had in 1994, would have been subject to a Mortgage. Now that the First Defendant has a registerable interest which is sufficient security for a mortgage, it is proper that the Plaintiff Bank has proceeded in the manner it has done. The First Defendant tendered into Court a copy of the Registered Lease as recorded in the Lands Records Office as Exhibits "E".

As regards the Caution I have already ruled on that aspect and need not repeat myself.

As regards the Sale Agreement and the First Defendant’s submission that it was prepared without his consent or knowledge, is not an acceptable reason. It matters not that he did not consent or have knowledge. Consent or knowledge was not necessary in view of his admission of the loans advanced to him without security. Any body in his right mind would be happy to enter into such an agreement, after all, who benefited from the loan monies advanced?

Was it the Plaintiff? No, it was of course the First Defendant and yet here he is saying that his consent should have been obtained first. That cannot be a good reason for not wanting to execute the Agreement. It is like the First Defendant saying to the Plaintiff Bank:

"Thank you for the monies you have advanced to me. I have had good benefit of the monies over 4 years now. Whereas at the time of obtaining the loans I had no means of security for the loans, but now I have a leasehold Title No. 03/0181/026 but I do not want you to have the land. I will keep my property and continue to enjoy the benefit of your monies. And I will not repay you all the moneys."

This is ridiculous. The Courts cannot allow this attitude to be prevalent in this jurisdiction. If it does the lending institutions in this nation would be in difficult financial situations.

Finally the First Defendant in his submission asks the question "Where is justice?" In other words what he is saying is that he wants justice done to him. He forgets that justice works both ways. He wants justice done to him but not to the Plaintiff Bank. He would do well to ask "Where is justice to the Plaintiff and to me in this particular case?"

As far as the Court is concerned, the First Defendant has had justice by the Plaintiff Bank advancing him monies. He on the other hand has denied justice to the Plaintiff Bank by refusing to execute a Sale Agreement to effect the sale of his property to enable the Plaintiff Bank to get back all monies advanced to him plus interests thereon.

For the Court, justice must not only be done, but must be seen to be done. This in my belief is seen to be done by the Court granting the Orders sought by the Plaintiff Bank as it has done in formal Orders issued and dated the 11^th day of June 1998.

Published in Port Vila, this 16^th day of June 1998.

BY THE COURT

Mr. Justice Oliver A. SAKSAK
Judge of the Supreme Court