Westpac Bank of Samoa Ltd v Craig [2006] WSSC 70 (30 August 2006)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN:

WESTPAC BANK OF SAMOA LIMITED
formerly known as PACIFIC COMMERCIAL BANK LIMITED
a duly incorporated company having its registered office in Apia
Plaintiff

AND:

FARREL CRAIG
Businessman and LUAPO CRAIG,
his wife, both of Vaoala
Defendant

Counsel: Ms Stowers for plaintiff
Mr Fepuleai for defendants

Hearing: 30 August 2006

INTERIM ORDER OF JUSTICE VAAI

1. On the 19th March 2002 the plaintiff advanced to the defendants $256,000 secured by deed of mortgage on the defendants residential property at Vaoala. Upon default the plaintiff as mortgagee exercised its power of sale and sold the mortgaged property for $430,000 but only $293,964.54 was credited to the loan. The balance was credited, at the discretion of the plaintiff, to the loan accounts of Alexander Cool Store Limited and Alexander and Marie Meats Ltd so the plaintiff rely on paragraph 10 of the loan agreement which states: Combination of Accounts and Appropriation of Balances. The Bank may at any time at its discretion and without notice to the Borrower combine any account which the borrower at any time has with the Bank, including the Loan Account with any other of the Borrower’s accounts with the Bank and may appropriate any credit balance at that time standing in any of the Borrower’s accounts with the Bank in or towards payment of the indebtedness in any other account including the loan account.
   
2. Clause 10 authorises the combination of accounts and appropriation of monies from one account to another when the account from which monies have been appropriated is in credit. Which means that all of the $430,000 received from the sale of the house which was mortgaged to secure the loan to the defendants should be, after deductions of disbursements and expenses of the sale, be utilised specifically to the defendants loan. Any credit balance can be appropriated to any other account of the borrower.
   
3. Alexander Coolstore Limited and Alexander and Marie Meats Ltd are totally different legal entities and their loan accounts with the plaintiff are separate from the defendants’ personal loan accounts.
   
4. The plaintiff is apply all the proceeds of the sale to the loan of the defendants appropriate the balance if any to any other loan accounts of the defendants and to submit to the Court a statement of balances owing by Alexander Coolstore Limited and Alexander and Marie Meats Limited.
   

JUSTICE VAAI