| Fiji Islands - Kumar v NBF Asset Management Bank - Pacific Law Materials |
IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
ACTION NO. HBC 0293 OF 1998
BETWEEN:
:
SATISH KUMAR
Plaintiff
AND:
NBF ASSET MMENT BANK
Defendant
J.K. Maharaj for the Plaintiff
Ms S. Ram. Ramswarup for the Defendant
Dates of Hearing and Submissions: 4th August, 13th October, 10th November 1998
Date of Ruling: 17th June 1999
This is yet yet another application by a Mortgagor in default to restrain the Mortgagee from exercising its powers of sale under
a Mortgage. Like most such cases which are frequently before the Courts in Fiji I consider this one is foredoomed to failure for
reasons which I shall give shortly.
On the 1st of June 1998 the Plaintiff issued the Writ herein seeking two declarations and an Interlocutory Injunction against the
Defendant restraining the sale of the Plaintiff's residence at Padam Lala Street, Tamavua.
In March 1993 the Plaintiff was given a loan of $80,000.00 by the former National Bank of Fiji which was increased later by another
$21,300.00 making a total of $101,300.00 to enable him to purchase the property in question.
According to the affidavits which have been filed in support of and against the present Motion the Plaintiff was indebted to the Bank
as at 14th August 1998 in the amount of $146,661.51 on which interest is accruing at 13% per annum. Since June 1996 no repayments
have been made to reduce the Plaintiff's indebtedness.
Reduced to essentials, in his Writ the Plaintiff who was an Assistant Manager Finance and Administration with the former National
Bank of Fiji from 1985 to 1996 claims a reduction of the interest rate from normal customer rates on loans to staff interest rates
for the six months following his resignation from the Bank in May 1996. He says in his supporting affidavit that when he resigned
to take up a position in Tuvalu, he was assured by the Human Resources Manager of the Bank that his loan would be treated at the
staff loan rate of 4.5% for six months. He alleges that after his departure for Tuvalu the Bank unilaterally raised the interest
rate to 13% for the housing loan and 14.5% for a car loan. It then began sending notices to him threatening to foreclose the Mortgage.
The Defendant denies making any such representation and relies on a letter dated 17th March 1993 from the Bank to the Plaintiff offering
the housing loan to the Plaintiff in which it is stated that interest rates are subject to change without notice and that upon leaving
the Bank's appointment all moneys outstanding would become due and payable on demand.
According to the Defendant, and this is not denied by the Plaintiff, on 6th April 1998 the Defendant wrote to the Plaintiff offering
settlement on the conditions that the sum of $130,000.00 be paid before 17th April 1998 and that the residual debt of $9,226.81 be
amortised over two years.
By Facsimile dated 6th May 1998 the Plaintiff refused settlement on these conditions but on the 12th of May 1998, the day the property
was advertised for sale, the Plaintiff changed position and sought again to accept the Defendant's conditions.
In his submissions the Plaintiff alleges that because the Defendant had misplaced certain documents the Bank withdrew its offer of
a loan. Moreover the Plaintiff alleges that the Defendant refused to accept payment of moneys offered by the Bank for the payment
of the Plaintiff's debts.
I comment here that I find that submission curious in that the Plaintiff speaks of the Defendant refusing to accept moneys for payment
of his debt while at the same time stating that the loan which he hoped to repay his debt to the Defendant had been refused. In any
event, the Defendant denies refusing to accept repayments of the loan from the Plaintiff to clear the Plaintiff's debt or that it
in any way hindered payments of the debt.
It seems to me reading the Plaintiff's submissions that his principal reason for seeking an injunction is the likelihood of success
of his action against the Bank. The Plaintiff seeks an injunction restraining the sale of the property until this matter has been
fully adjudicated upon by this Court.
THE LAW
The leading case on the subject on the grant or refusal of inter partes interlocutory applications for an injunction is the decision of the House of Lords in American Cyanamid Co. v. Ethicon Ltd (1975) AC 369 which states that before an injunction will be granted the Court is to be satisfied there is first a serious question to be tried
and secondly the Plaintiff must show that he has a real prospect of succeeding in his claim for a permanent injunction at the trial
p. 408A.
At p.408 the Court says:
"The governing principle is that the court should first consider whether, if the plaintiff were to succeed at the trial in establishing
his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained
as a result of the defendant's continuing to do what was sought to be enjoined between the time of the application and the time of
the trial. If damages in the measure recoverable at common law would be an adequate remedy and the defendant would be in a financial
position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff's claim appeared to be
at that stage."
One of the authorities most frequently cited on a Mortgagee's rights of sale is Inglis v. Commonwealth Trading Bank of Australia (1972) 126 CLR 161 the headnote of which reads:
"As a general rule an injunction will not be granted restraining a mortgagee from exercising powers conferred by a mortgage and,
in particular, a power of sale unless the amount of the mortgage debt, if this is not in dispute, is paid or unless, if the amount
is disputed, the amount claimed by the mortgagee is paid into court; and this rule will not be departed from merely because the mortgagor
claims to be entitled to set off the amounts of damages claimed against the mortgagee."
Inglis has been frequently followed in Fiji and I consider it applies to the facts as known in the instant case and satisfies me that the
Plaintiff's remedies against the Defendant will be satisfied by an award of damages only if he is eventually successful at the trial.
Failing this, and to keep the action on foot, the Plaintiff would have to pay the amount claimed by the Mortgagee into Court and
on the material before me I consider the prospect of doing that is remote.
Accordingly the Plaintiff's motion is refused with costs.
JOHN E. BYRNE
JUDGE
Cases referred to in Judgment:-
American Cyanamid Co. v. Ethicon Ltd. (1975) AC 369.
Inglis v. Commonwealth Trading Bank of Australia (1972) 126 CLR 161.
The following additional cases were mentioned in submissions:-
Civil Action No. 294A of 1990 Bidesi and Sons Limited v. Australia and New Zealand Banking Group Limited - unreported decision of Scott J. dated 13th May 1994.
Central London Property Trust Ltd v. High Trees House Ltd. [1946] EWHC KB 1; (1947) K.B. 130.
Combe v. Combe [1952] EWCA Civ 7; (1951) 2 K.B. 215.
Commonwealth v. Verwayen (1990) 170 CLR 394.
Walton Stores (Interstate) v. Maher (1988) 164 CLR 387.
Hbc0293d.98s
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