CIVIL ACTION NOS: HBC0066 OF 2000 and HBC477 OF 1999
BETWEEN:
&nbs> JOHN THOMAS LOW
& VASITI NAIKELEKELEVESI LOW
Plaintiffs
AND:
NBF ASSET MANAGEMENT BANK
Defendant
Counsel: Mr A. Tikaram for Plaintiffs
Mr W. Clarke for Defendefendant
Hearing: 4th April 2000
ass=MsoNormal alal align=center style="text-align: center; margin-top: 1; margin-bottom: 1"> JUDGMENT/p> This judgment is in respect of two applications in this action. The first is an aption for an injunction restraining the Defendant
from proceproceeding with the mortgagee sale of CT 14689, property at 8 Niranjan Street, Tamavua. The second application is an application
by the Defendant to strike out the Statement of Claim on the ground that it discloses no reasonable cause of action. I will deal
with the injunction application first.
The Injunction
This application is made by summons dated the 21st of February 2000, and is supported by the affidavit of John Thomas Low. The writ
of summons in the matter sets out the following matters. The Plaintiffs are the registered proprietors of CT 14689. They bought this
property in 1987 for $55,000. In 1988, the Defendant Bank lent $64,000 to Unique Marketing South Pacific Ltd. Security for the loan
was provided by a mortgage (268446) over CT 14689, the Plaintiffs’ matrimonial home, and by a second registered debenture of the
assets of Unique Marketing South Pacific Ltd. By November 1992, the Plaintiffs owed the Defendant $18,351.86. The Defendant then
advanced further loans to the Plaintiffs. The Defendant then proceeded in 1998 to issue notice of demand, and to advertise the property
for mortgagee sale.
The Plaintiffs claim that the further sums advanced to Unique Markettd., were advanced without the consent of the Plaintiffs. They
dispute the total amount owet owed, and claim the Defendant never provided proper accounts of the loan account. They say that they
offered to redeem the mortgage on 20th July 1999 for $180,000 for three properties, CT 14689, lease 192085 and CT 18143. They say
that the Defendant has failed to provide any information about any prospective purchaser, and they say that they were not given sufficient
time to redeem the mortgage.
In his affidavit in support, John Thomas Low states that he and his wife are in danger of losing thetrimonial home, that the undisputed
amount owed was $18,3518,351.86 in November 1992, and that the present market value of the property is $160,000, including chattels.
The Defendant filed an affidavit in reply of Laisenia Takala, Senior Loans Manager. He states that the first plaintiff has avoided
meeting with the bank to try to discuss arrangements as to the level of the debt. He said that the Plaintiffs had never asked for
accounts (until the Defendant began taking recovery action) and that the Plaintiffs had been given two years (since March 1998 when
the Notice of Demand was served) to settle the debt with the bank. He said that the total amount owing to the Bank was $383,575.63
as at 13th October 1999 and that the amount owed continued to escalate on a daily basis.
In an affidavit in answer, John Thomas Low said that he and his wife were willing to redeem the property through re-financing.
In a final affidavit in reply, Laisenia Takala said that the accounts had been provided to the Plais as Directors of Unique Marketing
Ltd., and that the appliapplication by the Plaintiffs was made to delay the inevitable.
At the hearing of the application on 4th April 2000, Mr A. Tikaram for the Plaintiffsed that there was a serious question to be tried
in the mate matter of the enforceability of the subsequent advances to Unique Marketing Ltd., against the Plaintiffs personally.
He said that damages were not an adequate remedy because the Plaintiffs were in danger of losing their matrimonial home.
Mr W. Clarke submitted that the Statement of Claim raised no justiciable issues at all. He further said that damages were clearly
an adequate remedy for the Plaintiffs, and that in the absence of an offer to pay the amount claimed into court, the court should
not restrain the mortgagee’s right to realise its securities.
ass=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> The principles relevant for the grant of an injunctre whether there is a serious question to be tried, whether damages would be an
adequate rete remedy if the Plaintiffs’ claim succeeded, and whether the balance of convenience favours the grant of an injunction.
In Inglis v. Commonwealth Trading Bank of Australia (1972) 126 CLR 161, the court said that an injunction shout be granted restraining a ng a mortgagee from exercising powers conferred by a mortgage,
unless the mortgage debt amount is paid into court. If the amount is disputed, the amount claimed by the mortgagee should be paid
into court. This rule should not be departed from, merely because the mortgagor claims to set off damages claimed against the mortgagee.
On the issue of whether there is a serious question to be tried, the issue for the trial appears to be an ad breach of contract. AlthoAlthough
this is by no means clear from the Statement of Claim, it appears that the Plaintiffs claim that in purporting to add the subsequent
advances to Unique Marketing Ltd. to the original mortgage amount of $64,000.00, the Defendant was in breach of its contractual obligations
under the mortgage. The Plaintiffs do not seek damages for breach of contract, merely an injunction to prevent eviction and an order
“to fix the amount of actual debt payable.”
Although, the Statement of Claim lacks clarity, I am prepared to accept that there is a serious question (y whether the subsequent
adnt advances could be accumulated under the mortgage) to be tried.
ass=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> However, I am not satisfied that the Plaintiffs cannot be suitably compensated in damages. Furthermore, in the absef an offer to pay
the amounamount claimed by the mortgagee into court, an injunction restraining the mortgagee from exercising its rights, would be
clearly inappropriate.
For this reason this application is refused. The Plaintiffs are to pay the Defendant’s costs which I set at $150.00
The Summons to Strike Out
&n/span>
The Defendant applied by summons, dated 17th March 2000 to strike out the Statement of Claim under Order 18 Rule 18 (1)(a) of the
High Court Rules 1988. Mr W. Clarke for the Defendant, submitted that the Statement of Claim fails to disclose what the cause of
action is. He submitted that the real remedy asked for appeared to be an injunction to prevent the Defendant from evicting the Plaintiffs,
and that a request for an order for proper accounts and for fixing the amount owed, was not a proper or real remedy arising from
a substantive cause of action.
Mr Tikaram for the Plaintiffs, said that it was clear that the breach ty alleged in Paragraphs 13, 14 and 15 of the Statement of Claim
is a breach of a contracturactual duty under Mortgage No. 268446. He said that if this was not clear, then the court should grant
leave to amend.
It was held in Ronex Properties Ltd. -v- John Laing Construction Ltd. And Others (1982) 3WLR 875 that an applic to strike out on the grounground that it disclosed no cause of action could only properly be made where it was evident
that there was an answer that was “immediately destructive” of the claim.
The question is whether the claim is bad, indeed, whether it is incontestably bad. This should be evident on a reading of the pleadings
themselves. It should not be necessary to delve, at any depth, into complicated issues of law, in considering whether the claim is
incontestably bad. The test adopted in Attorney-General of Duchy of Lancaster -v- L. & N. W. Ry. Co. [1892] UKLawRpCh 134; (1892) 3 Ch. 274, was whether the claim was “obviously unsustainable.”
On a reading of the statement of claim, the following issues emerge; that the original mortgage sum was $64,000; that the debt was
reduced to $18,351.86 in 1992 but that further sums of $227,000.00 were advanced to Unique Marketing Ltd. in 1992 and 1995; that
the Plaintiffs claim that these sums were wrongly added to the mortgage debt; that the Plaintiffs claim that no proper accounts or
information on the size of the debt were made available to them; and that the Defendant failed to act fairly in the exercise of mortgagee
sale. The remedies asked for are an injunction preventing eviction and sale, an order fixing the amount of the debt, and an order
granting the Plaintiffs reasonable time to settle the debt.
It appears that the orders asked for are misconceived. If, as is apparent, the substantive cause of action is breach of contract,
the appropriate remedy is damages. The order for accounts, injunction and time are appropriate at interlocutory or discovery stage,
but have no apparent function at substantive stage. It appears however that the real grievance, is the accumulation of debt under
the mortgage.
As such, I consider that amendment is necessary to clarify the cause of action, he remedies requested. It would be unjust to expect
the Defe Defendant to file a Defence on the basis of the Statement of Claim as it stands.
I therefore dismiss the Defendant’s application to strike out, butr the Plaintiffs to file an amended statement of claim specifying
the cause of action and tand the remedies sought.
The action can then take its usual course.
I make no order for costs as the Defendant was constrained to make this application because of the lack of clarity in the Plaintipleadings.
Nazhat Shameem JUDGE
At Suva
n lang=EN-GB>11th April 2000
Hbc0066j.00s
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