Mr. J.K.L. Maharaj for the Plaintiff
Mr. D. Sharma for the Defendant
JUDGMENT
This case raises for dination the right of a mortgagor to redeem his mortgage e vis-a-vis the exercise by the mortgagee of its `power of sale'.
Although there appears to be a long chronology of events dating back to when the plaintiff firf first purchased the mortgaged land with the help of a loan from the defendant bank, the essential facts for
present purposes are not in dispute and may be summarised as follows:
(1) &nbbsp; &nsp; In A gust wit> with the help of a loan of $38,000 from the defendant bank the plaintiff purchased eight (8) acres of agricultural land situated at Nasasa, Deuba and morticuldescrin Certifertificateicate of T of Title (CT) No. 23120 ;
(2) &nbbsp; &nsp; The afor said woan was secs secured by way of a statutory Notification of a charge issued by the defendant Bank in terms of Section 25 of the Fiji Development Bank Act anistered on t on the lahe land tind title on 24th March 1987 ;
(3) &nnbsp; &nsp; Sibce theb>the plaintiff has fallen substantially into arrears in his loan repayments resulting in several `demand notices' being served on him in 1991, /b> a>1997requiring reng repaymepayment ofnt of `the whole of the principal, interest and other moneys owing' to the defendant Bank ; The property was also publicly advertised by the defendant Bank for sale on several occasions with little
success ;
(4) & In December 1991 19> i/b> in an effort to repay the loan arrears, the plaintiff with the agreement of the defendant Bank, sed aivisi
the into er mosposable blocks. Town Planning approval tval to subo subdividdivide howe however,ever, was was not granted until mid
October-1997 ;
(5) & &nsp; A fortnight earlier o22nd 22nd September 1997 the defendant bank wrote to the plaintiff advising him that it had `ved aer tohase mortgprope.. compriomprised in CT 23120 ... for $50,100.00 wh00 which tich the Bahe Bank innk intendstends to accept'. The plaintiff's debt then stood at $70,923.95 ;
(6) &nbssp;&nnsp;& Tsp; Tsp; Thp; The plaintiff immediately wrote requesting further time to complete the subdivision but this was
declined by the defendant Bank in its letter of 17th October 1997, with an indication that it was `... now proceeding to accept the offer $50,100.00 on hand and have the property sold' despite the $20,000 shortfall;
(7) & p; On 9th February 1998 the plaintiff's son for reason(s) that remain unclear,lear, regi registerestered a cd a caveat against the title to the land which
remains outstanding ;
(9) &nbssp; &nsp; A week later tae plff issu issued a Writ out of the High Court seeking to prevent the sale of the mortgagepertyhe dent Ba/span
(10) arly August 1998 the> the plaintiff again offered to redeem his mortgage for the full amount then owing to the defendant bank y, k `.`... th.. the Plaintiff has lost his equity of redemption and further the Bank has now entered into an unconditional agreement to
sell the mortgaged property' ;
(11) &nbn A7th t gus8 t/b> the plaintiff obtained an ex-parte injunction restraining the defendant Bank from selling or trrringmortgpropeending the determination of the plaintiff's claim. Attached
thed to theo the plai plaintiffntiff's affidavit in support was a F.N.P.F. cheque for $70,154 made payable to the defendant Bank;
(12) &nbssp; O2 ctd Octd Octo October 1998 this Court ordered that the cheque for the sum of $70,154.00 be paid into Court pending the outcome of the plaintiff's application to redeem thtgagean>
In light of the foregoing and with the approval of counsels a preliminary issue was framed as follows :
`Whether on the agreed facts and chronology of events, the plaintiff has an equity of rtion in terms of Section 72on 72 of the Property Law Act (Cap.130) ?'
I am grateful unsels for the very full and comprehensive written submissions and chronologies filed for tfor the assistance of the
Court.
Before turning however to deal with counsel's submissions it is necessary to briefly trace how the `power of sale' arises in this case given the rather special nature of the security granted to the defendant bank.
As earlier pointed out the nature of the security in this case is a statutory notification of a charge under Section 25 of the Fiji Development Bank Act (Cap.214) (`the Act') which shall be released on repayment of all amounts due to the Bank (see : Section 26).
The Act further relevantly provides in Section 27(1)(b) that :
`if any farmer ... defaults in the paymf any moneys payable by himy him to the Bank and secured under the provisions of this Part
... then -
(i) &nnbsp;;&nbssp;&bsp;&nbs;&nbs; if the land fied in the nohe notification is the subject of an instrument of title registered
unde the Transfer Act, the provisions of Sections 75 to 81 inclusive of the Property Law ALaw Act shct shall mutatis mutandis, apply
as though the charge created ... were a mortgage registered under the provisions of that Act.'
then provides thes that :
`Every sale made in pursuance of powers of sale conferred by Suby Subsection (1) shall be by public auction or by private treaty as
the bank may consider appropriate, and notice of such sale shall be given -
(b) ... by tdverensemppe aing ring at least three times in any one newspaper published and circulating in Fiji' ;p claoNormyle="aligntify;in-to margin-bottom: 1">
ass=MsoNormaNormal style="text-align: justify; margin-top: 1; margin-bottom: 1"> and finally Section 27(3) provides that :
From the foregoing it is plain, and common ground between trties, that the defendant Bant Bank's security is to be treated as a `mortgage' to which Section 79(1) of the Property Law Act implies a statutory `power of sale' in the following relevant terms :
`If default in payment of the mortgage money ... continues for one month after the service of the (statutory demand) notice, the mortgagee may sell or concur with any other person in selling the mortgaged property ... by public auction or by private
contract ..., and subject to such conditions ... as the mortgagee thinks fit, with power to vary any contract for sale ... or rescind
any contract for sale and to resell without being answerable for any loss occasioned thereby ..., and may make and sign such transfers
and do such acts and things as are necessary for effectuating such sale.'
and Section 79(3)provides that :
`Where a transfer is made in purported exercisehe power of sale conferred rred by this Act, the title of the transferee shall not
be impeachable on the ground (amongst others), that the power was otherwise improperly or irregularly exercised, but any person damnified by any unauthorised, or improper or irregular
exercise of the power shall have his remedy in damages against the person exercising the power.'
I turn next to consider counsels' submis. In brief, the plaintiff's position is that :
<
`... the acceptance of a tender in question by tfendant (bank) does not deprive the plaintiff of the opportunity of redeeming his land because under the law, a mere acceptance of a tender, as in
this case, does not constitute an actual sale, (as required by Section 72 of the Property Law Act Cap.130 nor does it constitute a sale under the case laws). At the time the tender was accepted, and upto this point in time, the plaintiff's land remains unsold ...' (and alternatively) ... `it can be said that the tenderer's amount is so low, for a land of over 8 acres and subdivided, that there is at least evidence of
bad faith and unconscionability towards the plaintiff. It can equally be said that the inadequacy of the amount is also evidence
of fraud'.
The defendant bank's equally brief pon :
`is that it accepted a tender for $50,100.00 for the purchase of the property in CT 23120 on 1st September 1997. As at that date the
plaintiff had not made any repayments and neither had he rectified his default. The purchaser paid his deposit. He had obtained necessary
finance. The defendant entered into an unconditional sale with the purchaser. Transfer documents were signed, stamped and ready for
registration. The defendant submits the plaintiff has lost his equity of redemption'.
In this l regard other than what is deposed in para.4(k) of the affidavit of a Bank Officer ocer of the defendant Bank, no correspondence with the tenderer ; no newspaper advertisement(s) ; no deposit receipt ; no sale and purchase agreement ; and no executed and stamped transfer documents evidencing the defendant Bank's acceptance of the successful tender has been provided to
the Court although these would plainly have been readily available for perusal.
In any event, it is common ground that no transfer of the land has been reged such as to raise the proe protective provisions of Section 79(3) earlier referred to. Indeed, on the defendant Bank's own correspondence referred to at (5) and (6) above, by late October 1997 the successful tender had not yet been accepted. Counsel's submission in that regard is plainly inaccurate and the matter remains
unresolved.
As to the suggestion of `fraud' defence counsel whilst conceding ding that the successful tender is less than the amount then owing under the mortgage to the Bank
and less than the plaintiff's offer to redeem, nevertheless writes :
`There is no evidence of fraud on the part of the defendant ... the whole process of was transparent in that demt demand was served,
the property was advertised and the highest price on tender was accepted. The fact that the low price is received on tender does
not in itself amount to fraud.'
In latter regard it is worth noting at this stage the decision of the Court of Appeal (U.K.(U.K.) in the leading case of Cuckmere Brick Co. v. Mutual Finance Co. (1971) 1 Ch.D. 949 in which it was :
`Hu> : (1) that a mortgagee, when exercising his power of sale, owed a duty to the mortgagor agor to take reasonable care to obtain
a proper price (or per Salmon L.J. `the true market value').'
In the leading judgment delivered by Salmon L.J.`power of sale' and categorised them as `neighbours', and then after closely examining the judgments of the Court of Appeal and the House of Lords in Kennedy v. de Trafford [1897] UKLawRpAC 13; (1896) 1 Ch.D. 762 (1897) A.C. 180 ; and in Tomlin v. Luce [1889] UKLawRpCh 187; (1889) 43 Ch.D. 191 concluded, both on principle and authority, (at p.968) :
`... that a mortgagee in exercising his power of sale does owe a duty to take reasonable precautions to obtain the true market value
of the mortgaged property at the date on which he decides to sell it.'
In the present case, can it be said of the defendant Bank, given the mortgagor's offer to redeem for the full amount then due under
the mortgage, that it took `reasonable precautions to obtain the true market value of the mortgaged property (which had been effectively subdivided) at the date on which the successful tender was accepted ?
The Cuckmere Brick case is also factually interesting in that itdecided at first instance ance and upheld in the Court of Appeal, that the mortgagee was in breach of its above-mentioned duty in selling the property by public auction without adequately publicising
the planning approval granted in respect of the property, and further, in refusing to postpone the auction sale to enable the property
to be re-advertised.
In that regard the present case has some similarities in so far as it is common gmon ground, that approval had been given by the defendant
Bank and the Director of Town and Country Planning for the land to be subdivided and indeed, a subdivision survey plan by a registered surveyor had been prepared and was awaiting final
approval after minor corrections. In the absence of the relevant newspaper advertisement it is unknown whether the `planning approval' regarding the mortgaged land was adequately disclosed in this instance and, if not, could that failure or omission amount to a breach
of duty by the defendant Bank ?
It is clear from counsels respective submissions that the parties differ funtally on the meaning and efnd effect of Section 72(1) of the Property Law Act (Cap.130) which gives statutory expression to the principle enunciated by Turner L.J. when in delivering the judgment of the Privy Council in Walker v. Jones (1865) L.R. 1 P.C.50 his lordship said at p.61-62 :
It io clear that every mortgagor has the right to have a reconveyance of the mortgaged propertyperty upon payment of the money due
upon the mortgage ; and that every mortgagee is charged with the duty of making such re-conveyance upon such payment being made.
This, indeed, is no more than the necessary result of the relative positions of the parties, the mortgage being only a security for
the debt.'
Section 72(1) provides :
`A mortgagor is entitled to redeem the mortgproperty at any time beforeefore the same has been actually sold by the mortgagee under
his power of sale, on payment of all monies due and owing under the mortgage at the time of payment.'
Given the circumstances of case and the particular wording of the Section, the, the issue earlier framed narrows down to a consideration of what is the meaning and effect of the words `before the same has been actually sold by the mortgagee under (his) power of sale' which encapsulates the statutory limitation to a mortgagor's entitlement to redeem.
In this regard defence counsel submits :
`... that the very moment the mortgagee exercits power of sale and enters into a contract for sale, the mthe mortgagor loses his or
her equity of redemption. The mortgagor had all the time prior to acceptance of the tender to redeem the property.'
With all dgard to counsel the submission is a little confusing in so far as it appears to recognise tise three (3) different stages
at which the mortgagor's `equity of redemption' is lost, the first being, from `the very moment the mortgagee exercises its power of sale', does this mean once the power is enlivened by the expiry of the statutory demand notice ? or is it at the closure date of the public advertisement calling for tenders ? ; the second being, the acceptance of the successful
tender ; and, thirdly, the entry into a contract for sale with the successful tenderer.
Whatsmore the High Court decision cited in support of the above proposition naon namely, Bank of Baroda v. Joseph Nainima Civil Action No. 326 of 1996 is of little or no assistance at all to the present case. In the first place as counsel correctly points out, the case concerned
an application by a mortgagee for vacant possession under Section 169 of the Land Transfer Act, but more relevantly, the sole issue before the Court was whether a registered mortgagee had `locus' to bring an application under the Section as the `last registered proprietor' of the land. After referring to several authorities including Fraser v. Walker the Court concluded there was `locus'.
Be that as it may there is authority that appears to answer the question earlier posed in the defendant Bank's favour namely, the
judgment at first instance of Crossman J. in Waring (Lord) v. London and Manchester Assurance Co. Ltd. (1935) 1 Ch.D.310 in which it was :
`Held (1) thatrtgagee's exercise of his power of sale under S.101(1)(i) of the Law of Property Act 1925 t925 to sell the mortgaged property
by public auction or private contract is binding on the mortgagor before completion unless it is proved that he exercised it in bad
faith ;
(2) That the fact that a contract for sale was entered into at an under value is not by itself enough to prove bad faith.'
Crossman J. in rejecrejecting counsel's submission that notwithstanding the existence of a signed contract for sale, the `equity of redemption' was not extinguished pending completion by conveyance, said at p.317 :
`In my judgment, (the Section), which gives to a mortgagee power to sell the mortgaged property is perfectly clear and means that the mortgagee has power to sell
out and out, by private contract or by auction, and subsequently to complete by conveyance ; and the power to sell is, I think, a
power by selling to bind the mortgagor. If that were not so, the extraordinary result would follow that every purchaser from a mortgagee
would, in effect, be getting a conditional contract (subject to the mortgagor's equity of redemption) ... It seems to me impossible seriously to suggest that the mortgagor's equity of redemption remains in force pending completion of
the sale by conveyance.'
As for the submission in that case, that the sale could not lowed to stand because it w it was made at a gross under-value, an under-value
which would entitle the mortgagor to have it set aside, Crossman J. said at p.319 :
"I can find no evidence showing anything like of good faith in the company's conduct with regard to the sthe sale. The law as
stated by Kay J. in Warner v. Jacob [1882] UKLawRpCh 61; 20 Ch.D. 220 is perfectly clear. The learned judge there says (at p.224) :
`... a mortgagee is strictly speaking not a trustee of ower of sale. It is a powerpower given to him for his own benefit, to enable
him the better to realise his debt. If he exercises it bona fide for that purpose without corruption or collusion with the purchaser,
the Court will not interfere even though the sale is very disadvantageous, unless indeed the price is so low as in itself to be evidence
of fraud'
... It iossible on the fact facts of this case to conclude that the price is so low as in itself to be evidence of fraud."
The second authority is the judgment of the Court of Appe.K.) in Property erty & Bloodstock Ltd. v. Emerton (1968) 1 Ch.94 which approved the above judgment of Crossman J. and where it was :
`Held : dismissing the appeal (despite the contract being a conditional one) (1) that the entry by a mortgagee into an unconditional contract for the sale of the mortgaged property pursuant to Section 101(1)(i)
of the Law of Property Act 1925 (which is in substantially identical terms to our Section 79(1) op.cit) barred the mortgagor's right of redemption so long as the contract subsisted.'
Danckwerts L.J. in deliverlivering the first judgment in the appeal said, at p.114 :
`In my view, it is significant that Sections 101 and 104 deal quite separately with the exercise of the mortgagee's power of sale
by a contract of sale and the completion of the sale by conveyance. Section 104(2) [which is equivalent to our Sections 79(2) and (3)] is obviously intended to give protection to a purchaser, and absolves him from inquiries as to the exercise of the mortgagee's power
of sale before conveyance.'
As to this observation I would merely note that the `signnt' separation in t in the U.K. legislation is not followed in our Property Law Act which includes both the mortgagees power of sale and the protection of the purchaser in the same section.
whilst agreeingeeing with the result, nevertheless, left open the question whether, in the case of a conditional contract for sale
of mortgaged property where the condition had not yet been satisfied or fulfilled, the mortgagor's right of redemption could still
be exercised pending fulfilment of the condition. After all his lordship observed at p.123 :
`The (mortgagee's) real interest is t is in the recovery of the money he has lent, which redemption effects.'
On the law however, I confess to a preference for the scholarly judgment of Walsh J. in Forsyth v. Blundell [1973] HCA 20; (1972-1973) 129 CLR 477 where a mortgagee had acted in disregard of the interests of the mortgagor to obtain the best price reasonably available by failing
to pursue a scheduled auction where a firm offer for a lesser amount had been received. The High Court of Australia
`Held (2) thathe circumstances it was proper to restrain the mortgagee from completing the sale, notwithswithstanding that at the date
of the contract (the purchaser) was unaware of the impropriety of the transaction between the mortgagee and mortgagor.'
and further per and Mason J.J. :
`Section 94(2) of the Real Property Ordinance 1925-1961 [which is to the same effect as our Sections 79(2) & (3)] does not give to a purchaser from a mortgagee any greater protection than that given by the general law.'
Walsh J. in rejecting the statement of Kay J. in Warner v. Jacob (referred to in Lord Waring's case and set out at p.11 above), as exhaustive of the rights of a mortgagor to set aside a mortgagee sale, said at p.496/497 :
`There may be an improper exercise of the power of sale (that is one which constitutes a breach of the duty owed by the mortgagor) where although there is not any actual fraud (in the ordinary sense of the term) or any collusion between the mortgagee and the purchaser, there is improper conduct which goes beyond mere negligence in carrying
out the sale. There may be impropriety of various kinds. What has sometimes been described as a fraud on the power and sometimes
as a wilful or reckless disregard of the interests of the mortgagor or sometimes as sacrificing of the interests of the mortgagor
does not necessarily involve in my opinion, the commission of fraud. ... I think it is in accordance with authority and that it should
be affirmed that there may be conduct which amounts to reckless sacrificing of the interests of a mortgagor, although it is not shown
that there is an actual intention to defraud him or that there is corruption or collusion with the purchaser.
I do not doubt that as between (the mgor) and his mortgagee who has conducted himself in that waat way in entering into a contract
of sale, a mortgagor is entitled to invoke the aid of the Court to prevent the completion of the contract. As between those parties
the proprietary right of the mortgagor will be protected against such a wrongful alienation by the mortgagee.'
andr in p.497 his Honour said of the mortgagor's right to set aside a completed contraontract entered into in breach of the mortgagee's duty :
"In my opinion if the mortgagee does not exercise the power of sale `in gooth' (in the sense explained above) and the purchaser has knowledge of the facts which show the lack of good faith, the purchaser cannot obtain a right superior to the
right of the mortgagor. Even where a contract made in such circumstances is carried to completion, in many cases the transaction
may be set aside, or alternatively, the conveyance or transfer treated as operating only as a transfer of the mortgage and of the
debt secured by it, and not as a transfer of the mortgagor's interest : See : Latec Investments Ltd. v. Hotel Terrigal Pty. Ltd. (In Liquidation) [1965] HCA 17; (1965) 113 CLR 265 at pp.274-275.'
Further whilst accepting `as applicable and as correct' the decisions in Lord Waring (op.cit) and Emerton (op.cit) to a contract of sale which was not affected by any impropriety on the part of the mortgagee in exercising his `power of sale', nevertheless rejected the proposition at p.499 that :
`a contract is binding before completion upon a mortgagor, even if the mortgagee acted in bad faith, unless he acted in collusion
with the purchaser, or, alternatively, unless the purchaser had knowledge at the date of the contract of the facts which affected
the propriety of the sale.'
His Honour also rejected the analogy soughbe drawn between a mortgagee exercising his `power ofer of sale' and an agent acting within his ostensible authority but in breach (unknown to the purchaser) of his duty to his principal, saying
at p.500:
`Thtgagee in making a sale is acting on his own behalf and primarily in his own interests. The. The sale is not one by which the mortgagor,
through the medium of an agent is disposing of his own property. It is one by which his property is being divested from him. If the
power vested in the mortgagee is properly exercised the mortgagor is bound. But if it is not exercised in good faith there is, in
my opinion, no reason that can be derived from any general principle for holding that before completion the purchaser gets a good
title as against the mortgagor.'
Then at p.505 in upholding ower Court's `order for payment in', his Hono Honour said :
`The deposit of the securitas made in accordance with a condition imposed on the mortgmortgagor by the Court, for the benefit of the
mortgagee and as a means of doing justice between the parties.'
and further :
<1"> `he Court could have provided as a term of the order that as from the date of the payment innt in, the interest should cease to run.'
Finally in rejecting a not dissimilar submission to that of defence counsel regarding the necessity to seek an order setting aside
the `contract of sale' between the defendant Bank and the successful tenderer, Walsh J. said at p.504 :
`... in my opinion, the relief to which the piff's are entitled (namely an injunction to restrain completion) could properly be granted without first setting aside the contract. What is of importance to the plaintiff is that the parties should
be restrained from completing the contract, thereby depriving (the mortgagor) of his proprietary interest. The question whether the contract is set aside or remains on foot as a possible source of rights and
obligations as between (the mortgagee) and (the purchaser) is one which concerns those parties only and which was not fully litigated in the action. In my opinion it is not necessary to make
an order setting aside the contract.'
Mason J. for his part in agreeing with what Walsh J. had written, specifically reserved at p.511 ibid any expression of opinion :
`as to the correctness of the proposition [stated in the Waring and Emerson cases (op.cit)] that an exercise by the mortgagee of his power of sale is binding on the mortgagor before completion, unless the power of sale was
not exercised bona fide.'
Earlier his honour had observed of the facts of the case at p.510 :
(the mortgagee) determined willy nilly on a sale to (the purchaser) for a price which would cover the money owing to it, notwithstanding that there was a real possibility of selling at a higher price
to (an interested third party) and despite its knowledge that (the interested third party) would take over the mortgage and preserve the mortgagor's equity, if the need arose.'
In similar vein Stuart V-C in setting asid mortgagee sale in JeJenkins v. Jones (1860) 128 R.R. 41 which produced a substantial surplus and where the mortgagor had tendered the principal and interest (but not the costs which were
then unascertained), said at p.47 :
`... the defendants resolved that there should be no redemption, but that there should be a sale. This is precisely that of which
the plaintiff complains, and which this Court, which alone recognises the right to redeem, must regard as oppressive. Before the
surplus could be paid into Court, there must necessarily be a sale, which could not be effected consistently with that redemption
which the plaintiff desired.
Even if the case rethere, enough is proved to show such a settled determinationation to defeat, thwart, and discourage the redemption,
that this Court is bound to regard with great jealousy any subsequent proceedings against the mortgagor's endeavour to redeem.'
A fortiori, how much more is needed to satisfy a Court where the sale price produces substantially less than the monies owed under the mortgage
and there is a genuine tender by the mortgagor of an amount sufficient to meet the entire debt due at the time of the tender and whatsmore,
not result in the total displacement of the mortgagor from the land. Needless to say in light of the above dicta the so-called `transparency' with which the defendant bank exercised its `power of sale' is, in my opinion, neither conclusive of the matter nor does it necessarily negate a breach of its duties in that regard.
I have thus far covered as much of the case law as I desire for the purposes of this case and I turn to consider in more detail the
statutory entitlement of a mortgagor to redeem the mortgaged property under Section 72 of the Property Law Act (Cap.170).
At the outset the Section provides thatentitlement to redeem may omay occur `... at any time before (the mortgaged property) has been actually sold'. It should be noted that the words are not `sells' but rather `has been actually sold'. On the basis that every word in a section ought to bear some meaning I am driven to the view that `actually' when used in conjunction with `sold' means that the sale in the exercise of the mortgagee's `power of sale' has been `effectuated' by a registered transfer of the mortgaged property such as to raise in the purchaser's favour, the protective provisions of Section 79(3).
As was said by h J. in Forsyth v. Blundell op.cit at t p.498 :
`The mortgagor's interest of course, prior in time to any interest acquired by the pthe purchaser. The right of the mortgagor was
not merely an equity of redemption. The mortgages did not operate as transfers of his title to the land : See the Ordinance S.93 [which is identical to Section 63 of our Land Transfer Act (Cap.131)]. His title could be divested by a transfer in pursuance of a contract of sale made by the mortgagee in the exercise of the power
of sale. But until that occurred, he retained a legal interest in the land.'
Whatsmore tgal interest retained by the mortgagor in the mortgaged land is an equitable interest suffisufficient to support a caveat
to prevent the completion of a voidable contract for the sale of the land entered into by the mortgagee in exercise of his power
of sale See : Sinclair v. Hope (1982) 2 N.S.W.L.R. 870.
In ewer v. Papatoetoe Town Board [1934] NZGazLawRp 148; (1934) N.Z.L.R. 774, Fair J. speaking oing of the meaning and effect of the word `actual' in the phrase `actual occupation' said at p.777 :
ass=MsoNormal stal style="text-align: justify; margin: 1 36.0pt"> &q.. the word `actual' when used in conjunction with the word `occupation' is effective to exto exclude any constructive, legal or
notional occupation which might otherwise arise, and which does not completely correspond to the fact which it indicates. `Actual
occupation' means occupation in fact as distinguished from constructive occupation : R. v. inhabitants of St. Nicholas, Rochester [1833] EngR 268; (1834) 110 E.R. 773, 776.'
In this regard too in the rather unusual case of Life Interest and Reversionary Securities Corp. v. Hand-in-Hand Fire and Life Insurance Society [1898] UKLawRpCh 93; (1898) 2 Ch. 230 where the purchaser in a `contract of sale' entered into under a mortgagee sale, sought to question the propriety of the mortgagee's exercise of its `power of sale', and where objection was taken to the purchaser's requisition on the basis of Section 21(2) of the Conveyancing and Law of Property Act 1881 (U.K.) [which is in almost identical terms to Section 79(3) of the Property Law Act (Cap.130)], Stirling J. in over-ruling the mortgagee's objection said (of the wording of the Section) at p.238 :
`That gives protection only to a purchaser who has obtained a conveyance. The prote accrues only after the cone conveyance has been
made ... It appears to me that this provision is not applicable until after a conveyance is made, or, in other words, (the Sections) confer protection only on a purchaser who has obtained a conveyance without knowledge of any irregularity ... The provisions of Section
21 are, I think, for the protection of the purchaser, and not for the benefit of the vendor.'
It is significant in my view that the protection afforded to a purchaser under Section 79(3) `where a transfer is made ...', not only covers a lawful exercise of the mortgagee's power of sale but also extends to a `purported exercise of the power of sale' and even where the power is `improperly or irregularly exercised'.
One is tempted to ask if it was truly intended that the mortgagor's `equity of redemption' should be irretrievably lost upon the execution of an unconditional contract of sale, why then did the legislature not extend the
statutory protections in Section 79(3) to the contract ? and why draw the particular distinction between `a sale' of mortgaged land and `a transfer' for the purposes of protecting the one and not the other ? and what happens to the `equity of redemption' if the `contract of sale' is not carried out ? Can it be said in such a case, that the mortgaged land `has been actually sold' ? and if not, then where is the line to be drawn if not at the point where the legislature says the sale becomes `unimpeachable'?
In light of the view expressed above as to the meaning and effect of Section 72(1) of the Property Law Act (Cap.130), I would answer the question earlier posed at p.3 : `Yes, the plaintiff retains his statutory right to redeem the mortgaged land until such time as a transfer of the mortgaged land has
been registered by the defendant bank pursuant to the exercise of its power of sale.'
I hasten to add however, no findings have been made regarding the defendant bank's nk's actions in exercising its `power of sale' in this instance, or the enforceability or otherwise of the `contract of sale' entered into with the successful tenderer who remains unknown at this stage. These questions must be left to be answered if at all,
in another action between the appropriate parties and after full evidence has been received.
I shall hear counsels on the ariate final orders to be made in this case after they have have had time to properly consider this judgment
and its implications.
D.V. Fatiaki
JUDGE
At Suva,
14th January, 2000.
HBC0149J.98S
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