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Saunaqali v ANZ Banking Group [2001] FJHC 150; Hbc0457d.2000 (1 May 2001)

IN THE HIGH COURT OF FIJI
(AT SUVA)

CIVIL ACTION NO. HBC 457 OF 2000

Between:

SIVANIOLO MARIO SAUNAQALI
Plaintiff

and

ANZ BANKING GROUP
Defendant

Ms. S.L. Waqainabete for the Plaintiff
K. Kumar for the Defendant

DECISION

This is an application by a mortgagor to restrain a mortgagee from exercising its power of sale.

In support of the application the Plaintiff’s affidavit filed on 12 October 2000 advanced two arguments, the first being that a 3 week period given by the Bank to sell the property was inadequate and unreasonable and secondly that the amount of arrears owed under the mortgage, $4,210 was so small in proportion to the value of the property (said to be approximately $150,000) as to render the exercise by the bank of its powers unreasonable.

When the matter came before Pathik J for mention on 20 October 2000 the Bank consented to an order adjourning the application for one month to enable the Plaintiff to arrange the sale of the property and repayment of the loan.

In February 2001 the matter came before me and was further adjourned after counsel for the Plaintiff advised me that arrangements were in hand for the imminent repayment of the debt.

In March 2001 the Plaintiff filed a second affidavit showing that a number of repayments had been made and in particular that $5,200 representing the arrears had been paid into the account in October 2000. The affidavit also exhibited a letter advising the Bank that the Plaintiff had entered into a private sale and purchase agreement for the property.

On 20 April 2001 the Bank filed an affidavit in answer. It exhibited a copy of the Sale and Purchase agreement, one of the effects of which was that the purchaser was to take over the Plaintiff’s debt to the Bank and repay it over an 18 month period. According to paragraph 8.2 (viii) of the Bank’s affidavit, the Bank advised the Plaintiff’s solicitors that this arrangement was unacceptable.

The Bank’s case is simply that it has statutory and contractual powers of sale exercisable in the event of default and that no acceptable reasons have been advanced for the exercise of these powers to be restrained. Mr. Kumar, who filed an excellent written submission relied on Sections 77 and 79(1) of the Property Law Act (Cap 130) and on clauses 1 & 21 of the Mortgage. He also cited Inglis v. Commonwealth Trading Bank of Australia (1971-72) 126 CLR 161 which has been regularly followed both in the High Court and the Court of Appeal in Fiji.

In answer Ms. Waqainabete who appeared to acknowledge that she faced an uphill task, could only point to the total amount owed (about $50,000) in relation to the value of the property which the Plaintiff put at about $150,000. She also referred to the fact that the Plaintiff had sold the property to one Navitalai Naisoro who had moved into the property and was paying instalments to the Plaintiff.

I do not know how this sale and purchase of the property could have come about. It is a clear breach of clause 22 of the Mortgage. Ms. Waqainabete advised me that the sale and purchase has not been registered and it is of course therefore invalid (Land Transfer Act Cap. 131- Section 37). In my view it cannot defeat the mortgagee’s powers of sale.

Mortgages are sometime seen as somewhat harsh contracts which give wide powers to the mortgagee. In practice these powers are not exercised except after careful consideration and after persistent default by the mortgagor.

No offer of payment in of the amount owed has been made by the mortgagor. In my view, applying well established principles, the grounds advanced by the Plaintiff do not justify granting the injunction sought. The application is accordingly refused.

M.D. Scott
Judge

1 May 01.