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IN THE HIGH COURT OF FIJI
At Suva
Civil Jurisdiction
CIVIL ACTION NO. 0259 OF 1992
Between:
HOUSING AUTHORITY
Plaintiff
- and -
APISAI V. TORA
MELI NATALATU TORA
Defendants
Mr. V. Maharaj for the Plaintiff
Mr. A. Tikaram for the Defendants
JUDGMENT
This is an application to set aside summary judgment entered against the defendants under Or.14 of the High Court Rules 1988 on 20th January 1998. The action has a long and chequered history which bears repeating.
The action was first instituted by Writ dated 28th May 1992 which was accompanied by a summons under Or.15 r.14 seeking the leave of the Court `that the plaintiff be at liberty to conduct this action against the above-named defendants as trustees of Natuaniyarawa Village Housing
Scheme’.
The Writ was acknowledged by the defendants in a notice dated 16th June 1992 and despite being aware of it, in the absence of defence counsel on 17th July 1992, the plaintiff’s application under Or.15 r.14 was granted. By summons dated 27th July 1992 the defendant’s sought to set aside the Court’s order under Or.15 r.14. The defendant’s summons was heard on 19th October 1992 and by a ruling dated 3rd November 1992 the application was dismissed.
Thereafter, on 6th April 1993, in the absence of a Statement of Defence default judgment was entered against the defendants. By notice dated 26th May 1993 the defendants changed their solicitors who then filed a summons seeking to set aside the default judgment and leave to defend the
action. Before the defendant’s application could be heard however defence counsel died and new counsel was appointed by the defendants
on 14th September 1993 and they in turn, issued a fresh motion to set aside the plaintiff’s default judgment. By consent order dated 4th May 1994 default judgment was eventually set aside and the defendants were granted unconditional leave to defend.
A Statement of Defence was filed on 6th May 1994 and a reply to defence was filed on 3rd August 1994 thereby closing the pleadings in the action. Procedural matters then occupied a further 2½ years and finally the plaintiff Authority’s solicitors issued a summons for a hearing date to be fixed and for dispensing with the
holding of a pre-trial conference ostensibly because `the defendants (were) no longer legally represented ‘. On 4th March 1994 the defendants by their now 4th counsel served notice of change of solicitors.
A pre-trial conference was eventually held on 5th June 1997 and a fresh summons to fix a trial date was issued by the plaintiff Authority’s solicitors on 8th October 1997. Thereafter it is unclear what happened to the summons to fix a trial date but it is common ground that the action was never tried.
On 3rd November 1997 the plaintiff Authority issued the present Or.14 summons seeking `final judgments in the action against the defendants for the amount claimed ......’ On 20th January 1998 in the absence of any affidavit from the defendants and in the absence of defence counsel who had been served, summary judgment was
entered against the defendants with execution stayed for 3 months.
Thereafter on 4th May 1998 sealed copies of the summary judgment was personally served on the above-named defendants and that triggered the appearance of the
defendants by their now 5th legal counsel who recorded his appearance by notice dated 18th September 1998. That was simultaneously followed by an application to set aside `the default judgment entered and sealed on 9th February 1998'. The application was made under Or.14 r.11 of the High Court Rules 1988 which reads:
`Any judgment given against a party who does not appear at the hearing of an application under rule 1 or rule 5 may be set aside or
varied by the Court on such terms as it thinks just.’
Affidavits were exchanged between the parties and the defendant’s summons was eventually heard on 7th June 1999. It is much to be regretted that it has taken this long to deliver this judgment. It is clear however from the above brief chronology
that a good deal of the delay in this case has been occasioned by the constant changing by the defendants of their legal representatives
and the duplication of applications that that entailed. In all there were five (5) different sets of chambers.
The plaintiff’s claim against the defendant’s may be summarised as being one for the recovery of loan monies advanced towards the
construction of houses under the Natuaniyarawa Village Housing Scheme of which the above-named defendants were appointed trustees under a Trust Deed dated 21st September 1985.
The settlors of the Trust were eight (8) named individuals including the defendants who formed themselves into an unincorporated association called the Natuaniyarawa Village Housing Scheme with an avowed `...... purpose of rehousing and resettling their people at Natalau Village in the Dominion of Fiji’.
Under the Trust Deed the trustees were empowered to borrow and/or raise money generally for the purpose of carrying out the trust and more specifically
: `...... (to) enter into an agreement with the principal lender the Housing Authority whereby the Authority shall advance sums of money to the Trustees
for the construction of the houses at Natalau Village’ and by Clause 9 : `The Trustees shall ensure that the repayments of the said loan is correct and punctual.’
In this regard the plaintiff’s Acting Director Marketing had earlier deposed in the Or.15 r.14 application that `...... the defendants in their capacity as Trustees of Natuaniyarawa Village Housing Scheme ...... were granted four loans by the
plaintiff to construct houses and to carry cyclone upgrading to the said houses at the defendant’s village at Natalau, Nadi.’
Furthermore in its Statement of Claim the plaintiff avers at para.3 :
`Between December, 1982 and October 1986 at the defendant’s request, the plaintiff advanced to the defendants a total sum of $155,029.00
for the construction and upgrading of Village Housing scheme for the benefit of the members of Natuaniyarawa Village at Ba.’
By the time the summary judgment was entered a second time against the defendants on 20th January 1998 that sum with accrued interest had ballooned to $228,556.56.
The first defendant filed a lengthy affidavit dated 18th September 1998 in support of the present application seeking to show cause against the summary judgment entered on behalf of the plaintiff. No
proposed Statement of Defence was annexed to the affidavit although counsel in oral argument sought to rely on the Statement of Defence filed by the defendant’s third solicitors on 5th May 1993 and which, in the words of the defendant’s present counsel, `seeks to dissociate the defendants from the borrowings from Housing Authority’ by naming the actual borrowers and/or scheme members to whom it is claimed the monies were actually lent and from whom securities
for the loans comprising mortgages and crop liens, were obtained by the plaintiff Authority.
This is further exemplied in the first defendant’s affidavit wherein he specifically identifies two (2) lendings by the plaintiff one, to the 2nd named defendant and the other, to Sakiusa Turuva, both of which pre-dates the Trust Deed and which are separately secured by personal mortgages granted by them (as mortgagors) in favour of the plaintiff Authority
:
`IN CONSIDERATION of (monies) agreed to be lent to or advanced for the benefit of the Mortgagor by the HOUSING AUTHORITY.’
In respect of both these mortgage borrowings which on their face totals: $ (55,720.00 + 97,273.44) = $152,993.44. The 1st defendant deposes inter alia (at para.17) :
`......I verily believe the advances under their respective mortgages were made by the Plaintiff to them in their individual capacity
long before the implementation of the Deed of Trust.’
As for a further mortgage granted to the plaintiff Authority by Nikola Vetawa which post-dates the Trust Deed, the first defendant deposed that ` ...... (the mortgagor) is neither a member nor a beneficiary under the Natuaniyarawa Village Housing Scheme’, and that the advances to the borrower by the plaintiff Authority was done `in his personal capacity and I suspect the plaintiff is trying to recover this sum as well as from us as trustee.’
It is noteworthy however, that this latter mortgage document makes clear by the deletion of the word `mortgagor’ and the substitution therefor of the words `members of the Natuaniyarawa Housing Scheme, Natalau, Nadi’, that the monies secured by the mortgage i.e. $143,859.73 were not advanced or lent for the personal benefit of the named mortgagor.
More specifically, in referring to paragraphs 3 & 4 of the Statement of Claim the 1st defendant : `Categorically denies that the plaintiff ever advanced the sum claimed or any sum at all to us as trustees of Natuaniyarawa Village
Housing Scheme’ and further, `...... denies ever giving any mortgage to the Plaintiff to secure the alleged advance of $155,029.00.’
In reply however, the plaintiff’s Manager Corporate Services deposed :
`...... that the defendants at all times since December 1982 had held themselves out as Trustees of Natuaniyarawa Village Housing
Scheme and negotiated all loans with Housing Authority and entered into contracts in such capacity and the Deed of Trust executed
by the defendants on 21st September 1985 was to formalise hitherto an informal arrangement with a view to giving additional security for the loan thus far advanced and for any future advances
by holding the defendants responsible for payment of the loan.’
Counsel for the plaintiff Authority for his part argued that whatever securities were given by individual members of the Housing Scheme merely reflected what securities could be obtained by the plaintiff Authority but there can be no doubting that the loan amounts
were specifically requested by the defendants.
Furthermore counsel relies on the judgment in Brown Miller Press v. Insight Illustrations Ltd. (1996) D.C.R. (N.Z.) 728 in which Judge Morris after referring to para.940 of Vol.48 of Halsbury’s Laws of England (4th edn.), summarised the personal liability of a trustee in the following passage in his judgment at p.731 as follows :
`(1) Where a trustee trades or otherwise deals with trust property he or she is deemed as against all persons other than the beneficiaries
to do so in his or her own account, and is consequently personally liable for all debts incurred in the course of trading or dealing.
This is ameliorated only by a trustee’s right of indemnity and that would be from trust assets and contribution or indemnity from
co-trustees.
(2) A mere description of the capacity in which a trustee contracts as that of trustee is insufficient to exclude full personal
liability.
(3) The normal personal liability is only excluded by appropriate language or express stipulation that such liability is restricted to
trust assets. The fact that those who deal with the trustee know he is contracting in his capacity as trustee is immaterial.’
Plainly the mere fact that the defendants now depose that `all negotiations and all applications that we made to the Housing Authority on behalf of Natuaniyarawa Village for construction of
houses at the village were done purely in our capacity as Trustees and not in our personal capacity’ does not thereby exclude their personal liability for the debt.
Finally counsel submits that the defendant’s defence represents a veiled attempt on their part to appeal, by a sidewind, the Court’s
earlier ruling dismissing the defendant’s application to set aside the representative order made against them under Or.15 r.14 of the High Court Rules.
Having carefully considered the competing submissions of counsel and the affidavits together with the numerous annexures and, more
particularly, the correspondence provided in the affidavit of the plaintiff’s Manager Corporate Services which defence counsel accepts are accurate, I am driven to the firm conclusion that not only have the defendants not raised an arguable
defence on the merits to the plaintiff’s claim but further that the judgment has been approbated (see : plaintiff’s annexures C-6 and C-9 dated February and July 1996 respectively).
In this latter regard the judgment of the Fiji Court of Appeal in Navitalai Raqona v. Bhika Bhai Co. Ltd. (1987) 33 F.L.R. 44 in which the appellant, like the present defendants, had denied personal liability for a debt and had claimed to have been dealing
with the respondent company only `as trustee’, the Fiji Court of Appeal in dismissing the appeal against the entry of a default judgment said at p.47 :
`There can be no getting past the fact that the Appellant, who has the onus of proving a valid available defence has denied that this
was his debt, yet is faced with a written admission of a substantial portion of it.’
The defendants application is accordingly dismissed with costs to be taxed if not agreed.
D.V. Fatiaki
JUDGE
At Suva,
27th November, 2001.
HBC0259J.92S
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