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Kurulo v NBF Asset Management Bank [2002] FJHC 56; Hbc0162j.2000s (22 May 2002)

IN THE HIGH COURT OF FIJI
(AT SUVA)

CIVIL ACTION NO. HBC 162 OF 2000S

Between:

THE REVEREND SULIASI KURULO
PASTOR VILIAME LOMALOMA
PASTOR SANAILA SOQOVATA
PASTOR SOLOMONI VAKARURU
EMOSI TOROCA
First Plaintiffs

and

ISIMELI TUBUTUBU
Second Plaintiff

and

NBF ASSET MANAGEMENT BANK
Defendant

Ms. U. Fa for the Plaintiffs
Ms. R. Singh for the Defendant

JUDGMENT

By these proceedings (somewhat unusually commenced by way of Originating Motion) the Plaintiffs seek an order for specific performance of a contract for the purchase of land CT 7240 for which they successfully tendered after it was advertised by way of a mortgagee sale by the Defendant (the Bank). See Exhibits NG1, NG2 and NG5 to the second Plaintiff’s supporting affidavit filed on 13 April 2000.

As will be seen from Exhibit NG5 the Bank required that full settlement of the purchase price of $30,000 be effected within 30 days from 27 October 1999 but provided that this period could be extended by the Bank at its discretion.

On 10 November 1999 solicitors for the Plaintiffs wrote to the Bank (Exhibit NG7) requesting an extension of the 30 day period. Although the initial 30 day period had already expired, on 30 November 1999 the Bank extended settlement until the end of December 1999 (Exhibit NG8). As will be seen from the Bank’s letter a condition of the extension of the completion period was the payment of a non refundable deposit of $3,000 by 10 December.

On 14 November the Bank acknowledge receipt of the $3,000 deposit (Exhibit NG9). It also reminded Plaintiff’s solicitors that $26,900 (presumably $30,000 less $3,000 less $100 tender deposit) the balance of the purchase price was to be paid by 31 December 1999.

On 1 February 2000 Plaintiff’s solicitors again wrote to the Bank (Exhibit NG10). On behalf of their clients they sought “more time to pay off the outstanding $18,000 balance of the purchase price”. They offered to pay off the sum “by weekly instalments of $500 to $600”. At the rate of $600 per week it would take 30 weeks to pay off the sum of $18,000. The difference between $26,900 outstanding in November 1999 and $18,000 outstanding in February 2000 is apparently (although not exactly) accounted for by three payments made direct to the bank on behalf of the Plaintiff on dates unknown to me either in December 1999 or January 2000 (see Exhibit NG11).

On 15 February the Bank replied to the Plaintiff’s solicitors (Exhibit NG12). The offer of weekly payments was declined and the Plaintiffs were given a final 7 days to settle in full. The bank advised that “should you fail to settle (the outstanding balance of $18,300) within 7 days the Bank will proceed to re-advertise the property without further notice and all your deposits (will be) forfeited.”

On 16 February the Plaintiffs solicitors again sought a further month to raise the balance of $18,300 (Exhibit NG13).

On 17 February the Bank twice advised the Plaintiff’s solicitors that it stood by its final offer of 15 February: the whole sum outstanding was to be paid by 21 February. On 23 February (Exhibit NG17) the Bank advised the Plaintiff’s solicitors that owing to the Plaintiffs failure to complete it was proceeding to re-advertise the property.

The position now is that the property has been re-advertised and a binding sale and purchase Agreement has been entered into between the Bank and a third party. The Bank views the contract with the Plaintiffs as having failed. It is refusing to refund the $11,700 paid by the Plaintiffs. Mr. Laisenia Takala, Senior Manager Loan Recovery explained in paragraph 19 of his affidavit filed on 4 October 2000 that the moneys paid by the Plaintiff are regarded by the Bank as consideration paid by the Plaintiffs to the Bank for extending the completion date of a contract which subsequently failed.

Much of Ms. Fa’s written submission was devoted to the repayment of these sums in the event that specific performance was refused. As pointed out however at the hearing the reliefs sought in these proceedings do not include the return of sums paid by the Plaintiffs to the Bank and accordingly the right or otherwise of the Bank to retain these sums is not before me for determination.

The only questions before me are whether I should grant specific performance of the contract and whether I should restrain the Bank from selling the property to a third party.

Having considered the affidavits before me I am of the view the Plaintiffs failure to complete by 21 February 2000 as was required by the Bank’s letter of 15 February 2000 coming as it did after repeated earlier failures amounted to a breach of the contract between the Plaintiffs and the Bank by the Plaintiffs entitling the Bank to rescind.

I reach this conclusion notwithstanding the provisions of Section 12 (2) of the Property Law Act (Cap 130). I do so first because the Bank expressly stipulated and the Plaintiffs clearly accepted that 21 February 2000 was to be the final date for completion and secondly because of the Plaintiffs failure to complete within a reasonable time.

As I see it there is now no subsisting contract for the sale of the land between the Plaintiffs and the Bank. Therefore there is nothing in respect of which to order specific performance. Neither is there any basis for restraining the Bank from proceeding with its sale to the third party.

As already explained the question of the refund of moneys paid by the Plaintiffs to the Bank is not before me. Now that the Bank is free to proceed with the sale of the land it will doubtless reconsider the merits of retaining these sums.

M.D. Scott
Judge

22 May 2002