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Fiji Development Bank v Turaga [2005] FJHC 489; HBC0505.2000 (21 September 2005)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO.: HBC0505 OF 2000

BETWEEN:

FIJI DEVELOPMENT BANK
PLAINTIFF

AND:

EPARAMA TURAGA
DEFENDANT

Ms Y. Fatiaki for Plaintiff
Ms A. Koroi for Defendant

Date of Hearing: 20th September 2005
Date of Judgment: 21st September 2005

JUDGMENT

This is a claim by plaintiff for balance sum owing under a mortgage and Bill of Sale. The plaintiff had advanced to the defendant a total sum of $106,085.50 on security of mortgage over Crown Lease 3194 and a Bill of Sale. The term of loan was 15 years. Interest rate was 8% per annum. It is not disputed that the defendant defaulted in making his monthly payments of $1,075.00. The validity of the security documents is not questioned. The defendant says that when the plaintiff elected to sell the property under the mortgage, it did not realize the best price possible. That is the only issue raised on the pleadings.

The law on that is very clear. It is for a mortgagor to decide if he/she will sell the mortgaged property and when he will sell the mortgaged property.

But once the mortgagor decides to sell he/she owes a duty of care to act honestly and to take reasonable precautions to obtain the true market value of the property at the date of sale – Tse Kwong Lam v. Wing Chit Sen – [1983] UKPC 28; 1983 1 WLR 1349. The Court of Appeal in Jai Narayan v. Mohammed Samshu Dean & Others – ABU0056 of 1985 stated that the duty of the mortgagee was to obtain a fair market value when realizing the mortgaged property by sale.

The plaintiff in this case had the property valued by a registered valuer. He valued it at $95,000.00. The property was advertised in a newspaper for sale. The Bank received tenders ranging from $70,000.00 to $99,000.00. The highest tender was in fact over the figure fixed by a registered valuer. There is nothing unreasonable in the manner in which the sale was conducted or the price which was obtained. The property was sold for $99,000.00 leaving a residual balance of $27,633.01 which the plaintiff claims. The plaintiff has tendered statement of accounts to support its claim for residual balance.

I therefore enter judgment for the plaintiff against the defendant in the sum of $27,633.01 together with interest at 8% per annum from 1^st October 2000 until judgment. From the day of judgment, interest shall accrue at 4% per annum on the judgment sum. I also award costs summarily fixed in the sum of $2,000.00.

[ Jiten Singh ]
JUDGE

At Suva
21^st September 2005