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Western Wreckers Ltd v Credit Corporation (Fiji) Ltd [2010] FJHC 218; HBC119.2010L (29 June 2010)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 119 of 2010L

BETWEEN:

WESTERN WRECKERS LIMITED
Plaintiff

AND:

CREDIT CORPORATION (FIJI) LIMITED
Defendant

INTERLOCUTORY JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Mr. Haroon A. Shah for the Plaintiff
Mr. Anu Patel for the Defendant

Solicitors: Haroon Ali Shah Esq. for the Plaintiff
S. B. Patel & Co. for the Defendant

Date of Hearing: 25 June 2010
Date of Judgment: 29 June 2010

INTRODUCTION

[1] This is an application by Western Wreckers Limited (Western Wreckers) to restrain Credit Corporation (Fiji) Limited (Credit Corp) from proceeding with recovery action under 4 mortgages.

[2] The Motion was filed ex-parte on 15 June 2010 but I directed it to be issued inter-partes because I did not think that a case of urgency or serious mischief or hardship was made out after perusal of the affidavit in support.

[3] The Motion was made returnable on 22 June 2010 on which date I gave leave to Credit Corp to file and serve its affidavit in reply by Thursday 24 June and the matter set down for an early hearing on 25 June at counsels’ request. I am grateful for their cooperation which enabled this matter to be heard and judgment delivered promptly.

[4] As this matter may have some commercially sensitive elements I do not intend to refer to specific amounts and other details other than those necessary for the determination of this application.

THE APPLICATION

[5] The Motion was filed pursuant to O 29 of the High Court Rules 1988 and the Court’s inherent jurisdiction and sought to restrain Credit Corp from proceeding with recovery action under 4 mortgages.

[6] The relief sought in this application is substantially the same as that sought in the Writ of Summons filed together with the Motion. Although that does not make this application defective it does make it difficult for the applicant to obtain what it wants in this summary way.

[7] The Managing Director of Western Wreckers in his affidavit in support says that the company and Credit Corp have had financial arrangements over several years in which Credit Corp provided financial assistance secured by mortgages from the company. It had two loan accounts secured by 4 mortgages. On 12 January 2010, Credit Corp, at the company’s request, provided settlement figures for the two accounts valid till 29 January 2010. He says the company does not agreed with the settlement figures because Credit Corp had not given the company certain credits. The company wrote to Credit Corp on the same day pointing this out and requested a meeting to discuss its accounts. That meeting does not appear to have taken place. Because of this, he says the company did not make any repayments for February to May. On 1 June 2010, Credit Corp issued four demand notices for the total principal and interest owing under the loans secured by the four mortgages. He says the amounts demanded are over-inflated. Western Wreckers is a substantial and solvent company but he fears that if Credit Corp advertises for recovery under the mortgages it would jeopardise its financial standing. The company employs about 300 workers all around Fiji and the value of its assets far exceed the company’s exposure to Credit Corp.

[8] In reply, Credit Corp denies that Western Wreckers is entitled to any credits.

CONSIDERATION OF THE APPLICATION

[9] At the hearing, Mr Shah, counsel for Western Wreckers, rightly conceded that his client was not disputing the validity of the mortgages or Credit Corp’s right to recover under them. However, his client is disputing the amount allegedly owing.

[10] Mr Patel, counsel for Credit Corp, cited NBF Asset Management Bank v Fatiaki [2004] FJHC 360; HBC0149.2002 (22 October 2004) and my decisions in Whittaker v National Bank of Fiji Ltd [2009] FJHC 180; HBC155.2009L (31 August 2009); Whittaker v National Bank of Fiji Ltd [2009] FJHC 275; HBC155.2009L (9 December 2009) and Whittaker v National Bank of Fiji Ltd [2010] FJHC 104; HBC155.2009L (7 April 2010) as supporting the proposition that the court will only interfere with a mortgagee’s right of recovery in exceptional circumstances and in cases where it does interfere, the mortgagor is required to pay some money into court.

[11] Mr Patel also cited the decision of the NSW Court of Appeal[1] in Westpoint Finance Pty Ltd v Chocolate Factory Apartments Ltd [2002] NSWCA 287 (2 September 2002) as authority for the proposition that the mortgagor has no right to an interlocutory account:

32 It is important to realise that the present proceedings were proceedings between a mortgagor and a mortgagee. Mortgagors have relatively few rights to proceed against their mortgagee. Once the mortgagee's powers have arisen, the mortgagor is only entitled to restrain the exercise of those powers on very limited grounds. A dispute as to the quantum of the mortgage debt where there is no dispute as to whether there has been a default does not entitle a mortgagor to an injunction: Harvey v McWatters [1948] NSWStRp 58; (1948) 49 SR (NSW) 173.

33 I should add that there is no right to an interlocutory account, and a mortgagor is not entitled to a partial account. A mortgagor cannot pick out one or more aspects of the accounts between the parties and litigate that alone. The Court of Appeal has decided this on numerous occasions; see eg Colin D Young Pty Ltd v Commercial & General Acceptance Ltd (24 August 1982, unreported, C/A); Kennedy v General Credits Ltd (1982) 2 BPR 9456 and Adams v Bank of New South Wales [1984] 1 NSWLR 285.

34 To succeed then, the plaintiff had to show that (a) there is an arguable case; (b) that the balance of convenience favours the grant rather than the refusal of the injunction; and (c) damages are not an adequate remedy. This case concerns (a).

35 Accordingly, unless the plaintiff could convince the Court on a prima facie basis that nothing was owing under the mortgage, its application for an interlocutory injunction had to be dismissed.

36 Thus the question before the Judge and before us was whether the plaintiff had shown an arguable case as at the date of filing of the summons that no money was owing under the mortgage.

[12] He submitted that Western Wreckers did not dispute that a substantial part of the demand was owing and in fact did admit that such a substantial sum was owing, so I should order that this sum be paid directly to his client or, alternatively, that it be paid into court as a condition to the grant of any restraint against his client.

[13] I accept counsel’s submission that Western Wreckers has not shown special circumstances of the type justifying this Court restraining Credit Corp from proceeding with recovery under its mortgages. The cases cited above by him are clear authorities supporting his submission. I therefore refuse to make any orders restraining Credit Corp from proceeding with recovery action under its mortgages.

[14] It follows then that the question of payment into court does not arise. Secondly, it is true that on the affidavit material Western Wreckers admit owing a sum of money to Credit Corp but all that has happened so far is that a demand has been issued. There is no cross application by Credit Corp for summary judgment or payment to them. Thirdly, Mr Shah submitted that his client has assets to liquidate and pay off the debt and all they need is time to do it. At the end of the day, all he is asking for is that justice be done. In these circumstances I will therefore not order that Western Wreckers pay any money either into court or directly to Credit Corp.

COSTS

[15] The Plaintiff having lost his application should pay the Defendant’s costs which I summarily assess as $800, to be paid within 28 days.

ORDERS

[16] The Orders are therefore as follows:

a. The Plaintiff’s application by motion filed on 15 June 2010 for interim orders restraining the Defendant from proceeding with recovery action under its mortgages is refused and dismissed.

b. The Plaintiff shall pay the Defendant’s costs of this application of $800 within 28 days.

Sosefo Inoke
Judge

^[1] Handley JA, Young CJ in EQ and Foster AJA.