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Home Finance Company Ltd v Mavoa [2012] FJHC 1423; HBC146.2012 (9 November 2012)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

Civil Action No: 146 of 2012.

IN THE MATTER of Mortgage No: 549134 given by
ERONI BALEIWAI MAVOA and EMMALINE BUI MAVOA
of Lot 2, Toninaiwai Subdivision, Colo-i-Suva, Suva Consultancy Consult and Domestic Duties over the residential property comprised in Native Lease No: 9872.

BETWEEN:

HOME FINANCE COMPANY LIMITED
(referred to as HFC) a limited liability company having its registered office at 371 Victoria Parade, Suva in the Republic of the Fiji Islands.
PLAINTIFF

AND:

ERONI BALEIWAI MAVOA and EMMALINE BUI MAVOA
of Lot 2, Toninaiwai Subdivision, Colo-i-Suva, Suva Consultancy Consultant and Domestic Duties.
1ST DEFENDANTS

AND:

LUISA TARAIVINI MAVOA
and other Occupants of Lot 2, Toninaiwai Subdivision, Colo-i-Suva, Suva.
2ND DEFENDANT

BEFORE : Master Deepthi Amaratunga
COUNSEL : Mr. Nand for the Plaintiff
Ms. Vaurasi L. S. R. M for the Defendant

Date of Hearing : 24th October, 2012
Date of Ruling : 09th November, 2012

RULING

1. INTRODUCTION
   

1. This is a summons for the eviction of the Defendants from the premises in terms of Order 88 of the High Court Rules of 1988. The Defendant had raised a preliminary issue and that is whether the affidavit in support failed to comply with the requirements contained in Order 88 and if so whether the application should be dismissed in limine. In other words the Defendant is seeking a determination of the court as whether the requirements contained in Order 88 are mandatory and if so whether the action should be struck off.
   
2. This issue was dealt in Nationwide Building Society v Bateman [1978] 1 W.L.R 394 by Goulding J (p396-399) and held that 'Order 88 r.6(3)(b) requires the affidavit to state as at its date the total amount of repayment of principal made under the mortgage.'
   
3. Goulding J while arriving at the said decision stated as follows (p 396-399)
   

"At the request of the Plaintiff – which was unwilling, unless forced to do so, to alter or supplement what appears to be a standard form of affidavit for its use in such cases – the master adjourned the originating summons to me simply for the purpose of expressing an opinion on the two procedural points. They are quite short points. The first is, my judgment, not altogether easy because of the brevity of the relevant provision in the Rules of the Supreme Court and the possibility of interpreting it in more than one way.

I must read part of R.S.C., Ord. 88, r.6 for it is to that rule that both the questions relate. It consists of seven sub – rules. The first is in these terms:

"The affidavit in support of the originating summons by which an action to which this rule applies is begun must comply with the following provisions of this rule. This rule applies to a mortgage action in the Chancery Division begun by originating summons in which the plaintiff is the mortgagee and claims delivery of possession or payment of moneys secured by the mortgage or both."

Then sub – rule (2) provides for the production of the original mortgage or charge certificate, and for a true copy thereof to be exhibited to the affidavit. Sub – rule (3) is the one to which the first of the master's points relates. It reads:

"where the plaintiff claims delivery of possession the affidavit must show the circumstances under which the right to possession arises and, except where the court in any case or class otherwise directs, the state of the account between the mortgagor and mortgagee with particulars of (a) the amount of the advance (b) the amount of the repayments, (c) the amount of any interest or installments in arrear at the date of issue of the originating summons and at the Date of the affidavit, and (d) the amount remaining due under the mortgage."

Then comes sub – rule (4) to which the second of the master's points relate:

"Where the plaintiff claims delivery of possession the affidavit must give particulars of every person who to the best of the plaintiff's knowledge is in possession of the mortgaged property."

I know that in many cases a mortgagee complies with cub – rule (3) by exhibiting the full account between the parties, from which the state of the account and the four items (a) (b) (c) (d) can be readily ascertained. They are often set out as well, one by one, in the body of the affidavit. Other mortgagees – and the plaintiff in this case appears to be one of them – prefer to give quite concisely the figures required by the rule. The only item in the affidavit now in question which could satisfy. I think on any construction, item (b) of sub – rule (3) is the statement "To amount of monthly installments of interest £84.65."As counsel points out, that is in any case incorrect because it is the total amount of an installment consisting in part – and at the present time it must be much the greater part- – of repayment of principal. However that may be, the question arises: What is the true requirement stated by sub –rule (3) (b) "the amount of the repayment"?

The master in referring the question to me has formulated his point in this way:

"Whether Order 88, r.6 (3) (b) requires the affidavit in support to state as at its date the total amount of repayments made under the mortgage".

At least four possible interpretations of the short phrase "the amount of the repayments" have been mentioned in argument by Mr. Parker for the Plaintiff, the defendant unfortunately not being represented and indeed not having entered, so I am told, an appearance to the originating summons. Mr. Parker has presented the matter most helpfully. At the same time I regret that I have not had the benefit of antagonistic debate because it often enables points to be more fully developed.

The four possibilities that appear are these: first of all "the repayments" might mean either the repayments required by the terms of the mortgage and any subsequent effective variation of those terms or it might mean the amount of the repayments already made at the date of the affidavit. Again, "the repayments," following as it does on a reference to "the advance," might either mean repayments of the principal amount of the advance or it might mean repayments of the principal and interest or either. Thus there are at least four possibilities according to the way in which those two questions are answered.

It will be convenient to mention at once that there is a similar but not identical provision in the County Court Rules 1936, as amended. It is to be found in Ord.7, r.7 (2) (iii) and that paragraph provides that the particulars of the plaintiff's claim are to state, among other things:

"The state of the account between the plaintiff and the defendant with details of – (a) the amount of the advance (b) the sums payable from time to time under or in connection with the mortgage or charge (c) the amount of any such sums in arrear and (d) the amount remaining due under the mortgage or charge."

(a) (c) and (d) appear to be identical with the particulars required by Order 88, r.6 (3) but (b) is a good deal clearer. In the County Court Rules (b) relates to "sums payable from time to time" and that must, I think, mean payable in the future as the terms of the mortgage stand at the date of the claim. The editors of the County Court Practice have in recent editions inserted a note observing that sub – rule (2) (iii) (b) provides that it is the installments or other periodic sums payable under the mortgage which are required to be stated.

I am regretfully forced to the conclusion that I cannot get any help from the consideration of the County Court Rules in interpreting the Rules of the Supreme Court in this instance. The rules in both cases are clearly intended to cover both the simple case of a mortgage to secure a principal sum repayable at a specified date or on demand, with interest at a specified rate in the meantime, and the more elaborate case, common in building society mortgages, of a security providing for repayment of a principal sum with interest by installments containing on each occasion both a repayment in respect of principal and a payment of interest; and, indeed, there are other more complicated forms of mortgage that must also be covered. But let me take the simplest case of all, the loan of a fixed sum with interest at a fixed rate and no installment provision for repayment of principal. In that case it seems to me that it would be quite impossible on any reasonable view of the language in Order 88, r.6 (3) (b) to construe "the amount of repayments" following immediately on "the amount of the advance" as meaning the interest payable from time to time under the mortgage. Thus I am unable to equate item (b) in the two sets of rules and I must concentrate my attention on the language of the Rules of the Supreme Court alone.

I have, I think, to observe the context of the particular words rather carefully. Order 88, r.6 (2) provide for the production of mortgage and the provision of a copy of it as an exhibit to the affidavit. Thus the contractual terms as to payment both of principal and interest can be found in the document, though further information may be necessary where, without any further instrument, the mortgagee has the right to vary the rate of interest or the amount of installments. None the less, the framer of the rule must, I think, have relied primarily on the provision of a true copy of the mortgage as the source of information as to its terms. Then when we come to rule 6 (3) we find that current events are being dealt with. The affidavit must show the circumstances under which the right to possession arises and the state of the account between the mortgagor and mortgagee with specified particulars. That means, prima facie, I think, the state of the account as it stands at the date of the affidavit, and is not concerned to show what was originally required. Then we have (a) "the amount of advance," (b) "the amount of the repayments," (c)"the amount of any interest or installments in arrear," (d) "the amount remaining due under the mortgage." All those, or at any rate (a) (c) and (d), are figure ascertainable by facts that exist at the date of the affidavit. They do not seem to me to look to the future. Accordingly I would expect in that context that item (b) relates to repayments already made rather than to repayments to be made in the future. Further, when I see that "(a) the amount of the advance" – that is the principal sum –is immediately followed, without qualification or explanation, by "(b) the amount of the repayments," and that we then go on to "(c) the amount of any interest or installments in arrear," bearing in mind, again, that all types of mortgage must be covered by this rule, I am disposed to think – though I do not find it free from doubt – that the repayments referred to must be repayments of principal. Thus we shall see "(a) the amount of the advance (b) the amount of the repayments," the subtraction of (b) from (a) shows the principal money remaining, "(c) the amount of any interest or installments in arrear," which may or may not overlap the amount of principal remaining. But then the final figure gives the amount actually due for principal and interest, and, of course, any other moneys charged by the mortgage, as for costs or the like – "(d) the amount remaining due under the mortgage." Thus I take the view that the affidavit in the present case ought to show what repayments of principal have been made down to the date of the affidavit. It is unfortunate that the rule is not more specific and it is a matter that perhaps may be considered by the Rules Committee on some subsequent revision.

Thus I would answer the master's question by saying that R.S.C., Ord. 88. R.6 (3) (b) requires the affidavit in support to state as its date the total amount of repayments of principal made under the mortgage."(emphasis added)

4. The above quoted decision was referred in the case of National Bank of Fiji v Hussein [1995] FJHC 29 where Justice Fatiaki held
   

'There is little doubt in my mind that the affidavit in this instance falls well short of complying with the mandatory terms of the above rule (Nationwide Building Society v Bateman [1978] 1 W.L.R 394 per Goulding J)

5. The requirements are mandatory according to Fatiaki J in National Bank of Fiji v Hussein [1995] FJHC 29 and if the mandatory requirements are not complied the matter should invariably, be dismissed in limine. The summary procedure for eviction grants mortgagee to seek eviction in terms of the Order 88 of the High Court Rules and the compliance is mandatory and if not the action should be dismissed.
   
6. In the present application the affidavit in support or affidavit in reply does not contain the mandatory particulars as per Order 88 rule 3 which states as follows
   

'3(1) The affidavit in support of the originating summons by which an action to which this rule applies is begun must comply with the following provisions of this rule.This rule applies to a mortgage action begun by originating summons in which the plaintiff is the mortgagee and claims delivery of possession or payment of moneys secured by the mortgage or both.

(2) the affidavit must exhibit a true copy of the mortgage and the original mortgage or, in the case of a registered charge, the charge certificate must be produced at the hearing of the summons.

(3) Where the plaintiff claims delivery of possession the affidavit must show the circumstances under which the right to possession arises and except where the Court in any case or class otherwise directs, the state of the account between the mortgagor and mortgagee with particulars of

(a) the amount of the advance;

(b) the amount of the periodic payments required to be made;

(c) the amount of any interest or installments in arrears at the date of issue of the originating summons and at the date of the affidavit; and

(d) the amount remaining due under that mortgage.'

7. The Plaintiff has failed to fulfill the mandatory requirements in the affidavit in support or in the affidavit in reply. The Defendant in their affidavit in opposition clearly disputed the amounts stated in the affidavit in support. When there is a dispute as to the amounts the Plaintiff should have addressed the issue in its affidavit in reply. Even in the affidavit in reply the Plaintiff did not comply with the requirements stated in the High Court Rules. Nationwide Building Society v Bateman [1978] 1 W.L.R 394 by Goulding J (p399) held that 'Order 88 r.6(3)(b) requires the affidavit to state as at its date the total amount of repayment of principal made under the mortgage'and Justice Fatiaki held in National Bank of Fiji v Hussein [1995] FJHC 29 that said terms of Order 88 are 'mandatory' the only logical conclusion that I can arrive from the above decisions, is that the noncompliance of mandatory provision in law is fatal to the action, and this action should be dismissed in limine.
   
8. The preliminary objection to the application of the Plaintiff by the Defendant is sustained. The Plaintiff's summons should be dismissed in limine due to noncompliance with the mandatory requirements contained in Order 88 rule 3(3). The summons seeking eviction in terms of Order 88 of the High Court Rules of 1988 is struck off. I will hear both parties on the issue of costs.
   

2. FINAL ORDER
   

1. The summons for eviction is struck off.
   

Dated at Suva this 9th day of November, 2012.

.................................................
Master Deepthi Amaratunga
High Court, Suva