Australia & New Zealand Banking Group Ltd v Dutt [2015] FJHC 290; HBC164.2014 (27 April 2015)

	Home \| Databases \| WorldLII \| Search \| Feedback High Court of Fiji

AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED
a duly constituted banking corporation having its registered office in Melbourne, Australia and carrying on business in Suva and having branches throughout Fiji.
PLAINTIFF

RAMESHWAR DUTT off Queens Road, Lot 1 Malolo, Sector Road,
Navo, Nadi in the Republic of Fiji.
FIRST DEFENDANT

ILISAPECI NASAQA off Queens Road, Lot 1 Malolo Sector Road, Navo, Nadi in the Republic of Fiji.
SECOND DEFENDANT

ATECA PICKERING and JOHN PICKERING both of off Queens Road, Lot 1 Malolo Sector Road, Navo, Nadi in the Republic of Fiji.
THIRD DEFENDANT

(Ms)BhavnaGeeta Narayan for the Plaintiff
The first Defendant in Person
No appearance for the 2nd and 3rd Defendants

(1) Before me is the Australia and New Zealand Banking Group's application pursuant to Order 88 of the High Court Rules 1988 against the Defendants to forthwith give vacant possession of the Property comprised and described in Crown Lease No: 15819, being Lot 1, Plan SO 4281 (Part of) Navo and Nacaqara containing an area of 717 Square meters.

(2) The application is supported by the affidavit of "Jonathan Stevens", Manager of the Asset Management Unit of the Plaintiff's Bank in Suva, branch.

(3) Upon being served with Originating Summons, the first Defendant appeared in court in person and subsequently filed an affidavit in opposition opposing the application followed by an affidavit in reply thereto.

(4) The Second and Third Defendants neither appeared nor filed any affidavit to oppose the Plaintiff's application.

(5) The Plaintiff and the first Defendant were heard on the Summons. They made oral submissions to court. In addition to oral submissions, the Plaintiff filed written submissions to which I am grateful.

(1) Anil Kumar Rao is the registered proprietor of all that piece or parcel of land comprised and described in Crown Lease No: 15819.

(2) (1) By a Mortgage No. 594225 registered on 5th September 2006 andmade between the Plaintiff and Anil Kumar Rao, the property was charged to secure repayment to the Plaintiff of all banking advances, charges, interest and other banking accommodation made by the Plaintiff to Anil KumarRaofrom time to time on terms and conditions as therein contained.

(2) On or about 4th day of March 2013, the Plaintiff through its Solicitors made its demand under the Mortgage for payment of the outstanding debt in the Residential Investment Property Loan Account No. 9207360 as the Mortgagor (Anil Kumar Rao) was in default of his repayments.
(3) In response to the said Default Notice, the Mortgagor (Anil Kumar Rao) emailed thePlaintiff's Solicitors advising that there is a Court Order registered on the title which is restraining him from selling the property.

(4) The Plaintiff therefore proceeded with its rights under the Mortgage to call upon tenders for the sale of the property.

(5) On 12th August 2014, the Plaintiff through its Solicitors caused Notices to be served on the First Defendant, Second Defendant and the Third named Defendants where the First Named Third Defendant (Ateca Pickering) acknowledged receipt of the Notice on behalf of her Husband (John Pickering) the Second Named Third Defendant.

(6) On 19th August 2014, the Plaintiff through its Solicitors served another Notice to the Second Defendant and the Third named Defendant where the Second Named Third Defendant (John Pickering) acknowledged receipt of the Notice on behalf of his wife (Ateca Pickering) the First Named Third Defendant.

(7) That on 10th September 2014 another Notice was served on the First Defendant giving him final 7 days to vacate the property. A copy of the Notice was also served on the Nadi Police Station.

(8) That despite the said Notices to vacate, all the three named herein Defendants have failed and/or refuse to vacate the property and they continue to occupy the same.

(9) Meanwhile the other tenants who were served with Notices to vacate have vacated the property they were respectively occupying accordingly.

(10) That there is an Order registered on Crown Lease No. 15819. The Order had restrained the Mortgagor (Anil Kumar Rao) from selling the property because of certain claims made by MainaWati against him. A Ruling was delivered by the Honourable Justice Mr.Anare Tuilevuka on 30/06/14 in favour of Anil Kumar Rao where the injunction that had been granted restraining Anil Kumar Rao from selling, assigning, transferring or in any way dealing with Crown Lease No. 15819 was refused to be extended by the High Court Judge.

(11) The Plaintiff has accepted a tender received for the property pursuant to advertisements placed in the local daily newspaper "The Fiji Times" and has entered into a Sale and Purchase Agreement with the successful tenderers, Kamal Venkataiya Kumar and PushpaWati.

(12) The Plaintiff is required by the said Purchasers to give vacant possession of the property. The matter is at settlement stage and the only issue hindering settlement is the Plaintiff's obligation to provide vacant possession of the property to the Purchasers.

(C) Grounds of First Defendant's Opposition to Summons
The First Defendant in his affidavit in opposition, sworn on 08th December 2014, opposes the Plaintiff's application on the following basis;

(1) I am advised that the Plaintiff ought to obtain consent from the Lands Department to carry out the Mortgagee Sale which they have not done and any sale should be stopped.

(2) I humbly request this Honourable Court to dismiss the Plaintiff's application on the grounds that the Plaintiff has failed to obtain consent from the Lands Department to carry out a mortgage sale and also that there is a Civil Action pending which is to determine if the transfer from the late Ravindra Narayan to Anil Kumar Rao was fraudulent.

(D) THE LAW
The Plaintiff has filed this application under Order 88 of the High Court Rules of 1988.
(1) Order 88, r. 1 provides:

(d) delivery of possession (whether before or after foreclosure or without foreclosure) to the mortgagee by the mortgagor or by any other person who is or is alleged to be in possession of the property,

This rule shall not be taken as affecting Order 28, rule 4, in so far as it requires any document to be served on, or notice given to, a defendant who has acknowledged service of the originating summons in the action.

A copy of any affidavit served under this paragraph must be indorsed in accordance with paragraph (3).

(5) Service under paragraph (2) or (4), and the manner in which it was effected, may be proved by a certificate signed by the plaintiff, if he sues in person, and otherwise by his barrister and solicitor. The certificate may be indorsed on the affidavit in support of the summons, or as the case may be, on any further affidavit intended to be used at an adjourned hearing.

(6) A copy of any exhibit to an affidavit need not accompany the copy of the affidavit served under paragraph (2) or (4)

(7) Where the plaintiff gives notice to the defendant under Order 3, rule 5, of his intention to proceed, service of the notice, and the manner in which it was effected, may be proved by a certificate signed as mentioned in paragraph (5) –

(c) the amount of any interest or instalments in arrear at the date of issue of the originating summons and at the date of the affidavit, and

(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 deliver 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 –

(4) 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.

(5) If the mortgage creates a tenancy other than a tenancy at will between the mortgagor and mortgagee, the affidavit must show how and when the tenancy was determined and if by service of notice when the notice was duly served.

(6) Where the plaintiff claims payment of moneys secured by the mortgage, the affidavit must prove that the money is due and payable and give the particulars mentioned in paragraph (3).

(7) Where the plaintiff's claim includes a claim for interest to judgment, the affidavit must state the amount of a day's interest.

(2) The procedure under Order 88 was stated in case of National Bank of Fiji –v- Abdul KadeerHussain where Fatiaki J. (as he was then) held as follows:-

"Order 88 of the High Court rules only deal with action relating of Mortgage. It gives Mortgagees the right to claim possession without being registered proprietor with or without foreclosure.

To that extent Order 88 is available to him nothing can inhibit him from utilizing Order 88".

(1) I have before me an application by the Plaintiff by way of Originating Summons under Order 88 of the High Court Rules 1988. Order 88, rule 3 mandates that an affidavit in support of an Originating Summons seeking vacant possession must comply with certain rules.

The rules that the Plaintiff's affidavit in support must comply with in this case are;

(a) The affidavit must exhibit a true copy of the mortgage. The original mortgage or, in the case of a registered charge, the charge certificate must be produced at the hearing of the summons:Order 88 Rule 3 (2)	A certified true copy of the mortgage is annexed and marked "B" to the Affidavit in Support of Jonathan Stevens sworn on the 8th day of October 2014. The original mortgage was produced at the hearing of this matter.
(b) The affidavit must show the circumstances under which the right to possession arises and, except where the Court in any cases or class otherwise directs, the state of account between the mortgagor, and mortgagee with particulars of the amount of the advance, the amount of periodic payments required to be made, the amount of any interest or instalments in arrears at the date of the issue of the originating summons and the date of the affidavit, and the amount remaining due under the mortgage:Order 88 Rule 3 (3)	Paragraph 6 of the Plaintiff's Affidavit in Support deposes the Plaintiff's right to possession of the mortgaged property as required. The particulars of the state of the mortgagor's account with the Plaintiff are stated in paragraph 19 a. to d. of the Plaintiff's Affidavit in Support. The Default Notice for the debt is marked as annexure "C" in the Plaintiff's Affidavit in Support.
(c) The affidavit must give particulars of every person who to the best of the plaintiff's knowledge is in possession of the mortgaged property:Order 88 Rule 3 (4).	Paragraph 20 of the Plaintiff's Affidavit in Support complies with this rule as it states who in the Plaintiff's knowledge is in occupation of the mortgaged property.

Therefore, I am satisfied that the documentation in affidavit in support of Originating Summons complies with the requirement of Order 88, rule 3.

(2) At the beginning of the hearing of the matter, the first Defendant raised a preliminary objection in relation to the Plaintiff's legal standing to bring the proceedings. The first Defendant contends that the consent of the Director of Lands has not been obtained for the institution of proceedings for vacant possession. The argument of the first Defendant, though exceedingly ingenious, was, in my opinion, really calculated to obscure and not to elucidate the point which the court is called upon to decide.

I am aware, of course, that the Plaintiff filed a supplementary affidavit herein annexing correspondence to show that the consent of the Director of Lands has been sought and duly granted by the Director of Lands to continue with this legal proceedings.

On the question of whether the prior consent of Director of Lands would require prior to the institution of proceedings, if any authority is required; I need only refer to the sentiments expressed by Byrne J, in Civil Aviation Authority of Fiji Islands v LimalevuApisai, Civil Action No. HBC 268 of 2005L, when his Lordship held;

"The consent of the Director of Lands to commence proceedings can be obtained anytime before the land is actually "dealt with" by the Court – Mohammed Rasul –v- Jeet Singh and Hazara Singh – 10 F.L.R. 16."

We interpolate here that this was a decision of Hammett Acting C.J. who held that land is not dealt with by the Court until an order has been made or judgment of the Court delivered.

Therefore, the preliminary objection raised by the first Defendant in relation to the Plaintiff's legal standing to bring the proceedings is devoid of any merits as such is rejected.

(3) The first Defendant's sole ground of opposition to the Originating Summons derived from the pending Civil Action No: 193 of 2012, an action by MainaWati against the Mortgagor, Anil K.Rao and others. The first Defendant contends that the present action should await the outcome of the pending civil action.

In reply, the Plaintiff contends that MainaWati's allegation of fraud against the Mortgagor, Anil K.Rao, in the said Civil Action has nothing to do with the Plaintiff's legal right as mortgagee. The remedy, if any lies in a claim for damages against Anil K.Rao, Mortgagor personally. The Plaintiff has sought to place some reliance upon "Frazer vs Walker" (1967) NZLR 1069. I have looked at the case and I think that the decision in "Frazer v Walker" assists the Plaintiff.

What concerns me is that whether in the circumstances and having regard to the nature of the pending Civil Action No: 193 of 2012, and the claims made in that action, the Plaintiff should be prevented from exercising at all under the mortgage instrument, until the claims in the pending action have all been finally determine?

(4) Before I pass to consideration of the argument for the first Defendant, it will be convenient to refer to the Mortgage instrument which I conceive to be necessary for a right understanding of Plaintiff's "Contractual right to claim possession" and to "sell the Mortgaged property".

Clause 7 of the Mortgage expressly empowers the Plaintiff in the event of a default in repayment;

Unless special circumstances exist, ANZ will give me a notice that I am in default under this mortgage and allow me a period of at least 30 days (calculated as provided in the consumer credit law) to remedy the default before it takes possession of the property or takes any other action to enforce this mortgage (collectively "enforcement proceedings").

When ANZ is entitled to take enforcement proceedings, ANZ may take possession of all or any part of the property by entering onto it or by doing anything else that the law regards as equivalent to actually entering into possession. ANZ can take possession of all the property by taking possession of part of it. If ANZ enters into possession of the property, it can withdraw from possession later.

When ANZ is entitled to take enforcement proceedings, ANZ has complete discretion about selling the property. In particular, it can:

All the provisions of this clause also apply to and enlarge the power of sale under the Property Law Act.

The period fixed for the period of default under section 77 of the Property Law Act is one day.

The Plaintiff's contractual right to claim possession and sell the Mortgaged property is further reinforced by the terms of section 75 and 79 of the Property Law Act which provides;

75. A mortgagee, upon default in payment of the mortgage money or any part thereof, may enter into possession of the mortgaged land by receiving the rents and profits thereof or may distrain upon the occupier or tenant upon the occupier or tenant of the said land for the rent then due.

79. –(1) If default in payment of the mortgage money or in the performance or observance of any covenant continues for one month after the service of the notice referred to in section 77, the mortgagee may sell or concur with any other person in selling the mortgaged property, or any part thereof, either subject to prior leases, mortgages and encumbrances or otherwise, and either together or in lots, by public auction or by private contract, or partly by the one and partly by the other of those methods of sale, and subject to such condition as to title or evidence of title, time or method of payment of the purchase money or otherwise as the mortgagee thinks fit, with power to vary any contract for sale and to buy in at any auction or to vary or rescind any contract for sale and to resell without being answerable for any loss occasioned thereby, with power to make such roads, streets and passages and grant such easements of right of way or drainage over the same as the circumstances of the case require and the mortgagee thinks fit, and may make and sign such transfers and do such acts and things as are necessary for effectuating any such sale.

(2) No purchaser shall be bound to see or inquire whether default has been made or has happened, or has continued, or whether notice has been served, or otherwise into the propriety or regularity of any such sale.

(3) Where a transfer is made in purported exercise of the power of sale conferred by this Act, the title of the transferee shall not be impeachable on the ground that no cause had arisen to authorise the sale or that due notice was not given or that the power was otherwise improperly or irregularly exercised, but any person damnified by any unauthorised or improper or irregular exercise of the power shall have his remedy in damages against the person exercising the power.

(5) Be that as it may, the Plaintiff's Common Law Right to claim possession has been well established as borne out by the following judicial decisions;

It has for a very long time been established law that a mortgagee has a proprietary right at common law as owner of the legal estate to go into possession of the mortgaged property. This right has been unequivocally recognised in a number of modern cases: see for example, Four Maids Ltd v. Dudley Marshall (Properties Ltd. (1957) Ch. 317. ... It has nothing to do with default: See per Harman J. in the Four-Maids case where he said, at p.320:

The mortgagee may go into possession before the ink is dry on the mortgage unless there is something in the contract, express or by implication, whereby he has contracted out of that right.

Order 88 of the High Court Rules only deal with actions relating to mortgages. It gives mortgagees the right to claim possession without being the registered proprietors and with or without foreclosures. To that extent Order 88 is available to him. Nothing can inhibit him from utilising Order 88.

(6) With all of the above in my mind, I turn to the question. The question is, should the present action await the outcome of the Pending Civil Action No:- 193 of 2012, an action by Maina Wati against the Mortgager, Anil K.Rao, alleging fraud against the Mortgagor.

The decision of the question at issue must depend upon the construction of the 75th and 79th sections of the Property Law Act and upon consideration of the scope and meaning of the statute. If the words of a statute in their ordinary meaning are clear, effect must be given to them, however inequitable they may be, and however they may infringe private rights. But the meaning must be clear.

I am once again reitering the fact that, the essence of section 75 and 79 of the Property Law Act is that failing payment into court of the amount sworn by the Plaintiff as due and owing under the Mortgage, no restraint should be placed by order upon the exercise of the Plaintiff's rights under the Mortgage instrument. It is a statutory obligation cast on the Mortgagor, Anil K.Rao. Nothing short of actual payment is regarded as sufficient to extinguish a Mortgage debt.

i) The mortgagor is in default of the repayments under the Mortgage and could not be remedy the same despite a 30 days Default Notice being issued to him by the Plaintiff's solicitors.

ii) The outstanding debt due under the Mortgage just prior to filing the Originating Summons herein is in the sum of $68,357.83 on which amount interest accrues at the rate of $17.79 per day from 3/10/14.

iv) The Plaintiff therefore proceeded to exercise its powers of sale to recover the debt via mortgagee sale and called for tenders via advertisements in the daily newspapers.

v) The Plaintiff has duly accepted a tender and entered into a Sale & Purchase Agreement dated 28th April 2014 with the successful tenderer.

vi) Underclause (e) of the terms and conditions of the Sale and Purchase Agreement the Plaintiff is required to provide vacant possession of the property to the successful tenderer.

vii) The mortgagor has given vacant possession of the property to the Plaintiff to allow for completion of the mortgagee sale and so that he receives the balance proceeds after payment of his debt.

i) The 1st Defendant is occupying the property illegally (without any colour of right) and has also put his own tenants on the property.

ii) The Plaintiff accordingly issued Notices to vacate/quit to the 1st Defendant and his unlawful tenants. However, they have refused to give up vacant possession, resulting in this legal action.

At this stage, I ask myself what valid grounds can the Defendants have to interfere to deprive the Plaintiff of the benefit of its security when the Mortgagor, Anil K.Rao, himself is consenting to the Mortgage Sale?

The view that I have just expressed is in accordance with the sentiments expressed in the following judicial decisions.

In Civil Action No. 0331 of 1994 National Bank of Fiji v Husseinthe court held;

"Furthermore if the plaintiff bank were required to await the outcome of the defendant's claim in Civil Action No. 97/92, the Court would, in learned counsel's submissions, in effect, be restraining the bank from exercising its powers and rights as a mortgagee without the usual protection afforded a mortgagee under such an order i.e. by payment into Court of the amount claimed by the bank."

Inglis and another –v- The Commonwealth Trading Bank of Australia126 CLR 161at Page 165 Chief Justice Barwhich said;

"The benefit of having a security for a debt would be greatly diminished if the fact that a debtor has raised claims for damages against the Mortgagee were allowed to prevent any enforcement of the security until after the litigation of those claims had been completed.

In my opinion the fact that such claims have been brought provides no valid reason for the granting of a injunction to restrain, until they have been determined, the exercise by a Mortgagee of the remedies given to him by the Mortgage".

(7) Given the above, in my opinion, the fact that there has not yet been an adjudication upon MainaWati's allegation of fraud against the Mortgagor, Anil K.Rao is not a reason for restraining the Plaintiff from exercising its powers under the Mortgage instrument.

Therefore, I certainly agree with the sentiments which are expressed inferentially in the Plaintiff's submissions. The argument advanced by the first Defendant is devoid of any merits as such is rejected.

(1) After considering the facts of this case, the submissions made to court and in light of the authorities, I conclude that the Defendants have not afforded any acceptable legal Defence to continue to be in occupation of the Mortgaged property and to prevent the exercise of the delivery of the possession.

(1) I order the Defendants to deliver the Plaintiff vacant possession of the Mortgaged property.

(2) I award costs against the first Defendant in the sum of $1500.00 (summarily assessed) which is to be paid within 14 days from the date hereof.

High Court of Fiji

Australia & New Zealand Banking Group Ltd v Dutt [2015] FJHC 290; HBC164.2014 (27 April 2015)