DC4009

COMPLAINT NO 58 of 2018

 BETWEEN:
ALEKANO SAVINGS & LOAN SOCIETY INC
Complainant.

 AND,
Kase Robinson
Defendant.

                          CORAM: P KAUMBALLB(PNG).
2018 May 25th, 31st& June 5th.
Counsels:
Complainant: In person.
Defendant: In person.

BY THE COURT: This is a default summons filed by the complainant on the 8thof March 2018 claiming K6219.66 plusinterest and costs against the Defendant pursuant to Section 156 of the District Court Act. 
RELEVANT LAW.
1.	156 ISSUE OF DEFAULT SUMMONS.
Notwithstanding anything in this Act, other than section 21, on complaint made in respect of a debt or other liquidated demand in money payable by the defendant the Magistrate or Clerk before whom the complaint is made shall,instead of issuing a summons to the Defendant in the ordinary form,if so required by the person making the complaint and subject to this Division, issue a summons to the defendant under this division.
157 SERVICE OF DEFAULT SUMMONS.
(1)	A default Summons shall be in the prescribed form and there shall be attached to the summons two notices of intention to defend in the prescribed form and it shall be served not less than six(6) days before the date of return by delivering a true copy-
(a)	to the defendant personally; or
(b)	in the case of a company incorporated under the Companies Act- to the company in accordance with the provisions of the Companies Act; Or
(c)	in the case of the corporation-
(i)	to the secretary; public officer or other chief officer of that corporation in the country; or
(ii)	by sending it by post to the Secretary, public officer  or other chief officer at the last known address of the corporation in the country; or
(iii)	or in any other manner provided by law,
with true copies of the two notices of intention to defend in the prescribed form attached to it.
(2)	A person who serves a default summons shall-
(a)	Make an affidavit endorsed on the original summons, stating that a true copy of the summons with two copies of the notices of intention to defend attached was personally served on the defendant and specifying the time at which it was served; and
(b)	Immediately transit the original summons to the clerk for production at the time and place and before the court specified in the summons.
       (3). A document purporting to be an affidavit of service under Subsection (2) is prima facie evidence of the service of summons.
       (4) If the Defendant or his legal representative does not give notice of intention to defend a complaint to which this Division applies by serving notice at least 48 hours before the 
date appointed for the return of the default summons  on the clerk at the place where the court sits, and-
(a)	Personally or by post on the complainant at his address specified in the summons; or
(b)	On his legal representative at his address if specified in the summons,
the complainant need not attend personally or otherwise or prove his claim, and an order in his favour may be made by the court in his absence.
158. WHERE NO NOTICEIS GIVEN,DEFENCE NOT ALLOWED EXCEPT BY PERMISSION OF COURT.
       (1) If a defendant on whom a default summons is served under Section 157 does not give notice to defend within the time specified in that section, he shall not be 
allowed on the hearing of the complaint to make a defence to the claim except by permission of the Court and then only on such terms as to costs and otherwise as 
the Court determines.
        (2) If permission to defend is given under subsection(1), the hearing of the complaint-
           (a) may be adjourned to some other day to be fixed by the Court-
               (i) if the complainant or his legal representative desires; or 
               (ii) if the court thinks fit; and
            (b).shall be adjourned if the complainant or legal representative is not present and the clerk shall give notice of the adjournment without delay to the complainant 
by post orotherwise.

FAIRNESS OF TRANSACTIONS ACT 1973.

4. Fairness.
(1) For the purposes of this Act, the concept of fairness relates to the principle of the just and equitable distribution to and among parties to a transaction of the rights, privileges,advantages, benefits and duties,obligations and disadvantages of a transaction in proportion and relative to a parties standing in or contribution to the transaction and according to the business principles and practices appertaining to the transaction in question and provisions of this Act shall be read liberally and applied accordingly.
(2). In accordance with the general tenor and purposes of this Act as stated in section 1 and Subsection (1) of this section, but without departing drastically from the rule of Law of the right to contract, in determining the fairness or otherwise of a transaction, the circumstances of the parties existing before, at and after the entering into the transaction shall be taken into account.

Fairness or otherwise of an action is reviewable by the National & Supreme Court(Section 5 and section 1 of the Fairness of transaction Act). 

STATUTE OF FRAUDS AND LIMITATION ACT.
16 Limitation of Actions in contract, tort etc.
(1)	Subject to Sections 17 and 18 an action-
(a)	That is founded on simple contract or on tort; or
(b)	To enforce a recognizance or
(c)	To enforce an award, where the submission is not by an instrument under seal;or
(d)	To recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,
Shall not be brought after the expiration of six years commencing on the date on which the action arose.
(2)	…
SAVINGS AND LOAN SOCIETY ACT 1961.

9. Savings and Loan Societies.
Subject to this Act, a group of persons the objects of which are:
(a)	to promote thrift among its members; and
(b)	to educate its members in financial responsibility; and
(c)	to receive the savings of its members as contributions in the form of savings deposits and
(d)	to make loans to its members for any purposes specified in Part V,
may be registered as a Savings and Loan Society.

14. The liability of a member of a society is limited to the loan and interest credited to the account of the member.

15. POWER OF SOCIETIES.
 For the purpose of carrying out its objects a society may subject to this Act-
(a)	deposit money with an association of which it, or of which an association is a member, is a member and
(b)	deposit money in a bank and
(c)	raise money on loan subject to approval of the Registrar for the objects of the Society and mortgage or pledge its property as security for the loan and
(d)	Invest funds in any securities of or guaranteed by the state or in other prescribed securities.
(da)invest funds in any institution subject to the approval of the Registrar
(e)	Insure its loans, funds or property against loss and
(f)	hold, buy, lease, sell, surrender, exchange, mortgage or otherwise deal in property; and
(g)	do all other acts and things that are incidental or conducive to or consequential on the attainment of its objects.

18 BINDING EFFECT OF RULES.
Subject to this Act the rules of the Society bind the society and its members to the same effect as if-
(a)	each member had subscribed his name and affixed his seal to the rules and
(b)	there werein the rules a covenant on the part of himself, his successors and legal representative to confirm to the rules.

42. LOANS.
(1)…
  (2)…
  (3)…
  (4)…
  (5)…
  (6)…
  (7)…
  (8)…
  (9)…
  (10)…
  (11)…
  (12)…
 (13) Subject to Subsection(14) all monies due to a society by a member not being repaid for 18 months after the last date of repayment shall be provided as a bad debt of     
the member.
 (14) The Society shall continue to recover from a member moneys referred to in Subsection (13).

60 DISPUTES.
 Where a dispute concerning the business of the society arises-
(a)	…
(b)	between a members… and the society, the board or an officer of the society or
(c)	…
(d)	…
(e)	…
it shall be referred to the Registrar for decision.

ISSUES.
2.	Issues involved here are:
(1).Can the Defendant raise the issue of false pretences on the part of the complainant’s servants and/agents as a defence to the complainants claim?
(2). Can the Defendant raise the issue of the Complainants refusal to allow him to withdraw his savings with the Complainant society as a defence to the complainants claim?
(3).Is the complainants refusal to allow the Defendant to withdraw his savings in violation of the Fairness of Transactions Act?
(4).Has the complainant proved its claim on the balance of probabilities?
(5). Is the complainants claim statute barred?
(6).Has the parties exhausted the legal process provided under the Savings & Loan Societies Act before coming to court?

FACTS.
3.	The brief facts are:
(1). The Defendant paid K120.00 as his share in the Complainant society and was issued a receipt.
(2).The Defendant paid moneys into his savings account with the complainant and had K10,582.20 in his account.
(3). On the 17th of January 2007 the Defendant took out a loan of K10,000.00 from the complainant and failed to repay the loan and therefore the complainant is now suing the defendant for the loan plus interest and costs.
(4). The Defendant is now saying that the complainants servants and/or agents did not fully explain their policies and rules to him when he became a member of the society.
(5) Hencethought he saving his money in a normal bank and when he went to withdraw his savings he was not allowed to withdraw his savings and he went ahead obtained a loan because he had repay Wanima Coffee which advanced him material  and feed for his poultry project.
(6) Hence he withdrew his savings and he owes nothing to the society in interest.

FINDINGS ON FACT, LAW AND ISSUES.
4.	I will deal with the fifth and sixth issues first because if I find that the complainants claim is statute barred and the complainant has failed to follow process of dispute settlement provided by the Savings & Loan Societies Act then it will not be necessary to consider the first four issues.
5.	The complainants claim is a claim based on contract that was signed on the 17th of January 2007 and section 16 of the Statute of Frauds and Limitations Act provides that:
‘’Subject to sections 17 and 18 an action(a) that is based on contract or on tort… shall not be brought after the expiration of 6 years commencing on the date on which the action arose’’.
6.	I am of the view that the Statute of Frauds and Limitations Act apply to the complainant as a corporate citizen and the 6 year period commences when the outstanding loan becomes a bad debt pursuant section 42 Subsection (13) of the Savings and Loan Society Act 1961.
7.	The debt owed by the defendant to the complainant became a bad debt on or around 17th June 2008 so by 17th of June 2014 the six year period expired.
8.	Furthermore the Defendant’s dispute with the Society was supposed to be referred to the Registrar of Savings & Loan Societies for his decision pursuant to section 60 of the Savings & Loan Societies Act but that was not done and the Defendant was unfairly treated.
9.	The complainant did not follow the above-mentioned process before filing these proceedings and the complaint and summons is in my view null and voidabinitio.
10.	Hence it is not necessary to answer the four issues above.
11.	Accordingly this complaint should be dismissed.

ORDER.
12.	The courts formal orders are:
1.	The complaint is dismissed.
2.	The Defendants costs to be paid by the complainant to be taxed if not agreed.
Lawyer: 
Complainant: 
Defendant    : Nil.