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BSP Financial Group Ltd v Habu [2026] SBHC 10; HCSI-CC 264 of 2025 (4 February 2026)

HIGH COURT OF SOLOMON ISLANDS

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 264 of 2025

BETWEEN:

BSP FINANCIAL GROUP LIMITED
Claimants

AND:

DENNIS HABU AND LUCY HABU
Defendants

Date of Hearing: 4 February 2026
Date of Judgment: 4 February 2026

Counsel:

Mr W Kadi for the Claimant
No Appearance for the Defendant

Nott; PJ

JUDGMENT

Background

1. The Claimant, BSP Financial Group Limited, is a commercial bank carrying on business in Solomon Islands. The Defendants, Dennis Habu and Lucy Habu, are joint borrowers.
2. On 12 July 2017, the Defendants entered into a loan agreement with the Claimant (then Westpac Banking Corporation) under which loan facilities were advanced on agreed terms, including repayment by instalments together with interest.
3. The loan was secured by first registered charges over two fixed term estates, being Parcel Numbers 191-036-77 and 191-014-210, and by registered pledges over the Defendants’ Solomon Islands National Provident Fund contributions.
4. As at 30 April 2025, the total outstanding balance due and owing under the loan account was SBD 2,823,584.81, exclusive of accruing interest.
5. The Defendants failed to make repayments in accordance with the loan agreement. A letter of demand was issued on 20 January 2025, but no payment was made.
6. On 10 July 2025, the Claimant commenced these proceedings by filing a Claim (Category B), seeking recovery of the outstanding debt and an order for sale of the secured land

The Application

1. The Applicant seeks:
   1. judgment for the amount of SBD $ 2,823,584.81;
   2. Order for sale by public tender of fixed term estates in Parcel Numbers 191-036-77 and 191-014-210;
   100. Interest up to judgment; and
   4. Costs.
2. The issue for determination is whether the Applicant has satisfied the procedural and substantive requirements for default judgment under the Rules.

Legal Framework

3. Rule 5.11 requires a defendant who intends to contest a claim to file and serve a Defence within the time stipulated by r 5.37. Under r 5.37(a), where a claim is served within 20 kilometres of the main Post Office in Honiara, a Response must be filed and served within 14 days of service. Under r 5.37(c), a Defence must be filed and served within 28 days of service. A defendant who fails to file either a Response or a Defence within these timeframes falls into default for the purposes of r 9.17.
4. Rule 9.17 entitles the Applicant to apply for default judgment once proof of service is filed. In a Category B claim, being a liquidated monetary claim, r 9.23 to 9.27 govern the procedure:
   1. r 9.23: Applicant may apply for judgment for the amount specified, interest, and costs.
   2. r 9.24: Court may enter judgment for the principal sum, interest from filing, and costs.
   100. r 9.25: Sworn statement in support must specify the amount owing, reductions (if any), interest claimed and how calculated and costs claimed.
   4. r 9.26–9.27: Interest may be awarded either at the contractual rate, a rate fixed under r 17.65, or a lump sum.
5. The Court retains a discretion whether to enter judgment. The authorities emphasise that default judgment is not granted where jurisdictional questions arise or where the nature of the claim requires substantive adjudication. Where the claim is straightforward and no substantive issues are raised, default judgment is the ordinary and proper response to a defendant’s failure to engage.

Application of the Law to the Facts

6. Default judgment is not entered as a matter of course. Even where a defendant has failed to engage with the proceeding, the Court must be satisfied that the procedural requirements of the Rules have been met and that the nature of the relief sought is capable of being determined on the evidence before the Court, without the need for a trial.
7. In the present case, the Applicant seeks default judgment for a liquidated sum arising from a loan facility, together with interest and costs. The Court’s task is not confined to verifying procedural compliance with the Rules. Rather, the Court must be satisfied that the requirements for default judgment are met, that the material establishes entitlement to the relief sought, and that it is appropriate, in the exercise of the Court’s discretion and consistently with the overriding objective, to enter judgment in the form proposed.

Procedural compliance: service and default (r 5.11, 5.37 and r 9.17)

8. The evidence before the Court establishes that the Claim and Response Form were served on the Defendant on 11 August 2025 at the Solomon Islands Water Authority Office in Point Cruz. Ms Habu accepted service and signed the receipt of documents. Proof of service has been filed.
9. Pursuant to r 5.11 and 5.37, the Defendant was required to file a Response within 14 days of service and a Defence within 28 days of service. The Defendant has filed no Response and no Defence, and has not communicated with either the Applicant or the Court. More than 14 days, and indeed more than 28 days, have elapsed since service. The Defendant is therefore in default for the purposes of r 9.17.
10. The evidence also establishes that the Application for Default Judgment and Sworn Statement were also served on the respondent on 12 December 2025 at the Solomon Islands Water Authority Office in Point Cruz. Ms Habu accepted service and signed the receipt of documents. Proof of service has been filed.
11. The procedural precondition for applying for default judgment has accordingly been satisfied. The Defendant was not only served with the Claim and Response Form but was also served with the Application for Default Judgment and supporting material, and has been afforded ample opportunity to respond or otherwise engage with the proceedings

Evidentiary foundation for the debt (r 9.23-9.25)

12. The Applicant relies on the sworn statement of Michael Noda, Collections Officer with BSP Financial Group. Attached to this statement are a number of documents including the Loan Agreement, signed 12 July 2017. That agreement evidences:
    1. the advance of SBD 2,066,000.00 to the respondent to pay off existing investment property loan amount;
    2. That the loan is secured by parcel number 191-014-210 and 191-036-77;
    100. the applicable interest rate; and
    4. the repayment terms, including monthly repayments over a period of 20 years.
13. Exhibit MN2 annexes a copy of the registered charges used as security for the loan, signed on 24 August 2015.
14. Exhibit MN3 annexes a copy of the Fixed Term Estate Register for Parcel Number 191-036-77 and 191-014-210, which confirms that the parcels are registered in the joint names of the respondents.
15. Exhibit MN4 annexes registered pledges over available two thirds of the respondents SINPF Contributions.
16. Exhibit MN5 is a copy of the bank statement dated 8 May 2025 confirming the total amount outstanding for the loan being SBD2,823,584.81. Exhibit MN6 is a copy of the letter of demand served on the defendants on the 20 January 2025.
17. Taken together, Exhibits MN1-MN6 provide a coherent and complete evidentiary foundation for the existence of the loan, the security supporting it, the Defendant’s default and the Applicant’s entitlement to seek recovery of the outstanding balance.

Nature of the claim: liquidated sum (r 9.23-9.27)

18. The Applicant seeks judgment for SBD 2,823,584.81, being the outstanding balance said to be owing under the loan agreement as at the date of the Claim.
19. This is a liquidated monetary claim. The amount sought arises directly from the contractual repayment obligations and is capable of calculation by reference to the loan agreement and the repayment history. It does not require assessment, valuation or the exercise of judicial discretion.
20. The requirements of r 9.25 are satisfied. The sworn statement identifies the amount claimed as owing, confirms that the Defendant has failed to make required repayments, and exhibits the contractual documents upon which the debt is founded.
21. The claim therefore falls squarely within the category of claims for which default judgment may properly be entered under r 9.23-9.27.

Interest (r 9.24 and 9.26)

22. The Applicant seeks interest in accordance with the terms of the loan agreement.
23. The loan agreement exhibited at MN1 expressly provides for interest at the rate of 9.95% per annum with an additional 5% per annum upon default. Subject to the Solomon Islands Courts (Civil Procedure) Rules 2007, the Applicant is entitled to interest at that contractual rate up to the date of judgment.

Discretion and the overriding objective

24. The Court retains a discretion whether to enter default judgment and in what form. That discretion must be exercised consistently with the overriding objective of the Rules to deal with cases justly, efficiently and without unnecessary delay.
25. In the present case, the Defendant has been afforded every reasonable opportunity to engage with the proceeding and has chosen not to do so. The claim is supported by sworn evidence, the debt is liquidated and there is no suggestion of any jurisdictional defect or substantive issue requiring trial.
26. I am satisfied that no injustice will arise from entering judgment without trial. The prerequisites for default judgment have been met and it is appropriate to grant the relief sought.

Enforcement of the registered charges

27. A registered charge over land confers upon the chargee a proprietary security interest capable of enforcement only by order of the Court pursuant to s 171 of the Land and Titles Act. Enforcement is not automatic upon default. Rather, it requires a judicial determination that the statutory power should be exercised in the circumstances of the particular case. The authorities make clear that this determination is distinct from the entry of judgment for the underlying debt.
28. In Solomon Islands Consumers Co-operative Society Ltd (in liquidation) v W.H. Grove & Sons Ltd (Civil Appeal Case No. 3 of 1996, Court of Appeal, 15 April 1997), the Court of Appeal confirmed that, once default is established, a secured creditor is prima facie entitled to realise its security. However, that entitlement remains subject to the Court’s discretion under s 171, which must be exercised judicially and upon application. The Court’s role is not merely formal but supervisory.
29. The High Court has, in appropriate cases, exercised that discretion at the default-judgment stage where service was effective and the evidence established both default and entitlement to enforcement: Bank South Pacific Ltd v Zoloveke & Ors [HC-SI Civil Case No. 148 of 2010]; Pan Oceanic Bank Ltd v AJF Enterprises Ltd [HC Civil Case No. 10 of 2018, 27 February 2024]. Those cases reflect the uncontroversial proposition that where a borrower has knowingly charged land as security, enforcement by sale is the contemplated and bargained-for consequence of default, absent injustice or procedural irregularity.
30. A material distinction arises between the entry of judgment for a liquidated debt and the making of an order for sale of land. A default judgment on liability and quantum is inherently interlocutory in effect: the Civil Procedure Rules expressly contemplate that such a judgment may be set aside upon application, with the proceeding then continuing in the ordinary way. By contrast, an order for sale engages proprietary consequences which, once acted upon, may not be practically reversible. That distinction bears directly upon the exercise of discretion under s 171 in default proceedings.
31. The Act does not prescribe an exhaustive list of matters to which the Court must have regard in exercising that discretion. However, the discretion is not at large. It is a judicial discretion affecting proprietary interests in land and is to be exercised in a principled and transparent manner.
32. In order to promote consistency and predictability, particularly where enforcement by sale is sought in proceedings determined by default, it is appropriate to identify considerations that may be relevant to the exercise of the discretion. These considerations are not rigid preconditions or a checklist. They provide a framework to guide the Court’s reasoning, while preserving the flexibility inherent in the statutory discretion.
33. In considering the exercise of discretion, a first matter the court will ordinarily consider is the existence of statutory entitlement to enforcement. At this stage, the Court will ordinarily consider whether the statutory foundation for enforcement has been established. This may include consideration of whether:
    1. there is a valid registered charge over an identifiable interest in land;
    2. default under the secured obligation has been established on the evidence; and
    100. the application has been properly brought pursuant to s 171, recognising that enforcement may occur only upon application to the Court.
34. Satisfaction of these matters establishes that the chargee is entitled to seek enforcement of its security. It does not, of itself, determine whether enforcement should be ordered, nor the form or timing of any such enforcement. These matters are necessary to engage the Court’s discretion, but are not sufficient to exhaust it.
35. The Court may next consider the procedural context in which enforcement is sought. Relevant considerations may include:
    1. whether the proceeding has been determined after contest or on a default basis;
    2. where judgment has been entered by default, whether service of the originating process and enforcement application was effective and clear;
    100. whether the defendant has had a realistic opportunity to engage with the proceeding; and
    4. whether ordering immediate enforcement would, in practical terms, foreclose the defendant’s ability to seek relief from default under the Civil Procedure Rules.
36. These considerations reflect the fact that default judgments are procedurally provisional. The Civil Procedure Rules contemplate that such judgments may be set aside and that proceedings may thereafter continue on their merits. Where enforcement by sale is sought in that context, the Court may properly consider whether immediate enforcement is consistent with procedural fairness and the integrity of the Court’s own processes.
37. The Court may also have regard to the nature of the enforcement relief sought and its likely consequences. Relevant considerations may include:
    1. whether enforcement is sought by way of sale of land or other relief affecting proprietary interests;
    2. whether the proposed enforcement is likely to alter or extinguish proprietary rights or give rise to third-party interests; and
    100. whether the consequences of enforcement would be readily reversible if the judgment were later set aside.
38. This stage recognises the qualitative distinction between a money judgment and proprietary enforcement. An order for sale of land may produce consequences that cannot readily be undone. That characteristic does not preclude enforcement, but it may properly inform the Court’s assessment of whether enforcement should occur immediately, or whether safeguards are required.
39. Finally, where the Court is satisfied that enforcement is appropriate in principle, it may consider how enforcement should occur. Relevant considerations may include:
    1. whether enforcement should be immediate, deferred, or conditional;
    2. whether safeguards such as a stay of execution, a redemption period, or further service requirements are appropriate; and
    100. whether directions are required as to the mode of sale or other aspects of enforcement, consistent with the Court’s supervisory role under s 171.
40. This stage reflects that the discretion under s 171 is not confined to a binary choice between enforcement and non-enforcement. The Court retains control over the timing and manner of enforcement, and may structure relief so as to give effect to the security while ensuring that enforcement occurs in a lawful, fair, and procedurally coherent manner. These considerations are directed to the supervision of enforcement, not to relieving a defaulting chargor from the consequences of the security it has given.
41. In summary, and for ease of reference, the Court’s discretion under s 171 may be informed by consideration of:
    1. whether the statutory entitlement to seek enforcement has been established;
    2. the procedural posture in which enforcement is sought;
    100. the nature and consequences of the enforcement relief proposed; and
    4. the appropriate timing and manner of enforcement in the circumstances of the case.
42. These considerations are not exhaustive and are not to be applied mechanically. Their purpose is to assist the Court in exercising its discretion transparently and consistently in cases where enforcement of registered charges over land is sought.
43. The Court is satisfied that, on the material before it, the Claimant has established the existence of valid registered charges over the fixed term estates in question, the Defendants’ continuing default under the loan agreement, and compliance with the contractual and statutory preconditions to enforcement.
44. The Defendants were served with the Claim and with the application expressly seeking an order for sale of the charged land. They were therefore on notice of the nature of the relief sought and of the consequences that would follow in the event of default. The material further establishes that the Defendants knowingly offered the land as security for the loan and that sale of the charged land was the enforcement consequence contemplated in the event of non-payment.
45. The Defendants have elected not to file a response or otherwise participate in the proceeding. There is nothing on the material before the Court to suggest that enforcement by sale would be unjust, disproportionate, or attended by procedural irregularity. In those circumstances, the Court is satisfied that it is appropriate to exercise the discretion conferred by s 171(b) of the Land and Titles Act to order sale of the charged land notwithstanding that judgment is entered by default.
46. In exercising that discretion at the default stage, the Court proceeds on the basis that enforcement by sale is the ordinary incident of the security granted and that the Court’s supervisory role under s 171 is directed to ensuring that enforcement occurs lawfully and fairly. It does not extend to deferring enforcement in the absence of any identified impediment to its exercise.

Orders

1. Judgment is entered for the Claimant against the Defendant in the sum of SBD 2,823,584.81.
2. Interest is awarded on the judgment sum at the contractual default rate of 14.95% per annum, calculated in accordance with the loan agreement, up to and including the date of judgment.
3. Pursuant to sections 171(b) of the Land and Titles Act, the fixed term estates comprised in Parcel No. 191-036-77 and Parcel No. 191-014-210 are to be sold by public tender, unless the judgment sum and accrued interest are paid in full within such time as may be agreed between the parties.
4. The Defendant shall pay the Claimant’s costs of the proceedings and of the application.

By the Court
Hon. Justice Gina Maree Nott
Puisne Judge