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Bank of South Pacific Tonga Ltd v Tupou [2025] TOLC 4; LA 26 of 2024 (20 March 2025)

IN THE LAND COURT OF TONGA

NUKU’ALOFA REGISTRY

LA 26 of 2024

BETWEEN :

BANK OF SOUTH PACIFIC TONGA LIMITED

Plaintiff

AND :

SIUA LAVAKI TUPOU

Defendant

RULING ON FORMAL PROOF

Before: Hon. Justice Tupou KC
Hon. Land Assessor Mrs. Salote Fukofuka
Appearances: Mrs. Dana Stephenson KC for the Plaintiff
Siua Lavaki Tupou in person
Date of Hearing: 20 March, 2024
Date of Ruling: 20 March, 2024

Nature of the case

1. The Plaintiff, the Bank of the South Pacific Tonga Ltd is a financial institution carrying on business as a bank (“the bank”) in Tonga. It has applied for judgment by formal proof pursuant to Order 6 Rule (3) of the Land Court Rules.
   
2. The writ of summons and statement of claim filed on behalf of the Plaintiff was served on the Defendant on 9 December. 2024. He has elected not take any steps to defend or participate in the proceedings. He was served with notice of today’s hearing and has attended.
   
3. Pursuant to Order 6 Rule 1(3) he is not allowed to be heard.
   
4. The bank seeks a declaration that it is lawfully entitled to immediate possession of all that land comprised in Deed of Grant Book 413 Folio 14 (“the land”) situated at Kolofo’ou and registered in the name of Siua Lavaki Tupou and for orders against the Defendant to surrender up and grant vacant possession of all that land to the Plaintiff.
   

The Evidence

5. The bank called Mr Elias Kendler, 30 years of age, of Ma’ufanga. He is employed as a Recovery Officer in the Loans and Management Unit at the bank. He had provided a written brief of evidence as well as the relevant documents on which the bank has relied on in bringing this action. Mr. Kendler confirmed her brief of evidence in court today.
   
6. Mr. Kendler was familiar with the housing loan jointly taken out by Evelingi Pita, Losalu Kosilio and Siua Lavaki Tupou under account number 2001264122.
   
7. The loan was for the purposes of renovations and refinancing of an existing debt to the MBF Bank. The material terms of the loan were:
   1. Loan in the amount of $65,382.95;
   2. Term and period of repayment was 135 months at the rate of $700 per month commencing from 31 October, 2016;
   100. Applicable interest was at the rate of 8.29% per annum;
   4. Period of mortgage was 30 years; and
   5. pledged as security was the mortgage over Siua Lavaki Tupou’s allotment.^[1]

8. The loan was drawn down by the borrowers by the end of September, 2016.
   
9. On 22 June, 2017, Mr. Tupou mortgaged the land to the bank in consideration of mentioned loan. The mortgage was duly registered in the register of mortgages Book 7 Folio 11427.^[2]
   
10. In December, 2017, the loan was varied^[3] to increase the borrowed amount to $94,763.94 with a reduced repayment rate of $323 per fortnight for an extended period of 280 months.
    
11. Notice of the bank’s mortgage was registered on the Personal Property Securities Register on 20 March 2024 with registration number 1001961085.^[4]
    
12. In 2020, the loan began to fall into arrears whereby no loan repayments were made:

a) for the month of February, 2020;^[5]

b) except for a partial payment for the month of March, 2020^[6];

c) from January to June, 2022^[7]; and

b) from January and February, 2023^[8].

13. The bank issued demands which were served on the mortgaged property on 15 July, 2020, 13 July, 2022 and 17 February, 2023^[9]. No repayments were forthcoming and the loan remained in default.
    
14. By the failure to settle the arrears as demanded, the Defendant was in default for the purposes of section 109 of the Land Act which provides:

"In the event of the mortgagee taking possession of the lands mortgaged following default by the mortgagor of any of the obligations to the mortgagee set out in the mortgage deed or in any other document lodged with the Minister in terms of the next succeeding section the mortgagee shall give notification both to the mortgagor and the Minister of his intention to take possession of the lands mortgaged and may thereafter take possession at any time after the expiry of 14 days from the date of said notification.”

15. On 20 March, 2023 the bank served the Defendant with a section 109 notice^[10] of the said default and its intention to take possession of the Land after the expiration of 14 days. A copy of that notice was served on the Minister of Lands on even date.
    
16. The notice expired on 4 April, 2023 but Mr. Tupou remained on the mortgaged land to date.
    
17. Mr. Kendler’s evidence is accepted and I am satisfied on the balance of probabilities that the Plaintiff has proven its claim.
    

Result

1. Accordingly, it is ordered that:
   
   1. the Plaintiff bank is entitled to possession of the town allotment situated at Kolofo’ou consisting of an area of 811.9m² and registered in the name of Siua Lavaki Tupou, best described under Deed of Grant Book 413 Folio 14;
      
   2. Siua Lavaki Tupou and any persons claiming through him must surrender up and grant vacant possession of the said Land forthwith.
      
2. The Defendant shall pay the Plaintiff's costs to be taxed, if not agreed.

P. Tupou KC

NUKU’ALOFA: 20 March, 2025 Judge of the Land Court

^[1] Refer pgs. 9 – 13 for the executed loan contract of the Court Book
^[2] Refer to pgs.14 – 18 for the memorandum of mortgage and pg.20 for the endorsement on the back of the Deed of Grant
^[3] Refer to pgs. 21-23 for the variation documents and pg.20 for the endorsement on the back of the Deed of Grant
^[4] Refer to pgs. 24-25
^[5] See pg.33
^[6] Ibid.
^[7] See pgs. 36 - 37
^[8] See pg.38
^[9] See pgs. 39-41
^[10] See pg.64