The applications are made under Or 18 of the High Court Rules 1988.
The orders sought are for the striking out and dismissal of the action.
I have outlined at some length tcts surrounding this case. With that background I am required to consider whether the appliapplications
should be granted or not.
On tw I have drawn heavily on the Notes to Or 18 r.19 of THE SUPREME COURT PRACTICE 19955 Vol. I. There it is stated:
"It is only in plain and obvious cases that recourse should be had to theo the summary process under this rule..... The summary
procedure under this rule can only be adopted when it can be clearly seen that a claim or answer is on the face of it "obviously
unsustainable".... It cannot be exercised by a minute and protracted examination of the documents and facts of the case, in
order to see whether the plaintiff really has a cause of action.... The powers conferred by this rule will only be exercised where
the case is clear beyond doubt..... The Court must be satisfied that there is no reasonable cause of action .... or that the defences
raised are not arguable."
It was also said by MARSACK J in A SHIU PRASAD HALKA [1972] 18 FLR 210 at 215 215 that this summary procedure "should be exercised sparingly and only in exceptional cases".
This is a disputed matter and "on an application to strike out the statement of clnd to dismiss the action, ion, it is not permissible to try the action on
affidavits when the facts and issues are in dispute" (SUPREME COURT PRACTICE (ibid)).
There clearly are issues to be tried in this action and that cannot be dt this hearing. It cannot bnot be said here beyond doubt that
there is no cause of action against the defendants. Merely showing that the Plaintiff has a weak case is not sufficient; it has to
be shown that there is no cause of action.
Mr. March complains of sal"below its real value which exceeds $500,000"; he disputes the validity of thof the demand notice; he questions the method adopted in accepting the tenders when early in September
D1 rejected all the tenders and no clear explanation has been given for such rejection; he complains that D1 and D2 did not accept
or in any way test the highest tender for $695,000 and have given no reasonable explanation for so rejecting this tender; he alleges
that after the tenders closed the D1 and D2 entered into "private negotiation with the Third Defendants only". No attempt was made to "sound out" the other parties whose tenders had been previously rejected"; he raises an issue that by rejecting all tenders D1 and D2 had
waived the tender notice and by "their private negotiations" "had waived the Demand notice".
I am nmindful of the fact that D1 exercised its power of sale under the mortgage. However, the Plhe Plaintiff has raised a number
of issues as stated above arising out of such exercise of power. Mr. March certainly has a grievance and those grievances are of
a serious nature involving, inter alia, allegations of fraud on the part of D1, D2 and D3. No doubt a mortgagee has very wide powers
of sale under a mortgage. But if that exercise is not carried out with duty of care in mind towards the mortgagor and in good faith,
the mortgagor is well within his rights to question that in a court of law. The burden will be on him to prove all the allegation
including the allegation of fraud.
On the facts and circumstances of this case and applying the above principles I cannot shu door on the Plaintiff by d by dismissing
the action.
In considering these applications, one has to bear in mind what the mortgagees dn sale are and to see how fhow far, if at all, the
D1 has departed from the requirements of the law in this regard. Mr. Patel has referred the Court to a number of cases on the subject
such as, inter alia, CUCKMERE BRICK CO LTD v MUTUAL FINANCE LTD (1971) Ch. 949 where at 978 it is stated that mortgagee is under an obligation to take reasonable care to obtain "the true market value" (per Salmon J at 966) at the date of sale, or as it was similarly expressed, to take reasonable care to obtain "a proper price for the land in the interest of the mortgagors" (per CAIRNS L.J. at 978).
I have carefully considered the submissions made by all counsel in this matter.
I agree as Mr. Daubney submits in law that the cour an inherent jurisdiction to control proceedings and thus phus prevent an abuse
of its process. This jurisdiction is quite apart from that conferred by the rules of the Court to strike out frivolous and vexations
pleadings and actions where a cause of action is not revealed.
Upon a proper consideration of all the evidence before me, after giving anxious consideration to the rights and powers of a mortgagee
and the principles applicable when fraud is alleged, I find myself unable to strike the action out on the basis of the arguments
put forward by the defendants. For the Plaintiff there are many hurdles to be overcome and fraud has to be proved by him, that no
doubt is not going to be an easy hurdle to surmount. He has to satisfy the Court on the principles of law involved in a case of this
nature where certain stringent proof is required, particularly where it concerns mortgagees sale and indefeasibility of title under
the Torrens system.
Using Mr. Daubney's following quotation from the case of MATHAMAN v NABALCO TD [1979] 14 FLR 10LR 10 I do not consider that I am in a position here to dismiss the action:
"Wollows...is that if, in interlocutory proceedings of this kind, the judge (1) bears in mind mind that the power to dismiss
the action in such proceedings is to be used with great caution, and (2) is satisfied that the question of substance is crucial
to taintiff's ca's case, and (3) is satisfied that the question has been sufficiently argued before him, and (4) on that question
coo a conclusion, contrary to the plaintiff, which is satisfactorily definite and certain, thn, then he should dismiss the action."
I am of the view that the Plaintiff's case is arguable and that he ought to be allowed to proceed with his action. Looking at the
whole of the affidavit evidence, one is left with a lurking doubt at the back of one's mind as to whether a proper procedure was
adopted in accepting the tenders. This aspect of the matter is crucial and it cannot be cleared up without evidence in the trial
of the action.
ass=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> Conclusion
Bearing in mind that it is well established that any court possesses an inherent jurtion to dismiss cases brougbrought before it which
are frivolous or vexatious or an abuse of the process of the Court, I do not consider that the facts and circumstances of this case
are such that this power should be exercised as to exclude MR MARCH from asserting or exercising a right given to him by law.
Here there is ne exercise eise extreme care before striking out the action cularly when MR MARCH has rhas raised questions of general
importance involving serious questions of law which could only be determinon the trial of the action.tion. When I say this I am not
unmindful of the powers of a mortgagee (D1 in this case) and of the purchasers (Sundarjees) under mortgagee sale under s79 of the
Property Law Act Cap. 130. However, because of the strength of the affidavit evidence before me, in the interests of justice, MR MARCH should be given
the opportunity to present his case as fully as possible and to prove his allegations against the defendants. One of the things that
MR MARCH will have to do is to bear in mind the "true tests of fraud" as stated by SALMON J in WAIMIHA SAWMILLING CO LTD v WAIONE TIMBER CO. LTD [1923] NZGazLawRp 32; [1923] NZLR 1137 at 1175 when he said:
"The true test of fraud is not whether thchaser actually knew for a or a certainty of the existence of the adverse right, but
whether he knew enough to make it his duty as an honest man to hold his hand, and either to make further inquiries before purchasing,
or to abstain from the purchase, or to purchase subject to the claimant's rights rather than in defiance of them. If, knowing as
much as this, he proceeds without further inquiry or delay to purchase an unencumbered title with intent to disregard the claimant's
rights, if they exit, he is guilty of that wilful blindness or voluntary ignorance which, according to the authorities, is equivalent
to actual knowledge, and therefore amounts to fraud."
To fulfil the requirements as contained in the above passage there has to be a trial of the n in all the circumstances nces of this
case.
To conclude, because these summonses to dismiss were made under Or 18 r.18 of the High CRule it was not necessary tary to go deeply
into the merits and demerits of the applications but merely to consider the contents of the affidavit evidence before me which as
I have stated do not persuade me to grant the applications.
In the outcome the three sums are therefore dismissed with costs in the cause. I also make the following orders:span>
(a) that should the defts require any further particulars regarding the allegationation of fraud then they ought to indicate that
to the Plaintiff within 7 days of this decision whereupon the Plaintiff shall within 21 days after being so notified file in Court
and serve on the defendants such further particulars.
(b) that the time for filing and service of the StatemenDefence of the Defendants ints is extended to 21 days after the delivery to
the defendants of the further particulars as ordered. Thereafter the action to take its normal course.
(c) Liberty to parties to apply generallyan>
Befoconclude this matter there is one other thing I would like to mention here and that relateslates to the civil action No. 29/96
which is a s169 possession case wherein SUNDARJEES are Plaintiffs and MR MARCH is the defendant.
As I stated at the commencement of thiision that I will consider the Summonses herein first and dand depending on the outcome will
hear Mr. Patel's consolidation application.
I would therefore like to hear counsel appearing in that case to indicate to Court in due course what they propose to do about the
application to consolidate.
D. Pathik
JUDGE
ass=MsoNormal stal style="margin-top: 1; margin-bottom: 1"> At Suva
15 January 1997
Hbc0135d.96s
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