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

Singh v NBF Asset Management Bank [2003] FJHC 306; HBC0218.2003 (31 July 2003)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO.: HBC0218 OF 2003

BETWEEN:

ATENDRA SINGH
PLAINTIFF

AND:

NBF ASSET MANAGEMENT BANK
DEFENDANT

Mr. K. Muaror - For the Plaintiff
Ms M.A. Chan - For the Defendant

DECISION

The plaintiff is a registered proprietor of freehold land comprised in CT 17196 having an area of 379 acres 1 rood and 38 perches. It is situated in Tailevu. It was mortgaged to the National Bank of Fiji to secure advances made to the plaintiff. The mortgage was registered on 24^th July 1987. The actual mortgage has not been annexed to the affidavit of either party. Neither party also deposed what is the exact amount owing to the Bank but it is roughly $130,000.00 according to the plaintiff. It appears from affidavit filed on behalf of the Bank that over the years the mortgaged property has been advertised for sale pursuant to the mortgagee’s powers. However, for one reason or another, the Bank did not sell the property.

It appears that on or about 21^st May 2003 the Bank accepted an offer by one Dhijendra Singh to buy the land for $135,000.00.

The plaintiff contends that the defendant is selling the land at a gross undervalue. He attached a valuation of the property at $2.7 million. He also alleges that the defendant has not acted in good faith as the amount owing to the Bank is $130,000.00 and the accepted tender is for $135,000.00 that is slightly over the amount owing. Plaintiff suggests there is collusion between the Bank and the alleged purchaser. He refers to the affidavit of Dhijendra Singh (the proposed purchaser) sworn on 5^th June 2003 and filed on behalf of the Bank wherein he states that the property has been offered to him as a result of negotiations. He submits that it’s not a sale pursuant to a tender under mortgage.

The defendant Bank submits that the plaintiff’s equity of redemption is lost as the Bank has accepted a tender and plaintiff’s claim if any lies in damages and the interim injunction ought not to continue as it was just a delay tactic by the plaintiff. It submits that the plaintiff in the past had opportunities to redeem but failed.

I have in the exercise of my discretion considered that the interim injunction shall continue for following reasons:

1. The mortgage document itself is not disclosed to the court. That is the prime document on which the defendant intends to exercise its powers of sale. Its terms and conditions are not known to the court.
   
2. The affidavit of Dhijendra Singh the proposed purchaser suggests that he is buying the property pursuant to negotiations, suggestions that it is pursuant to private treaty rather than under the process of tender which the Bank alleges.
   
3. There are competing valuation reports tendered by both parties. The plaintiff has filed a recent valuation report dated 24^th May 2003 from Pacific Property Consultants which places the value of property at 2.7 million dollars. The defendant has tendered a valuation report dated 11^th January 2002 from Rolle Hillier Parker that gives the valuation of property at $115,000.00.
   
4. The plaintiff had entered into an agreement for extraction of gravel and rocks from part of the land. The agreement is for a term of five years and this sudden windfall may have boosted the value of land. The Bank was aware of this agreement. Mr. Kafoa suggested that both this agreement and the balance owing were made known to the proposed buyer and that is why he offered $135,000.00.
   
5. It is obvious that the prospective purchaser is not a resident of Fiji but of New Zealand. Any sale of land to him would be subject to the provisions of Section 6(1) Land Sales Act which provides that no non-resident of Fiji shall without prior consent in writing of the Minister responsible for Lands enter into purchase of land in excess of one acre in Fiji. An agreement entered into in contravention of this section is void illegal and unenforceable see Mohammed Akhbar & Others v. Jennyne Gonzalez – Civil Appeals No. 54, 63 and 68 of 1998 Fiji Court of Appeal.
   

The effect of this decision therefore is that parties cannot enter into an agreement without prior consent of the Minister. The agreement can only be made after such consent so until the agreement is made the plaintiff has not lost his equity of redemption. There is nothing before me to suggest that the Minister has sanctioned the sale.

For above reasons I am of the view that there are serious questions at issue and allow the interim injunction to continue pending trial subject to the plaintiff paying the sum of $130,000.00 into court by 3.00 p.m. on 4^th August 2003. The defendant is at liberty to make application for payment out of court if it wishes. If the above sum is not paid into court by 3.00 p.m. on 4^th August 2003 the Bank is at liberty to proceed with the mortgagee’s sale.

[ Jiten Singh ]
JUDGE

At Suva
31^st July 2003