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Lal v Lal [2013] FJHC 104; HBC108.2012 (12 March 2013)

IN THE HIGH COURT OF FIJI AT LAUTOKA
[CIVIL JURISDICTION]

CIVIL CASE NO : HBC 108 OF 2012

IN THE MATTER of MORTGAGE NO. 727441A REGISTERED ON 24 DECEMBER 2009 GIVEN BY DAYAL LAL IN FAVOUR OF BRIJ LAL OVER PROPERTY COMPRISED IN CROWN LEASE NO. 17137.

BETWEEN:

DAYAL LAL of Rarawai, Ba, Fiji, Foreman.
DEFENDANT-APPLICANT

AND:

BRIJ LAL of Rarawai, Ba, Fiji, Retired.
PLAINTIFF-RESPONDENT

Counsel
Mr W Pillai for the Defendant-Applicant
Mr S K Ram for the Plaintiff-Respondent

Date of Hearing : 25 February 2013
Written-submissions : 05 March 2013
(Filed only by the plaintiff-respondent)

JUDGMENT

1. The defendant-applicant (the applicant), by his Originating Summons dated 05 February 2013, seeks to redeem the property mortgaged to the plaintiff-respondent (the respondent) by Mortgage No 72441A on 14 August 2009 in respect of Lot 15 of the Crown Lease No 17137. The applicant specifically seeks inter alia a declaration as to his right to redeem the property; an order for account of the amounts due from the applicant under the Mortgage with the respondent; and, an order that, upon payment of that amount to the respondent, the applicant be at liberty to redeem the mortgaged property.
   
2. The Originating Summons is accompanied by a simultaneous ex-parte Notice of Motion dated 05 February 2013 for stay of proceedings against the execution of the writ of possession dated 30 January 2013 in favour of the respondent issued by this court.
   
3. The Summons and the Motion are supported by an affidavit dated 05 February 2013 from Mr Dayal Lal, the applicant.
   
4. The matter arises out of a transaction where the applicant purchased the property for a sum of $ 38,000.00 from the respondent on 14 August 2009. A mortgage was registered on the title of the property in order to secure the payment of the balance amount of $ 33,000.00 of the consideration on 24 December 2009 (DL-1 and DL-2 annexed to the affidavit). The balance amount became payable on or before 31 December 2011.
   
5. The applicant deposed that he was not able settle the monies due to the respondent before 31 December 2011owing to financial difficulties.
   
6. Initially, the respondent, by his Originating Summons dated 16 May 2012, filed action against the applicant seeking vacant possession of the mortgaged-property as the amount in its entirety was defaulted by the applicant. The action was filed after serving a 'Demand Notice' as borne-out by 'BL-3', annexed to the respondent's affidavit in support of his Originating Summons. The applicant filed affidavits in response opposing the Originating Summons of the respondent on 10 July 2012 and 08 August 2012.
   
7. As that matter stood for hearing on 10 August 2012, both the applicant and the respondent informed court that the matter was being settled and moved for time to file 'Terms of Settlement'. The 'Terms of Settlement' were filed with mutual consent of the parties on 16 August 2012 before this court.
   
8. The 'Terms of Settlement' were:
   

The Defendant [applicant] is to give vacant possession of the property described as Crown Lease number 17137 described as Lot 15 Plan Ba 2369 (pt of) Rarawai & Vunisamaloa fmly CT 7822 in the Province and District of Ba containing as area of 708 m² situated at Rarawai, Ba subject to the conditions in this order.

The order for vacant possession is to be suspended for 3 (three) months on the condition that the Defendant [the applicant] pays to the Plaintiff a sum of $35,000.00 (Thirty Five Thousand Dollars) in full and final settlement of the Mortgage debt secured by the Mortgage, being the subject of these proceedings, within a period of 3 (three) months.

Upon the defendant [the applicant] paying the plaintiff a sum of $35,000.00 (Thirty Five Thousand Dollars) within the period of 3 (three) months:-

1. The plaintiff [the respondent] shall Discharge the mortgage;
   
2. These proceedings and any orders made for vacant possession shall be wholly discontinued and discharged.
   

9. The applicant in his Originating Summons now states that he had secured a buyer to purchase the property for a sum of $ 38,000.00 with some financial facility from the Bank of South Pacific. The applicant annexed an incomplete copy of a letter dated 17 July 2012 addressed to one Mrs Priyatna Shalina Chandra, whom, the defendant claimed to be the prospective buyer, in support.
   
10. The applicant also relied on a letter dated 14 November 2012 addressed to Mr Samuel K Ram, learned counsel for the respondent, notifying the latter of the prospects of settlement of the mortgage to which, the applicant claimed, that there was no response. The applicant stated that the respondent had, instead, filed a writ of possession dated 30 January 2013 seeking immediate vacant possession of the property.
    
11. As ex-parte applications were listed for hearing on 13 February 2013 before this court, the respondent had filed an affidavit in response. The respondent asserted that the applicant did not make an effort whatsoever to make any payment under the mortgage; and, that he had sent a 'Demand Notice' dated 13 January 2012 informing the applicant of his intention to exercise the right of sale under the mortgage to satisfy the debt. The respondent further stated that the applicant had, at no time, asked for further time to pay the debt albeit the absence of any attempt to do so previously.
    
12. The respondent stated that the writ of possession was applied for and executed on 05 February 2013 in pursuance of the order of this court under the terms of settlement entered on 16 August 2012.
    
13. As the matter was taken-up on 13 February 2013, Ms S Dewan, learned counsel appearing for the applicant moved for two days to file a supplementary affidavit in support of the Originating Summons dated 05 February 2013 of the applicant. The respondent was allowed to respond to such supplementary affidavit on or before 22 February 2013. Hearing inter-partes was fixed for 25 February 2013.
    
14. No supplementary affidavit was filed in compliance with the timeframe set by court. However, an affidavit dated 12 February 2013 was purported to have been filed on 21 February 2013 to which the respondent, nevertheless, had replied. Upon objections being raised to the admission of the purported supplementary affidavit by Mr Ram, learned counsel for the respondent, this court struck-out the purported supplementary affidavit.
    
15. The applicant, thereupon, confined his case to the contents of the initial affidavit dated 05 February 2013 in support of the Originating Summons and the Notice of Motion.
    
16. It is common ground that there is no challenge to the settlement by consent entered on 16 August 2012 and that the writ of possession was executed by the respondent on 05 February 2013 in furtherance of that consent order. Learned counsel for the applicant, in the circumstances, did not pursue the application for stay as it had by then become redundant.
    
17. In the circumstances, the basis for the reliefs sought by the Originating Summons of the applicant is not clear. However, learned counsel for the applicant relied on Section 72 of the Property Law Act and stressed the point that a mortgagor was entitled to seek a redemption '... at any time before [the property] has been actually sold ...'.
    
18. Section 72 of the Property Law Act states:
    

72 (1) A mortgagor is entitled to redeem the mortgaged property at any time before the same has been actually sold by the mortgagee under his power of sale, on payment of all moneys due and owing under the mortgage at the time of payment.

(2) A mortgagor is entitled to redeem the mortgaged property although the time for redemption appointed in the mortgage has not arrived; but in that case he shall pay to the mortgagee, in addition to any other moneys then due and owing under the mortgage, interest on the principal sum secured thereby for the unexpired portion of the term of the mortgage.

(3) A mortgagor seeking to redeem after the expiry of the term of the mortgage, or of any further term for which it has been renewed or extended, shall give to the mortgagee three clear months' notice in writing of his intention to redeem, or shall pay to the mortgagee three months interest in lieu thereof:

Provided that this subsection shall not apply in any case where the mortgagee has entered into possession of the mortgaged property or any part thereof, or has taken any steps to realize his security.

(4) For the purposes of this section, the expressions "moneys due and owing under a mortgage" includes all expenses reasonably incurred by the mortgagee –

(a) for the protection and preservation of the mortgaged property or otherwise in accordance with the provisions of the mortgage; and,

(b) with a view to the realization of his security,

and in either case includes interest on the sums so expended at the rate expressed in the mortgage.

19. Learned counsel relied on the decisions in Khan v Fiji Development Bank [2000] 1 FLR 11 and Singh v National Provident Fund [2003] FJHC 266 in order to establish what was really meant by the phrase '... [the property]...actually sold' in the context of a mortgagor's right to redeem the mortgaged property.
    
20. Learned counsel for the respondent, on the other hand, submitted that the mortgagor's right had ceased to exist as the mortgagee was installed in possession by means of a writ of possession issued by this court in pursuance of the 'Terms of Settlement' dated 16 August 2012. Learned counsel further submitted that what had been urged in the present Originating Summons was only a regurgitation of the matters relied on in the responses to the respondent's Originating Summons seeking possession dated 16 May 2012. It was the counsel's submission that the proviso in Section 72 (3) of the Act, in the circumstances, makes the applicant disentitled to the reliefs.
    
21. Upon consideration of the matters and material, I uphold the submissions of Mr Ram, learned counsel for the applicant. I also take into account that no steps whatsoever had been taken by the applicant during the subsistence of the mortgage or after its expiration to pay the debt. The debt continued to be in default in its entirety from 24 December 2009 to-date. I hold that a mortgagor would be entitled to the remedy of redemption of the property only '... on payment of all moneys due and owing under the mortgage at the time of payment' under Section 72 (3) of the Act.
    
22. In the result, I see no merit in the Originating Summons of the applicant and the same is dismissed with costs fixed at $ 3000.00 payable to the plaintiff-respondent.
    

Priyantha Nāwāna
Judge

High Court
Lautoka
12 March 2013