IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION
Civil Action No. HBC 202 of 2015

IN THE MATTER of Mortgage No. 767192 given by JONE QIO aka JONE QIO MATANISIGA of Lot 75, Kaudamu Place, Kinoya, Nasinu, Unemployed, over the residential property comprised in Housing Authority Sub Lease No. 163532.

BETWEEN	: 	HOME FINANCE COMPANY LIMITED trading as HFC Bank (referred to as HFC) a limited liability company having its registered office at 371 Victoria Parade, Suva, Fiji.
PLAINTIFF

AND	:		JONE QIO also known as JONE QIO MATANISIGA of Lot 75, Kaudamu Place, Kinoya, Nasinu, Unemployed.
DEFENDANT

Appearances	:		Nands Law for the Plaintiff
Naco Chambers for the Defendant

Before	:		Acting Master S.F. Bull
Hearing	:		23 May 2016
Judgment	:		04 October 2016

JUDGMENT
1.	On 01 June 2015, the Plaintiff instituted these proceedings by originating summons, seeking an order for the Defendant and his family, servant and or agents to deliver vacant possession of all that property comprised and described in Housing Authority Sub-Lease No. 163532 being Lot 75 on DP No. 4107, having an area of 18.4 perches together with all the improvements thereon situated in the District and Province of Naitasiri.  

2.	The Defendant is the registered lessee of the property in question.  By mortgage No. 767192 registered on 7 December 2013, a legal charge was created over the said property to secure repayment to the Plaintiff of all loans, advances, charges, interest and other accommodation granted by the Plaintiff to the Defendant.

3.	The Plaintiff brings the application under Order 88 rule 3 (3) of the High Court Rules (the Rules), saying that it had advanced to the Defendant the sum of $51,489.11.  Pursuant to an offer dated 3 October 2012, the Defendant was required to pay $183.07 per fortnight.  Subsequently, and pursuant to a second offer letter dated 24 April 2013, the repayments were increased to $562.57 per month.  

4.	As at the date of issue of the originating summons in these proceedings, the Defendant was in arrears of interest and instalments in the sum of $11,813.97, with the total amount remaining under the mortgage being $67,454.97.  A daily interest accrues on this amount at the rate of $17.56 per day.  

5.	On account of the Defendant defaulting in payments under the mortgage, the Plaintiff issued and served on it a default notice on 23 January 2014.  The Defendant failed to pay and the Plaintiff exercised its powers under the mortgage, calling for tenders for the sale of the property.

6.	On 18 November 2014, the Plaintiff entered into a sale and purchase agreement for the sale of the property for the sum of $85,000.  The Transfer document has been executed and stamped in readiness for settlement, but the Plaintiff has not been able to conclude the settlement as the successful tenderer requires vacant possession of the property prior to or on the date of Settlement. 

7.	On 31 March 2015, the Plaintiff issued and served on the Defendant a notice to vacate, but the Defendant continues in occupation.  

8.	The Defendant opposes the application saying that the Plaintiff was fully aware that after it issued the offer letter of 24 April 2013, he was terminated from his employment and therefore unemployed.  He says the restructuring of repayments was done by the Plaintiff without any assessment as to his ability to repay the debt.  The increase in the amount owing under the mortgage was the result of the Plaintiff’s negligence in failing to restructure his loan given that he was unemployed.

9.	The Plaintiff replies that no correspondence was ever made to the Plaintiff that the Defendant had been terminated from his employment, nor was there any correspondence from the Defendant seeking restructuring of his loan.  In any event, the Defendant had not objected when the loan agreement of 24 April 2013 was entered into.  

Order 88
10.	Rule 3 of Order 88 sets out the requirements of an affidavit in support of a mortgage action begun by originating motion, seeking delivery of vacant possession of land and premises occupied by a defendant and which are secured by mortgage.  The affidavit must:

(2) 	must exhibit a true copy of the mortgage and the original mortgage;
(3)	show the circumstances under which the right to possession arises and … the state of the account between the mortgagor and mortgagee with particulars of –

(a) 	the amount of the advance; 
(b) 	the amount of the periodic payments required to be made;
(c) 	the amount of any interest or instalments in arrears at the date of issue of the originating summons and at the date of the affidavit; and 
(d)	the amount remaining due under that mortgage. 
(4)	in a claim for delivery of possession, give particulars or every person who, to the best of the Plaintiff’s knowledge, is in possession of the mortgaged property.
11.	In Shantilal (supra) at p.7, Jayaratne J stated the scope of Order 88 thus:

Order 88 of the High Court Rules only deals with actions relating to mortgages.  It gives mortgagees the right to claim possession without being the registered proprietor with or without foreclosures.  To that extent Order 88 is available to him.  Nothing can inhibit him from utilising Order 88.

12.	In NBF Asset Management Bank v Sharma [1999] FJHC 159; HBC0132J.1999 (2 September 1999), Shameem J stated: 

Provided Order 88 has been complied with, the mortgagee has unquestionable rights to possession.

13.	It is well established under the common law that a mortgagee has a right to possession.  Thus in Western Bank Ltd. v. Schindler [1977] 1 Ch. 1, Goff L.J. stated:

It has for a very long time been established law that a mortgagee has a proprietary right at common law as owner of the legal estate to go into possession of the mortgaged property. This right has been unequivocally recognised in a number of modern cases: see, for example, Four Maids Ltd. v. Dudley Marshall Properties Ltd [1957] Ch. 317. ... It has nothing to do with default: see per Harman J. in the Four-Maids case where he said, at p. 320:

The mortgagee may go into possession before the ink is dry on the mortgage unless there is something in the contract, express or by implication, whereby he has contracted out of that right.

14.	In addition to the common law right, the mortgagee also has a statutory right to possession under  75 of the Property Law Act, Cap 130 which provides:

A mortgagee, upon default in payment of the mortgage money or any part thereof, may enter into possession of the mortgaged land by receiving the rents and profits thereof or may distrain upon the occupier or tenant of the said land for the rent then due.

15.	Under section 79 of the Property Law Act, a mortgagee has the right to sell the mortgaged property where the mortgagor has defaulted in payment of mortgage monies, where such default continues for one month after service of a default notice under section 77.

16.	An application under Order 88 must comply with the requirements of that Order and rules 2, 3 (2), 3, 4, 6 and 7. (Per Pathik J in Australia and New Zealand Banking Group Ltd v Bulewa [2004] FJHC 280; HBC0233j.2002s (10 March 2004). 

The mortgage
17.	Clause 5.2 of the mortgage states:

If I/any of us:

-	fail to pay HFC an amount due under this Mortgage or a Secured Agreement or 
-	fail to do anything I/we promise HFC or that I/we must do under the Mortgage or a Secured Agreement

and the failure continues for at least seven days, HFC may notify me/us of the failure and serve a notice on me/us.

If the failure continues for at least thirty days after service of the notice then HFC can do any one or more of the following, but it need not do so:

-	Demand that I/we or any of us or all of us to pay to HFC all money secured by this Mortgage and payable by me or any of us or all of us under the Secured Agreements.  I/each of us will then pay immediately all principal and all other amounts which I/we promise to pay under this Mortgage and the Secured Agreement, even if they are not yet otherwise payable

-	Take possession of the property

-	Sell the property in one or more lots or with other property

-	Do anything I/we could do in relation to all or part of the property. For example:

•	let it;
•	improve it;
•	subdivide;
•	demolish;’
•	vote at meetings;
•	carry on any business or other activity;
•	collect rents and other amounts;
•	surrender it;
•	deal with leases and other rights and agreements (for example, perform them, exercise rights under them, enforce them, give consents, or end or change them);
•	sign or execute any document or agreement;
•	make, defend, enforce, pay and settle insurance or other claims; and
•	dedicate it to a government body.  

_	Appoint one or more receivers, (who alone or together may do anything HFC can do as set out above); remove or replace such a receiver; and fix the remuneration of any receiver.

18.	On the powers of the mortgagee under the mortgage document, Pathik J in ANZ Banking Group Ltd v Bulewa (supra), cited the following passage from Matthie v Edwards [1794] EngR 1945; 73 ER 776 779:

‘Now those powers so given may undoubtedly, be often used for purposes of oppression. They are however, powers which the party having a power of the property thinks proper to confer on the individual from which he borrows the money; it is a bargain; one party parts with his money, and he has to pay himself out if the property upon which it is charged; and it is for the other party, who creates the mortgage, to consider whether he has not given too large a power to the individual with whom he is dealing. But when once it is given, the party advancing his money is perfectly entitled to execute the power which such a contract gives him. However if the power is sought to be exercised for exorbitant purposes, without a due regard to the interest of the parties concerned, this Court will interfere under certain circumstances, and, like other pledges, if the individual comes and deposits the money, the Court will, under certain circumstances prevents a party from exercising that power arbitrarily, but not without the actual deposit of the sum which the other party is entitled to.

Now it is quite clear, that the interests of society (and more particularly financing institutions) require, and the justice of such a case requires that those powers, when they do not come within the (above) principles on which the Court has acted, should not be interfered with; it is merely a power which the individual has given.’

19.	The Defendant does not dispute executing the mortgage.  Nor does he deny being indebted to the Plaintiff, his only contention being that the Bank had restructured payments knowing he was unemployed, and without any assessment as to his ability to repay.  The allegations are not supported by any evidence that the Bank had known or had been informed of his being unemployed at the time of restructuring of payments.  In any event, he has signed the offer letter and there is nothing to say he was not aware of the terms therein.  

20.	Whilst the Defendant alleges negligence against the Bank, he has not adduced any evidence of negligence.  

21.	I have considered whether the Plaintiff has complied with the requirements of Order 88 and am satisfied that it has.  The affidavit in support exhibits a copy of the mortgage and not the original.  In Australia and New Zealand Banking Group Ltd v Kumar [2003] FJHC 326; HBC0307.2002 (1 January 2003), Singh J had this to say about the production of the original mortgage in Order 88 proceedings:

The usual practice in Order 88 applications is to annex a true copy of the mortgage and to produce the duplicate of the registered mortgage on hearing. The original is always kept at the titles Office and if Mr. Sharma’s submission were correct, the Registrar of Titles would need to be subpoened on each occasion to produce the mortgage. Mr. Sharma’s query is answered by Cross on Evidence 2nd New Zealand edition at page 574 where it states –

'There are certain private documents which must be filed in a Court or other public office and when they are thus filed, the copy issued by the Court or other office may be treated as the original. Thus the second executed copy of a Memorandum of Mortgage registered under the Land Transfer Act 1952 is an original.'

The mortgage produced in court was the second executed copy of the registered mortgage.

22.	In Wati v Pillay [2009] FJHC 102; Civil Action No. 310.2008 (7 April 2009), Scutt J accepted a copy of the mortgage with the original stamp “Provisional” appearing on it as satisfying the requirements of Order 88 rule 3 (2).  

23.	In this case, the Plaintiff has exhibited a copy of the mortgage with the original stamp of the Registrar of Titles certifying true the said copy.  In light of Kumar and Wati (supra), I am willing to accept the copy as sufficient compliance with Order 88 rule 3 (2).

24.	The affidavit in support sets out the amount advanced to the Plaintiff, the amount of the periodic payments to be made, the amount of the interest or instalments in arrears at the date of issue of the originating summons, and at the date of the affidavit, as well as the amount remaining due under the mortgage.

25.	Though the Originating Summons seeks delivery “by the Defendant and or his family servants and or agents”, of vacant possession, the affidavit in support makes no mention of servants and or agents occupying the property.  The Plaintiff says that the property is, to the best of his knowledge, presently occupied by the Defendant and his family.  In Wati (supra), Scutt J took “family” or “families” as “any persons in occupation by reason of his being the occupier of the property.” 

26.	As required under Clause 5.2 of the Mortgage, a Default Notice was served on the Defendant on 23 January 2014.  

27.	I am satisfied that the Plaintiff has complied with the requirements of Order 88 and as mortgagee therefore has “unquestionable rights to possession” (Sharma, (supra), per Shameem J) under the Mortgage document, common law, and statute. 

28.	The Defendant has not been able to provide any reason for the Court to restrain the Plaintiff from exercising its right to vacant possession of the property.  

29.	In Housing Authority v Peni Bulucama Delana HBC No. 283 of 2006, the Court stated:

This Court has long held the view that failing payment into Court of the amount sworn by the Mortgagee as due and owing under the Mortgage, no restraint should be placed on the exercise of the Mortgagee’s powers of sale under the mortgage (see Westpac Banking Corporation Ltd –v- Adi Mahesh Prasad (1999) 45 FLR 1; NBF Asset Management Bank –v- Kolinio Bulivakanua and Selina Mau Bulivakarua Civil Action No. 97 of 1999 unreported decision of Byrne J (as he then was) delivered on 30 November 1999; NBF Asset Management Bank –v- Donald Thomas Pickering and Eileen Pickering Civil Action No. 170 of 1999 unreported decision of Byrne J (as he then was) delivered on 19 May 2000 and NBF Asset Management Bank –v- Naipote Vere and Another Civil Action No. 323 of 2001 delivered 10 November 2003 unreported per Scott J).

And later:

The only way in which the claim for possession may be defeated is by a payment into court of the whole amount claimed to be owing under the mortgage as at the date stated in the affidavit in support…

30.	The Defendant has not made any such payment into Court.  The Plaintiff is entitled to the relief it seeks.

Orders:
1.	The Defendant and or his family/ies, are ordered to deliver up to the Plaintiff, within one month of the date of this judgment, vacant possession of the property comprised and described in Housing Authority Sub-Lease No. 163532 being Lot 5 on DP 4107 having an area of 18.4 perches, together with all the improvements thereon situated in the District and Province of Naitasiri.

2.	The Defendant to pay costs of $800, summarily assessed, to the Plaintiff, within 14 days of this judgment.  

S.F. Bull
Acting Master