Fiji Law Reports

“(a) &##60;& An order that the Dthe Defendant do forthwith take alessary steps to have the Receiving Order rescinded” a21; and

“(b) rder thendanaccenaccept thet the debts ebts lawfulawfully owing to it to allow the Plaintiff to redeem the mortgage and pay off the debts and to obtain prond vaischan regable form.”
Althoughhough para para paragraph (b) will be readily understood given the context already set out, paragraph (a) calls for further explanation.

As is wederstood a mort mortgagee, so long as part of the mortgage debt remains unpaid may pursue any or all of the remedies available to the mortgagee at the same time. Thus, the mortgagee may rrently sue for payment on t on a covenant in the mortgage to pay principal and interest, for possession of the mortgaged property an foreclosure.

Doubtless aware that that this is the general position in law tlaw the Bank not only exercised its powers of sale but also sued for the amount owed. On 21 April 1998 Jut in dein default of notice of intention to defend was obtained by the Bank against the Defendant for the sum due. The Judgment has not been been satisfied.

The Bank then werther: it commenced bankrupnkruptcy proceedings against the Plaintiff in the Suva Magistrates’ Courtion No. 210 of 1.&#16.&#16 relied on the unhe unsatisfied judgment debt and a bankruptcy notice was issued on 9 June.June. On ly the petition was pres pred. y is Exhibit D to the Plai Plaintiff’s supp supporting affidavit filed on 1 March. On 11 mber 1998 a receiordeiordermade.

The first matter which calls flls for consideration is the power of this this Court to grant the interlocutory relsought.

So far as prayer (a) nc concerned ther there are, as it seems to me, two objections to such relief being granted at this stage. The first is that thing ofng of a receiving order by a Magistrates Court under the powers conferred on the Court by Sections 5 and 94 of the Bankruptcy Act (Cap 48 and see also L.N ) /94) is subject to the right of appeal conferred by Section 100 of the Act. This right must hr be exer exercised within ys of the decision against which it is desired to appeal. The Plaintid not availavailavail himself of this statutory right of a. It general principle of ouof our system of law that that where a specific method of questioning a particular activity is provby st then that specifpecific method should be adopted and not, without exceptional cause, anothanother (see e.g. R v Inland Revenmmissionssioner ex parte Preston [1984] UKHL 5; [1985] AC 835 and&#u>R v Birmingham JJ exJJ ex parte Ferrero&#16> [1993] 1 All ER 530). & In my view the Plaintannotannot now seek the same relief available to him under the athe appeal procedure provided for by the Bankruptcy Act by commenommencing proces wngs within the original jurisdiction of the High Court, de the appeal period.

The secbjection to n to n to granting the relief sought in (a) at this stage is that it seems to mt the order sought is not inot interlocutory but final, that it is not being sought in order to preserve the status quo uthel ights of the parties ties have been determined in the action and that therefore it is not within the scope of RHC O 29 as aable ct to the criteria explained in American Cynamid Co v Ethico&#1u> [1975] UKHL 1; [1975] AC 396.

Turning ragraph (b) e m) e mott appthat what what that the Plaintiff is seeking is the right tght to exercise what he must be asserting is a still existent equity of reion. If granted, this prayer would have the effect of prevepreventing the Bank further exercising its powers of sale, in other words prayer (b) effectively encompasses prayer (c) and therefore the two may be taken together. Before considering them in depth it must be pointed out that there is in fact no relevant legal nexus at all between relief (a) on the one hand and reliefs (b)(c) on the other. I do not knowher the PlainPlaintiff will be able successfully to apto appeal against his receiving order on the ground that the Bank’s supporting affidavit was factually incorrect but even if he is ultimately successful on this issue it can have no bearing at all on his entitlement, if any, to restrain the mortgagee Bank from exercising its powers of sale.

The Plaintiff says in paragraph 20 of his supporting affidavit that he has “been able, willing and ready to redeem the mortgage debt”. AlthWestpac Bank was williwilling to refinance the Plaintiff’s loan (paragraph 9 and Exhibit F) there is no evidence that money has actually been offered to the Bank and neither was there any offer to pay the amount claimed by the Bank into Court.
&#br>On 13 April the Bahe Bank filed a reply to the Plaintiff’s affidavit. Mr. iths on beoalf of the the Bank deposed that after the failure of the demand notice served on the Plaintiff to evoke any respons0; thpertyadvertised “on several occasions” in about December 1997.&#97. 160; In thIn the folg Sept September the property was auctioned. Following the auctnd receireceipt of only one bid the Bank had “numerous telephone discussions with theof giving the Plaintiff a last opportunity to redeem the mohe mortgage”. Only when these efforiled iled did the Bank accept the bid offered at the auction and proceed to enter into a sale and purchase agreement with the successful bidder.

Alh no was filed to thto the Bank’s affidavit Mr.Lala Lala told me (which the Plaintiff’s affidavit did not) that the Plai based his claim for relief on the fact that he had offered the Bank a cheque in full satissatisfaction of the amount claimed, but that the cheque had been refused, that the sale of the property not been handled by the Bank in good faith and that neither the attempted sale nor the auction had been sufficiently advertised. Mr. Lala pointed out that no copies of the advertisements had been exhibited to the Bank’s affidavit. Mr. Lala also me that the the successful bidder at the auction was in fa employee of the Bank.

In anso these subm subm submissions Mr. Lateef, relying on Hawson vle [1948] NZLR 1073 submitted whatentitt the Plhe Plaintiff might have had to redeeredeem had been lost because of the fact tact that the Bank had entered into a bindile and purchase agreement with the bidder; the property had, in other words, already been seen sold within the meaning of Section 72 (1) of the Property Law Act (Cap 130). He stressed that nus opporopportunities had been given to the Plaintiff to redeem and argued that even if, which was of course not admitted, taintid any cause of action against the Bank then, (citing Uluinayap; Anr Anr v NB v NBFv NBF - HBC 175/1994S) the Plaintiff could sufficiently be compensated in damages.

Before concg his submisubmissions Mr. Lateef raised another mattech muso be dealt with.with. As apperom paph raph 12 of thof the Plaintiff’s af;s affidavit and Exhibit H, a caveat was l over the property on 6 Jan6 January 1998, apparently by the Plaintiff’s wife. This caveat remains istencstence following the refusal of the Registrar of Titles to remove it despite request to do so by the Bank’s solicitors made on 9 March 1999 (Exhibito the Bank’s affidavit). ateef sought the the cave caveat’s immediate removal. In discussion with with counsel it emerged that the problem of caveats being lodged over property already subject to mortgage was now a serious one. s tolt the present Registraistrar of Titles (unlike her prer predecessor) took the view that Section 113 (1) absolutely prevented thesfer by sale of a property subject to a caveat (other then a Section 117 caveat) even when when the caveat was lodged subsequent to the registration of a mortgage and that therefore such a transfer could presently only be effected after the caveat had been removed. This had become a proboth both for the Banks and other mortgagees and also for the legal profession. Both Mr. Lala a. Lateef inef indicated that any guidance that this Court could offer as a means of resolving the difficulty would be welcomed.& Mr. Lala most kindly lent me a volume from his own library (which our own does not includeclude) namely Caveats by an &rmp; Jackson, Men, Melbourne 1996. I was also referred to a paper “Caveats & Injunctions - Consequences and ts wispect to Mortgagee sales” delivered by R.R. Douglas QC at the Fiji Law Soci Society Cety Convention in 1998.

The Hourt ji has for maor many yany years followed the long established rule that:

(ury 4n Vol 32, par, paragraph 725).

Among many many other authorities in support of this proposition may be cited (1883) 243) 24 Ch 289; Inglmp; Anr v Commonwealnwealth Trading Bang Bank of Australia&#a href=://ww://wwlii.org.vu/cgi-bigi-bin/LawCite?cit=126%20CLR%20161" title="View LawCiteRecord">126 CLR 161R 161 and Suva S.C. 323/84.

Alt the ruhe rule appeaappears on its face to be absolute it is in fact subject to qualifon.&#While the power of sale is given to a mortgagee fgee for hior his own benefit, to enable him the better to realise the debt (Warner v Jacob [1876] UKLawRpCh 69; (1882) 2 Ch. D 220; Forsyth v Blundell [1973] HCA 20; (1973) 129 CLR CLR 477, 483, 494) and the mortgagee is not a trustee of the power fo mortgagor yet neverthelesseless the mortgagee must pay some regard to the interests of the mortgagor. Where their interests cot lict the mortgagee is not entitled to act in a manner which sacrifices the interests of the mortgagor (Forsyth v Blundell
When exercisipower of s of sale the mortgagee is required to act inct in good faith and owes the mortgagor a duty to take reasonable care to obtain a proper price (Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949; ndraav New Zealand BreweBreweries Ltd [1974] 1 NZLR 497). Discharge of this duty requires the the propeproperty to be adequately and sufficientlyrtised and where an auctionction takes place it must be held in reasonable conditions (see generallyCommercial and General Acceptatd v Nixon [1981] HCA 70; (1983) 152 CLR 491; Standaartered Bank Ltd vLtd v Walker[1982] 1 WLR 1410).

As has al been seen a mn a mortgagoruting the amount due ratherather than the mode of sale is required to pay into Court the amount claimed by the mortgagee before the Cwill consider restraining the sut it seet seems that that a mortgagor (upon whom the onus of proof rests - Haddington Islandry Co L Co Ltd v Huson [1911] AC 727) who is seeking to restrain the mortgagee on the grounds of want of g of good faith or breach of duty of care, need not (Murad v National Provincial Bank (1966) 198 EstGazette 117).117).

It isr that the Court wurt will only intervene on behalf of a mortgagor to prevent completion of con of sale, where it is s is satisfied that the contractbrougout by want of goof good faith on the part of the mortgageegagee (Warring v London and Manchester Assurance Co [1935] 1 C;&#16Property andy and Bloo Bloodstock Ltd v Emerton [1968] 1 Ch >Forsyth v Blun Blundell, supra). On the papers b me I am sitisfied there is no evidence of want of good faith or, in other words, dishonestonesty. Whethe Lala’s allonsllons oufficient advertivertising and an unsatisfactory auction will eventually be borne out by fuby further evidence I do not know. Iy aren as already seen, ten, they will prima facieafford evidence to support a claim by the mortgagor relying on Sec79 (3) of the Property Lawy Law Act. I am satisfied howevet these allegations are quie quite insufficient to warrant interference by this Court at this stage. In trcumstances therefore fore rs (b) and (c) of the motion also fail.

There remains the matf r of the caveataveat.

ge 15 of tss Col&amp Jackson quote anot another work namelyamely Woodman & Nettle’s The Torrens System w Souw Souths;and ve that:

“Generally tlly the system of caveats worked reasonablonably wely well over the years but there were incre complaints ... that abuse of the system was beginning to d to discredit it. The main areas of complwert were that:

ټ #160; &#1. ; pe0sons who haho had no i no interest in the landed ca for oppressive and other reasons;

&160;&##160; Bt&#2. & th0; the cave caveator often did not give sufficient mation about the circumstances from which the alleged interest in the land arose; and