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Motor Parts Traders Limited v Mafi [2010] FJMC 172; Civil Case 571.2010 (14 December 2010)

IN THE MAGISTRATE'S COURT AT NASINU

Civil Case No: 571 of 2010

MOTOR PARTS TRADERS LIMITED
PLAINTIFF

V

MERESEINI LUTU MAFI
DEFENDANT

Mr. Tirath Sharma for the Plaintiff
Mr. J. Waqaivolavela for the Defendant

Ruling on: 14th December 2010

Ruling on Defendant's Motion and Orders and reselling of the vehicle

1] The plaintiff filled its Ex-parte application seeking, inter alias, to repossess the Toyota Crown Comfort Registration Number FN/170/LT 6200, with Engine Number 3Y-1283738 and Chassis Number YX11-0012729 and all parts/tools/ or accessories( Order 3) and that the Plaintiff be entitled to dispose of the said vehicle by way of public sale. Having satisfied with the plaintiff's ex-parte motion, I granted orders in terms of said motion on the 18th of October 2010.

2] Plaintiff says thereafter the Defendant was properly served said Order and they advertised the vehicle for tender in the daily newspapers and managed to sell the vehicle to one Emori Moli Veitavi. However, LTA informed the plaintiff that the vehicle could not be transferred as there was a freeze on the transfer of the vehicle.

3] On 15th November 2010, this court heard the ex-parte motion of defendant and stayed the orders of 18th October 2010 which granted in favour of the plaintiff. Then matter was fixed for inter parte. On 01st of December 2010, matter was argued by both counsels and Defendant was given 7 days to file a response to plaintiff's affidavit and 3 days thereafter to the plaintiff to reply if any. Then this case was fixed for hearing of motion on yesterday (13-12-2010). Defendant failed to comply with court's order (file a response) and asked another 7 days to file reply. Defendant's Counsel indicated that he has instruction only to get a date for response. Plaintiff strongly objected to that application. As a matter of urgency and for the interest of justice this matter has been stood down and parties were given time to file response or written submission on legal issues if any.

4] At 2.22pm, on 13-12-2010 case was called and defendant's counsel asked to fix this on tomorrow to file response. This application was rejected by court by practical reason. Because I will be going on annual leave for the home country and defendant has ample time to prepare her response which she failed to do so. I decided to give ruling as a matter of urgency. I am relying on the legal maxim of "Lex Vigilantibus, Non Dormientibus, Subvenit- Law assists the wakeful, not the sleeping". Thus, defendant has to bear his own risk by failing.

5] Now I turn to the facts placed before me. According to the affidavit of Ajay Dutt Mishra plaintiff lend the defendant a sum of $15560 and interest @ 15% per annum fixed at $4403 making a total sum of $19963. Plaintiff took a Bill of sale as security over the Toyota Crown Comfort Registration Number FN/170/LT 6200, with Engine Number 3Y-1283738 and Chassis Number YX11-0012729. Upon the terms (inter alias) that the Defendant would repay to the Plaintiff the said sum by way of Weekly instalments of not less than $250.00 commencing from the 17th day of February 2009 for a term of 80 weeks until debt is paid in full. Bill of sale is marked as "A1". Defendant had defaulted the repayment from the month of 23rd January 2010 and its account has accumulated arrears in the sum of $ 3922.08 as at 04th October 2010. Plaintiff then issued a 30 days demand notice which is marked as "A2". Documents 'A3, A4 and A5" give evidence of attempt to repossess the said vehicle as mentioned in the Bill of Sale. Plaintiff has demanded that the Defendant deliver its securities to the plaintiff but Defendant has failed, refused pr neglected to do so. Therefore plaintiff has sought redress from the court.

6] Defendant in her affidavit stated she was aware that the plaintiff was pursuing her for what they allege was late repayments. According to MLF1 she had paid $15,989.50 and remaining balance to be paid is $ 4872.08. In her affidavit Defendant told that payments have been slightly lapsed because of the windscreen of car was broken and it was not covered by the insurance policy and she had to repair it for herself. She said she had paid more than 75% of the value of the car.

7] Basic legal principles for granting interlocutory injunctions are set out in American Cyanamid Co. V. Ethicon Ltd [1975] UKHL 1; [1975] AC 396;

A) The Plaintiff must establish that there is a serious question to be tried.

B) The inadequacy of damages to compensate the Plaintiff by the Defendant

C) Balance of convenience.

8] Now I analysed the facts before me. The nexus between Plaintiff and the defendant stems from "A1" Bill of Sale. The burdens of mortgagor and mortgagee have been mentioned therein and in the event of default repossession and resale are agreed in clauses 5.2 and 5.6. The Defendant said that she has paid 75% of total sum. Will it suffice to succeed the Defendant application? Under the head note the Bill of sale, it was created under Consumer Credit Act 1999. The section 83 of said Act provides;

83. (1) A credit provider must not, without the consent of the court, take possession of mortgaged goods if the amount currently owing under the credit contract related to the relevant mortgage is less than 25% of the amount of credit provided under the contract or $2,000, which-ever is the lesser.

(2) The restriction in subsection (1) does not apply –

(a) to a continuing credit contract; or

(b) if the credit provider believes on reasonable grounds that the debtor has removed or disposed of the mortgaged goods, or intends to remove or dispose of them, without the credit provider's permission or that urgent action is necessary to protect the goods.

9] But by the clause 12.3 of Bill of Sale "obligations, rights and liabilities are governed by the bill of sale and not by the Consumer Credit Act 1999. It further says any other laws that change those obligations; rights or liabilities do not apply to this bill of sale". Therefore payment of 75% money does not make any difference to the bill of sale; as it is strictly and narrowly drafted in favour of the Mortgagor. Under the principle of "Caveat emptor- Buyer bewares" the mortgagee has to beware of her own risks and said Section 83 has no application for this Bill of Sale. Under the bill of sale, it is patent that the Plaintiff has serious question to be tried. But Bill of Sale (the statute for this contract) does not leave any room for the Defendant's claim.

10] I wish to start from the defendant's end. Would Reselling of this mortgage property cause irreparable loss to the defendant? Court notes that damages to the defendant can be quantified. Clause 16 of the Ajay Dutt Mishra's affidavit undertakes to pay any damages and is able to meet any award for damages. On the other hand there is no undertaking by the Defendant as such. Suspension of resale is made by this court on the application of the Defendant. In National Australia Bank Limited & others v. Bon Brewing holdings Limited & others (1990) 169 CLR 271 court held "that the ex parte order should not have been made without an undertaking as to damages being offered or required". This is a case in which the Defendant can be compensated for in damages which Plaintiff Company is in a position to pay as the own substantial property. Thus, This factor also lies with the Plaintiff.

11] Now I consider the third limb. The plaintiff has found the prospective buyer and almost sold the vehicle. If court allows The Defendant's application, it will affect prospective buyer's rights as well. The Defendant admits that there are arrears of instalments and do not even suggest the mode of settlement. The Bill of sale is silence regarding in default by act of god or act beyond control of the Mortgagee. Whatever, this court sees that the Defendant can be adequately compensated. Therefore, Balance of convenience favours the discharge of the Defendant's application for ex parte motion which was made on 15th November 2010(Suspension of resale).

12] I have carefully considered the facts before me. I am of the view that suspension order of resale and repossession should be vacated. Therefore, I make following orders.

i) The Order on 15th November 2010 on Defendant's application is vacated/dissolved and dismissed. (Suspension Order of resale and repossession).

ii) Orders in favour of the Plaintiff on 18th October 2010 were upheld and The Plaintiff has liberty to alienate the vehicle Toyota Crown Comfort Registration Number FN/170/LT 6200, with Engine Number 3Y-1283738 and Chassis Number YX11-0012729.

iii) The Plaintiff is ordered to deposit $ 25000 cash in the court's registry as security of this case before reselling the mortgage property.

iv) Parties should bear their own cost in this application

v) The Defendant ordered to file Statement of Defence for the main case within 14days and The Plaintiff should file the reply within 7 days from today.

Sumudu Premachandra
Resident Magistrate