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Tu'ivai v Tonga Development Bank [2009] TOCA 5; AC 06-2009, AC 09-2009 , AC 16-2009 (10 July 2009)

IN THE COURT OF APPEAL OF TONGA
NUKU’ALOFA REGISTRY

AC 06, 09, 16 of 2009

BETWEEN:

‘AMINI TU’IVAI
Appellant

AND:

TONGA DEVELOPMENT BANK
Respondent

Coram: Burchett J
Salmon J
Moore J

Counsel: Mr. Tu’ivai in person
Mrs. Vaihu for the Respondent

Date of hearing: 2 July 2009.
Date of judgment: 10 July 2009.

JUDGMENT OF THE COURT

[1] Before the Court of Appeal are a number of applications and an appeal by Mr ‘Amini Tu’ivai and others.

[2] Mr Tu’ivai and others borrowed money from the Tonga Development Bank ("the Bank"). They did so pursuant to a loan agreement for which security was pledged which included mortgages over two tax allotments. The money was not repaid and in March 2006, the Bank commenced proceedings against Mr Tu’ivai and the other debtors. Those proceedings became CV197/2006. Further proceedings were commenced by the Bank against Mr Tu’ivai and the other debtors which became CV198/2006 and CV 199/2006. We will refer to the three proceedings as "the Proceedings". It appears that in the Proceedings the Bank alleged that there had been loan agreements between it and Mr Tu’ivai and the other debtors, the loans had been secured, the money had been lent to Mr Tu’ivai and the other debtors and the money had not been repaid in accordance with the loan agreements.

[3] In their defence filed on September 2006, Mr Tu’ivai and the other defendants put the Bank to proof of its claims. Additionally they raised a defence that the Bank was a statutory authority and was bound to act fairly and had not. Also, Mr Tu’ivai and the other defendants raised a counterclaim to the following effect. The money the Bank lent was to finance an agricultural venture by Mr Tu’ivai and others to grow squash in 2004. It was alleged that the agricultural venture was undertaken under the auspices of the Friendly Islands Marketing Cooperative ("FIMCO"). It was also alleged that the loan application by Mr Tu’ivai and the other defendants was supported by FIMCO. The counterclaim went on to allege that an employee of the Bank (the lending manager) and the general manager of FIMCO entered an illicit and corrupt agreement whereby they would take advantage of a portion of the squash export quota managed by FIMCO and, in order to do so, reduce the loan payments to, or terminate the loan agreement of (it is not clear from the pleading which is alleged), Mr Tu’ivai and his other co-venturers. It was further alleged that Mr Tu’ivai's agricultural venture in 2004 failed because of the activities of the lending manager of the Bank and the general manager of FIMCO.