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Koto v Australia New Zealand Banking Group [2020] TOCA 3; AC 11 of 2019 (27 March 2020)

IN THE COURT OF APPEAL OF TONGA
NUKU'ALOFA REGISTRY
AC 11/2019
(CV 51/2009)


BETWEEN FOLAU KOTO and JACINTA KOTO

Appellants

AND AUSTRALIA NEW ZEALAND BANKING GROUP

Respondent


Coram: Whitten P
Blanchard J
Hansen J


Counsel: Mr D Corbett for the Appellants

Mrs DE Stephenson for the Respondent

Date of Hearing: 23 March 2020

Date of Judgment: 27 March 2020



JUDGMENT OF THE COURT


Introduction

[1] The appellants applied unsuccessfully to set aside a default judgment entered against them on 13 May 2009 for $70,702.80 (plus interest) on a housing loan and the sum of $19,893.78 (plus interest) on a personal loan. They appeal against the judgment of Niu J refusing their application.

Background

[2] The appellants are husband and wife. In 2005 they obtained a housing loan of $65,000 and a personal loan of $10,000 from the respondent. The housing loan was to repay an existing loan of $45,000 to another bank and to fund improvements to their home. Later in 2005, a further personal loan of $6,500 was approved, increased by $10,000 in January 2017. Proceedings were issued and judgment by default obtained after defaults began in 2008.
[3] The application to set aside the Judgment was made on 2 August 2019. It was supported by an affidavit by the first appellant in which he claimed that, by four payments in September and October 2005, the respondent had “by fraud” increased the amount of the housing loan by $20,000. He said he and his wife “could not” file a defence to the proceedings against them as there was no personal service on them and they were “shocked” to be advised that judgment had been entered against them.
[4] In opposing the application, the respondent filed an affidavit by ‘Ana Fono, a bank officer, who explained that the $20,000 was for house renovations that was drawn down by way of four payments made in September and October 2005. She said at no time did the appellant question the loan arrangements or balances owed. She explained that after judgment was entered there were discussions with the appellants and the respondent agreed to accept repayments at a reduced level. She chronicled the following further actions in relation to the indebtedness: