IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU

BETWEEN:

NATIONAL BANK OF SAMOA LIMITED
a duly incorporated company having its principal place of business at Apia
Plaintiff

AND:

THERESA THOMPSEN
of Alamagoto, Businesswoman
First Defendant

AND:

FARANI POSALA
of Vailima, Architect
Second Defendant

Counsel: S Wulf for Plaintiff 
K Enari for Defendants

Hearing: 9 February 2011

Decision: 18 February 2011

DECISION OF THE COURT

Introduction

1.	By statement of claim dated the 20th February 2009 the plaintiff sought to recover the balance of the first defendant's loan secured by chattel mortgage and the personal guarantee of the second defendant. The statement of claim was listed for mention on the 16th March 2009. Both defendants were served on the 6th March 2009. As neither defendant appeared or responded to the claim, judgment by formal proof was entered on the 20th April 2009 against both defendants in the sum of $87,544.92 inclusive of costs.

2.	By Judgment Summons dated 15th May 2009 and served on the first defendant on the 27th May 2009 the plaintiff sought to enforce judgment. Service on the second defendant was not effected when the judgment summons application was mentioned on the 8th June 2009. On that date counsel for both defendants appeared and the Court granted his application to adjourn the judgment summons application to the 22nd June 2009 for counsel to obtain instructions. But on the 22nd June 2009 counsel for the defendants was not available and the matter was again adjourned to the 6th July 2009. On the 6th July 2009 the matter was adjourned for the final time to the 20th July for counsel for the defendants to obtain instructions. However on the 20th July 2009 the matter was again adjourned to the 3rd August on the application by defendants counsel. On the 3rd August counsel for the defendants did not appear and the matter further adjourned to the 17th August for counsel to appear. When counsel did not appear again the Court made the order for the matter to be called immediately after the Court's call over list on the 20th August 2009.

3.	On the 20th August 2009 the Court had before it an application by the defendants to adjourn the judgments summons and to permit them to rehear and set aside judgment entered. It was then adjourned to the 31st August for the plaintiff to file affidavit in reply.

4.	After several adjournments by consent for parties to negotiate settlement the matter was finally set down for hearing on the 23rd September 2010 but that hearing did not eventuate at the fault of neither the plaintiff nor the defendants. It was then adjourned to the 4th October 2010.

5.	On the 4th October 2010 the defendants' original application was amended by leave of the Court. The amendment restricted the defendants' application to set aside the judgment entered by formal proof on the 20th April 2009 and to grant a rehearing.

6.	It is that application which is the subject of this decision. The application is dated the 17th August 2009, four months after judgment was entered and about three months after judgment summons application was filed and served on the first defendant.

Chattel Mortgage

7.	The second defendant executed an Instrument by Way of Security on the 6th February 2003 whereby he mortgaged two recently purchased motor vehicles to secure the loan of the first defendant. The two motor vehicles were:

(a)	A 2000 Nissan Lan Cruiser, and
(b)	A 2001 Nissan Land Cruiser

8.	In 2008 when the loan was seriously in default the plaintiff exercised its power of sale under the chattel mortgage but one of the mortgaged vehicle was, with the second defendant's consent, already sold by way of exchange with another motor vehicle, namely a Ford 150. As the Ford 150 was the consideration or purchase price for the mortgaged vehicle, the plaintiff took and sold the Ford 150 and the other mortgaged vehicle to reduce the debt owing. A statement showing the proceeds of the sale of the vehicles and the balance of the loan owing was sent to the first defendant.

Application to set aside Judgment and to grant rehearing

9.	Several grounds have been advanced by counsel and these are:

(a)	The second defendant was not served with the summons and statement of claim
(b)	The judgment included interest charges not stipulated in the loan agreement, and 
(c)	In enforcing its rights under the chattel mortgage the plaintiff sold a vehicle which was not the subject of the security.

10.	The essence of the application is firstly that the defendants have a substantial ground of defence to the claim and secondly there is a reasonable explanation for the delay.

The Law

11.	It is common ground that pursuant to the provisions of rules 140 and 141 Supreme Court (Civil Procedure) Rules 1980 the defendants as applicants to set aside judgment and to grant a rehearing must establish:

(a).	That there is a reasonable justification for the delay,
(b).	That there is a substantial ground of defence, and
(c).	The plaintiff will not suffer irreparable harm if the judgment is set aside.

Is there a reasonable ground for the delay?

12.	The first defendant was served with the summons and statement of claim on the 6th March 2009 and she immediately gave them to the second defendant. Again when she was served with the judgment summons application on the 27th May 2009 the first defendant took them to the second defendant. When that judgment summons application was mentioned on the 8th June 2009 counsel for the defendants appeared and sought an adjournment. After five further adjournments, sometimes due to the failure of the defendant's counsel to appear, the application by the defendants was finally filed.

13.	Although the second defendant denies being served with the summons and statement of claim, there is on court file an affidavit of service by the same process server who served the first defendant at Alamagoto and the second defendant at Vailima on the same day, the 6th March 2009. Whereas the first defendant acknowledged receipt of the summons and statement of claim, the second defendant refused. Soon after that service the first defendant told the court in her affidavit she gave the documents to the first defendant.

14.	Before the statement of claim was filed and served two motor vehicles of the second defendant have already been repossessed and sold by the plaintiff in 2008 pursuant to the chattel mortgage to reduce the first defendant's loan. If the second defendant's complaint about the manner of the repossession and improper sale of one of those motor vehicles is genuine, the opportunity has arisen for him to challenge it when the first defendant gave him the statement of claim. He did not, because he had no complaint. He sold one of the mortgaged vehicle to an innocent third party who would have suffered financially if the plaintiff had repossessed the mortgaged vehicle. The plaintiff avoided further legal hassle by taking from the second defendant the proceeds of the sale of the mortgaged vehicle, namely the exchanged Ford 150.

15.	It follows that the court is not persuaded that the second defendant was not served with the summons and statement of claim. That being the case, the defendants have failed to establish that there is a reasonable ground for the delay.

Is there a substantial ground of defence

16.	The contention by the defendants that the judgment included interest charges not stipulated in the loan agreement has no merit. The copy of the loan agreement signed by the first defendant and the plaintiff stipulates under clause 4 (a) (b) and (c) the interest rate to be accrued, computation and variation of the interest rate.

17.	For the second defendant to insist that the plaintiff should repossess from the third party the mortgaged vehicle and sell it to reduce the loan balance instead of the plaintiff selling the Ford 150 which the second defendant exchanged with the mortgaged vehicle tantamount to seeking a decree from the court to ignore his wrongdoing and punishing the innocent third party. The argument to put it mildly, lacks sense. The sale of the Ford 150 vehicle by the plaintiff in the exercise of its power of sale under the chattel mortgage does not provide the defendants with a defence to the plaintiff's claim.

18.	It follows there is no substantial ground of defence.

Conclusion

(a).	The application to set aside judgment and to grant a rehearing is dismissed.

(b).	Each defendant will pay costs of $500.

__________________
JUSTICE VAAI