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\par CIVIL JURISDICTION
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \qc \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 CIVIL ACTION HBC 150 OF 2010
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \qc \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 BETWEEN:
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\lang2057\langfe1033\langnp2057\insrsid7409099 
\par }\pard \qc \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 LAGOON RESORT LIMITED
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 PLAINTIFF
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \qc \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 AND:
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\lang2057\langfe1033\langnp2057\insrsid7409099 
\par }\pard \qc \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 FIJI DEVELOPMENT BANK
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 DEFENDANT
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }{\b\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Mr P Knight for the Plaintiff
\par Mr D Sharma with Mr P Sharma for the Defendant
\par }{\b\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \qc \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 DECISION}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par This is an application by the Plaintiff seeking two interlocutory injunctions in the following terms:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 1.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 That the Defendant, its servants and agents forthwith vacate and hand over possession of the property known as Lagoo
n Resort situated at Pacific Harbour, as comprised in Certificates of Title 38850 and 38851 (}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 the said premises}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 ).
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 2.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Restraining the Defendant, its servants and agents from proceeding with a mortgagee}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s sale of the said premises.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par The application was made by summons dated 11 May 2010 and was supported by an affidavit sworn by James Terence Sherlock on 10 May 2010 (the first affidavit).}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The application was opposed by the Defendant who filed an answering affidavit sworn by Mustalab Hafiz Ali on 12 May 2010.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The Plaintiff filed two further affidavits sworn by Mr Sherlock on 13 and 17 May 2010 (the second and third affidavits).}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The Defendant filed a further affidavit sworn by Hemant Kumar Mahadeo on 18 May 2010.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Counsel presented their submissions on 12, 13, 18, 25 and 31 May 2010.
\par 
\par The immediate background to these proceedings is set out in paragraph 26 of the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s first affidavit.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It appears that on 7 May 2010 a team of security officers arrived at and took possession of the premises.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 They were acting on instructions from the Defendant.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Guests, staff and management were directed to leave the premises and public road access was closed.
\par 
\par The action taken by the Defendant arises under a mortgage over the premises whereby the Defendant as mortgagee is purporting to exercise its rights as a result of default by the Plaintiff as mortgagor.
\par 
\par The Plaintiff purchased the premises situated at Pacific Harbour from the Defendant in June 1999 for the price of $3,150,000.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 transaction was effected by two agreements.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The first was a loan agreement whereby at the request of the Plaintiff the Defendant agreed to lend to the Plaintiff the amount of $3,150,000 to enable the Plaintiff to purchase the premises.

\par 
\par As a condition precedent the Plaintiff as mortgagor was required to execute a mortgage over the premises to the Defendant as mortgagee.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
In addition, James Sherlock was required to provide an executed guarantee in the sum of $350,000.00.
\par 
\par The terms in respect of the repayment of principal and the payment of interest were set out in clause 5 of the agreement.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
Clause 5 (vi) provided for the payment to the Defendant of moneys other than the principal sum and interest in the following manner:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 (vi)}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 in addition to the above, the Lender will retain 70% of the timeshare sale proceeds, the balance 30% being retained by the Borrower.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Provided however, the Lender will release the full sale proceeds of every 10th
 Timeshare sold without any deductions to enable the Borrower to service its operating expenses}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 .
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It is worth noting the provisions in the agreement that are set out in clause 7 that relate to the question of timesharing.
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 7.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 So long as any moneys are due or remain outstanding from the Borrower to the Lender under the terms of this Loan Agreement, the Borr
ower and each of them shall:
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 (a)-(h) \'85
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 (i)\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls1\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
advise and discuss with the Lender all aspects of the creation of the Timeshare and appoint KPMG Chartered Accountants to administer the financial aspects of the Timeshare sales who will also maintain a trust account
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 (j)\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls2\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 advise the Lender of all the Timeshare sales and will include a clause to be approved by the Lender acting reasonably in all the Agreements for Timeshare sales reserving the Borrower}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s right to terminate individual agreements without penalty if the Borr
ower has not sold 30% of the Timeshares in 36 months following the date of their creation and availability for sale}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Under clause 8 of the agreement, in the event of default by the Plaintiff of any payment due for more than seven days, the Defendant may b
y notice in writing declare the full amount owing under the agreement be due and payable.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
Such declaration shall be effective without the need to give any further notice or make any further demand, both of which are waived by the Borrower.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Under the same clause, default under the loan Agreement is and is deemed to be default under the mortgage.
\par 
\par The second document is the mortgage itself.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 This is mortgage number 474306 registered on 21 January 2000.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It was signed by the parties and dated 30 June 1999.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Under the mortgage the premises were charged to secure repayment to the Defendant of all advances
, charges, interest and other lending accommodation made by the Defendant to the Plaintiff from time to time on terms and conditions stated in the mortgage.
\par 
\par Under clause 6 of the mortgage, this Defendant as mortgagee may exercise:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \'85
 the power of sale and all other power conferred on a mortgagee by the Property Law Act \'85 immediately upon or at any time after default in payment of any of the moneys hereby secured \'85
 and such default continues for the space of seven (7) business days after the Mortgages shall have given notice to the Mortgagor to pay the money then due or owing hereunder \'85.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 .
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par Under clause 7 of the mortgage upon the power of sale becoming exercisable }{\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 the Mortgagee
 at any time without giving notice to the Mortgagor may enter upon and take possession of all or any part of the premises \'85}{\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par 
\par It is apparent from the Loan Agreement that the parties contemplated that at some time in the future the Plaintiff would become a Timeshare resort.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The Loan Agreement did not impose any obligation on the Defendant in respect of such arrangement.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 However, the Loan Agreement did contain provisions that would become operative if and when the Plaintiff did become a Timeshare resort.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  
\par 
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 As for the Plaintiff, I was informed that the resort was located at Deuba, Pacific}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Harbour.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It was originally known as the Atoll Village
 and more recently known as the Korean Village.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It was acquired by Mr Sherlock and renamed the Lagoon Resort.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It is on two titles.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 T
he accommodation block has two levels consisting of 22 units of different sizes.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 There is also a restaurant, bar and swimming pool.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It had not been operating for two years prior to purchase and was sold by the Defendant as mortgagee exer
cising its power of sale under a previous mortgage.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It re-opened for business in August 1999.
\par 
\par It was not disputed that the events of May 2000 resulted in a substantial downturn in business for the Plaintiff.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 In the month of May 2000 a
nd between September 2000 and June 2001 the Plaintiff failed to make any interest payment whatsoever.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
At the same time the monthly interest payable in May 2000 was $10,667.33 and by June 2001 it had climbed to $22,162.37.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The Plaintiff resumed mostly small monthly payments in July 2001.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
To assist the Plaintiff get back on its feet the Defendant waived interest payments altogether for the period October 2001 to June 2006.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
In that period the Plaintiff continued to make modest monthly payments.
\par 
\par Negotiations between the parties in 2005 and 2006 resulted in a restructure of the financial arrangements.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Their agreement was reduced to 
writing in the form of a Deed of Settlement dated 31 August 2006.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 By this time the amount of the accumulated debt owed by the 
Plaintiff to the Defendant under the loan agreement stood at $3,151,000.00.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 T
his amount excluded any accrued interest for the period October 2001 to June 2006 which had been permanently waived by the Defendant.
\par 
\par Under the Deed, the Defendant agreed to accept a discounted debt of $2,000,000.00 on certain terms and conditions.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
This discounted debt was to be in full and final settlement of all the debt owed by the Plaintiff to the Defendant.
\par 
\par Pursuant to the agreement the Plaintiff had made a payment of $200,000 prior to execution which payment was acknowledged in the Deed.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The balance of $1,800,000.00 together with interest at 8% per annum from 1 July 2006 was to be paid by way of interest only payments of not less than $12,000.00 per month on and from 28 J
uly 2006, a lump sum payment of $500,000 by 31 October 2006 and the balance of the discounted debt together with all accrued interest, charges, fees and costs to be paid in full by 29 June 2007.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par The Deed also contained a default clause which stated:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 5.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
If Lagoon fails to make any one payment to FDB of the discounted debt including all accrued interest, charges, fees and costs as stated in paragraph 2 above, then the concession made by FDB to discount the debt shall be null and void and of no effect and 
FDB shall be entitled to demand and recover the entire debt owing by Lagoon at the material time together with interest, charges and costs and shall also be entitled to enforce and take recovery action under all or of the securities held by them
 AND LAGOON HEREBY COVENANT AND AGREE not to interfere or in any way stop FDB from exercising its rights under all or any of the securities to recover the total cost.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It would appear that the Plaintiff made the necessary interest payments from July 2006 up to and including May 2007.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Since then the Plaintiff has failed to make any monthly payment in the required amount of $12,000.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 For most months since then the payments have been under $6,000.00.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
As a result the monthly interest payment due as at April 2010 was $19,289.34.
\par 
\par The events of December 2006 appeared to have an effect on the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s business but not noticeably until the middle of the following year.
}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 As a result of the difficulties being experienced, the Plaintiff met with representatives of the Defendant in August 2007.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It would appear that the urgent need to timeshare the resort and the need for further financial assistance from the Defendant were discussed.}
{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It is apparent that there was no agreement of any substance reached at that meeting.
\par 
\par A further meeting was held on 4 October 2007.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The meeting was held in Suva and in attendance were representatives of the Defendant and Mr Sherlock.
\par 
\par In a letter dated 5 October 2007 the Plaintiff set out what it considered to be the points of agreement between the parties.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Included 
in the arrangements were the following matters that are expressly stated by the Plaintiff in the letter:}{\lang2057\langfe1033\langnp2057\insrsid7409099 
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 -}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The existing Deed of Settlement of Debt dated 31 August 2006 which was to allow the writing off of $1,151,000 debt is rescin
ded, however that debt will remain interest free.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\f43\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af43\dbch\af0\loch\f43 -\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The main existing debt will maintain the 9% interest rate on the balance.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\f43\lang2057\langfe1033\langnp2057\insrsid7409099 \hich\af43\dbch\af0\loch\f43 -\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 An additional loan of $300,000 with a 12% interest rate on the drawn down amount will be made available specifically for the pur
pose of converting the resort to a timeshare and will be advanced progressively during the conversion process that will have time frames as to the drawn-downs.
\par }\pard\plain \s17\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\f43\lang2057\langfe1033\langnp2057\insrsid7409099 \hich\af43\dbch\af0\loch\f43 -\tab}}\pard\plain \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin1440\itap0\pararsid7409099 
\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The loan will be based on a 5 year term and will be renewable for a further term.
\par }\pard\plain \s17\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\f43\lang2057\langfe1033\langnp2057\insrsid7409099 \hich\af43\dbch\af0\loch\f43 -\tab}}\pard\plain \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls3\adjustright\rin0\lin1440\itap0\pararsid7409099 
\fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 That the proceeds from the sale of the timeshares will be lodged into the }{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Lagoon Club Trust Account}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  for the disbursement of 70% to the FDB and 30% to Lagoon Resort Limited once the initial 30-day clauses has expired.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par By letter dated 25 October 2007 the Defendant informed the Plaintiff that:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
We wish to inform you that the Bank has approved, in principle, your Company}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s restructured
 loan package, subject to the submission of the following:
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 1.\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls4\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Submission to the Bank of the formal certification on}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
your RCI Application.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 \hich\af0\dbch\af0\loch\f0 2.\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls4\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Receipt of budget (inclusive of your projected schedule of construction) relating to the additional 16 units.
\par }\pard\plain \s17\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard\plain \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The Bank will issue its formal Letter of Approval as soon as you have complied with the above.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
We further appreciate if your company can submit the above cited documents as soon as possible}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 .
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par By letter dated 30 October 2007 addressed to the Defendant the Plaintiff acknowledged receipt of the letter dated 25 October 2007.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 T
he Plaintiff indicated that the RCI (Resort Condominium International) application fee was now $35,000.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 T
he old agreed fee of $10,000 no longer applied.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Negotiations were taking place to have the new fee reduced to the old agreed fee.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 So far as the budget requirement was concerned, the Plaintiff indicated that it was awaiting }{\lang2057\langfe1033\langnp2057\insrsid7409099 
"}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 costing from an interior designer}{\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  for the interior improvements.
\par 
\par At this point it should be noted that the Plaintiff had acknowledged in his letter dated 5 October 2007 addressed to the Defendant that the timeshare process was the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s responsibility and that the Defendant was acting as mortgagee.
\par 
\par As at 25 October 2007 the financial arrangements that existed between the parties had been set out in the correspondence referred to above.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
It is clear that what the Defendant had agreed to by its letter dated 25 October 2007 were the arrangements proposed by the Plaintiff in his letter dated 5 October 2007, subject to the Plaintiff complying with two conditions precedent.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Those two conditions were clearly set out in the Defendant}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s letter dated 5 October 2007.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
It is clear that the Plaintiff acknowledged that the amount of $1.15m was no longer discounted debt.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It was an amount owing as part of
 the mortgage debt, but interest free.
\par 
\par The agreement between the parties as evidenced by the letters that I have referred to was not the same arrangement that the Plaintiff outlined in paragraph 17 of his first affidavit.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 There was no reference in the letters to the arrangement whereby the Defendant would accept monthly payments of the balance in the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s bank account after it had paid creditors and operating expenses.
\par 
\par In a letter dated 29 August 2008 addressed to the Defendant the Plaintiff stated:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \'85.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 On the 5th October 2007 a further meeting confirmed the bank}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s approval of the loan subject to Lagoon Resort firstly, submitting a costing for the conversion, secondly with us obtaining a RCI Affiliation agreement.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 We have complied with those requirements pending FBD}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s approval of the RCI agreement.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \'85.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 We have our maintenance people working 
on several small conversion jobs which we have funded out of our limited cash flow, but we still have only four of our twenty rooms converted into Timeshare Units.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
We really need to restructure our loan so that we can complete the conversion process \'85.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par There is no material before me to indicate what transpired between the parties in the period from October 2007 up to 29 August 2008 being the date of the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s letter to the Defendant.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The Plaintiff wrote a further letter dated 25 September 2008 which amongst other things set out some options concerning the future of the resort for the consideration of the Defendant.
\par 
\par The Defendant replied to these two letters by letter dated 8 October 2008.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 In that letter the Defendant confirmed the terms of the ag
reement that was set out in the letters dated 5 and 25 October 2007.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The Defendant then set out the matters that it considered were outstanding obligations on the part of the Plaintiff.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The Defendant also
 outlined the assistance provided to the Plaintiff up to that date and then stated:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
However we are willing to allow you until 31 December 2008 to fulfill the conditions for conversion to timeshare or the offer will be withdrawn.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Please note that whilst the timeshare proposal was being pursued you were to continue with your repayment obligation of $12,000.00 per month.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 However we note that this has not been honoured and the account is in arrears of $156,240.01 as at 30 September 2008.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 You are to immediately clear the arrears on the account and commence
 payment of monthly interest on the account.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Further you are to submit the following by no later 30 October 2008:
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid7409099 {\lang2057\langfe1033\highlight16\langnp2057\insrsid7409099\charrsid7409099 \u9679\'3f}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Audited financial statement for the year ending 30 June 2007 and 2008
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin1440\itap0\pararsid7409099 {\lang2057\langfe1033\highlight16\langnp2057\insrsid7409099\charrsid7409099 \u9679\'3f}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Management accounts for the months of July, August & September 2008 preferably compiled by an accountant.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 By letter dated 30 October 2008 the Plaintiff gave a status report of the position concerning the Defendant}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s conditions.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The Management accounts for July \endash 
 September 2008 were provided with the letter.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Unaudited financial statement for the year ending 30 June 2008 were also provided.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The audit of that financial statement had not yet been completed.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 However, there was no reference in that letter to the payments required by the Defendant other than an acknowledgement that the Plaintiff was in arrears.
\par 
\par A further letter dated 19 November 2008 from the Plaintiff addressed to the Defendant indicated that it had been agreed that the audited financial statement up to 30 June 2008 was to be made available by 28 November 2008.
\par 
\par It was apparent from this letter that the budget costs for converting the resort to a Timeshare resort had not yet been provided by the Plaintiff as requested by the Defendant.
\par 
\par This letter also indicated that although the Plaintiff had received a final draft affiliation agreement from RCI, four studios and six hotel rooms were not ready as air conditioners and televisions were yet to be supplied and installed.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 In addition, six new refrigerators were required for the hotel rooms.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 There were other minor items that still needed to be completed although there were no details set out in the letter.
\par 
\par In its letter dated 16 December 2008 the Plaintiff informed the Defendant it was enclosing two final copies of the agreement with RCI.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
In relation to the budget for converting to Timeshare, the Plaintiff provided a bottom line figure that the Quantity Surveyors had determined.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It was not apparent whether a copy of the report or supporting documentation had been provided to the Defendant.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The audited financial statement to 30 June 2008 had not yet been forwarded to the Defendant.
\par 
\par In the last paragraph, the Plaintiff stated:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
To complete the timeshare project we need the addition $300,000 to complete the conversion.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
If the Bank is not going to allocate the funds please let us know.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The affidavit material indicated that between October 2007 and December 2008 the Plai
ntiff made monthly payments to the Defendant ranging from a low of $1699 (in October 2007) to $7955 (in September 2008) which was the largest monthly payment for that period.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 At the same time the monthly payment due in October 2007 was $14,286.86 and by December 2008 it had risen to $16,053.09.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
In the same period the Plaintiff banked amounts on a monthly basis ranging from a low of $39,889 (in October 2007) to $77,115 (in April 2008) which was the largest monthly deposit for that period.
\par 
\par In a letter dated 6 January 2009 the Defendant indicated to the Plaintiff that most of the issues raised in the Bank}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
s letter dated 8 October 2008 had not yet been finalised.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The Defendant indicated that it wanted to discuss all the outstanding issues with the Plaintiff no later than 20 January 2009.
\par 
\par Between 24 February 2009 and 7 May 2010 the parties and/or their Solicitors have exchanged}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 correspondence on
 unresolved issues relating to the Timeshare project documentation, the further loan of $300,000 and then the demand by the Defendant that the Plaintiff vacate the premises.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 There are three letters that reveal the outstanding issues upon which the parties had not been able to agree.
\par 
\par The first letter is a letter dated 18 March 2010 from the Defendant}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s Solicitors addressed to the Plaintiff}{
\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s Solicitors.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
In that letter, the Defendant}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s position was clearly set out in the following terms:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
Our client has considered your client}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s submission and has now made a decision that it is unable to support your client}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s proposal as outlined in the letters dated 22 January 2010 and 26 February 2010.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Our client is not prepared to compromise its security position.
\par \'85.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Our client has also taken into account your client}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s unwillingness to accept the terms and conditions it has stipulated for the new advance of $300,000.
\par \'85.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
Given the above, we are now instructed to pursue recovery action against your client.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 In order to avoid recovery action we would ask
 whether your client is prepared to redeem the total current debt (including the $1.15m) owed to our client?
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
If your client is unable or unwilling to do so then we would ask that your client hand possession of Lagoon Resort together with all improvements and chattels to our client}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s employee Mr Hafiz Ali.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \'85.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 In the event that your cl
ient wishes to know what the current debt figure is we would advise your client to immediately contact Mr Ali and he will provide the latest figure.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 May we please have your response within 14 days.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par Then in a letter dated 9 April 2010 addressed to the Defendant}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
s Solicitors the Solicitors acting for the Plaintiff put forward an offer to settle the differences.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The last three paragraphs stated:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Assuming your client}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s loan of $300,000 is forthcoming by the end of this month (with no establishment fee as 
agreed in 2007) the conversion to timeshare can be completed by 1 July 2010 and sales of timeshare can commence with our client paying to your client 75% of the net proceeds of each sale, with minimum monthly payment of $25,000 commencing 31 August 2010.}
{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The time within which sufficient sales of timeshares must be achieved to make the project viable will be thirty six months.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 On the basis of the above our client agrees to the previously }{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 written off}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
 debt of $1,150,000 to be added to the debt, subject to the following:
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 (a)\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls5\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 the $1,150,000 will remain an interest free off balance sheet debt and will be written off if our client}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s debt to your client, excluding the $1,150,000 is paid in full by 30 June 2013;
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 (b)\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls5\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 if our client}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s total debt is legitimately called up 
prior to 30 June 2013 the $1,150,000 with interest thereon at your client}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s current loan interest rate will remain and be part 
of the debt.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 (c)\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls5\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 if our client}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
s debt to your client, excluding the $1,150,000 is not paid by 30 June 2013 the $1,150,000 plus interest as referred to above will remain and be part of the debt.
\par }\pard\plain \s17\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard\plain \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
We look forward to hearing from you as to whether this proposal is acceptable to your client. \'85.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par Then in a detailed response the Defendant}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s Solicitors stated in a letter dated 30 \line April 2010, amongst other things, that
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 (g)}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 On the issue of the $1.15m.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 This was
 part of an earlier proposal that your client had put up to our client.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
Your client then failed to satisfy the terms and conditions of this proposal. Your client admitted recently that this debt was not written off.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The fact that it may not be shown on the active loan account printout for 2006, 2007 and 2008 does not mean that the said debt was written off.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 (h)\tab}}\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls6\adjustright\rin0\lin720\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Your client has now admitted that it is unable to service the debt of $3,894,954.51.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 (i)\tab}}\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls6\adjustright\rin0\lin720\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Your client}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
s latest proposal as contained in page 2 of your letter is not acceptable to our client.
\par }\pard\plain \s17\ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard\plain \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 \fs24\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
Given the above state of affairs our client now gives notice that it wishes to enter into possession of the mortgaged property to do the following:
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 (a)\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls7\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Secure the mortgaged property}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 (b)\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls7\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Take an inventory}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par {\listtext\pard\plain\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \hich\af0\dbch\af0\loch\f0 (c)\tab}}\pard \ql \li1440\ri0\nowidctlpar\aspalpha\aspnum\faauto\ls7\adjustright\rin0\lin1440\itap0\pararsid7409099 {
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Get the property ready for mortgagee sale.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
Our client wishes to take possession on 7 May 2010 and it will engage the services of a security firm to move in on that date to secure the premises.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par The Plaintiff has filed a Writ with an indorsement of its claim seeking an order that the Defendant advance to the Plaintiff a loan of $300,000 and permit and do everything necessary to allow the 
Plaintiff to proceed with its timesharing of the property known as Lagoon Resort situated at Pacific Harbour as comprised in Certificates of Title 38850 and 38851 (the said premises).
\par 
\par The claim also sought injunctive relief in the same terms as the relief sought in the interlocutory application along with damages.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 To dat
e no pleadings have been delivered.
\par 
\par Counsel for the Plaintiff submitted that interlocutory relief should be granted and that the Defendant should hand back possession of the premises and be restrained from exercising its power of sale essentially for two reasons.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The first was that the Defendant was estopped as a result of its conduct and/or representations made to the Plaintiff in circumstances when there was an agreement made between them concerning the conversion to timesharing and the provision of add
itional funding of $300,000 to complete the timesharing conversion.
\par 
\par Secondly, it was submitted that the power of sale had not become exercisable due to the non-service of a notice required under section 77 of the Property Law Act Cap. 130.
\par 
\par It was submitted that these matters constitute serious issues to be tried as they were the basis for the relief claimed in the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
s indorsement of its claim delivered with the Writ.
\par 
\par This application must take into account the special considerations which apply in relation to an application to restrain the exercise of a mortgagee}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s power of sale when applying the principles stated by Lord Diplock in }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 American Cyanamid Ltd \endash v- Ethicon Ltd}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  [1975] AC 396.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 First, the Plaintiff is required to establish that his claim r
aises a serious question to be tried.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The Plaintiff is not required to establish a prima facie case that he will gain a permanent injunction after trial.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The te
st required the affidavit material to contain sufficiently precise factual supporting evidence to satisfy the court that the claim is not frivolous, vexatious or hopeless.
\par 
\par I have considered the facts in some detail.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 I am satisfied that there are several serious issues of fact and law to be tried.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 They concern, amongst other matters, to what extent have the parties committed to timesharing, was there an
 agreement for a further loan of $300,000 and if so, what were the terms of that agreement and to what extent are the parties or either of them in breach of either the mortgage, the loan agreement, or any other agreement made by them.
\par 
\par I do not consider any of these issues to be frivolous.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 More significantly, they cannot be resolved simply by reference to the affidavits.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The factual assertions made by both parties must be tested under oath by cross-examination.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }
{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Lord Diplock in the }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 American Cyanamid}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
 case (supra) emphasised the limited nature of such applications.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 At page 406 His Lordship observed:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
In those cases where the legal rights of the parties depend upon facts that are in dispute between them, the evidence available to the court at the hearing of the application for an interlocutory injunction is incomplete.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It is given on affidavit and has not been tested by oral cross-examination.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 At page 407 he continued:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It is no part of the court}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which 
call for detailed argument and mature considerations.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 These are matters to be dealt with at the trial.}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 His Lordship at page 409 continued on the same point by noting:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The court is not justified in embarking upon anything resembling a trial of the action upon conflicting affidavits in order to evaluate the strength of either party}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s case.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par On the issue of evaluation at the interlocutory stage he observed at page 410 that:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
In view of the fact that there are serious questions to be tried upon which the available evidence is incomplete, conflicting and unte
sted, to express an opinion now as to the prospects of success of either party would only be embarrassing to the judge who will have eventually to try the case.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par The Fiji Court of Appeal has indicated that the principles set out in }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 American Cyanamid}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
 (supra) are the appropriate tests to be applied in Fiji in such applications}{\lang2057\langfe1033\langnp2057\insrsid7409099 :}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  }{
\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Natural Waters of Viti Limited \endash v- Crystal Clear Mineral Water (Fiji) Limited}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
 (unreported Civil Appeal No. 11 and No. 11A of 2004 delivered on 26 November 2004).
\par 
\par Having concluded that there is a serious question to be tried, the question becomes a matter of the balance of convenience.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 I turn then
 to the first limb which concerns the adequacy of damages.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The issue is simply about whether damages would provide an adequate
 remedy to the Plaintiff.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 I accept that a problem arises in attempting to quantify the Plaintiff}{
\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s claim against the Defendant.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 There is no difficulty in calculating the actual amounts spent by the Plaintiff to ensure that the Resort would be suitable for timesharing.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 These are capable of determination by evidence and, if liability is established, are compensable.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 However the difficulty arises in attempting to determine the loss of income as a result of the Resort being closed down and also the loss in 
what is referred to as the capital value of the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s business by way of loss of good-will which is reflected in loss of turnover.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 I have concluded that the difficulty in calculating damages in this case indicates that damages would not be an adequa
te remedy for the Plaintiff.
\par 
\par It then becomes necessary to consider other factors that come under the heading of the balance of convenience.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par 
\par This usually requires the Court to consider the consequences for each of the parties in the event that the injunction is granted and alternatively if the application is refused.
\par 
\par However, in a case such as the present, the Court is also required to consider the effect of decisions such as that of the High Court of Australia in }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Ingliss
 v Commonwealth Trading Bank of Australia}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  (1972) 126 CLR 161 where Walsh J at page 164 stated:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
A general rule has long been established, in relation to applications to restrain the exercise by a mortgagee of powers given by a mortgage and in particular the exercise of a power of sale, 
that an injunction will not be granted unless the amount of the mortgage debt, if this be not in dispute, be paid or unless, if the amount be disputed, the amount claimed by the mortgagee be paid into court .}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par And at page 165 His Honour stated:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 If the d
ebt has not been actually paid, the Court will not, at any rate as a general rule, interfere to deprive the mortgagee of the benefit of its security, except upon terms that an equivalent safeguard is provided to him by means of the Plaintiff bringing in a
n amount sufficient to meet what is claimed by the mortgagee to be due.
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The benefit of having a security for a debt would be greatly diminished if the fact that a debtor has raised claims for damages against the mortgagee were allowed to prevent any enforc
ement of the security until after the litigation of those claims had been completed.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par These principles were accepted by the Fiji Court of Appeal in }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Westpac Banking Corporation Ltd v Adi Mahesh Prasad}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
 (unreported Civil Appeal No. 27 of 1997 delivered on 8 January 1999).
\par 
\par In the }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Ingliss}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  decision (supra) h
is Honour noted that any proprietary rights vested in a Plaintiff are subject to and qualified by the rights over the property given to a Defendant by the mortgage.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 At page 165 he then continued:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 If the defendan
t exercises the latter rights or threatens to do so that is not, as such, an act or a threatened act in contravention or infringement of the plaintiff}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s proprietary rights.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Of course, a mortgagee does sometimes
 act, in purported exercise of the rights and the powers given to him by the mortgage, in a manner which is not a proper exercise of them and which does infringe upon the rights of the mortgagor.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par In the present case Counsel for the Plaintiff submitted that in taking possession with a view to exercising its right of sale, the mortgagee has not complied with the statutory requirements set out in the Property Law Act.
\par 
\par The Plaintiff submits that it was not served with the necessary notice under section 77 and that as a result the power of sale does not arise.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The Defendant submits that the correspondence dated 18 March 2010 and 30 April 2010 contain the necessary information and comply with the statutory requirements.
\par 
\par This issue was also discussed by the Fiji court of Appeal in the }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Westpac Banking Corporation}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  decision (supra).}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 At page 11 the Court stated:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
This matter had earlier been the subject of a decision by Sugerman J \'85 of the NSW Supreme Court in }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Harvey \endash v- Mc Waters}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  (1948) 49 SR (NSW) 173.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
Sugerman J said that, where a mortgagor sought an interlocutory injunction to restrain his mortgagee from selling there was a distinction with respect to the terms that would be imposed 
as to payment into court between a case in which the power of sale was admittedly exercisable and the only dispute
 was as to the amount due or the mode in which the mortgagee proposed to exercise the power, and a case in which the very matter in dispute was whether the power of sale was exercisable at all.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par The approach taken by the courts in such circumstances was discussed by Brereton J of the Equity Division of the NSW Supreme Court in the unreported decision of }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
E and P Developers Pty Ltd \endash v- D J Capital Solutions Ltd}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  (Civil Action No 4894 of 2005 delivered on 8 September 2005).}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 His Honour indicated that if the challenge to the mortgagee sale were based upon the non-existence or lack of present availability of the power of sale, \'85 then (at paragraph 22):
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
What was invoked was the axilliary jurisdiction in equity to grant an injunction to prevent interference with one}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
s legal rights, in which case the plaintiff was not to be required, as a condition of obtaining relief, to do equity by bringing into court the mortgage money, or offering to redeem.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 I accept that this is a case which falls within that exception but as will be seen, that does not mean that no terms are imposed.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par Counsel for the Plaintiff submitted that the potential loss to the mortgagor if an injunction were declined would be substantial and that the potential loss to the mortgagee if an injunction were granted would be minimal.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The second part of the submission depends to some extent on the valuation evidence.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The only valuation which is in evidence is that of Fairview Valuations dated 8 December 2005.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 In the affidavit sworn by Hemant Kumar Mahadeo on 18 May 2010 the Defendant identifies a number of significant issues concerning that valuation.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The unencumbered current market value at that time was estimated at $3.7m which was apportioned at $400,000
 for the freehold land value and $3.3m for the value of structural and other improvements.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 There was no evidence as to the
 current valuation nor was there any evidence concerning the impact of the events of December 2006 on that 2005 valuation.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
All that can be said is that there is a risk, in the event of a mortgagee sale, that the said premises will not sell for more than $3,894,954 being the amount owing under the mortgage as at 30 April 2010.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }
{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It may be that, in an environment other than a mortgagee sale environment, the property would realize more.
\par 
\par Counsel for the Plaintiff submitted from the Bar table that the premises may well have increased in value since 2005 and may well continue to do so in the future.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 He also conceded that there is a risk that the market may have declined.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
As a result the sufficiency of the property to cover the entire amount of the ever increasing debt will be further diminished.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
It is therefore possible that the mortgagee may not be able to recover the mortgagee debt in its totality.
\par 
\par There may be a shortfall of an amount that is difficult to estimate, but which could be substantial.
\par 
\par The question for the Court is what should be done to protect the interests of the mortgagee when one of the issues to be tried is whether the mortgagee}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s power of sale has arisen at all?
\par 
\par The authorities suggest that what should occur in a case such as this is }{\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
not that no payment into court would be required, but that the amount ordered to be paid in would not necessarily be the whole amount claimed, as sworn to by the mortgagee or appearing
 from the terms of the mortgage, but that the terms of payment in may be moulded, so as to require payment in of so much only as would suffice to give adequate protection to the mortgagee}{\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  (see }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 E and P Developers Pty Limited \endash v- D J Capital Solutions Ltd}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  supra at paragraph 30).
\par 
\par In my opinion, having considered the limited evidence and the surrounding circumstances, at least $100,000 would be required to adequately protect the mortgagee in this case in respect of the possible shortfall.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 On the evidence in the affidavit material before me it is apparent that the Plaintiff is not in a position to make such a payment in.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 There was no indication from the Plaintiff of a willingness to make such a payment in.
\par 
\par The fact that, in the absence of such a payment in, there would not be adequate protection for the mortgagee, is, in my opinion, a significant factor when evaluating the balance of convenience in this case.}{\lang2057\langfe1033\langnp2057\insrsid7409099 
 }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 It was certainly a factor of some significance in }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 German Football Archive Ltd \endash v- The National Bank of Fiji}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  (unreported Civil Action No. 255 of 1992 delivered 28 January 1993).
\par 
\par The opinion expressed by the Fiji Court of Appeal in the }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Westpac Banking Corporation}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
 case (supra) is to the effect where the mortgagee}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s power of sale is not in question, interlocutory relief should be refused.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Where the mortgagee}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
s power of sale is in issue, then relief may be granted on such terms as the court sees fit.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
Those terms will be determined by the particular facts and circumstances of the matter.
\par 
\par As I have already indicated, it is my opinion that this is a case where relief may be appropriate, but as the authorities have clearly stated, on such terms that will provide protection for the mortgagee.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }
{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 In this case the Plaintiff does not appear to have the ability to make a payment in of an amount that would offer reasonable protection for the mortgagee.
\par 
\par Another factor to be considered is the sufficiency of the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
s undertaking as to damages which was proffered in paragraph 12 of the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s second affidavit.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 In }{\b\i\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Honeymoon Island (Fiji) Ltd \endash 
v- Follies International Limited}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099  (unreported Civil Appeal No 63 of 2007 delivered on 4 July 2008) the Fiji Court of Appeal stated unequivocally in paragraph 16 that:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
Applicants for interim injunctions who offer an undertaking as to damages must also proffer sufficient evidence of their financial position.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{
\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par The loss in monetary terms and hence the damages for which the Plaintiff may be liable should an interlocutory injunction be granted to the Plaintiff who subsequently f
ails in the substantive proceedings is likely to be the difference between the accumulated mortgage debt and the amount realized by the sale price of the mortgaged premises.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 I have already indicated, based on the very limited material before me, that there is a real risk that the sale will not realize the full amount owing to the mortgagee.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 I am not satisfied that the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s assets are sufficient to meet such a shortfall.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
On the other hand, the Defendant}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s solvency is not in issue and any award of damages to the Plaintiff will be satisfied.
\par 
\par Finally, on the balance of convenience, I take into account the material in the affidavits that relate to the questions to be tried.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
I accept that the Defendant is entitled to set out appropriate conditions for providing further financial assistance to the Plaintiff.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
The affidavit material indicates that it has formed the view that those conditions had not been satisfied and that as a result the present financial position of the Plaintiff did not justify exposin
g itself to the risks involved in advancing a further sum of $300,000 to the Plaintiff.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 They
 are, of course, matters to be tested at the trial.
\par 
\par Furthermore, the forward bookings that were set out in the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s first affidavit for the period May to O
ctober 2010 do not provide any indication that the Plaintiff would be in realistic position to meet the regular substantial payments that are currently due and payable.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 There was no material before me from the timesharing entity RCI to indicate the present position in relation to the conversion to timesharing.}{\lang2057\langfe1033\langnp2057\insrsid7409099  
}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 Nor was there any detailed financial analysis as to the impact of conversion to timesharing on the ability of the Plaintiff to meet its ever increasing debt burden under the mortgage.}{
\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 There is insufficient material concerning the financial future of the Plaintiff to tilt the balance of convenience in favour of the Plaintiff.

\par 
\par The financial position of the Plaintiff is vividly described by Mr Sherlock in paragraph 11 of his second affidavit, in which he states:
\par 
\par }\pard \ql \li720\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin720\itap0\pararsid7409099 {\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 \'85
 LRL (the Plaintiff) has made little or no profit for all these years.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099  }{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
In the last 11 years my wife and I have lived on the property and have only drawn $50.00 a week each from LRL.}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099 "}{\b\i\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par There is no material in the affidavits to indicate that this position will change in the foreseeable future.
\par 
\par I have not overlooked the potential detriment to the Plaintiff which I accept may be substantial.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
However, having regard to the authorities on the subject to which I have referred and to the other matt
ers that I have discussed, I have concluded that the balance of convenience, and the overall justice of the case, does not favour the granting of an injunction in this case.
\par 
\par Accordingly I order that the Plaintiff}{\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s application be dismissed and that the costs of the application be the Defendant}{
\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s cost in the proceedings, on a party party basis.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{
\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The effect of this order is that the Defendant will be entitled to its costs of this application if it is successful in its defence of the Plaintiff}{
\lang2057\langfe1033\langnp2057\insrsid7409099 '}{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 s action.}{\lang2057\langfe1033\langnp2057\insrsid7409099  }{\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 The 
Plaintiff will not be entitled to the costs of these proceedings even if it is successful in its action against the Defendant.
\par 
\par }\pard \qc \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 W D Calanchini
\par }{\b\ul\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 JUDGE
\par }\pard \ql \li0\ri0\nowidctlpar\aspalpha\aspnum\faauto\adjustright\rin0\lin0\itap0\pararsid7409099 {\b\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 
\par }{\b\lang2057\langfe1033\langnp2057\insrsid7409099\charrsid7409099 25 June 2010
\par At Suva
\par }}