Appeal Court upholds million pa'anga debt judgment [1]
Friday, April 26, 2013 - 16:40. Updated on Monday, September 9, 2013 - 18:40.
Nuku'alofa businessman, and former parliamentary candidate, Saia Moehau, and Epic International Ltd. have lost an appeal over Westpac Bank of Tonga's claim against him in seeking to recover debts amounting to over $1 million pa'anga.
Moehau and Epic appealed to Tonga's Court of Appeal against a Supreme Court Summary Judgment in favour of a creditor Westpac Bank of Tonga, who was seeking recovery of a $939,925 pa'anga loan, with interest going back to April 2012 and costs.
The loan plus interest and costs was guaranteed by Epic International Ltd. a company of which Moehau was the sole director and shareholder in April 2009 when he signed a $921,000 guarantee for the loan.
The Appeal Court was told that the bank had lent Moehau more than $2 million pa'anga in September 2007. By April 2009 a part had been repaid and the outstanding balance was restructured with the guarantee from Epic. After the new loan fell into arrears, and after making several successive demands for payment , the bank sued Moehau and Epic for the debts owed by them.
The Supreme Court's Lord Chief Justice found that none of Mr Moehau's assertions had raised an arguable defence.
It was that decision that the appellants were seeking to overrule in the higher court.
The Court of Appeal of Tonga found that, "The Chief Justice was satisfied that Mr Moehau was a professional and experienced businessman who employed the services of a competent legal adviser to advise him in connection with his dealings with the bank and that he did not enter into the loan restructuring agreements suffering from any form of bargaining disadvantage," and that he had been assisted by the advice of Stephen Stanton, a senior counsel of Tonga and a member of the New South Wales bar.
The Chief Justice had also found that "Mr Moehau's signature on the Business Finance Agreement (incorporated in the loan agreement) was an unconditional acceptance that, despite anything that might have happened beforehand, the debt being restructured was due."
The Court of Appeal of Tonga on April 17 in dismissing the appellants' appeal, found that, "On admissible evidence it is clear that Mr Moehau and Epic did not suffer from any situation of special disadvantage or disability of which the bank took advantage at the time of restructing the loan…Far from acting unconscionably, the bank appears to have been cautious and reasonable in exercising its legal rights against the appellants."
"In agreement with the Lord Chief Justice, we are satisfied that none of the proposed defences has any prospect of succeeding at trial. They are clearly untenable. The appeal is dismissed with costs."
The appellants were represented by Stephen J. Stanton SC and O. Pouono. The respondent, Westpac Bank of Tonga, was represented by Ralph Stephenson.
Debt confirmed
It is understood that now that the debt has been confirmed by Tonga's highest court, it means that the creditor may pursue the appellants to recover the debt, which is now estimated to be over $1 million pa'anga with accummulated interest. If the creditor fails to recover the debt from the appellants it may now seek a court order to appoint a receiver and to seize assets.
Epic International Ltd. of Tonga, on its website, describes its business as a general wholesaler and trader buying various construction materials and products from China and exporting to smaller islands in the South Pacific, with an annual "sales range of USD$5-10million", and lists its representatives as Stephen Stanton and Siosaia "Josh" Moehau. Its property in Nuku'alofa includes a land lease.