Polem Enterprise Ltd v Attorney-General of Papua New Guinea (2010) SC1073

• Jurisdiction: Papua New Guinea
• Judge: Kirriwom J, Cannings J, Manuhu J
• Judgment Date: 15 September 2010
• Court: Supreme Court
• Citation: (2010) SC1073
• Docket Number: SCA NO 9 0F 2006
• Year: 2010
• Judgement Number: SC1073

Full Title: SCA NO 9 0F 2006; Polem Enterprise Ltd v Attorney-General of Papua New Guinea (2010) SC1073

Supreme Court: Kirriwom J, Cannings J, Manuhu J

Judgment Delivered: 15 September 2010

SC1073

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO 9 0F 2006

POLEM ENTERPRISE LTD

Appellant

V

ATTORNEY-GENERAL OF PAPUA NEW GUINEA

MR FRANCIS DAMEM

First Respondent

ACTING SOLICITOR-GENERAL OF PAPUA NEW GUINEA

MR JOHN KUMURA

Second Respondent

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Third Respondent

EAST SEPIK PROVINCIAL GOVERNMENT

Fourth Respondent

Waigani: Kirriwom J, Cannings J, Manuhu J

2010: 3, 15 September

JUDGMENTS AND ORDERS – interest – whether a court which does not include an award of interest in a judgment can award interest after entry of judgment – whether a successful party has a right to an award of interest – Judicial Proceedings (Interest on Debts and Damages) Act – Constitution, Section 155(4).

An appellant that succeeded in an appeal to the Supreme Court in obtaining an order for enforcement of a deed of settlement returned to the Supreme Court after the entry of judgment with an application for interest on the judgment sum, arguing that the Supreme Court had not awarded interest even though the appellant had asked for it. Interest at a rate of eight per cent per annum was sought on the judgment sum calculated from the date on which the cause of action arose to the date of judgment. The application was based on two provisions of the Judicial Proceedings (Interest on Debts and Damages) Act Sections 3(1) and 1(1), together with Section 155(4) of the Constitution.

Held:

(1) The application, to the extent it was based on Section 3(1) of the Judicial Proceedings (Interest on Debts and Damages) Act, was misconceived as that law, though it gives a party the right to be paid interest, only relates to the period after the date of judgment, not before it.

(2) The application, to the extent it was based on Section 1(1) of the Judicial Proceedings (Interest on Debts and Damages) Act, was refused as that law does not confer any right on a successful party to an award of interest, rather it confers a discretion on the court giving judgment to include an amount of interest in the sum for which judgment is given; and, in this case, the Supreme Court had already exercised that discretion by not including any interest in its order on the appeal.

(3) The application, to the extent that it was based on Section 155(4) of the Constitution, was refused as it was not necessary, in the circumstances of this case, to award interest.

(4) The application was accordingly dismissed and costs awarded to the respondents.

Cases cited

The following cases are cited in the judgment:

Alotau Enterprises Pty Ltd v Zurich Pacific Insurance Pty Ltd

Cheong Supermarket Pty Ltd v Pery Muro [1987] PNGLR 24

Lawrence Sausau v PNG Harbours Board (2007) N3255

PNG Aviation Services Pty Ltd v Geob Karri (2009) SC1002

Polem Enterprise Ltd v Attorney-General (2008) SC911

Trawen v Kama (2010) SC1063

APPLICATION

This was an application for an award of interest on a judgment already delivered.

Counsel

C Narokobi, for the appellant

D M Steven, for the 1st, 2nd and 3rd respondents

15 September, 2010

1. BY THE COURT: This is a ruling on an application for an award of interest. It is made by the appellant, Polem Enterprise Ltd, which succeeded, on 2 May 2008, in an appeal to the Supreme Court, by obtaining an order for enforcement of a deed of settlement against the State (Polem Enterprise Ltd v Attorney-General (2008) SC911). The appellant has returned to the Supreme Court (constituted by the same Judges who heard and determined the appeal) with an application, filed on 18 June 2008, for an award of interest on the judgment sum.

2. The appellant says that the judgment sum was K3,042,176.70 and that it is entitled to interest at the rate of eight per cent per annum of that sum calculated over a period commencing on the date on which the cause of action accrued (which it says is 7 February 2003) and ending on the date of judgment (2 May 2008), a period of five years and 85 days. The appellant thus claims K1,273,547.00 as interest.

3. The appellant argues that the Supreme Court did not award interest even though it was sought and that our judgment of 2 May 2008 should be varied by including an order for payment of that amount of interest. The appellant argues that it acted quickly to bring this matter to the Court’s attention soon after the date of judgment. Its counsel, Mr Narokobi, says that the appellant has attempted to negotiate an out-of-court settlement with the respondents, to no avail, and has brought the matter back to court only as a last resort.

The application is opposed by the respondents.

GROUNDS OF THE APPLICATION

4. The application appears to be based on two provisions of the Judicial Proceedings (Interest on Debts and Damages) Act – Section 3(1) and Section 1(1) – together with Section 155(4) of the Constitution. We say ‘appears’ as we found it difficult at the hearing of the application to elicit from Mr Narokobi a clear enunciation of the jurisdictional basis of the application. In oral submissions Mr Narokobi relied on Section 3(1) of the Judicial Proceedings (Interest on Debts and Damages) Act and Section 155(4) of the Constitution, whereas in the formal application filed on 18 June 2008, Section 155(4) is relied on but only Sections 1 and 2 of the Act are referred to – there is no mention of Section 3.

5. We therefore treat the application as being based on three grounds:

· Section 3(1) of the Act;

· Section 1(1) of the Act;

· Section 155(4) of the Constitution.

LAW

6. The Judicial Proceedings (Interest on Debts and Damages) Act has only three sections, so we set it out in its entirety:

Judicial Proceedings (Interest on Debts and Damages) Act.

Being an Act to make provision for interest on certain judgements.

1. Interest on certain debts and damages.

(1) Subject to Section 2, in proceedings in a court for the recovery of a debt or damages the court may order that there be included in the sum for which judgement is given interest, at such rate as it thinks proper, on the whole or part of the debt or damages for the whole or part of the period between the date on which the cause of action arose and the date of the judgement.

(2) Where the proceedings referred to in Subsection (1) are taken against the State, the rate of any interest under that subsection shall not exceed 8% yearly.

2. Interest on interest, etc.

Nothing in Section 1—

(a) authorizes the awarding of interest on interest; or

(b) applies in relation to a debt on which interest is payable as of right, whether under an agreement or otherwise; or

(c) affects the damages recoverable for the dishonour of a bill of exchange.

3. Interest on debt under judgement or order.

(1) Subject to Subsections (2) and (3), where judgement is given or an order is made for the payment of money, interest shall, unless the court otherwise orders, be payable at the prescribed rate from the date when the judgement or order takes effect on such of the money as is from time to time unpaid.

(2) Where, in proceedings on a common law claim, the court directs the entry of judgement for damages and the damages are paid within 30 days after the date of the direction, interest on the judgement debt shall not be payable under Subsection (1) unless the court otherwise orders.

(3) Where, in proceedings for damages on a common law claim, the court makes an order for the payment of costs and the costs are paid within 30 days after the ascertainment of the amount of the costs by taxation or otherwise, interest on the costs shall not be payable under Subsection (1) unless the court otherwise orders.

(4) Notwithstanding anything in this section, where the judgement given or the order made is given or made against the State—

(a) the rate of interest payable under Subsection (1) shall not exceed 8% yearly; and

(b) any payment under Subsections (2) and (3) shall be deemed to have been made on the date of the drawing of the cheque for payment; and

(c) where the sum awarded is increased on appeal—interest shall only be payable on the increase in accordance with this Section from the date when the appellate judgement or order takes effect.

7. The Constitution, Section 155(4), states:

Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.

JUDICIAL PROCEEDINGS (INTEREST ON DEBTS AND DAMAGES) ACT, SECTION 3(1)

8. Mr Narokobi’s principal submission was that the appellant was entitled to an award of interest on the judgment sum by virtue of Section 3(1).

9. Section 3(1) entitles a successful party to interest if two preconditions are met. First the judgment must be given or an order made “for the payment of money”. Secondly, the court must not order that interest under this provision not be payable. However, the period over which interest is calculated is “from the date when the judgment or order takes effect”. It only concerns post-judgment interest: interest calculated over the period from the date of judgment to when the money is paid.

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