WS 1463 OF 2004; Albert Purane v Ase Tipurupeke Land Group Incorporated, Mineral Resources Development Company Limited and Secretary for Department of Petroleum and Energy (2005) N2806

• Jurisdiction: Papua New Guinea
• Judge: Davani, J
• Judgment Date: 07 April 2005
• Court: National Court
• Citation: (2005) N2806
• Docket Number: WS 1513 OF 2004
• Year: 2005
• Judgement Number: N2806

Full Title: WS 1513 OF 2004; WS 1463 OF 2004; Albert Purane v Ase Tipurupeke Land Group Incorporated, Mineral Resources Development Company Limited and Secretary for Department of Petroleum and Energy (2005) N2806

National Court: Davani, J

Judgment Delivered: 7 April 2005

N2806

IN THE NATIONAL COURT OF

JUSTICE AT WAIGANI

PAPUA NEW GUINEA

WS 1513 OF 2004

WS 1463 OF 2004

BETWEEN:

ALBERT PURANE

Applicant/Judgment Creditor

AND:

ASE TIPURUPEKE LAND GROUP INCORPORATED

Judgment Debtor

AND:

MINERAL RESOURCES DEVELOPMENT COMPANY LIMITED

First Garnishee

AND:

SECRETARY FOR DEPARTMENT OF PETROLEUM & ENERGY

Second Garnishee

Waigani: Davani, .J

2005: 9th March

7th April

Judgment and Orders – enforcement – garnishee proceedings – application by Mineral Resources Development Company Limited as garnishee disputing liability – National Court Rules O. 13 R. 56.

Judgment and Orders – enforcement – discussion on whether the Mineral Resources Development Company Limited is an entity of the State – distinction between a trustee and a Corporation – Funds invested under Trust Deed - Funds invested are State funds – not to be garnished – Claims By and Against the State Act s. 13 (1); Public Finance Management Act 1996 ss. 4 (1); Oil and Gas Act 1998 ss. 159, 167 (2) (3) (4) (5), 168 (2) (3) (4), 176

Judgment and Orders – enforcement – Original order to pay made relying on future payment – not an attachable debt – cannot be garnished.

Texts and Cases cited

· Webb v. Stenton (1883) 11QBD 518

· Re: Greenwood (1901) 1 Ch 887

· O ‘Driscoll v. Manchester Insurance Committee [1915] 3KB 499

· Okam Zacharius v Chris Tep and Cocoa , Coconut Extension Agency [2003] N2355

· Dan Salmon Kakaraya v The Ombudsman Commission of Papua New Guinea and

the Independent State of Papua New Guinea [2003] N2478

· Otto Napi v the National Capital District Commission [2004] N2797

· Ritchies NSW Supreme Court Procedures

· Lewins on Trusts (16th Edn.) W. J. Mowbray (London: Sweet & Maxwell 1964)

· Principles of Company Law (4th Edn.) H. A. J. Ford (Butterworths 1986)

T. Kirio for Applicant/Judgment Creditor

P. Kuman for the first Garnishee

No appearance for the second Garnishee

RULING

(Application to garnish account)

7th April 2005

Davani .J: I heard this application and reserved for ruling because it raises the fundamental issue of the role played by bodies holding and controlling equity and funds as trustees on behalf of beneficiaries. This is my ruling.

Background

Before me is a Notice of Motion filed by Gubon Lawyers on 31st March, 2005, application filed for and on behalf of the applicant/judgment creditor (‘applicant’), in the both proceedings and which seek various orders in the same terms. Both counsel consented to having the both motions heard together because they involved the same parties.

In WS 1513 of 2004, the judgment creditor seeks orders that the defendants pay it the sum of K13,200.00, being monies owing to him from a judgment obtained in this court and that in default, the court to issue a warrant of execution.

In WS1463 of 2004, the applicant seeks orders in the same terms, but for payment of judgment debt in the sum of K57,600.00.

The original judgment debt in both matters are consent orders taken out by the applicant in proceedings between itself as the plaintiff and the Ase Tipurupeke Land Group incorporated as the defendant which orders were endorsed by the court on 26th November, 2004. The sealed orders read that the defendant shall pay K13,200.00 (WS 1513 of 2004) and K57,600.00 (WS 1463 of 2004) to the plaintiff after it receives its “monetary benefit from the Department of Petroleum and Energy and the Mineral Resources Development Company Limited.” The propriety of these orders are questionable but which the defendant does not take issue with, no doubt because that was the basis on which agreement to pay was reached. Subsequently, the defendant/judgment debtor filed garnishee proceedings naming the first and second garnishees as parties. The notices of motion that I must now deal with seeks orders that these monies be garnished and paid. I should state at the outset that it is the second garnishee who is named in the notice of motion, to pay the judgment creditor, not the first garnishee.

However on my hearing counsel for the applicant, he seeks orders that the Mineral Resources development Company (MRDC), the first garnishee, be garnished and to pay the debt owing.

Mr Kuman for the MRDC opposes the application and submits amongst others that the MRDC is a governmental body within the meaning of s. 219 of the Constitution. In saying that, Mr Kuman referred the court to Dan Salmon Kakaraya v The Ombudsman Commission of Papua New Guinea and the Independent State of Papua New Guinea N2478 dated 24 October, 2003, a case where his Honour Justice Kandakasi held that where an instrumentality, incorporated under the Companies Act 1997 or any other legislation but is solely owned and controlled by the State in terms of appointing the Board and or its Managing Director, for a public purpose, is a governmental body within the meaning of s. 219 (1) of the Constitution. This provision refers to the Ombudsman Commissions functions to investigate any conduct by a “State Service”. I will elaborate further on this in the latter part of this judgment.

The applicant’s lawyer, however argues that the MRDC is the proper garnishee because under the Gobe Petroleum Trust Deed (GPTD), the equity has always been managed by the MRDC through the trustee who is the Petroleum Resources Gobe Limited (PRGL).

Issues

The issues pertinent to the proper determination of this matter are the following;

1. Is the MRDC, a trustee of funds held for an on behalf of Incorporated Land Groups? (‘ILGs’).

2. If so, what is the instrument governing this trust?

3. Who are the parties involved in this trust and what role do they play?

4. What is the effect of a Trust Deed?

5. Should the funds presently held in trust by the trustee be garnished to settle debts incurred by ILGs?

6. Is the MRDC an instrumentality of the State?

I will address these issues in this ruling.

In opposing the application, Mr Kuman relies on O. 13 R. 62 of the National Court Rules which reads;

“62. Dispute of liability by garnishee

Where, on the hearing of a motion by the judgment creditor pursuant to the garnishee notice, the garnishee disputes liability to pay the debt attached, the court may hear and determine the questions in dispute and direct the entry of such judgment, or make such order, as the nature other case requires.”

Mr Kuman relies on the following affidavits;

1. Peter Kuman sworn on 21st February, 2005 and filed on 22nd February, 2005;

2. Imbi Tagune sworn on 11th February, 2005 and filed on 14th February, 2005;

3. Imbi Tagune sworn and filed on 28th January, 2005.

The applicant relies on the following affidavits;

1. Albert Purane sworn on 23rd December, 2004 and filed on 24th December, 2004;

2. Albert Purane sworn on 4th February, 2005 and filed on 7th February, 2005;

Reasoning on issues

This application arises from Garnishee Notices issued by the National Court on 21st December, 2004. The application returnable before me today, apart from the motions, is for those garnishee orders to be made absolute. The garnishee notice specifies the debt as “total annually or quarterly monetary benefits due or not yet payable or owed by you to the judgment debtor as landowners equity or royalties, etc”.

The Garnishee Notices then seek that the judgment debts be “attached and bound in the hands of the garnishees to the extent of the sum required” and that the applicant/judgment creditor would on a return date, move for an order for payment.

Which then takes me to the first issue. Is the MRDC a trustee of funds held for an on behalf of ILGs?

The judgment debtor in this case is an ILG. The court must firstly familiarize itself with the nature of the debt before it deals with this issue. This is because it then determines whether the debt was properly incurred by the ILG and the agreement to pay was properly sanctioned by the ILG. It means I must have recourse to Writ of Summons and Statement of Claim. This document pleads a verbal agreement between the plaintiff and the Chairman and Secretary of the defendant ILG where the Chairman and Secretary of the defendant ILG agreed to pay the debt owing after it received monies owing to it from the named garnishees.

Which then raises the issue of whether the ILG did consent to providing services to the applicant. This will be answered by reference to the ILG’s constitution and the affidavit relied on by plaintiffs counsel when seeking the courts endorsement of the judgment/ consent orders (judgment debt).

The defendant ILG’s Constitution is before me as annexure ‘IT5’ to Imbi Tagune’s affidavit sworn on 11th February, 2005. I note that there are two forms of the ILG’s Constitution. I will refer to them as Const. 1 and Const. 2. If there is debt incurred by the ILG, and a decision was made by the ILG for monies to be paid from funds...