Manus Fuel Distributors Limited V Madang Provincial Government (2019) N7789

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 02 April 2019
• Citation: (2019) N7789
• Docket Number: OS NO 604 OF 2018
• Court: National Court
• Year: 2019
• Judgement Number: N7789

Full Title: OS NO 604 OF 2018; Manus Fuel Distributors Limited V Madang Provincial Government (2019) N7789

National Court: Cannings J

Judgment Delivered: 2 April 2019

N7789

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO 604 OF 2018

MANUS FUEL DISTRIBUTORS LIMITED

Plaintiff

V

MADANG PROVINCIAL GOVERNMENT

Defendant

Madang : Cannings J

2018: 8 December

2019: 14 March, 2 April

JUDGMENTS AND ORDERS – interest – claim for post-judgment interest on judgment debt against provincial government – whether judgment creditor has a right to an award of interest – Judicial Proceedings (Interest on Debts and Damages) Act 2015.

The plaintiff succeeded in earlier proceedings in obtaining a judgment debt in the sum of K2,259,170.24 against the defendant, a provincial government. Eight months later the plaintiff commenced fresh proceedings against the defendant, applying by originating summons for a declaration that the defendant had failed to satisfy the judgment debt and an order that it was entitled to interest on the judgment debt under Section 6(1) of the Judicial Proceedings (Interest on Debts and Damages) Act 2015. The defendant argued that the relief sought should be refused as there is an exclusive procedure for satisfaction of judgment debts against provincial governments provided for by the Claims By and Against the State Act 1996, which the plaintiff had not followed, and therefore the proceedings were an abuse of process.

Held:

(1) A person who obtains a judgment debt against a provincial government must, to enforce the judgment debt, follow the procedure in Section 14 of the Claims By and Against the State Act 1996, beginning with a certificate of judgment being issued by the Registrar of the Court under Section 13(2) of that Act.

(2) Though that procedure was not followed in this case, the proceedings were not an abuse of process as they are properly characterised as an application for declarations of the parties’ rights and obligations regarding the judgment debt, rather than enforcement of the judgment debt.

(3) The plaintiff’s application was determined on its merits. The plaintiff was granted the relief that it sought: a declaration that the defendant had failed to satisfy the judgment debt and an order that the plaintiff was entitled to post-judgment interest.

Cases cited

The following cases are cited in the judgment:

Polem Enterprise Ltd v Attorney-General (2010) SC1073

Seseno v Zurenuoc (2006) N5508

Counsel:

D F Wa’au, for the Plaintiff

B B Wak, for the Defendant

ORIGINATING SUMMONS

This was a trial in which the plaintiff sought a declaration and on order relating to a judgment debt obtained in earlier proceedings.

2nd April, 2019

1. CANNINGS J: The plaintiff, Manus Fuel Distributors Ltd, succeeded in earlier proceedings in obtaining a judgment debt against the defendant, Madang Provincial Government. Eight months later the plaintiff commenced the present proceedings against the defendant, applying by originating summons for a declaration that the defendant had failed to satisfy the judgment debt and an order that it was entitled to post-judgment interest on the judgment debt under the Judicial Proceedings (Interest on Debts and Damages) Act 2015. The defendant argues that the relief sought should be refused as there is an exclusive procedure for satisfaction of judgment debts against provincial governments provided for by the Claims By and Against the State Act 1996, which the plaintiff has not followed, and therefore the proceedings are an abuse of process.

2. The following issues arise:

1. Are the proceedings an abuse of process?

2. Should the Court declare that the defendant has failed to satisfy the judgment debt?

3. Is the plaintiff entitled to post-judgment interest?

1 ARE THESE PROCEEDINGS AN ABUSE OF PROCESS?

3. Mr Wak for the defendant submits that the Claims By and Against the State Act 1996 provides an exclusive procedure for satisfaction of judgment debts against provincial governments. The plaintiff has not followed it, and therefore the proceedings are an abuse of process.

4. I uphold the first leg of that argument. A provincial government is regarded as part of the State for purposes of the enforcement provisions of the Claims By and Against the State Act 1996. Sections 13 (no execution against the State) and 14 (satisfaction of judgment against the State) state:

Section 13:

(1) In any suit, execution or attachment, or process in the nature of execution or attachment, may not be issued against the property or revenue of the State.

(2) Where a judgement is given against the State, the registrar, clerk or other proper officer of the court by which the judgement is given shall issue a certificate in Form 1 to the party in whose favour the judgement is given.

Section 14:

(1) The certificate referred to in Section 13(2) shall be served on the Solicitor-General by—

(a) personal service; or

(b) leaving the document at the office of the Solicitor-General with the person apparently occupying the position of personal secretary to the Solicitor-General between the hours of 7.45 am and 12 noon pm and 4.06 pm., or such other hours as may from time to time be declared by or under the Public Services (Management) Act 1995 to be the normal public service hours of duty, on any day which is not a Saturday, Sunday or a public holiday declared by or under the Public Holidays Act (Chapter 321).

(2) The Solicitor-General shall, within 60 days from the date of service upon him of a certificate under Section 13(2), endorse the certificate in Form 1.

(3) Upon receipt of the certificate of a judgement against the State bearing the Solicitor-General's endorsement that judgement may be satisfied, the Departmental Head responsible for finance matters shall, within a reasonable time, satisfy the judgement out of moneys legally available.

(4) Any payment in satisfaction of judgement may, in the absolute discretion of the Departmental Head responsible for finance matters, be made by instalments, provided the judgement is thereby satisfied within a reasonable time.

5) No action—

(a) for or in the nature of mandamus; or

(b) for contempt of court,

or otherwise lies against the Solicitor-General or the Departmental Head responsible for finance matters in respect of the satisfaction of a judgement under this Act, other than for failure to observe the requirements of Subsection (2), (3) or (4), as the case may be, or unless other exceptional circumstances can be shown to the satisfaction of the court.

5. As explained in Seseno v Zurenuoc (2006) N5508, when a judgment debt is obtained against a provincial government, the debt is to be satisfied in accordance with Section 14. That means:

· a certificate of judgment must be issued by the Registrar under Section 13(2) to the party in whose favour the judgment is given;

· that certificate must be served on the Solicitor-General;

· the Solicitor-General must endorse the certificate within 60 days;

· the endorsed certificate must be served on the Secretary for Finance who is obliged to satisfy the judgment out of funds legally available within a reasonable time.

6. I also uphold the second leg of the defendant’s argument: the evidence reveals no indication that the plaintiff has obtained a certificate of judgment under Section 13(2).

7. However, I reject the third leg of the argument – that because of the failure to obtain a certificate under Section 13(2) these proceedings are an abuse of process. These proceedings are best characterised as an application for declarations as to the parties’ rights and obligations regarding the judgment debt, as distinct from proceedings for enforcement of the judgment debt. These proceedings do not entail any action for or in the nature of mandamus or contempt of court (being proceedings proscribed by Section 14) and do not otherwise fall into the class of proceedings that could be regarded as an application to enforce the judgment debt. It was therefore not necessary to obtain a Section 13(2) certificate or follow any of the steps in Section 14 prior to making the application now before the Court.

8. The defendant has failed to prove that the proceedings are an abuse of process. I now turn to the merits of the application.

2 SHOULD THE COURT DECLARE THAT THE DEFENDANT HAS FAILED TO SATISFY THE JUDGMENT DEBT?

9. The judgment debt at the centre of these proceedings was obtained in WS No 785 of 2017, Manus Fuel Distributors Ltd v Madang Provincial Government, by an order dated 10 February 2018 in these terms:

(1) The defendant shall pay to the plaintiff a total amount of debt and damages of K2,227,100.00 plus interest of K32,070.24, being a total judgment sum of K2,259,170.24.

(2) The defendant shall pay the plaintiff’s costs of the entire proceedings on a party-party basis, which shall, if not agreed, be taxed.

(3) The file is closed.

10. The plaintiff has presented sufficient evidence to show that at the time of trial none of the judgment debt had been paid. The defendant has failed to adduce any contrary evidence or provide any good reason for refusing the...