Tyson Yapao as Administrator of the Estate of the late George T. Yapao v Yaliman Pawe representing himself and Others

• Jurisdiction: Papua New Guinea
• Judge: Shepherd J
• Judgment Date: 03 February 2023
• Neutral Citation: N10110
• Citation: N10110, 2023-02-03
• Counsel: Mr Jerry Siki, for the Judgment Creditor,Mr Rex Mann-Rai, for the Judgment Debtors,Ms Gertrude Tamade Elai, for the First Garnishee
• Hearing Date: 12 December 2023,03 February 2023,12 December 2018
• Docket Number: WS NO. 1053 OF 1997
• Court: National Court

N10110

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1053 OF 1997

Between

Tyson Yapao as Administrator of the Estate of the late George T. Yapao

formerly trading as Yapao Lawyers

Plaintiff/Judgment Creditor

v.

Yaliman Pawe representing himself, his Kiyo Clan and on behalf of other persons and their respective clans whose names appear in the schedule at the back of the Writ

First Defendants/Judgment Debtors

and

Porgera River Alluvial Miners Association

Second Defendant/Judgment Debtor

and

Barrick (Niugini) Ltd

Garnishee

Waigani: Shepherd J

2018: 12^th December

2023: 3^rd February

PRACTICE & PROCEDURE — garnishee proceedings — National Court Rules, Order 13 Division 7 — outline of procedure and principles for garnishee proceedings in National Court — National Court Rules, Order 13 Rule 62 — application by garnishee pursuant to Order 13 Rule 62 to set aside garnishee notice — applicant must show fairly arguable case that there is a genuine substantial dispute regarding garnisheed debt — mere assertion that there is such a dispute is not sufficient — there should be evidence of genuine substantial dispute — where there is material evidence demonstrating that a genuine substantial dispute exists then the garnishee notice should be set aside and the garnishee proceedings dismissed — application to dismiss garnishee proceedings granted.

Cases Cited:

Aure v Sai Business Group Inc (2008) N3349

Barrick (Niugini) Ltd v Pokoli (2015) SC1438

Ipara v Gaupe (2018) N7667

International Finance Company v K.K. Kingston Ltd (2019) SC 1872

Kedmec Auto Repairs Ltd v PNG Power Ltd (2019) N7930

Papo v Barrick (Niugini) Ltd (2019) N9071

Papua New Guinea Banking Corporation v Yama (2010) N4184

Re Bemobile Ltd (2011) N4712

The PNG Balsa Company Ltd v New Britain Balsa Company Ltd (2004) N2520

Legislation:

Companies Act 1997: ss. 337, 338

National Court Rules: Order 13 Rules 56, 61, 62, 63; Schedule 1 Form 60

Counsel

Mr Jerry Siki, for the Judgment Creditor

Mr Rex Mann-Rai, for the Judgment Debtors

Ms Gertrude Tamade Elai, for the First Garnishee

Greg Manda Lawyers: Lawyers for the Plaintiff/Judgment Creditor

Mannrai Lawyers: Lawyers for the First Defendants/Judgment Debtors and Second Defendant/Judgment Debtor

Ms Gertrude Tamade Elai: In-house lawyer for the Garnishee

DECISION

3^rd February, 2023

1. Shepherd J This is a decision on a contested garnishee notice issued by the judgment creditor seeking payment of a judgment debt by way of attachment of monies allegedly owed by the garnishee to the judgment debtor.

2. Leave was granted to the plaintiff/judgment creditor on 23 November 2015 to serve on the garnishee, Barrick (Niugini) Limited, a garnishee notice. The garnishee notice attached the sum of K1,414,577.56 of debt said to be due by the defendants/judgment debtors to the plaintiff/judgment creditor. Barrick (Niugini) Ltd as garnishee disputes its liability to pay the debt attached on the ground that it is not indebted to the defendants/judgment debtors. Barrick (Niugini) Ltd contends that these garnishee proceedings should be dismissed, with costs.

3. For the purposes of this decision, unless the context indicates otherwise, I refer to the plaintiff/judgment creditor as the Yapao Estate; to the first and second defendants/judgment debtors collectively as PRAMA and to the garnishee Barrick (Niugini) Ltd as Barrick.

4. The Yapao Estate initially named the Bank of South Pacific Limited as second garnishee in the garnishee notice. However, Yapao Estate did not pursue the Bank of South Pacific Limited in these garnishee proceedings.

LAW ON GARNISHEE PROCEEDINGS IN THE NATIONAL COURT

5. In civil proceedings, when a court orders a party to pay a sum of money to another party, the sum of money is called a judgment debt. The party who must pay the judgment debt is called the judgment debtor, while the party who is entitled to receive payment of the judgment debt is called the judgment creditor.

6. If the judgment debtor does not pay the judgment debt, the judgment creditor may enforce the judgment in different ways. If a third party, called a garnishee, owes money to the judgment debtor, the judgment creditor may apply to the Court for an order that the garnishee pay that money to the judgment creditor instead of the judgment debtor. In this way payment of the judgment debt owed by the judgment debtor to the judgment creditor is funded from money owed by the garnishee to the judgment creditor.

7. In more technical terms, garnishee proceedings are a means of enforcing a money judgment by the seizure or attachment of debts due or accruing to the judgment debtor. Garnishee proceedings are a form of execution upon debts. As with foreclosure by a mortgagee of property, garnishee orders are in two stages. A judgment creditor must first obtain a preliminary order of the Court granting leave to issue a garnishee notice, conventionally called an order nisi. This is then followed by a substantive order of garnishment if the Court is satisfied that such an order should be made. Such an order is conventionally called an order absolute.

8. Garnishee proceedings in the National Court are instituted under Division 7 of Order 13 of the National Court Rules (NCR) . The procedure is akin to that which governs applications for judicial review under Order 16 NCR for judicial review, which is commenced by an ex parte application for leave to apply for judicial review, which if granted allows for substantive hearing of an application for judicial review.

9. Garnishee proceedings are commenced by way of ex parte application to obtain leave of the Court to issue a garnishee notice. The application on motion is made under Order 13 Rule 56 NCR, which provides:

56. Garnishee Notice

(1) A judgment creditor may, with the leave of the Court, but subject to any Act, file and serve on the garnishee a garnishee notice in Form 60—

(a) of attachment, to the extent of an amount specified in the notice, of debts due or accruing to the judgment debtor from the garnishee; and

(b) of motion for payment under this Division.

(2) A judgment creditor may move for leave under Sub-rule (1) without filing or serving notice of the motion.

(3) The Court shall not give leave under Sub-rule (1) unless it appears to the Court that—

(a) the judgment or order is unsatisfied; and

(b) there is a debt due or accruing to the judgment debtor from the garnishee.

(4) The Court shall, in giving leave under Sub-rule (1), fix the amount for specification in the garnishee notice under Sub-rule (1)(a).

(5) Subject to Sub-rule (6) the amount to be fixed by the Court for specification in the garnishee notice shall be the sum of—

(a) the amount due under the judgment or order on the date on which leave is given; and

(b) such amount as the Court may determine having regard to—

(i) interest on the judgment debt accruing after the date on which leave is given; and

(ii) costs of the garnishee proceedings.

(6) …

(7) A garnishee notice shall include such particulars of the debt attached as are known to, or reasonably capable of ascertainment by the judgment creditor and as are necessary to enable the garnishee to identify the debt …

10. A garnishee notice in Form 60 in Schedule 1 NCR sets out the particulars required by Order 13 Rule 56 NCR and states that the debt owing by the garnishee to the judgment debtor is “attached and bound in the hands of the garnishee to the extent of the sum required on and after service of this notice on the garnishee.” A date and time for the return of the matter before the Court is specified in the notice.

11. Term 5 of a garnishee notice in Form 60 states:

5. Provision exists for the determination at the hearing of any dispute by the garnishee of his liability to the judgment debtor for the debt attached.

12. It was held in Aure v Sai Business Group Inc (2008) N3349 (Kirriwom J) that the Court must satisfy itself of three requirements before leave to issue a garnishee notice can be granted:

(1) there is a debt owing to the plaintiff by the defendant;

(2) the debt has not been settled; and

(3) the defendant is owed money by the garnishee.

These three requirements were later confirmed in Papua New Guinea Banking Corporation v Yama (2010) N4184 (Kariko J) and more recently in Kedmec Auto Repairs Ltd v PNG Power Ltd (2019) N7930 (Numapo AJ).

13. When leave to issue a garnishee notice has been granted, a separate motion for an order for payment of the garnisheed debt must then be filed and served.

14. In addition to the filing and service of the motion for an order for payment of the garnisheed debt, Order 13 Rule 57 NCR requires a judgment creditor to serve the following documents on the garnishee personally and on the judgment debtor at least three days before the date fixed by the garnishee notice for the motion for payment:

(1) the garnishee notice; and

(2) each affidavit used on the motion for leave.

15. The powers of the Court to deal with the substantive application for an order for payment by a garnishee of a garnisheed debt are set out in Order 13 Rules 61, 62 and 63 NCR.

16. Order 13 Rule 61 NCR provides:

61. Payment to judgment creditor

Subject to Rules 62 and 63, the Court may, on motion pursuant to the garnishee notice, order the garnishee to pay to the judgment creditor the debt attached to the extent specified in the garnishee notice, or so much of the debt attached to the extent so specified as is required to satisfy the judgment or order on which the garnishee proceedings are taken together with interest and such costs of the garnishee proceedings as may be payable to the judgment creditor out of the debt attached.

17. Where a garnishee disputes liability to pay the debt attached by the garnishee notice, the Court has extensive powers to hear and determine the dispute. Order 13 Rule 62 NCR states:

62. Dispute of liability by garnishee

Where, on the hearing of a motion by the judgment creditor pursuant...