N4184

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 675 OF 2001

BETWEEN:

PNGBC LIMITED
 trading as PAPUA NEW GUINEA BANKING CORPORATION
(now Bank of South Pacific Limited)
Plaintiff

AND:

PETER YAMA
First Defendant

AND:

AGATHA YAMA
Second Defendant

AND:

MARY YAMA
Third Defendant

Waigani: Kariko J
2010: 19, 25 August, 17 December

JUDGMENT – Enforcement of Judgment – Application for leave to issue garnishee notice – Preconditions before leave is granted – Whether garnishee owes money to the debtor – whether debt owed by the State can be attached by way of garnishee action.

Cases cited:

Phillip Aure & Simon Kama v Sai Business Group Inc. & Mainland Holdings Limited (2008) N3349

Counsels:

R Pato, for the plaintiff
No appearance for the defendants 

1.	KARIKO J: Based on an amended notice of motion filed 4 August 2010, the plaintiff has applied for leave pursuant to Order 13, Rule 56 to issue a garnishee notice. 

Issues

2.	The relevant issues raised by the application are:

(1)	Whether the preconditions to leave being granted have been satisfied?

(2)	Even if the preconditions have been met, should leave nevertheless be refused as a garnishee order cannot be issued against the State?

Evidence of debt owed to defendant

3.	In support of the application, the plaintiff filed an affidavit by one John Maddison, the CEO for the plaintiff, who has relied on two newspaper articles that suggest the State has agreed to settle a court action by the defendant Peter Yama against the State for damages. One of these articles reports that the then Attorney-General, Dr Allan Marat, on 30 April 2010 stated that the State had consented to settle a K15.5 million claim against the State by Mr Yama. In the second of the articles, the Honourable Prime Minister, Sir Michael Somare, is reported to have queried this compromise and noted that the National Executive Council had not approved the settlement. 

Preconditions for leave

4.	As explained in Phillip Aure & Simon Kama v Sai Business Group Inc. & Mainland Holdings Limited (2008) N3349 by His Honour Kirriwom J, the Court must satisfy itself of three requirements before leave 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.

Should leave be granted?

5.	In this case I am satisfied that the plaintiff is owed money by way of judgment debt by the defendant. I am also satisfied that this debt remains unsettled.

6.	The only question that remains to be answered is whether the garnishee owes any money to the defendant that the plaintiff can attach by way of a garnishee order. There is simply insufficient evidence before me and I cannot be properly satisfied on these newspaper articles that the State owes Peter Yama K15.5 million. And I hinted as much to counsel on the first day of hearing the application on 19 August 2010 before the matter was adjourned to 25 August 2010 for continuation. 

7.	This seemingly prompted the plaintiff to file a further application on 24 August 2010 seeking orders from this court for the production by the Registrar of the relevant National Court file which the plaintiff believes will confirm that the State has settled a claim by Peter Yama for K15.5 million.

8.	This action confirms my view that the plaintiff's application is based on speculation. It ought to have confirmed the debt or payment owing to the defendant by the garnishee, before filing the application for leave. It has put the cart before the horse, so to speak. On this basis alone, leave should be refused.

9.	But there is a second reason why leave should not be granted. The plaintiff is seeking to have the garnishee notice issued to the Garnishee who is named in the notice of motion as: 

(a)	Gabriel Yer, in his capacity as Secretary for the Department of Finance;

(b)	Ano Pala in his capacity as Attorney General of Papua New Guinea on behalf of the Independent State of Papua New Guinea; and 

(c)	Neville Devete in his capacity as the Solicitor General of Papua New Guinea. 

10.	The Concise Commercial Dictionary by Osborn & Gandage defines "garnishee" as "A debtor who has been ordered to pay the debt to a person who has obtained a judgement against the debtor's original creditor". It is clear that the garnishee must owe a debt to the judgement debtor.

11.	There is no evidence that these named persons personally owe Mr Yama any debt. They are officers or officials of the State and it is the State that purportedly owes the debt to Mr Yama. In law the three named individuals or for that matter persons occupying the respective offices, cannot be garnisheed. 

12.	Even if I was to accept that the State owes Peter Yama the debt, the garnishee would ultimately not be enforceable by virtue of section 13 of the Claims By and Against the State Act 1996, which reads:

13.	No execution against the State.
(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.

13.	The applicant is seeking leave to attach a debt owed by the State. This is not permitted by section 13 of the Claims By and Against the State Act 1996.

14.	As the court has no jurisdiction to issue the garnishee order against the State, this is yet another ground why leave should be declined.

15.	In the circumstances, I deem it not necessary to consider the application by the plaintiff filed 24 August 2010.

Orders

16.	The orders of this court are:

(1)	The application for leave to issue garnishee notice is refused.
(2)	Costs of the application are awarded against the plaintiff. 
_______________________________________________

Steeles Lawyers: Lawyer for the plaintiff
Lomai & Lomai Lawyers: Lawyer for the defendants