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Australia & New Zealand Banking Group (PNG) Ltd v Short [1986] PNGLR 57 (21 February 1986)

Papua New Guinea Law Reports - 1986

[1986] PNGLR 57 - Australia & New Zealand Banking Group (PNG) Ltd v Ian Thomas Short 

[1986] PNGLR 57

N527(L)

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

AUSTRALIA & NEW ZEALAND BANKING GROUP (PNG) LTD

V

SHORT

Waigani

McDermott AJ

14 February 1986

21 February 1986

JUDGMENTS AND ORDERS - Effect of judgments - Merger of cause of action - - Rights on judgment - Include rights to interest - Enforcement of judgment not affected by limitation periods - Statutes of Frauds and of Limitations Act (Ch No 300), s 14.

JUDGMENTS AND ORDERS - Interest on judgment - Enforceable in same manner as judgment - Enforcement not affected by limitation periods - Statutes of Frauds and of Limitations Act (Ch No 300), s 14.

INTEREST - Award of on judgment - Merger of cause of action Enforcement of judgment and interest - Enforcement not affected by limitation periods - Statutes of Frauds and of Limitations Act (Ch No 300), s 14.

EXECUTION - Execution of judgment for principal sum plus interest - Distinguished from right to sue on judgment - Enforcement not affected by limitation periods - Statutes of Frauds and of Limitations Act (Ch No 300), s 14.

GARNISHEE - As means of executing judgment - Not affected by periods of limitation - Statutes of Frauds and of Limitations Act (Ch No 300), s 14.

Held

(1)      Following judgment the cause of action in which it is given is merged in the judgment and its place is taken by the rights created by the judgment including interest thereon.

Aman v Southern Railway Co [1926] 1 KB 59 at 72, considered.

(2)      The right to sue on a judgment, which is affected by statutory periods of limitation, is quite distinct from the right to issue execution under it which may be done pursuant to the rules of the court at any time.

W T Lamb & Sons Rider [1948] 2 KB 331 at 337, applied.

(3)      Garnishee proceedings are a way of enforcing, in the sense of obtaining satisfaction of, a judgment and are not affected by the Statutes of Frauds and of Limitations Act (Ch No 300), s 14.

(4)      Accordingly, garnishee proceedings instituted in 1985 in respect of the interest component of a judgment obtained in 1975, where payment of the principal sum was completed in 1984 were competent proceedings.

Cases Cited

Aman v Southern Railway Co [1926] 1 KB 59.

W T Lamb & Sons v Rider [1948] 2 KB 331.

Summons

These were proceedings in which the applicant/debtor sought orders declaring that a judgment debt against him has been fully satisfied and that no further proceedings should be taken thereon.

Counsel

D Houseman, for the applicant/debtor.

R Aisi, for the respondent/creditor.

21 February 1986

MCDERMOTT AJ: The applicant, debtor has asked for orders:

(1)      declaring that the judgment has been fully satisfied; and

(2)      that the creditor take no further steps to enforce any part of the judgment that remains unsatisfied.

On 17 October 1975 the plaintiff obtained a judgment for K3,556.98 plus interest to the date of judgment at the rate of 14 per cent, plus costs. There is also interest of 5 per cent running on the judgment at the prescribed rate, from 17 October 1975 on the outstanding balance of the judgment debt pursuant to O XLVII, r 17 of the rules then in force. The plaintiff had sued on a money count for money lent and the interest in the judgment was for the period 29 July 1975 to 17 October 1975, according to the terms of the agreement.

The plaintiff was unable to obtain satisfaction as the defendant left the jurisdiction. However he later returned and a writ of fieri facias (under the former rules) issued on 7 January 1982 claiming K3,706.56. In it the plaintiff neither claimed interest up to judgment nor interest on the judgment debt. An incorrect amount of costs was also claimed. K105.03 was added for poundage, making the overall claim of K3,706.56.

The plaintiff proceeded to pay, first the Bailiff and then the Sheriff, instalments of K200 in reduction of the amount set out in the writ. On 10 September 1984 the Sheriff issued a receipt for K106.56 entitled “The final payment under warrant of execution”; it should read “writ of execution” pursuant to the new rule, O 13, r 17.

At no stage had the plaintiff made a claim for interest, but in December 1985 proceeded by way of garnishee proceedings (O 13, r 56) to claim interest. In support is an affidavit sworn by Michael Milinkovic an officer employed by the judgment creditor who claims interest of K3,736.16 plus costs; suffice to say, this is totally incorrect. The assessed rate of interest is wrong. In the proceedings before me an affidavit of Robert Aisi a lawyer employed by the creditor’s legal advisers, claims interest of K1,328.60 plus costs. Whilst this figure is closer to the mark it is also wrong, as the interest should be assessed on the outstanding balance from time to time and to arrive at this figure the relevant date is when the Bailiff or Sheriff received the money and not the date when it was subsequently collected on behalf of the creditor. Because of the plaintiff’s actions it is probably impossible now to assess interest accurately.

What is certain is that on 10 September 1984 the principal sum was liquidated. On behalf of the debtor two interesting submissions are made. The first, concerns the limitation period of six years, and reliance is placed on s 14 of the Statutes of Frauds and of Limitations Act (Ch No 300) in particular “all actions of debt grounded upon any lending or contract without speciality ... within six years next after the cause of such actions or suits and not after ...”. This immediately raises two questions (a) whether the interest portion of the judgment is severable from the principal; and (b) whether the present claim for interest is a debt or whether the garnishee proceedings are an action within the terms of the section.

It is submitted that as interest was not claimed in the fi fa writ it was abandoned and action now is another cause.

I have been referred to Halsbury’s Laws of England (4th ed), Vol 28, par 700 where the following appears: “... and no arrears of interest in respect of any judgment debt can be recovered after the expiration of six years from the date on which the interest became due.” This statement is qualified. It relates to “an action” brought on a judgment and it relates to the operation of the Limitation Act 1939 (UK) which has no equivalent here.

So disregarding that Act, I look to the context of the claim. Following judgment, the cause of action in which it is given is merged in the judgment and its place is taken by the rights created by the judgment, including the interest thereon, and “that interest is nothing but the fruit of the judgment, and if the tree dies the fruit must die with it”: Bankes LJ in Aman v Southern Railway Co [1926] 1 KB 59 at 72. In that case the judgment became unenforceable owing to legislation which gave the plaintiff other assets in lieu. However, in matters of limitation, the right to sue on a judgment has always been regarded as quite distinct from the right to issue execution under it.

“Execution is essentially a matter of procedure — machinery which the court can, subject to the rules from time to time in force, operate for the purpose of enforcing its judgments or orders. A refusal by the court ... to place this machinery at a plaintiff’s disposal in no way affected his right to sue on the judgment at any time within the statutory limit of time ...” See W T Lamb & Sons v Rider [1948] 2 KB 331 at 337.

That case concerned leave to levy execution under the Rules of the Supreme Court (UK), O 42, r 23, which is in similar terms to the rule of this court, (O 13, r 18). These cases do not support the submission that the payment of the principal sum excludes a later claim to the interest, when that claim is the execution for interest arising on a judgment. In my view garnishee proceedings are another way of enforcing, in the sense of obtaining satisfaction, a judgment and the remarks are therefore apposite.

It is clear to me that the statute based objection is misconceived.

The second submission concerns laches. Whilst I appreciate that the judgment debtor should not have to pay any extra because of delays and because of the way in which the interest claim on the judgment debt has been forgotten, I again consider reliance upon these equitable defences to a claim for interest misconceived. The remedy for the judgment debtor is in costs in this instance. The judgment should not be taken from the creditor.

I will not make orders (1) and (2) as asked.

In my view the judgment of 17 October 1975 still stands subject to a reduction in the amount owing by the part payments received. The judgment creditor is entitled to (1) Interest at 14 per cent from 29 July 1975 to 17 October 1975 on K3,556.98; and (2) Interest at 5 per cent from 17 October 1975 on the outstanding balance of the judgment progressively reducing, until it was paid on 10 September 1984. These sums will have to be ascertained.

Because of the way in which the creditor has allowed this matter to develop I order the judgment creditor to pay the costs of this application and direct the Registrar to levy no further garnishee costs against the judgment debtor.

Currently there is an order for the garnishee to appear before the Registrar. I direct that no action be taken on the notice of garnishee dated 3 December 1985 until the correct amounts, pursuant to O 13, r 56(5) have been ascertained.

Orders accordingly

Lawyer for the applicant/debtor: D Houseman.

Lawyer for the respondent/creditor: Gadens.