Waip v Motor Vehicles Insurance (PNG) Trust, Hastings Deering Pty Ltd and Kondali [1996] PNGLR 374 (16 February 1996)

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[1996] PNGLR 374 - Margaret Waip v Motor Vehicles Insurance (PNG) Trust, Hastings Deering Pty Ltd and Gabriel Yari Kondali

JUDGEMENT AND ORDERS – Charging Order – In the nature of money standby to credit of judgement debtor – By way of costs awarded to debtors – Amount to be charged against previous orders for costs – NCR Order O13 R 2(1)(c) and Order 22.

PRACTICE AND PROCEDURE - Charging Order - Order in the nature of - Money standing to the credit of Judgment debtor - Costs awarded to the Judgment Debtor - Jurisdiction to make - Whether charging order could be made on judgment amount - National Court Rules 1983, Order 22, Order 13 (2) (1) (c)

Where the parties reached a compromise, and the Court entered judgment by consent of K10,000.00 in damages to the plaintiff and the first defendant applied for:

(a) the plaintiff to pay to the defendant all costs incurred up until the entry of the judgment by consent;

1. Pursuant to Order 13 (2) (1) (c) of the National Court Rules, the National Court may enforce an order for costs in favour of the judgment debtor by making a charging order against the judgment amount.

2. Alternatively, the National Court in the exercise of its jurisdiction in equity may enforce an order for costs in favour of the judgment debtor by making a charging order against the judgment amount: Brereton v Edwards [1988] QBD 488 adopted and applied.

3. Where the plaintiff’s action for damages for personal injuries was compromised and consent judgment of K10,000.00 was given in favour of the plaintiff, the judgment debt was charged with three orders for costs made in favour of the judgment debtor in relation to certain interlocutory proceedings. The amount of costs which was not ascertained at the time when the charging order was made was to be ascertained by agreement or by taxation.

INJIA J: On 6 October 1995, this Court declared, by consent, that on 23 May 1993, a compromise was reached between the parties to settle the plaintiff’s personal injury claim for K10,000.00 in damages. The first defendant then applied for:

1. The plaintiff to pay to the defendant all costs incurred since 23 May 1993 including the orders for costs made in favour of the first defendant/judgment debtor on 15 February 1995, 6 March 1995 and 16 June 1995.

I will first deal with the second application because it is a peculiar one. The application is equivalent to an application for a charging order or a lien. There is no provision in Part 7, Order 22 (Costs) of the National Court Rules which provides for the enforcement of an order for costs by way of a charge or a lien on the judgment amount. I am not aware nor informed of any local precedent on this point. However, pursuant to O 13 r 2 (1)(c), a “judgment for the payment of money” may be enforced by a charging order. A judgment includes an order: O13 r 1(d). In my view, an order for the payment of costs is analogous to an order for the payment of money. Therefore an order for costs may be enforced by a charging charging order pursuant to O 13 R 2(1)(c).

But a charging order is not defined in O 13. Some assistance may be gained from the English Supreme Court Practice Rules, 0 50 8(1) which provides:

8(1) The Court may for the purpose of enforcing a judgment or order for the payment of an ascertained sum of money to a person by order impose on any interest to which the judgment debts is beneficially entitled to any money in Court identified in the order a charge for securing payment of the amount due under the judgment or order and interest thereon.

Order 50 Rule 8(1)(c) above, is a new inclusion into the Supreme Court Practice Rules. It was intended to reflect the practice developed in the English Courts which in the exercise of their jurisdiction in equity made charging orders on judgment amounts against money standing to the credit of the judgment debtor. The practice initially employed by the equity courts prior to 1888 in several cases was later affirmed and given the force of principle of equity by the Court of Appeal in Brereton v Edwards [1888] QBD 488. Similar practice is followed in England in garnishee proceedings where money standing to the credit of the judgment debtor is charged against the judgment debt: See London County Council v Monks [1959] Ch 239 at p 243. Similar provisions exist in our National Court Rules: O 13 r 65

Under Order 50 Rule 8 (1)(c) above, it is noted that a charging order may only be made in respect of an ascertained sum of money. In the instant case, the amount of costs is yet to be ascertained by agreement or by taxation. However that does not prevent a general charging order being made subject to the sum being ascertained later.

In summary, I am of the view that our National Court Rules Order 13 r 2(1)(c) empowers this Court to enforce the aforementioned orders for costs made in favour of the judgment debtor against the judgment amount. Alternatively, this court in the exercise of its jurisdiction in equity can make such order in accordance with the practice as laid down in Brereton v Edwards. I see no reason why that practice which has the force of a principle of equity cannot be adopted and applied as being appropriate to the circumstances of this particular case or other similar cases. This will ensure that the Court recognises its own orders for costs in the same proceedings and enforces it in the most efficient and effective way.

In relation to the first application, the first defendant is entitled to receive its costs for the various court appearances as per the Court orders of 15 February 1995, 6 March 1995 and 16 June 1995.

There exists no orders for costs for the substantive proceedings. It is fair to say that the declaration made by the Court on 6 October 1995 was not sought for by the first defendant on its motion filed on 26 September 1995. The first defendant’s application in that motion was to dismiss the whole proceedings but that motion was not successful. It was at the indulgence of the court that both parties, in court, consented to the said declaration. Then of course, the first defendant could have promptly come to court to seek the declaration soon after the compromise in 1993 or thereafter but it didn’t .

In these circumstances, I decline to make an order for costs of the substantive proceedings in favour of the first defendant. Both parties should meet their own costs of the substantive proceedings.

1. The judgment amount of K10,000.00 shall be paid into Court by the first defendant forthwith.

2. The said sum of K10,000.00 shall be charged against the three Orders for costs made in favour of the first defendant on 15 February 1995, 6th March 1995 and 16th June 1995.

3. The first defendant’s costs as per previous court orders made on 15 February 1995, 6 March 1995 and 16 June 1995, the amount of which is to be agreed or taxed, shall be deducted from the judgment debt and paid to the first defendant and the balance paid to the plaintiff.

4. Subject to clause 3 above, each party shall bear their own costs of the proceedings.

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Papua New Guinea Law Reports

Waip v Motor Vehicles Insurance (PNG) Trust, Hastings Deering Pty Ltd and Kondali [1996] PNGLR 374 (16 February 1996)

PNG Law Reports 1996