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Ivat v Department of Health [2002] PNGLR 13 (28 March 2002)

[NATIONAL COURT OF JUSTICE]

JOEL IVAT

V

DEPARTMENT OF HEALTH; and
DEPARTMENT OF PERSONNEL MANAGEMENT

Kokopo: Lenalia J

22 February; 28 March 2002

CONTEMPT – Civil Contempt – Disobedience of Court orders – What constitutes contempt – Terms of orders must be unambiguous – Wilful disobedience – Standard of proof on civil contempt – "Proof beyond reasonable doubt".

CONTEMPT – Civil Contempt – Disobedience of Court orders by two defendants

DEPARTMENTS – Orders for payment of Ex-Gratia entitlements – Ex – Gratia entitlements only payable on retrenchment – Retrenchment.

CONTEMPT – Civil Contempt – Former employee of first defendant – Approving authorities to pay – Orders not served on the two contemnors – Correspondences highlighted – Insufficient – Conflicting legal advise – Casting doubts – Contemnors. No proper "service" – No clarity in terms of Court Order: Ross Bishop and Others v Bishop Bros Engineering Pty Ltd and Others [1988-89] PNGLR. 533 – Contemnors Not Guilty.

Facts

The plaintiff obtained default orders for assessment and payment of ex gratia payment on retrenchment and interests at 8% pursuant to the Judicial Proceedings (Interests on Debts and Damages) Act on 13 February 1998. The plaintiff's lawyers filed a notice of motion on 17 December 2001 seeking to imprison Messrs. Akuila Tubal and Clement Semmy who were being named as contemnors having consistently refused to pay as ordered by the Court on 13 February 1998. Mr. Akuila Tubal was, at the relevant time, the provincial Administrator and Mr. Clement Semmy was the advisor to the Human Resources Development Unit in the East New Britain Provincial Administration. This contempt proceeding was instituted to enforce compliance with the Court orders of 13 February 1998. Part of the defence argument was that the two named contemnors were never personally served with the Court Order as required by Order 6 Rules 3 & 8 of the National Court Rules.

Held

1. Although the contempt proceeding is a civil proceeding, the standard of proof is higher than the civil standard since contempt is the only offence for which the Court can punish a contemnor for an offence that is not defined in any legislation – Section 37(2) of the Constitution. The standard of proof in civil contempt is proof beyond reasonable doubt. Yap v Tan and B & T. Engineering Pty Ltd and Wong and Baptiste and Tau [1987] PNGLR 227 followed.

2. The terms of an order made against a person must be clear. Ross Bishop and Others v Bishop Bros Engineering Pty Ltd and Others [1988-89] PNGLR 533 applied.

3. This was not a case of persistent refusal to pay up the amount ordered. The fact that the named parties in the Writ of Summons were different than those who were named in the Notice of Motion and lack of proper service on the contemnors created a doubt in the minds of the two contemnors.

Papua New Guinea cases cited

Ross Bishop and Others v Bishop Bros Engineering Pty Ltd and Others [1988-89] PNGLR 533.
Yap v Tan and B & T Engineering Pty Ltd and Wong and Baptiste and Tau [1987] PNGLR 227.

Counsel

Dr. A. Marat, for the plaintiff.
O Kivu, for the defendants.

8 March, 2002

Lenalia J. The plaintiff commenced proceedings against the two defendants for non-payment of his retrenchment entitlements. He was an Aid Post Orderly in the employ of the first defendant. He commenced his long career prior to Independence since July in 1965 and worked his way up until either his retirement or retrenchment on 9 March 1992. He was purportedly retired from the date earlier mentioned, but such retirement was reviewed by the second defendant. The result was that his retirement was rescinded and instead approved by the second defendant for retrenchment.

It also appears from the evidence that it may be that the plaintiff has also been paid his retirement entitlement, defeating the purpose for his claim against the two defendants. This is not, however, an issue before this Court to determine.

The Secretary of the second defendant wrote to Secretary of the Department of East New Britain informing them that his Department had reviewed its decision on the retirement of the plaintiff and instead had approved his retrenchment. In that same correspondence of 23 June 1992, the same requested that the Department of East New Britain process to the plaintiff his ex-gratia payments, as other entitlements had been paid to the plaintiff. The evidence reveals that this direction was even late since the plaintiff had been paid his retirement benefits by 9 March 1992.

When no such payments were paid to the plaintiff, he commenced proceedings against the two defendants for non-payment of his ex-gratia entitlements. The Writ of summons, filed on 6 May 1996, was served on the two defendants. No Notice of Intention to defend was lodged nor was there any defence filed. A notice to set down for trial was ordered and was set to 13 February 1998. The plaintiff through his lawyers by a Notice of Motion filed on 6 January 1998, obtained the following default orders.

1. The first and second defendants shall, within 14 days from the date of service of this order on both defendants, assess all full ex-gratia payment payable to the plaintiff.

2. Within seven (7) days from the expiration of the fourteen (14) days for assessment, the first and second defendants shall pay to the plaintiff's Lawyers the plaintiff's full ex-gratia payments.

3. In addition to the full ex-gratia payment the first and second defendants pay interests of eight percent (8%) pursuant to the Judicial Proceedings (Interests on Debts and Damages) Act.

4. The first and second defendants shall pay the plaintiff's costs.

Since the orders of 13 February 1998, the plaintiff says through his lawyers that the two defendants have defaulted and proceedings for this Contempt of Court was commenced. There are four (4) separate charges laid against the two contemners in the Notice of Motion. The four charges contained in the Statement of charge are in the following terms:

5. Between (sic) 5 March 1998, the first and second defendants did wilfully commit contempt of Court when they failed to complete, within fourteen (14) days from the date of service of the Court Order upon them, assessment of the full ex-gratia payment for the plaintiff and since then have continuously refused to do so in spite of their own legal advice to assess the said full ex-gratia payment.

6. Between 20 March 1998 and 27 March 1998, the first and second defendants did commit or have wilfully committed Contempt of the Court when they failed to pay the plaintiff's lawyers the full ex-gratia payment and since then have continuously refused to do so in spite of their own legal advice to pay the full ex-gratia payments to the plaintiff.

7. Between 5 March 1998 and 27 March 1988 the first and second defendants did wilfully commit contempt of Court when they failed to pay interest of eight percent (8%) and since then have continuously refused to do so.

8. Between (sic) 30 March 1998, when the bill of costs pursuant to Clause 4 of the Order was sent to the first and second defendants, until today, the two defendants have continuously wilfully committed contempt of court by failing to pay the plaintiff's costs.

The plaintiff's lawyers filed a Notice of Motion on 17 December last year seeking to imprison Messrs. Akuila Tubal and Clement Semmy who are being named as contemnors and it is alleged by the lawyers for the plaintiff that the two contemnors have consistently refused to pay as ordered by the Court on 13 February 1998. Mr. Akuila Tubal is the Provincial Administrator and Mr. Clement Semmy is the Advisor to the Human Resource Development Unit in the East New Britain Provincial Administration. This process was taken to enforce compliance.

Both counsels chose to file affidavit evidence and other supporting documents. On 31 January 2002, this Court directed the plaintiff to file and serve his evidence on the two contemnors' lawyers by 8 February and the plaintiff and the two contemnors to file submissions by 22 February, for which all parties complied. The decision was to be announced on 8 March; however, it was not possible since the Court was on circuit to another Province. In spite of that fact the draft had been ready before the date set for decision.

The plaintiff's evidence consists of a copy of the Court Order of the 13th of February 1998, which the Court has taken judicial notice of and other documentary evidences particularly copies of various correspondence between the parties in the course of their dealing with the plaintiff's claim. The plaintiff had been an Aid Post Orderly employed by the first defendant since the 1st of July 1965. On the 9th of March 1992, he was compulsorily retired and paid his retirement expenses. The evidence filed on behalf of the two contemnors show that on his retirement, the plaintiff was paid a sum of three thousand, eight hundred and fourteen kina fifty-five toea (K3,814.55). Quite surprisingly, the retirement was reviewed by the second defendant in April of that same year and consequently rescinded with the result that he was retrenched.

It is convenient to examine a number of exchanged correspondence between the parties as to who was ordered and who was to pay. The judgment creditor now alleges that the two contemnors by virtue of their various offices are liable for the non-compliance of the two defendants. On 23 June 1992, the Secretary of the second defendant wrote to the Secretary of the Department of East New Britain attention to the Assistant Secretary, Division of Health, advising that the second defendant had reviewed their decision to retire the plaintiff and had instead approved his retrenchment. In that same correspondence, the second defendant, through its Secretary, pointed out that though the plaintiff had been paid his other entitlements he was entitled to be paid his ex-gratia payment (see Ann. "a" to Dr. Marat's Affidavit filed 6 February 2002).

Again by 29 November 1993, the second defendant, through its Secretary, wrote to the plaintiff's lawyers advising that the Department of East New Britain was responsible for paying to the plaintiff his ex-gratia entitlements.

Soon after the orders were obtained on 13 February 1998, the lawyers for the plaintiff wrote to the Secretary of the first defendant requesting to settle an amount of K6,830.70. In his letter, Dr. Marat copied the Secretary to the second defendant. On the 22 November 1993, the Chairman of the Redundancy Monitoring Committee wrote to Dr. Marat and his office advising that according to the Personnel Management Circular Instruction No. 8/92 made on 19 November, 1992, the Department of East New Britain was responsible for paying the plaintiff his ex-gratia payment. He advised on that same letter that if there were no funds for retrenchment in 1993, then it should be budgeted for in the following year, 1994.

Dr. Marat wrote another letter on 27 July 1998 (Ann. "D" to his Affidavit still of 6 February 2002) on which he included a copy of the Court Order expressing concern that it was already some five months from the date of the orders and no settlement had been effected and he further indicated that, upon instructions their office was seriously considering taking out contempt proceedings. The plaintiff's lawyers also wrote to the Solicitor General's Office attaching a copy of the Court Order and requested the Solicitor General to advise the two defendants to quickly settle the amount adjudged and their bill of costs.
It seemed nothing was forthcoming from the Solicitor General's Office, so the plaintiff's lawyers wrote again to them (see Ann. "G") on 7 September 1999 reminding them of the unsatisfied judgment. They wrote yet another follow-up letter (Ann. "H") to the Secretary to the first defendant advising that the order had not been satisfied for some eighteen months by then.

Then, on 11 October 1999, the Acting Solicitor General wrote to Dr. Marat's office indicating that their office (Solicitor General's) had made representation to the first defendant and the Department of Treasury & Finance and advised they were awaiting instructions. Dr. Marat followed this up by four other letters, (see his Aff. Anns. "K" "L" "M" and "N"). The Solicitor General picked the matter up on 3 April 2000 and wrote back to Dr. Marat's office telling them that his Department had not heard from the first defendant but that they had written instead to the Department of East New Britain.

In fact, by 29 March, 2000 the Acting Solicitor General wrote to the Administrator of East New Britain requesting them to make an assessment of the amount due to the (see Ann. "A: to Mr. Tubal's Aff.) plaintiff in consultation with the two defendants so as to expedite settlement of the outstanding and unsatisfied judgment. In that correspondence, the Administrator was advised that failure to assess and quickly settle the order could result in civil contempt proceedings against the Secretaries of the two judgment debtors.

The Acting Provincial Legal Officer, Mrs. Magdalene Kivu, with the East New Britain Provincial Administration, says in her affidavit, in reply filed on behalf of Messrs Akuila Tubal and Clement Semmy, that she was given instructions and received the plaintiff's file in May 2000 from the Human Resources Development (HRD) Division and was further advised to study the file and reply to the letter from the Solicitor General's office. Having done this, Mr. Clement Semmy wrote to the Provincial Legal Officer on 14 August 2000, on which he advised that the plaintiff had been paid his retirement expenses except for his ex-gratia component which he assessed to be some K5,890.50. Mr. Matalau,the then Provincial Legal Officer on his letter (see Ann. "C: and "C.1" to same Aff.) of 22 August, replied to that letter of the Attorney General.

The two contemnors filed affidavit evidence through their lawyers. The defence case is that the contemnors named in the Notice of Motion cannot be held responsible for these contempt proceedings and they rely on a number of reasons. First and foremost is that neither the East New Britain Provincial Administration nor the East New Britain Provincial Government had been a party to these proceedings. Secondly, that the plaintiff was not retrenched by the Department of East New Britain as he was retrenched by the Departments of Health and Personnel Management. The third argument by the two contemnors is that when an officer from the Solicitor General wrote to them, they were advised that the contempt proceedings was to be taken out against the Secretaries of the two judgment debtors. The two contemnors also say that the order was made against the two Defendant Departments and not the Department of East New Britain.

I am grateful to both counsels for your helpful written submissions. On behalf of the plaintiff, Dr. Marat submits that almost three years have now gone past from the date of service of the Court Orders upon the first and second defendants and such orders remain unsatisfied. Dr. Marat further submits that Messrs. Tubal and Semmy have been wrapped up in these contempt proceedings since they are implementors of executive decisions made either by National Departments or the East New Britain Provincial Administration, and not only them, but even the National and Provincial Governments.

He further submits that in the concept of governance, a Secretary of a National Department would make decisions and there are officers below him to implement such decisions. For instance, in the instant case where the two National Departments were ordered, their secretaries could give executive decisions and their subordinates must implement them. Further that the National Secretaries of the two Judgment Debtors should not be held liable as there are officers in the East New Britain Provincial Administration who are implementors, as in the case of Messrs. Akuila Tubal and Clement Semmy.

Part of the defence argument is that the two named contemnors in the Notice were never personally served with the Court Order, as required by Order 6 rr. 3 & 18 of the National Court Rules. Further, they say that neither of the two contemnors nor the Department of East new Britain was ever made party to those proceedings these contempt proceedings for non-compliance with terms and the tune of correspondences and the legal opinions given the two contemnors.

The plaintiff has properly taken out contempt proceedings pursuant to Order 14 rr. 42 & 43. The former provisions provide:

"42. Procedure generally.

1 Where contempt is committed in the Court, an application for punishment for the contempt must be made by motion on notice in the proceedings, but, if separate proceedings for punishment of the contempt are commenced, the proceedings so commenced may be continued unless the Court otherwise orders.

2 Where contempt is committed, but not in connexion with proceedings in the Court, proceedings for punishment of the contemnor must be commenced by originating summons, but if an application for punishment of the contempt is made by motion on notice in any proceedings, the application may be heard and disposed of in the latter proceedings, unless the Court otherwise orders."

The counsels, in their written submissions, have properly addressed the issues of law in relation to the standard of proof in civil contempt: "proof beyond reasonable doubt" Yap v Tan and B & T. Engineering Pty Ltd. and Wong and Baptiste and Tau [1987] PNGLR. 227. This means that the plaintiff must prove the contemptuous behaviour by the two contemnors on the criminal standard. That is to say, each of the element stated in each charge must be strictly proven to the standard required by law in criminal cases. Although these contempt proceedings being civil contempt, the standard of proof is higher than the civil standard since contempt is the only offence for which the Court can punish a contemnor which offence is not defined in any legislation, see s 37(2) of the Constitution.

The Court notes here that the wording of the four charges specifically name the first and second defendants. Dr. Marat, counsel for the plaintiff, argued in submission that by applications of Order 13 r 9(2) of the Rules in relation to enforcement of judgment, the two contemnors must be arrested and be imprisoned. Order 13 Rule 9 (1) (2) and (3) of the Rules say:

"9. Enforcement by or against non-party.

(1) Where, in any proceedings, a person who is not a party obtains an order, or an order is made in favour of a person who is not a party, he may enforce the order by the same means as if he were a party.

(2) Where, in any proceedings, obedience to a judgement may be enforced against a person who is not a party, the judgement may be enforced against him by the same means as if he were a party.

(3) Where, in any proceedings, obedience to a judgement may be enforced against a corporation which is not a party, an officer of the corporation shall be liable to the same process of enforcement as if the corporation were a party."

The requirement of "proof beyond reasonable doubt" being the Criminal standard, the application of Order 13 r. 9 (1)(2) and (3) may be suitably adopted in proceedings where elements of contempt are clear and particularly where an order is to be enforced. In my view, in a case like the instant proceedings where the two contemnors are being wrapped up by virtue of their respective administrative responsibilities and where, neither they nor the Department of East New Britain Provincial Administration were ever made parties to the proceedings on which the two judgment debt were being ordered, the issues of proof becomes very acute. The reason I say acute is because it must be strictly proven that the two contemnors were properly served with the process.

A number of correspondence' need to be examined in order for me to determine if the contemnors should be criminally liable in these proceedings. The Acting Provincial Legal Officer, on a letter dated 8 May 2000, some two years three months seven days after the orders were given, gave a written opinion to Mr. Clement Semmy advising that there were no more issues to be argued since the Court Order of 13 February 1998 was already in place, which legally meant that the ex-gratia payments due to the plaintiff should be processed as the Court had already resolved such issues.

Some three months later, contemnor Clement Semmy wrote to the Provincial Legal Officer advising him/her that the calculation of the plaintiff's retirement entitlements was or is governed by the Public Service General Orders and the Public Service Management Act. In that same letter, he advised that ex-gratia payment is payable only to officers who are retrenched from the Public Service but that if the plaintiff was to be paid ex-gratia entitlements, it would have to be paid by the two judgment debtors. He estimated the gross of ex-gratia payments due to the judgment creditor was some K5,890.50.

In that same letter and month, namely August 2000, contemnor Clement Semmy advised the Legal Officer (see Ann. "B: to Magdalene Kivu's Aff.) that the East New Britain Provincial Administration was unable to pay the judgment creditor his ex-gratia payments as the plaintiff was retired. I understand from the evidence the reasoning for the view taken by Mr. Semmy as well as the Office of the Administrator.

From the commencement of consideration by the Department of East New Britain on the judgment creditor reaching old age of 54 years, he was recommended for retirement. To effect that, he was paid his retirement benefits already. Evidence clearly shows that the judgment creditor had been paid his retirement payout of K3,814.55 on or about 14 February 1992. The Department of East New Britain had been advised by the Secretary of the Department of Personal Management as early as 23 June 1992 that they had reviewed the decision to retire the judgment creditor and instead have approved his retrenchment. This decision was actually made four months after the judgment creditor had been paid his retirement expenses. This, in my view, was confusion.

When the plaintiff commenced contempt proceedings, an officer from the Attorney General's Office, Hitelai Polume Kiele, wrote to the Provincial Administrator to provide their office with an assessment of ex-gratia entitlements due to the judgment creditor and the same advised in that same letter of 29 March 2000 that failure to process the entitlements would result in contempt proceedings taken out against the Secretaries of the two judgment debtors.

The judgement creditor's lawyers were dealing mainly with the Secretaries of the two judgment debtors. It may have been an oversight on the part of the plaintiff's lawyers not adding as a party to the proceedings the Department of East New Britain when they knew the judgement creditor was employed by the Department of Health in East New Britain. Although the Department of East New Britain had been informed of an order, it appears from evidence that they were not served with the terms of the Court Orders. It did not make any difference who was going to pay to the judgment creditor his ex-gratia entitlements because the money was to come from the same source.

It is my view there was conflicting legal advice given to the two contemnors. The Provincial Legal Advisor insisted that the Department of East New Britain should pay the ex-gratia entitlements to the plaintiff. The Solicitor General's Office advised that the two Judgment Debtors were to be prosecuted for civil contempt.

What is clear from our case authority is that where an order has been pronounced against a person personally or a corporate entity by a Court of competent jurisdiction, unless the order is discharged, the person or body ordered must obey as ordered even where a person affected believes an order is irregular or even void: Yap v Tan and B & T Engineering Pty. Ltd and Wong and Baptiste and Tau [1987] PNGLR 227. In Ross Bishop and Others v Bishop Bros Engineering Pty. Ltd. and Others [1988-89] PNGLR 533, it was held that the terms of an order made against a person must be clear.

Turning now to the facts and evidence presented in these proceedings, I am of the view that the two contemnors had not been properly served with copies of the Court Orders of 13 February 1998. All that is required by law under s 37 of the Constitution and Order 6 r 3 of the National Court Rules has not been complied with. No service of the Court Orders was ever effected on the two contemnors. This despite notices by way of correspondence. After all, the two judgment debtors are who they are, and one would have thought that with inclusion of the Department of East New Britain as a party would have been more appropriate as compared to the random notice of motion on which the two contemnors have been named. This is in my view, is totally against the concept of protection of law provided for under s 37 of the Constitution and Order 6. r.3 of the National Court Rules.

After all, the Department of East New Britain was not a party in these proceedings. It may be that Mr. Tubal needed enlightenment on the issue of retirement and retrenchment. A person retired compulsorily from the Public Service for old age is entitled to retire if the officer desires to do so and, under the 1995 Public Services (Management) Act, an officer may continue to serve until he attains age 60 years. The judgment creditor was retired at age 54 years. In the plaintiff's case, he had been paid his retirement benefits which, in my view, created doubts in the minds of the two contemnors as to what would actually be the case, although the Department of East New Britain had been informed. I find this was not a case of persistent refusal to pay up the amount ordered. The fact that the named parties in the Writ of Summons were different than those who are named in the Motion on Notice, in my view, created a doubt in the minds of the two contemnors. Applying the test of clarity and proper service stated in the case of Ross Bishop and Others v Bishop Bros Engineering Pty Ltd and Others [1988-89] PNGLR 533 - was there clarity and proper service in terms of the Court Orders, the subject of these proceedings? I answer in the negative. I am not satisfied that the judgment creditor has proven this Motion on Notice "beyond reasonable doubt" and the Court must refuse the application.

The Court orders costs in favour of the two contemnors and their lawyers to be taxed, if not agreed.Lawyer for the plaintiff: Marat Lawyers.
Lawyers for the Contemnors: Sialis Tedor & Associate Lawyers.