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Valikoula v Toa [2000] TOLawRp 36; [2000] Tonga LR 397 (7 November 2000)

IN THE SUPREME COURT OF TONGA

Valikoula

v

Toa

Supreme Court, Nuku'alofa
Ward CJ
C 746/98

7 November 2000; 7 November 2000

Creditors' remedies — liability for costs of bailiff — execution creditor personally liable

On 21 June 1999, the plaintiff was awarded judgment against the first defendant in the sum of $3,114 with interest. On 25 July 2000 a writ of distress was issued on the application of the plaintiff. It was executed on 18 August 2000 and a van, T3149, seized. Following execution, the Bank of Tonga gave notice of claim in relation to the van and the bailiff notified the execution creditor on 11 September 2000. Two days later the execution creditor gave notice that he admitted the claim of the Bank and, on the bailiff's application hearing to be relieved of possession of the van, the court ordered its immediate release to the Bank on 9 October 2000. However at that application, the bailiff also sought an order against the execution creditor for all costs incurred in the execution of the writ up to the admission of the bank's claim. The plaintiff opposed that claim.

Held:

1. The test the bailiff must apply was whether the goods appeared to be in the possession of the judgment debtor. If there was a claim to ownership which was not admitted by the execution creditor nor admitted within seven days as allowed under section 13, its resolution was a matter for the court and the bailiff must apply to the court for the claimants to interplead.

2. Where the bailiff acted properly he was entitled to the reasonable costs incurred in the execution from the execution creditor. The execution creditor gave notice that he admitted the adverse claim within seven days of his receipt of the bailiff's notice so he was only liable for the fees and expenses incurred by the bailiff prior to his notice of admission.

3. If any property other than the van was seized, the bailiff's expenses were to be taken out of its proceeds of the disposal in accordance with section 23 of the Bailiffs' Act. If the execution produced no other goods, the judgment creditor who sought the issue of the writ was personally liable for the costs.

Case considered:

Fatai v Fakaulu (Supreme Court, C 956/99)

Statute considered:

Bailiffs Act 2000

Rules considered:

Rules of the Supreme Court (UK)

Counsel for execution creditor: Mr Fifita
Counsel for bailiff: Mr Bloomfield

Judgment

On 21 June 1999, the plaintiff was awarded judgment against the first defendant in the sum of $3,114.00 with interest. On 25 July 2000 a writ of distress was issued on the application of the plaintiff. It was executed on 18 August 2000 and a van, T3149, seized.

Following execution, the Bank of Tonga gave notice of claim in relation to the van and the bailiff notified the execution creditor on 11 September 2000. Two days later the execution creditor gave notice that he admitted the claim of the Bank and, on the bailiff's application to be relieved of possession of the van, the court ordered its immediate release to the Bank on 9 October 2000.

However at that application, the bailiff also sought an order against the execution creditor for all costs incurred in the execution of the writ up to the admission of the bank's claim. The plaintiff/ execution creditor has opposed that claim on the following grounds:

"1. The plaintiff was not notified by the bailiff that he had executed distress warrant (sic) and further if executed what goods seized and the nature of the goods.

2. The law is clear on what the bailiff can seize from the judgment debtor and the bailiff officers cannot do more.

3. The plaintiff did not say at any stage that the van T3149 can be seized nor said that it was the property of the judgment debtor.

4. The court in issuing distress warrant did not order that the said van be seized as happened in civil case Fatai v Fakaulu (Supreme Court, C 956/99).

5. The matter of executing distress warrant is the sole responsibility of the bailiff department. It should be exercised with great care which always reflect justice. It cannot seized anything then claim the costs on innocent party."

Those grounds were supported by an affidavit from the judgment debtor to say that he had told the bailiff that he did not own the car himself but had purchased it by a loan from the bank and they had joint ownership. He complained that the bailiff still took the vehicle.

That affidavit and the grounds set out above show a lack of understanding of the nature and purpose of a writ of distress, of the role of the bailiff and of section 23 of the Bailiffs Act, No. 5/2000. I have refused the application and ordered that the execution creditor shall pay the bailiff's costs up to the notice of admission of the claim.

It may avoid similar waste of the court's time in future if I briefly set out my reasons.

Any practitioner seeking the issue of a writ of distress would be wise to check, if possible, that the judgment debtor has property liable to seizure and worth seizing. If he has information, for example, that a suitable item of property is owned or has just been acquired by the judgment debtor, he may consider it expedient to apply for a writ in order to have it seized. In such a case he might ask the court to order that the execution is limited to a particular item and the court may endorse the writ accordingly but, once the writ is issued, the bailiff is under a duty to obey the court order and execute it. He has no duty to report to or consult with the judgment creditor or his lawyer and they cannot control or limit his actions except by application to the court.

The test the bailiff must apply is whether the goods appear to be in the possession of the judgment debtor. It is not uncommon for the bailiff to be confronted with suggestions that the property does not belong to the judgment debtor but to another or that others have a legal interest in it. It is not the bailiff's function to ascertain the truth or otherwise of such statements. If there is a claim to ownership which is not admitted by the execution creditor or not admitted within seven days as allowed under section 13, it's resolution is a matter for the court and the bailiff must apply to the court for the claimants to interplead.

If the bailiff has acted properly, he is entitled to the reasonable costs incurred in the execution from the execution creditor.

Under Order 17 rule 2 of the English Rules of the Supreme Court, where the execution creditor gives notice that he admits the adverse claim within seven days of his receipt of the bailiff's notice as occurred in the present case, he is only liable for the fees and expenses incurred by the bailiff prior to his notice of admission.

I have not been advised whether, in the present case, any property other than the van was seized. If it was, the bailiff's expenses shall be taken out of its proceeds of the disposal in accordance with section 23 of the Bailiffs' Act. The amount retained from the proceeds of sale to satisfy the judgment debt may properly be increased to cover those expenses in addition to the judgment debt but the bailiff has first claim and so his costs are deducted before any money is paid towards the debt.

If the execution produced no other goods, the judgment creditor who sought the issue of the writ is, himself, liable for the costs.