Home | Databases | WorldLII | Search | Feedback National Court of Papua New Guinea

Sakarius v Tep and Cocoa, Coconut Extension Agency [2003] PGNC 135; N2355 (28 March 2003)

N2355

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 29 of 1999

OKAM SAKARIUS & SIX (6) OTHERS

Plaintiffs

And

CHRIS TEP, PROJECTOR MANAGER

First Defendant

And

COCOA, COCONUT EXTENSION AGENCY

Second Defendant

WAIGANI: SALIKA, J
28 March, 2003

CIVIL CLAIM FOR DAMAGES – Cocoa and Coconut Extension Agency – Whether the Cocoa and Coconut Extension Agency is a governmental body.

Issue: Whether the term "the State" in s.13(1) of the Claims by and Against the State Act 1990 includes the Cocoa and Coconut Extension Agency for the purpose of any suit execution or attachment against the Cocoa and Coconut Extension Agency.

Held: In this case the cocoa and Coconut Extension Agency is a governmental body.

Counsel:
Mr Uware for the Plaintiffs
Mr J Abone for the First & Second Defendant

28 March, 2003

The plaintiffs obtained a judgement in their favour against the defendants on the 24th July 2002. The judgement was entered on the 8 August 2002. The defendants were ordered to pay K130,000.00 plus interest at 8% per year on the principal sum and K28.49 daily rate from 8 August 2002.

On 31 October 2002 the plaintiff’s filed a writ of levy against the defendants. The defendants filed a motion to stay the wit of levy on the 2nd of January 2003. They also seek further orders that the writ of levy be dismissed as being frivolous and vexatious and an abuse of the process.

In support of the motion the defendants through the First Defendant filed an affidavit outlining the circumstances under which he was sued.

The First defendant is the Project Manager of the Papua New Guinea Cocoa and Coconut Extension Agency which is the second defendant. The agency is a subsidiary company of the Cocoa Board and Copra Marketing Board which has since became the Kokonas Indastri Koporasen (KIK) which is a state owned company.

The Cocoa and Coconut Extension Agency was established by the National Executive Council and registered under the Company’s Act as a company limited by guarantee, being registered under the Business Names Act. The two major shareholders of the second defendant are the Cocoa Board and Kokonas Indastri Koprasen who act as trustees for the State.

The scope of the second defendant’s duties are that it has the sole responsibility of providing extension services for Cocoa and Coconut Industries in PNG. The agency was also given the authority to enter into agreements with 14 important cocoa and copra growing provinces for the attachment of staff, facilities and equipment to commence the extension programs in 1997. The government then transferred some K800,000.00 from the Cocoa and Coconut Research Institute to the second defendant to fund its operations.

The Department of Agriculture and Livestock authorised the second defendant to use the land described as Portion 740, Manabo at Kalo Central Province. This agreement gave the second defendant the right of occupancy on the land. The second defendant uses the land for the purpose of the Manabo Hybrid Coconut Project. Because of the program sensitivity, it require a buffer zone of at least 200 to 500 meters from other vegetation. This is to prevent contamination by foreign pollen.

In the light of this, the second defendant gave notice to the plaintiff’s to vacate their gardens from that land. The plaintiffs vacated their gardens and then sued the second defendant for damages for destruction of their food crops. They were awarded damages and costs on 13 August 2002. On 31 October they took out the writ of levy against the defendants to enforce the judgement. The Sheriffs office was directed to execute the writ.

The defendants now want the writ of levy to be stayed pending review by the Supreme Court, or alternatively to dismiss the writ of levy on the basis that because the second defendant is a state agency and as such a successful litigant cannot file a writ of levy against the State or its instruments or agents. They rely on the unreported Supreme Court Decision of SC672 which was a – Reservation Pursuant to S.15 of the Supreme Court Act. I was a member of that Supreme Court Bench that determined the question of whether the word "State" referred to in s.13(1) of the Claims by and Against the State Act included provincial governments. In that judgement the court ruled that Provincial Governments are included under the word "State" as used in that Act for the reasons that there was a high degree of control by the National Government over the provincial governments politically and financially.

In this case the defendants argue that the Cocoa and Copra Extension Agency is politically and financially controlled by the State and as such its assets should be regarded as assets of the State and its people. They argue that as such a writ of levy cannot be executed against it. In other words the second defendant argues that it is an instrumentality or creature of the State.

The plaintiffs on the other hand argue that the second defendant is a company incorporated under the Companies Act and as such is liable to be sued and be dealt with like a normal company under the Companies Act. They argued that the Second defendant should not hide under the umbrella of Corporate veil of the State. They argued that upon issue of certificate of incorporation the company became a body corporate or a corporation and as such it is responsible for its own actions.

Both arguments are valid in my view but I must rule one way or another. Having considered the matter I now minded to dismiss the writ of levy because while the second defendant is a company in its own right it relies on the National Government for its annual financial grants. The monies belong to the State and so as its assets. I am of the view that the Company is a government entity. It gets its funding and directions from the government. In this case I am satisfied that the term "the State" in Section 13(1) of the Claims By and Against the State Act 1996 also includes a governmental body or a subsidiary of a governmental body such as the Cocoa and Coconut Extension Agency which in my view is a governmental body.

In the circumstances I will dismiss the writ of levy against it.

This means that the plaintiffs will have to wait in line to receive their payments as ordered by the court.

Each party is to meet its own costs.
_____________________________________________________________________
Lawyer for Plaintiff:
Lawyer for First & Second Defendant: Peter Pena & Associates