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Kedmec Auto Repairs Ltd v PNG Power Ltd [2019] PGNC 220; N7930 (12 July 2019)

N7930


PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


WS No. 320 OF 2008


BETWEEN
KEDMEC AUTO REPAIRS LIMITED
Plaintiff (Judgement Creditor)


AND:
PNG POWER LIMITED
Defendant (Judgment Debtor)


AND:
BANK SOUTH PACIFIC
Garnishee


Lae: Numapo AJ
2019: 12th July


PRACTICE AND PROCEDURE – Garnishee Proceedings - A Notice of Motion for which leave is granted for a Garnishee Notice and an Order Nisi is heard ex parte and not inter party (Order 13, Rule 56 NCR) – Judgment Debtor is not entitled to be heard nor served with the Notice of Motion seeking Leave to file and serve a Garnishee Notice (Order 13, Rule 57) – Only the Garnishee, not the Judgment Debtor has the right to challenge a Garnishee Notice or Order Nisi ( See Kendo Limited –v- Niugini Builders Supplies Limited [2014] N5661) – Only the Court, not the Judgment Debtor shall fix the amounts to be specified in the Garnishee Notice which shall include the principal amount due on the day leave is given, interests due on the date of Leave and costs (Order 13, Rule 56 (5) and (b) (i) and (ii) of NCR) – Order Nisi is made Absolute in favour of the Judgment Creditor.


Case Cited:


Kendo Limited v Niugini Builders Supplies Limited [2014] N5661

Aure v Sai Business Group Incorporated [2008] N3349.


Counsel:


Mr S Tedor, for the Plaintiff (Judgment Creditor)

Ms A Samol, for the Defendant (Judgment Debtor)


DECISION


12th July, 2019


1. NUMAPO AJ: This is a garnishee proceedings application made pursuant to Order 13, Rule 54 of the National Court Rules (NCR) in respect of a Garnishee Notice filed on the 19th June, 2019 regarding an Order Nisi made on the 07th June 2019 to be made Order Absolute.


  1. BACKGROUND

2. The Plaintiff (Judgment Creditor) filed a garnishee notice for an order nisi issued by the Court on the 07th June 2019 to be made absolute and after hearing Counsels representing the Plaintiff and the Defendant (Judgment Debtor) I directed that parties filed and served their respective submissions on whether or not the costs of garnishee proceedings with interests and costs totalling K7252.66 in the order nisi be made absolute.


3. The garnishee notice and the order nisi are in enforcement of a judgment by the judgment creditor against the judgment debtor on the 13th February 2019 and taken out against the judgment debtor’s account with the Bank South Pacific at the Boroko Branch in the National Capital District. The judgment debtor and the Garnishee (Bank South Pacific) were served with the garnishee notice and the order nisi on the 20th June 2019. The Garnishee did not appear nor did it filed any submissions to dispute the garnishee notice or the order nisi.


4. Since the entry of the judgment order against the defendant (PNG Power Ltd) on the 13th February 2019 the judgment has not been satisfied and continues to remain outstanding which prompted the plaintiff to commence garnishee proceedings under Order 13, Rule 54 of the NCR.


5. On the 07th June 2019 the Judgment Creditor moved the garnishee application ex parte and the Court granted Orders as per the garnishee notice and the order nisi inclusive of K7252.66 as costs and interests and so the net total increased from the K78, 850.00 to K86, 102.66. The break-up of the K7252.66 is as follows:


(i) 8% per annum interests commencing on 13th February 2019 to 07th June 2019 amounting to K2,102.66;

(ii) An amount of K650.00 for provision of interest due between the date of leave to issue of Garnishee Notice and the date of the Order Absolute; and

(iii) An amount of K4, 500.00 for the cost of the Garnishee proceedings.

6. The Judgment Creditor moved that Orders granted on the 07th June 2019 for the garnishee notice and order nisi be made absolute.


7. The Judgment Debtor (defendant) disputed the amount of K7252.66 claimed in the order nisi and argued that the total judgment debt of K78, 850.00 including interests and certified costs by consent has already been paid on the 28th June 2019 in compliance with the Court Order of the 13th February 2019 with the break up as follows; K75, 000.00 as the principal judgment debt plus interest and costs of K3850.00 totalling to K78, 850.00. The defendant submitted that the order nisi issued by the Court on the 07th June 2019 for interest and costs specified in the garnishee notice in the sum of K7252.66 is unjustified and unreasonable and should not be made absolute.


8. There appears to be some misunderstanding on the part of the judgment debtor regarding interests and costs. According to the materials placed before me the sum of K3850.00 consented to by parties as interest and costs was for the enforcement proceedings commenced by the judgment creditor to enforce payment and the defendant admitted to that in their submission. The costs and interest associated with garnishee proceedings fixed by the Court is a different matter altogether. I am at a loss to understand why the defendant decided to raise the matter after admitting that the payment of K3850.00 was for interest and costs relating to enforcement proceedings. What is now before the Court relates to interest and costs associated with the garnishee proceedings commenced by the judgment creditor pursuant to Order 13, Rule 54.


  1. ISSUE

9. Having established that the K7252.66 is interest and costs for the garnishee notice and order nisi the following issues now arises for the Court to determine:


(i) Whether or not the Judgment Debtor has a right to be heard in a garnishee proceedings?

(ii) Whether or not the Judgment Debtor has the right to dispute the amounts in interest and costs specified in the Garnishee Notice fixed by the Court?

(iii) Whether or not a Judgment Debtor has the right to challenge a Garnishee Notice or an Order Nisi issued by the Court?
  1. GARNISHEE PROCEEDINGS

10. Garnishee proceedings are instituted under Order 13, Rule 53 of the NCR to satisfy an unpaid judgment debt against the garnishee. Order 13, Rule 54 more specifically refers to garnishee proceedings against bank accounts. Pursuant to Order 13 Rule, 56 sub-rule (1), a judgment creditor may, with the leave of the Court, serve on the garnishee a garnishee notice of the amount specified in the notice of debts due or accruing to the judgment debtor from the garnishee and the motion for payment of the same. Sub-rule (2) states that the judgment creditor may move for leave under sub-rule (1) without filing or serving the notice of motion. In granting leave for garnishee proceedings the Court must have satisfied itself that; (i) there is a debt owing to the Plaintiff by the Defendant; (ii) the debt has not been settled, and (iii) the defendant is owed money by the garnishee. See: Aure v. Sai Business Group Incorporated [2008] PGNC 55; N3349.


11. With respect to the first issue on; ‘Whether or not the judgment debtor has a right to be heard in a garnishee proceedings?’


12. Order 13 Rule 56 is plain clear in that it requires the judgment creditor to serve on the garnishee a garnishee notice and may move for leave under sub-rule (1) without filing or serving the notice of motion for which leave for a garnishee notice and an order nisi are obtained. Given that notice is not served to move for leave the judgment debtor is not required to attend and the motion is heard ex parte and not inter party. Hence a judgment debtor is not entitled to be heard or served with the notice of motion seeking leave to file and serve a garnishee notice but can only be served with the garnishee notice and the affidavit used on the motion for leave to issue a garnishee notice after the garnishee notice has been obtained - Order 13, Rule 57.


13. With regards to the second issue; the judgment debtor does not have any right to dispute or challenge the interests and costs fixed by the Court on a garnishee notice or the order nisi. Only the garnishee not the judgment debtor has the right to challenge it. See: Kendo Limited v. Niugini Builders Supplies Limited [2014] PGNC 242; N566. The interests and costs portion specified under the garnishee notice is set by the Court not the judgment creditor when it granted the garnishee notice. On the same token, only the Court, not the judgment debtor that fixed the amounts to be specified in the garnishee notice which shall include the principal amount due on the day leave is given, interests due on the date of the leave and costs in accordance with Order 13, Rule 56 (5) and (b) (i) and (ii) of the NCR. For this reason, the amount of K7252.66 in the present case fixed by the Court that granted leave to issue the garnishee notice and the order nisi pursuant to its powers under Order 13, Rule 56 (5) (a) and (b) is not open to challenge neither by the judgment creditor nor the judgment debtor. The judgment debtor on being served with the garnishee notice and order nisi on the 20th June 2019, paid K78, 850.00 to the judgment creditor’s lawyer’s trust account on the 28th June 2019, twelve (12) days after the grant of leave, leaving a balance of K7, 252.66 of the garnisheed sum still outstanding to be paid.


14. As regards to the third issue, it is not a requirement for the judgment debtor to appear for such application. Order 13, Rule 56 (2) is very clear on that. The application does not require the judgment debtor to appear as he is not served the notice of motion to command his appearance to be heard. Motion seeking leave only requires the appearance of the judgment creditor to move the motion ex parte. There is no expressed provision under the NCR and in particular, under Order 13 requiring the attendance of judgment debtor to be heard in a garnishee proceedings. The defendant in their submission did not point to the Court any law, rule or authority that states that the judgment debtor has the right to appear and is entitled to challenge the amount set in a garnishee notice or the order nisi. Only the garnishee can challenge it not the judgment debtor. Therefore, the actions taken by the defendant (judgment debtor) to dispute the amount fixed by the Court as interest and costs on the garnishee notice and order nisi, is an abuse of process.


15. Defendant told the Court that the cheque made for the payment was ready three (3) days after the garnishee notice and order nisi were granted by the Court on the 20th June 2019 however, it was not be paid until the 28th June 2019, some twelve (12) days later. The late payment was due to insufficient funds and some administrative issues within the organization (PNG Power Ltd) that resulted in the delay. There are processes in place whereby the defendant can, by consent, apply for extension of time to settle payment if funding is not immediately available. And unless this is done through a proper application an Order of the Court must be complied with in full.


  1. ORDERS

16. Based on the above, I make the following Orders:


  1. The Order Nisi made on the 17th June 2019 in respect of the Garnishee Notice filed on the 19th June 2019 is herein made Order Absolute.
  2. Interest in the sum of K17.28 per day is payable on the judgment debt of K78,850.00, commencing the date of judgment on the 13th of February 2019 up to the date of the Order Absolute.
  3. Costs of the garnishee proceedings is K4, 500.00.
  4. Interests and Costs on the judgment debt as follows:
  5. The Garnishee shall pay to Sialis Tedor & Associates Trust Account, monies held in credit on behalf of the Defendant (Judgment Debtor) until the sum of K7, 952.66 is satisfied in full.

Orders accordingly

_________________________________________________________

Sailas Tedor & Associates Lawyers: Lawyer for the Plaintiff (Judgment Creditor)

Ms A Samol: Lawyer for the Defendant (Judgment Debtor)


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