HIGH COURT OF SOLOMON ISLANDS

Case name: 	Solomon Islands National Provident Fund Board v Solomon Security Services Ltd 	
		
Citation:		
		
Date of decision: 	21 December 2021	
		
Parties: 	Solomon Islands National Provident Fund Board v Solomon Security Services Limited 	
		
Date of hearing: 	26 July 2021	
		
Court file number(s): 	206 of 2020	
		
Jurisdiction: 	Civil 	
		
Place of delivery: 		
		
Judge(s): 	Faukona; PJ	
		
On appeal from:		
		
Order:	1. Application granted in part, three years 2009 to 2011 contributions and surcharges be exempted or deducted from the overall debt by operation of S.5 of the Limitation Act, and S. 46 (2) of SI NPF Act.
2. The calculated amount exempting the three years is to be paid by the Defendant within 2 weeks from the date of this order.
3. The cost of this application is cost in the cause.	
		
Representation: 	Mr G Toaki for the Claimant
Mr B Upwe for the Defendant	
		
Catchwords: 		
		
Words and phrases:		
		
Legislation cited:	Limitation Act s 5, s30 (1) (c) S 30 (2) (c), SI National Provided Fund (SINPF) Act S.46 (2), s13 , s16, s 46,49 	
		
Cases cited:		

IN THE HIGH COURT OF SOLOMON ISLANDS
CIVIL JURISDICTION

Civil Case No. 206 of 2020

BETWEEN

SOLOMON ISLANDS NATIONAL PROVIDENT FUND BOARD 
Claimant 

AND: friend 

SOLOMON SECURITY SERVICES LIMITED
Defendant

Date of Hearing: 26 July 2021
Date of Ruling: 21 December 2021

Mr G. Toaki for the Claimant 
Mr B. Upwe for the Defendant 
RULING ON APPLICATION TO DETERMINE PRELIMINARY POINT OF LAW
Faukona, DCJ: A claim was filed by the Claimant on 12th May 2020. It was a category B claim pursuant to Rule 2.2.
2.	The main relief is to recover from the Defendant outstanding surcharges incurred and owed to the Claimant, as a result of late payment of its employee’s NPF contributions for certain months from 2009 to 2019.
3. 	This application is for determination on preliminary point of law. It was filed by the Defendant on 23rd March 2021. The application sought a court order to determine whether the amount of $117,430.00 as surcharge incurred for late payment of NPF contributions for the years from January 2009 to December 2012, are statute barred under S.5 of the Limitation Act and S.46 (2) of SI National Provided Fund (SINPF) Act.
4.	In accordance to S.13 of SINPF Act requires every employer must pay to the NPF its employees contributions. Once the contribution for the month is not paid then S.16 come into play, that is, the employer shall be liable to pay surcharges on the total amount of all the contribution at a rate of 2% in respect of each month which such contribution was due to be paid.
5.	In this case the Claimant claims that the Defendant owes it the sum of $1,015,142.57 being the outstanding surcharges incurred as a result of late payment of its employees NPF contributions for the month wages from January 2009 to July 2019.
6.	The Defendant denies being late to pay the surcharges amount of $117,430.00 as incurred from January 2009 to December 2012. Its argument premise on S.5 of Limitation Act which states that, “no action shall be bought, nor shall any arbitration commence after the aspiration of six (6) years from the date on which the cause of action accrued. 
7.	Henceforth argues that the amount of surcharges now statute bar by virtue of S.5 of Limitation Act. S.46(2) of the SINPF Act reiterated with a similar inspiration, that proceedings for the recovery as civil debts of any contribution may, notwithstanding anything in any other law to the contrary, be brought any time within six years from the date when the contribution becomes due.
8.	I noted the argument submitted by the Claimant that paying surcharges goes along with the payment of due contributions in the following month. Therefore, surcharges claimed become due and is calculated when the late contributions are paid.
9.	Therefore it works in a way that surcharges for late payment of NPF contributions for the month of January 2009 to December 2014 become due when the late contribution for those months are paid. Hence limitation in this case starts to run as at the date when the late contributions were paid, that is 2014.
10.	The Counsel for the Claimant further explains that late contribution for the month of January 2009 to July 2019, were paid on various dates. The earliest was being 3rd December 2014, and the latest being on the 25th October 2019. Therefore, by computation the cause of action accrued as at 3/12/2014, that is when the late contribution was paid. Therefore, from 3/12/14 to 12/5/20, the claim was brought within 5 years and 4 months, still on time.
11.	S. 5 of the Limitation Act is well acknowledged and the reading is very clear. That simply mean a case be brought within 6 years after the event accrued, and not outside of 6 years after the date the debt incurred.
12.	In a similar fashion was the construction of S. 46 (2) NPF Act which states, “the recovery of civil debts of any contribution may be brought at any time within 6 years from the date when the contribution becomes due.
13.	S. 13 of NPF Act require employer to pay contributions of his employee in every month during which they due calculates upon wages paid for the preceding month. S.16 of the same Act states” if the employer fails to pay contribution when they due for the previous month a surcharge on the total amount on all contributions be paid to the fund at a rate of 2% in respect of each month.
14.	Apparently, it would appear, when calculating annual payments of contributions, it entails after the expiration of the last month during which such contribution was due. Simply, at the end of December was the last event when such contribution was due. By January the following year was the month after the expiration of the earliest month during which such contribution was due. If nothing is paid in January, then the employer is liable for a surcharge on the total amount for the whole of the year which had become due.
15.	Therefore, any time after January a cause of action must be brought within 6 years, to recover the surcharges as a civil debt. So the date the cause of action accrues is January of each year. For instance in 2009, six years start to run from January 2010 to 2015.
16.	It would appear the Limitation period expressed by the Limitation Act and NPF Act should have equivocal interpretation and should operate on the same legal basis. 
17.	I cannot read into those provisions the action that although contribution was due monthly or yearly, as this case may be, can be intentionally accumulated for number of years until late contributions were paid. There is no provision for accumulation of due dates until the late contributions were paid, before limitation period starts to run. That is a misconception of the law.
18.	Take for example, if January 2010 was a due date for payment of contributions and surcharges for 2009, the Claimant by filing a cause of action for debt recovery within the next 6 years, will give notice to the Defendant to recover its dues. At the same time the amount of dues is on reasonable level to recover quickly. When the surcharges were accumulated until late charges are paid, in this case in 2014, may be problematic for a local entrepreneur as the Defendant must recover the amount of $1,015,142.57 surcharges.
19.	 In my respective opinion I would agree with the Defendant that surcharges for the years 2009, 2010, and 2011 were statute bar, on the basis that the cause of action to recover these debts are filed on 12th May 2020, more than 6 years, but not 2012. 
	Fresh accrual of cause of action acknowledged on part payment
20.	S. 30 (1) (c) of the Limitation Act provides that a person liable for any debt acknowledge such debt or claim, a first cause of action to recover the debt or clam shall accrue to the person where favour such acknowledgment has been made.
21.	 Again S. 30 (2) (c) of the Limitation Act states, a person liable for any debt makes any payment in respect of it, create a fresh cause of action to recover such debt or claim, as the case may be, shall accrue. 
22.	The Claimant has relied on those provisions on the basis that before this claim was filed on 12th May 2020, these were notices demanding payment issued on two occasions, 26th August 2018 and on 4th December 2019 to the Defendant.
23.	Mr. David Atu on behalf of the Defendant responded to the first notice by confirming that the Defendant was in debt to NPF in terms of contributions/surcharges amounting to a total of $1,015,142.57. Mr Atu also under took to pay the amount of $103,902.00 on 15/10/2018 and contribute on at $25,000.00 monthly thereafter.
24.	The Defendant in fact paid some money on 18th October 2018 and on 21st December 2018. These were done before the cause of action to recover the debts was filed.
25.	Further the Defendant agrees that contributions and surcharges due for the years 2013 to 2019 is liable to pay; amounted to $117,430.00.
26.	By making some payments and by confirmation of liability for the amounts due in 2009 to 2012 has waived the limitation of six years period. However resets the clock back on six (6) years limitation period to commence from the date of payment or as agreed to liability which ever commenced first in time.
27.	The Counsel for the Defendant argued that the deemed notice issued to recover $1,015,142.57 included the amount of $117,430.00 which practically sought to recover 4 years after limitation for 2009 surcharges which lapsed on 2015, 2010 surcharges lapsed in 2016 and 2011 surcharges lapsed in 2017. Therefore, the total surcharge the Claimant entitled to calm is $897,712.57 for the period from 2013 to 2019. It is those surcharges the Defendant agreed liability. However because of part payment and consent given, the Claimant could only benefit from that act in respect of surcharges for 2012 which was directly affected. In other words 2012 six years limitation period should end at 2018 but because of payment and consent sets the clock back.
28.	I have read sections 30 (1) (c) and S. 30 (2) (c) of the Limitation Act cautiously and diligently. In my opinion they do not assist the Claimant at all. The reasons are that any agreed liability or part payment must be made after the accrued of a cause of action but before the expiry of prescribe period, which means 6 years limitation period.
29.	Therefore, 2009 to 2011, 3 years do not fall outside of the exception, only 2012 which had expiry date by the end of December 2018. Therefore, surcharges payable for the year 2009 to 2011 were time barred for reason of six (6) years’ time limit pursuant to Section 5 of Limitation Act and Section 46 92) of the SI NPF Act. Hence the Defendant is exempted to pay any contribution/surcharges for those 3 years. However, must pay contributions and surcharges for the years 2012 to 2019.
30.	The Claimant to calculate how much surcharges be deducted for those three years for the overall amount that could indicate in the formal orders to be endorsed by the court.
Orders:
1.	Application granted in part, three years 2009 to 2011 contributions and surcharges be exempted or deducted from the overall debt by operation of S.5 of the Limitation Act, and S. 46 (2) of SI NPF Act.
2.	The calculated amount exempting the three years is to be paid by the Defendant within 2 weeks from the date of this order.
3.	The cost of this application is cost in the cause.
THE COURT
Hon. Justice Rex Faukona
Deputy Chief Justice