Development Bank of Kiribati v Bank of Kiribati [2009] KICA 13; Civil Appeal 08 of 2009 (26 August 2009)

IN THE KIRIBATI COURT OF APPEAL
CIVIL JURISDICTION
HELD AT BETIO
KIRIBATI

Civil Appeal No 8 of 2009

BETWEEN:

DEVELOPMENT BANK OF KIRIBATI
APPELLANT

AND:

BANK OF KIRIBATI
RESPONDENT

Before: Hardie Boys JA
Tompkins JA
Fisher JA

Counsel: Batitea Tekanito for appellant
Aomoro Amten for respondent

Date of Hearing: 21 August 2009
Date of Judgment: 26 August 2009

JUDGMENT OF THE COURT

[1] As the result of proceedings against him, Nauma Aukitino was adjudged liable to the Development Bank of Kiribati in the sum of $11,236.97, and on 27 June 2008 in CN 109/06 the Chief Justice made an order "attaching so much of the judgment debtor’s KPF as will satisfy the judgment debt and direct payment of it to the plaintiff DBK".

[2] In making that order, the Chief Justice was not aware that Nauma had already given Bank of Kiribati Ltd (now ANZ Bank (Kiribati) Ltd a pledge as security for an arrangement he had with that Bank. On learning of the order, ANZ sought a stay of the attachment so that it could pursue an appeal against it. This application was apparently served on DBK and KPF and came before the Chief Justice on 2 February 2009. When the Chief Justice was shown the pledge, he said that had he known of it, he would have qualified his order of 27 June with the phrase "Subject to any earlier pledge." He added "To have done otherwise would have been quite unjust."

[3] Therefore, and over the protest of counsel for DBK, the Chief Justice recalled his earlier order, "it having been made in ignorance of the full facts" and in its place made the following order:

Subject to any earlier pledge of his KPF contributions, attach so much of the judgment debtor’s KPF as will satisfy the judgment debt and direct payment of it to the plaintiff DBK."

[4] DBK has appealed, asserting that the Chief Justice erred in law, in these respects:

"1. He overruled his own judgment.

2. The order was made in contravention of section 3 (2) of Part VIB of an Act to amend the Provident Fund Ordinance No 4/2001 which requires the member to use only 70 percent of his KPF funds as security.

3. Further or in the alternative the Appellant is entitled to enforce the order against 30 percent of Nauma’s KPF funds pursuant to section 3 (2)."

[5] Mr. Amten submitted that the appellant was not entitled to raise these grounds, as they were not raised before the Chief Justice on 2 February. But this is not an unusual situation, and in any event the hearing before the Chief Justice Developed in such a way as to preclude the parties from giving any sort of consideration to the implications of what he stated he intended to do. There is thus no substance in this submission.

[6] It is debatable whether the Chief Justice was entitled to vary his order (see Halsbury’s Laws of England 4th ed. vol. 37 para 279, and the judgments in Autodesk Inc v Dyason and Others) [1993] HCA 6; (1992-93) 176 CLR 300) but it is unnecessary to decide that, because amendment was unnecessary. The prior charge in favour of ANZ Bank clearly takes priority over the attachment order. A court order cannot defeat a contractual right held by another party. Moreover, there is no breach of the Provident Fund Ordinance. The relevant provision is section 2 (1) – not 3 (2) – which enables the Board to permit a member to use his credit as security for a loan within certain limits. This is not what has happened here.

[7] In short, the attachment order takes effect in respect of Nauma’s full KPF entitlement but subject to the prior right of ANZ under its pledge security.

[8] For these reasons DBK’s appeal is misconceived and is dismissed. The respondent is entitled to costs: an amount to be agreed or failing agreement to be fixed by the Registrar.

Hardie Boys JA
Tompkins JA
Fisher JA