Public Utilities Board v Schutz [2020] KIHC 28; Miscellaneous Application 80 of 2020 (15 October 2020)

IN THE HIGH COURT OF KIRIBATI 2020

MISCELLANEOUS APPLICATION NO. 80 OF 2020
(ARISING FROM CIVIL CASE NO. 76A OF 2016)

[PUBLIC UTILITIES BOARD APPLICANT
[
BETWEEN [AND
[
[EMILE SCHUTZ
[TERENGA SCHUTZ DEFENDANTS
[
[AND
[
[ATTORNEY-GENERAL IN RESPECT OF
[KIRIBATI PROVIDENT FUND GARNISHEE

Before: The Hon Chief Justice Sir John Muria

28 August 2020

Mr Reiati Temaua for Applicant
Mr Tabibiri Tentau for Respondents
Ms Raaman Teneaki for Garnishee

JUDGMENT

Muria, CJ: The plaintiff is seeking to attach the defendant’s KPF contribution so as to satisfy the payment of the defendant’s outstanding debt of $11,290.30 to the plaintiff. The Garnishee (KPF) opposes the application on the basis that the defendant also had outstanding debt with KPF for employer’s KPF contributions.

2. The facts are not in dispute. The defendant owes the plaintiff an outstanding judgment debt in the sum of $11,290.30. After a number of attempts to settle the outstanding debt, the defendant offered to pay $350.00 per month repayment. The plaintiff did not agree to the offer and took out these garnishee proceedings to attach the defendant’s KPF contribution.

3. In the meantime, the defendant’s company, Royal Crown, had owed KPF contributions for its employees in the sum of $72,449.39. On 11 February 2020, the defendant entered into a contractual arrangement with KPF to commit his KPF contribution to the repayment of his outstanding KPF contribution for his company’s employees. The agreement was signed on 11 February 2020. This agreement is a commitment to pay $500.00 per month to KPF. In addition, the defendant signed a Consent letter on 24 February 2020 authorising KPF to deduct from his KPF Account the said $500.00 per month to pay for his company’s outstanding KPF contribution for his employees.

4. In law, the agreement entered into by the defendant and KPF on
11 February 2020 was a pledge, committing the defendant’s KPF contribution to settle his company’s outstanding contribution for his employees. The Consent letter was an authority to put into effect his pledge or commitment.

5. Mr Temaua, nevertheless, argued that the plaintiff is entitled to an order to attach the defendant’s KPF contribution since he also owes money to the plaintiff. Counsel submits that the Court can still direct the defendant’s KPF contribution to be attached despite the contractual arrangement between the defendant and KPF.

6. Ms Teneaki relies on the case of KPF –v- Tewera [2015] KIHC which held that a Court order including an attachment order, cannot defeat a contractual right of another party. Despite the distinction sought to be made by Mr Temaua between the terms “pledge” and “agreement”, the above case clearly answers the plaintiff’s case here.

7. The case of KPF –v- Tewera follows the Court of Appeal case in DBK –v- Bank of Kiribati [2009] KICA 13; Civil Appeal 08/2009 (26 August 2009). In the latter case, the Court of Appeal held that the prior charge in favour of the respondent Bank takes priority over an attachment order and that a Court order cannot defeat a contractual right of a party.

8. Further, as pointed out in DBK –v- Bank of Kiribati, section 2(1) of the Provident Fund Ordinance permits a member to use his KPF credit as security. There is nothing before the Court to show that the defendant in the present case cannot pledge his KPF credit to secure payment of his outstanding debt with KPF.

9. In the Court’s view, an attachment order in favour of the plaintiff would serve no useful purpose in view of the contractual arrangement already put in place between the defendant and KPF. It may well be that for the moment, the only viable arrangement between the plaintiff and defendant would be to pursue the settlement offer of $350.00 per month repayment. That is, of course, a matter for the parties.

10. The attachment order sought, however, would be an empty order and so it must be declined.

Dated the 15^th day of October 2020

SIR JOHN MURIA
Chief Justice