J's Motors Pty Ltd v Rangip [1997] PGNC 74; N1588 (20 June 1997)

Unreported National Court Decisions

N1588

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

WS 27 OF 1993
BETWEEN
J’s MOTORS PTY LTD - PLAINTIFFS
AND
TOM RANGIP - DEFENDANT

Mount Hagen

Akuram J
21 May 1997
20 June 1997

CONTEMPT PROCEEDING FOR NON-PAYMENT OF JUDGMENT DEBT - section 169(1)(b) -meaning of - INSOLVENCY Act, Ch.253 - dismissed.

Upon application for judgment debtor to be proceeded with contempt charges pursuant to section 169 (1)(6) of the Insolvency Act, Ch. 263, whilst the judgment debtor has already been declared insolvent.

Held:

1. ҈& A60; Any proy proceedings against a judgment debtor pursuant to section 169(11)(6) can be taken any time after presentation of an insolvency petitioinst tor bt after a debtor has been declared an i an insolvnsolvent.

2. &#160
h0; Tes pr contempt proc proceedings are not proceedings that was in progress at the commencement of the insolvency petition or commenced during its contin but es toeedinat han commenced and cond concludecluded.

>

3.&#13. &##160; A60; Applicatoon fnt cot pmpt proceedings is therefore refused with costs.

Counsel:

D Poka for Applicant/Plaintiff

T Rei for Respondent/Defe

ign="">20 June 1997

AKURAM J: The PThe Plaintlaintiff iiff is seeking orders by way of motion of contempt of Court by the Respondent/Applicant.

The brief history of this Application is that the Plaintiff took out legal proceedings against the Defendant claiming damages in the sum of K23,168.60 for services rendered and a default judgment was entered in the sum of K21,068.28 with interest and costs on the 24th May 1994. Defendant hassettled the jthe judgment debt which accumulated with interest and costs up to about K71,706.28. Meanwhile there were other similar court proceedings against the Respondent/Defendant andrs made but Respondent/Defe/Defendant could not meet the judgment debts. One of the Creditors - American Express International k out insolvency proceedingedings against Respondent Defendant in MP. No. 482/95 and on the 27/10/95 Respondent/Defendant was adjudgeolvent pursuant to Insolvency Act, Ch. 253. A creditoeditors me was caas called on the 22nd of November 1995 but a trustee was not elected. That process is stending.

The Applicant/Plaintiff in this proceedings did attend the meetings of 97 and 28-2-97 and is theretherefore aware of those Insolvency proceedings.

However on the 21st March 1997, Applicant/Plaintiff or Judgement creditor filed a notice of Motion that Judgement/Debtor be charged for contempt for not settling his debt within reasonable time. And again on th May 1997, 997, Applicant/Plaintiff or Judgment/Creditor filed a further notice of motion seeking orders that the Electoral Commission be restrained from accepting the nomination of the Respondent on the ballot paper for the Mul/Baiyer Electorate in the 1997 for reasons that he was adjudged insolvent. The Applicant/Piff or judg judgment creditor filed three affidavits in support of his motions and the Respondent/Defendant or judgement debtor filed one affidavit in reply.

SUBMISSIONS

Counsel for Applicant/Plaintiff submitted that Respondent/Defendant had been declared bankrupt. There had beetings to appo appoint a trustee and sort out the method of payment of his judgment creditors (about four) including the Applicant/Plaintiff.

The issue of appointment of the trustee isl in the hands of the AssisAssistant Registrar National Court. bmits that Respondent/Defe/Defendant has been declared bankrupt, that no trustee has been appointed and that settlement of creditors is insecure or uncertain. ncedes that when a pers ders declared bankrupt, a trus trustee is appointed to deal with his affairs but where there is none appointed, who deals with his affai160; In absence of any trustee, Court to enforce the judgmeudgment debt pursuant to section 169 (1) (b) of Insolvency Act, Ch. 253, which reads:

“169. Actions against insolvents.

(1) & At any time after the pree presentation of a petition against a debtor, the Court may:

(a) ;&#16strain furt further prer procgs inactioit, execution oer legal process against the the debtodebtor in r in resperespect of a debt provable in insolvency; or

(b) &&#160ow anh proceproceedingedings, whs, whether in progress at the commencement of the insolvency or commenced during its continuance, to proce suchs as ourt thinks just.

(2) ҈ At any any time time afterafter the the presentation of a petition against a debtor, the Court may also:

(a) ҈ appointpoint a receiver oa manager of the property or business, or ant of roperty or busineusiness, oss, of the debtor; and

(b) ; direct immediote possessisession to be taken of the rty oiness or of any pany part oart of it.

(3) ҈ An appl application under this section may be made ex parte21;&#(emphadded).

He

He subm submits that this application is commenced under section 169(1)(b) and that the only question now for Court tode isher Mr Rangip (Jup (Judgmendgment debtor) can be proceeded against in the absence of a trustee. There is also no official trustee appointed by the Minister under section 5 of Insolvency Act. There is therefore no trustee nor an official trustee appo. Th why this action is brou brought under section 169(1)(b) of the Act and thereforeefore the Court has power to deal with con procgs.

On contempt, Counsel submitted that that this is a case where contemnor failed tled to comply with a court order - being a judgment debt. This Court has broad powerpowers under section 155(4) of the Constitution to make such orders and also ad hoc orders. He then submitted this Cous Court make appropriate orders for Mr Rangip to be brought to court to explain why he should not be dealt with.

Mr Rei for the Respondent/Defendant or judgment debtor submitted that this court cannot deal with this proceedings pursuant to section 169(1)(b) as it only applies to situations where a party is not declared insolvent and thus applicant is barred. The appl is reviving this this case despite the fact that Respondent is declared insolvent.

Section 169(1)(b) in my view, says:

“at any time after presentation of a petition against a debtor”,

but not after the debtor has been declared insolvent. That is once tholvency pety petition has been adjudicated and debtor has been declared insolvent, the court has no authority to go further and take any other proceedings against the debtor. The only exon isllowed by d by sectionction 168 where the insolvent may continue certain actions in his own name and for his own benefit but anyeeds from that action, if he is successful, is to go to the trustee by order of the Court.&urt. Subsection (1)(b) of Section 169 also stipulates that any such process must be proceedings that was in progress at the commencement of the insolvency petition mmenced during its continuance but does not refer to proceedings which has commenced and cond concluded and orders made but not complied with as in this case. is the current initial prol proceedings commenced in 1993 and concluded in May 1994. This preseterlocutory proc proceedings are not new and to be regarded as being in progress at the commencement of the insolvency proceedinr had commenced during the continuance of the Insolvency proceedings.

In view of thef the above interpretation of section 169(1)(b), I am of the view that judgment creditor or Applicant/Plaintiff cannot bring these contempt proceeding against the Respondent/Defendant or judgment debtor.

There is another matter which I like to point out that support my findings. Under Order 13, Rule 2, judgment for payment of money may be made by any of the following means:

(a) Lfvy opepro; oty/p>

(b)p>(b) &#1ttachment of debts; or

(c) &##160;; Chg ordg ordr

d

d)҈& Appointment of a receiver; or in a casa case in e in whichwhich Rule Rule 6 ap 6 applies but subject to Rule 8,

(i) ;ټ Ctal; and

d

(ii) Stquesonatip> Rulp 6 re 6 re 6 requirequires attendance of judgment debtor or arson ve eve or produce any document or thing, or answer or charge of contemontempt orpt or for for any other purpose. If the perefaults in appeaappearance, Court may issue a Warrant for his arrest. The provisions of sub-rul (2) does not affect the provisions of Order 14 Division 6erning contempt proceedings.

In the present case, ine, in fact, there was proceedings in this Court which went before His Honostice Injia on 10/3/95 wher where he made the following orders:

THE COURT ORDERS that:

1. ; T60 RANMIP of Mount HagenHagen shall attend:

(a) b foreAshe tanisRegi trar;trar;

(60;&##160;;&#16 the nal Court at Mt Hagen;

(c) #160; & on0; on Wedn Wednesday they the 5th day of July 1995 at 9:3and uhe issed from further ther attenattending;ding;

(d) &##160;; for ther the purpopurpose of being examined as to the questions:

(i) ; whetheraany ifd, if so, who, what debts are owing to him; and

(ii) &##160; whetherether he hasiad, t what propor mef satisfying the judgment or order by which he is b is bound;ound; and

(iip>(iii) ; as e aboutthe tthe gwhichwhich hich he is bound, pursuant to the judgementement whic which has been entered against him, to deliver to the Plaintiff, or as the may/p> <#160; TOM; TNG RANGIRAshIP shallshall attend and produce all documents or things in his possession, power or custody relating to those questions.

3. He need not attend or proauce any documents on any day unless his reasonable expenses have been paid or tendered to him.

And on the 5th day of July 1995, no appearance of all parties, m was rned /7/95. On 20th July 1uly 1995, 995, 995, no appearance of Mr. O’Connor for Applicant/Plaintiff and Mr. Kandakasi so matter was adjourned die. In essence, those proceedangs are still pending and can be resurrected by the Athe Applicant/Plaintiff anytime. Those prings have not been been exhausted yet.

In view of above findings, I refuse the orders sought in this motion and thereforeiss it with costs against the Applicant/Plaintiff.

Lawyer for the Plaintiff: Milner lner & Associates Lawyers

Lawyer for the Defendant: