Ruta v Eastern Highlands Provincial Government [1998] PGNC 166; [1998] PNGLR 157 (12 June 1998)

[1998] PNGLR 157

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

KAYAPAS RUTA trading as ARITI ROAD & BUILDING MAINTENANCE

V

EASTERN HIGHLANDS PROVINCIAL GOVERNMENT; and

JOE A. MENANIKE

V

EASTERN HIGHLANDS PROVINCIAL GOVERNMENT

GOROKA: SAWONG J
10, 12 June 1998

Facts

The two applicants did some work for the Eastern Highlands Provincial Government and requested for payment from the defendant. The defendant failed to make the payments. The applicants applied to garnishee the accounts of the defendant. The defendant claimed protection under the Claims By and Against the State Act 1996. The plaintiffs applied for leave to attach or garnishee the accounts of the Eastern Highlands Provincial Government. The Provincial Government claimed protection under the Claims By and Against the State Act.

Held

1. Provincial governments are creatures of the Constitution and the Organic Law on Provincial Governments and Local-level Governments and therefore fall outside the definition of "State" under the Claims By And Against the State Act 1996.
   
2. A provincial government can sue and be sued, and its accounts can be attached, garnisheed and judgements and orders can be executed against it.
   

Papua New Guinea cases cited

Rimbink Pato v Enga Provincial Government [1995] PNGLR 469.

Steven Pupune & 8 Others v Ubum Makarai and PNGBC [1997] PNGLR 622.

Counsel

D A Umba, for the plaintiffs.
N Teninge, for the defendant.

12 June 1998

SAWONG J. These are applications by the two plaintiffs by way of a notice of motion to issue a garnishee notice pursuant to O 13 r 56 of the National Court Rules. Two criterias must be satisfied under this rule, and these are:

(a) a judgement order is not satisfied; and

(b) there is a debt due to the judgement debtor.

The applications in these cases are supported by two affidavits of Dennis Umba, both sworn on 26 March 1998. The evidence contained in these affidavits satisfied both these requirements.

During submissions, Mr Teninge, counsel for the defendant submitted that the Provincial Government being part or instrumentality of the State, no execution proceedings could be issued against it. He referred to the case of Rimbink Pato v Enga Provincial Government [1995] PNGLR 469 and Steven Pupune & 8 Others v Ubum Makarai and PNGBC [1997] PNGLR 622.

I have read both of those cases. Both are decisions of the National Court.

In Pato, Kapi DCJ, held, inter alia, that any suit, execution or attachment or process in the nature of execution or attachment may be issued against the Provincial Government.

In view of the arguments put by Mr Teninge, I consider it necessary to consider two relevant laws. The first is the claims By and Against the State Act, (being Act No. 52 of 1996) which came into force on 6 February 1997. The second is the provisions of the Organic Law on Provincial and Local Level Governments.

The relevant provisions of the Act is s 13(1), which is in the following terms:

13. No Execution Against the State.
    

(1) In any suit, execution or attachment, or process in the nature of execution or attachment, may not be issued against the property or revenue of the State.

The relevant provisions of the Organic Law is s 6, which is in the following terms:

6. Legal Capacity.

A Provincial Government or a Local Level Government -

(a) may acquire, hold and dispose of property of any kind; and

(b) may sue and be sued,

and a provincial law or a local - level law may make provisions for and in respect of the manner and form in which each respective government may do so.

Kapi DCJ in Pato’s case considered and analysed the predecessors of those provisions. In that case he said (at p 470 - 471):

"The question is whether a provincial government comes within the meaning of the word "State". This word is not defined by the Act. Interpretation Act (Ch 2) defines "the State" as the Independent State of Papua New Guinea. This is consistent with the definition given by Interpretation Act 1990 (Enga).

The Constitution does not define the word "State", but it defines the name "Papua New Guinea" under Sch 1.2 to mean the Independent State of Papua New Guinea. The Independent State of Papua New Guinea derives its legal existence or capacity from the Constitution of Papua New Guinea (see Preamble to the Constitution). The power and the authority of the people are vested in the State of Papua New Guinea, and this power is exercised by the National Government (see s 99 of the Constitution). Subject to any other provision of the law, the term "the State", for purposes of Claims By and Against the State Act, means the National Government or an arm, department, agency, or instrumentality of the National Government. This does not include a provincial government.

The provincial government system is separately established by the Constitution (see s 187A). The establishment of a particular provincial government is a matter left to an Organic Law to provide for (see s 187B of the Constitution). Part II of the Organic Law on Provincial Government sets out the manner in which a provincial government may be granted. The Enga Provincial Government would have been granted under these provisions.

12. Legal capacity of provincial governments.

A provincial government -

(a) may acquire, hold and dispose of property of any kind; and

(b) may sue and be sued,

and a provincial law may make provision for and in respect of the manner and form in which it may do so.

The Enga Provincial Assembly passed the Legal Proceedings By and Against the Provincial Government Act 1978 and made provision for matters allowed to be made by the Organic Law. Sections 2 and 3 provide for the manner in which the Enga Provincial Government may be sued or may sue. There is no provision, which prohibits any execution or attachment or a process in the nature of execution or attachment against the Enga Provincial Government.

It is, therefore, clear that any suit, execution or attachment, or process in the nature of execution or attachment may be issued against the Enga Provincial Government."

In Pupune & Others, Injia did not follow the decision in Pato. Instead, His Honour came to the conclusion that a provincial government is an organ of the State. And therefore by implication it was part and partial of the State. Accordingly he held that the accounts of the provincial government could not be garnisheed.

It is quite clear that these decisions are conflicting and come to two different conclusions. With the greatest respect to the trial judge in Pupune’s case, I am of the view that the decision by Kapi DCJ and the reasons he expounded are sound. In Pupune’s case, the trial judge applied a very wide and liberal interpretation to come to the conclusion that he did. However, I would prefer the decision and reasoning in Pato’s case and I apply it here.

I have not been referred to any Eastern Highlands Provincial Government Legislation, which either expressly or otherwise prohibit any execution or attachment or a process in the nature of execution or attachment.

It is, therefore, clear that any suit, execution or attachment, or process in the nature of execution or attachment may be issued against the Eastern Highlands Provincial Government.

I grant leave for garnishee notice.

Lawyers for the plaintiff: Acanufa & Associates.
Lawyers for the defendant: N Teninge.