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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS 727 of 1998
BETWEEN
KUNAMPA VISOSOMPA
Plaintiff
AND
FERRO YASONA
First Defendant
AND
KK TRADING LIMITED TRADING AS
RAMU COFFEE
Second Defendant
Goroka: Davani. J
2007: 8, 9 November
JUDGMENTS AND ORDERS - judgment debt unsatisfied - writ of levy issued - stay of execution sought - tests on stay discussed - o. 13 r. 21 of National Court Rules.
JUDGMENT AND ORDERS - stay of execution - pending application to set aside judgment - pending hearing of writ of summons - prospects of success in pending applications - a factor for determination in grant of stay.
The plaintiff obtained ex parte judgment on 21 December, 2001. The defendants did not apply to set aside judgment but instead, applied to the Supreme Court for a review. The Supreme Court dismissed the review and ordered that the defendants apply to set aside the ex parte judgment. The Supreme Court also granted a stay of execution. But for 4 years the defendants did not apply to set aside the judgment. The plaintiff now applies to execute a Writ of Levy of Property. The defendant is applying for a stay of the execution of the Writ of Levy, pending the hearing of the application to set aside judgment or alternatively hearing of a claim against the plaintiffs for fraud which the defendants filed two days before the hearing of the application for stay.
Held
(1) For the Court to grant a stay of execution of the Writ of Levy of Property, the applicant need only demonstrate a ‘reason’ or ‘an appropriate case’ for stay.
(2) That because the defendants did not apply to set aside the judgment for 4 years and did not provide any credible explanation for the delay, that the court is unable to exercise its discretion to grant a stay of execution of the Writ of Levy.
(3) The Court should also consider whether the applicant has an arguable case either on the pending application or the claim before the court, the basis on which the applicant seeks a stay.
Cases Cited
State v Philip Kapal [1987] PNGLR 302
Independent State of Papua New Guinea and Minister for Village Services and Provincial Affairs v Gulf Provincial Government (In suspension) [1994] PNGLR 34
Independent State of Papua New Guinea v Daniel Mollen [1997] PNGLR 193
Post PNG Ltd v Westpac Bank PNG Ltd [1999] PNGLR 582
Gary McHardy v Prosec Security and Communication Ltd [2000] PNGLR 279
Counsel
D. Umba, for the Plaintiff/Respondent
K. Pilisa, for the First and Second Defendants/Applicants
REASONS FOR DECISION
9 November, 2007
1. DAVANI. J: The first and second defendants/applicants (‘applicants’) apply by Notice of Motion filed on 7 November, 2007 seeking several orders. Mr. Pilisa for the applicant only seeks order no. 2 of that motion, which is to stay enforcement of Writ of Levy of property.
2. The application is opposed by the plaintiff/respondent (‘respondent’).
3. Reliance is had by the applicant on two affidavits that of Kamo Pilisa, sworn and filed on 7 November, 2007 and Murphy Yasona, sworn on 6 November, 2007 filed on 7 November, 2007.
4. Because the application was moved as an urgent application, Mr. Umba did not have time to file any affidavits in reply, so seeks to rely on his affidavit sworn and filed on 23 May, 2007.
Background
5. It is necessary that I set out a brief background of this matter as taken from the facts on the court file.
6. On 4 August, 1998, the plaintiff filed Writ of Summons and Statement of Claim against the defendants, claiming monies lost during the 1993 to 1997 and part of 1998 coffee season including general damages for frustration and inconvenience suffered during that period, together with interest and costs. On 21 December, 2001, the Court entered judgment against the defendants in the sum of K106,265.11. (‘Judgment Debt’).
7. The Judgment Debt was entered after the court proceeded ex parte to hear the plaintiff’s evidence on the claim.
8. In September, 2002, the plaintiff obtained a garnishee order naming the Westpac Bank Goroka as the Garnishee. This was when Mr Pilisa of Pilisa Lawyers, was engaged to act for the defendants. Although Mr. Pilisa filed an application to set aside the Garnishee Orders, he decided to apply to the Supreme Court seeking a review of the order to pay the judgment debt, such order being sought under s. 155(2)(b) of the Constitution. The Supreme Court review was filed sometime in 2002 as SCR 68 of 2002.
9. On 24 November, 2003, the Supreme Court ordered the defendants to withdraw the application for judicial review and directed the defendants to file an application in the National Court Goroka to set aside the ex parte orders of 21 December, 2001. The Supreme Court further ordered and stayed execution and enforcement of the 21 December, 2001 orders pending the filing and hearing of the application.
10. Because of non-action by the defendants in relation to compliance with the Supreme Courts orders, the plaintiff made further application to the Supreme Court to discharge the Supreme Court orders of 24 November, 2003. On 30 June, 2006, the Supreme Court made orders effectively discharging the stay of enforcement orders.
11. On 9 August, 2007, the plaintiff’s lawyers filed a fresh Writ of Levy of Property for execution of the Judgment Debt. This is the writ that the defendants now seek to stay.
The application
12. The affidavits relied on by the defendants are not only very brief but also are very inadequate as to the reasons advanced by the defendants, more particularly the reasons as to the following;
(1) Why they did not apply to set aside the judgment as directed by the Supreme Court.
(2) The delay of nearly 4 years, since the Supreme Court order was made.
13. Order 13 Rule 21 of the National Court Rules (‘NCR’) state that "the Court may on terms, stay execution of a payment or order".
14. The tests to be applied in applications for stay particularly before the Supreme Court under s. 19 of the Supreme Court Act (Ch. 37), were considered in a number of cases. In the State v Philip Kapal [1987] PNGLR 302 which was referred to by the Supreme Court in the Independent State of Papua New Guinea and Minister for Village Services and Provincial Affairs v Gulf Provincial Government (In suspension) [1994] PNGLR 34 it was decided that an applicant must show ‘special’ or ‘exceptional circumstances’ before the courts unfettered discretion to grant a stay can be exercised in his favour.
15. However, in the Independent State of Papua New Guinea v Daniel Mollen (1997) PNGLR 193, the Supreme Court was of the view the ‘special’ or ‘exceptional circumstances’ were not specifically required by s. 19 of the Supreme Court Act and all that needed to be established by an applicant was a ‘reason’ or ‘an appropriate case’ to warrant the exercise of discretion in his favour. The issue was decided without full argument having been advanced on it.
16. Subsequently in Post PNG Ltd v Westpac Bank PNG Ltd [1999] PNGLR 582, the court considered that the court had sufficiently clarified the test and concluded that the previous test of ‘special’ or ‘exceptional circumstances’ no longer applied and that an applicant for stay, needed only to show or demonstrate a ‘reason’ or ‘an appropriate case’ by evidence, to warrant the exercise of discretion in his favour. The Supreme Court re-examined these tests or principles in Gary McHardy v Prosec Security and Communication Ltd [2000] PNGLR 279. The Supreme Court held that the tests in the above cases were based on what foreign courts have said about their provisions and did not demonstrate a satisfactory way of dealing with the issue in Papua New Guinea. The Supreme Court held that it ought to consider for themselves what ought to be the relevant factors and circumstances for the exercise of this discretionary power in this jurisdiction. It said at pg. 8;
"We distil from these precedent cases the kinds of factors and circumstances that the court will consider, amongst others, in the exercise of the discretion, whether or not to grant a stay order. We start with the principle demise that the judgment creditor is entitled to the benefits of the judgment. The other factors include the following;
17. I discuss only the relevant factors.
- Whether there has been any delay in making the application: The Ex parte Judgment was entered on 21 December, 2001. The Supreme Court granted a stay on 24 November, 2003 during which time the defendants would file application to set aside. The defendants did not take any steps which resulted in the Supreme Court discharging the stay orders, upon application by the plaintiff, on 30 June, 2006. The defendants took no steps to file the application to set aside until 7 November, 2007, only after the defendants became aware that the plaintiff would seek to enforce the judgment by a writ of levy of property.
18. Clearly, there has been inordinate delay in the making of this application. The defendants were given the opportunity by the Supreme Court to apply to set aside the judgment but did not. Mr. Pilisa asked the Court to refer to Murphy Yasona’s affidavit sworn on 13 November, 2006 for the requested explanation for the delay. Although I refused to accept the affidavit because Mr. Pilisa had earlier told the court he was not relying on it, I note the explanation provided therein is without merit particularly where Mr. Yasona deposes that during the period 2004, Mr. Pilisa did not have a practising certificate.
19. Mr. Yasona also deposes at par. 5 of his affidavit that "for various reasons" they were not able to file the application to set aside. What are these reasons?
20. Clearly, the defendants have failed to provide an explanation for the delay in making the application to set aside.
- Possible hardship, inconvenience or prejudice to either party: The plaintiff has been denied the fruits of his judgment since 2001. The defendants have not shown how they will be prejudiced except for the glaring fact that they sat on their laurels for about 4 years and did nothing.
- Preliminary assessment about whether the applicant has an arguable case on the proposed appeal: The defendants recently filed a claim alleging fraud by the plaintiffs in relation to the manner in which the plaintiffs conducted the business, the subject of these proceedings. This was done on 5 November 2007. It appears the writ and application to set aside were all made at the 11 hour as a means of avoiding or beating the enforcement process. As regards this application, the stay is being sought to pursue the application to set aside or alternatively, until after the hearing of the fraud claim. Even then, what are the prospects of success of the fraud claim. Par. 9 of the statement of claim refers to an agreement between the parties which was entered into sometime in 1993. They allege that the plaintiffs have misled them (the defendants) and have not accounted to them the monies made and as such fraud was perpetrated and the agreement breached. Clearly the action will be statute-barred under s. 16 of the Frauds and Limitations Act, because it has been 14 years since this agreement was entered into.
21. Even then, the defendants have known of this alleged fraud since 2001 when judgment was entered against them, but did not file the action, until some 7 years later.
22. As for the application to set aside, the defendants cannot or are unable to explain their delay and inaction in applying to set aside. On that basis alone, the application does not have any merit. I am unable to exercise my discretion in the defendants favour.
23. In line with Gary McHardy (supra) I am unable to find that there is a ‘reason’ or this is ‘an appropriate case’ for a stay.
24. As I said, the defendants have sat on their laurels for 4 years and cannot now expect the Court to accede to their application when they have failed to take any steps for so long. I find their application to be an abuse of process and have no hesitation in dismissing it.
25. In light of the comments I made in relation to the application to set aside and the writ claiming fraud, I suggest that the defendants’ lawyers and the defendants carefully seriously consider their position, before proceeding any further.
Final orders
1. The defendants’ application for stay of the Writ of Levy filed by the plaintiffs on 9 August, 2007, is dismissed.
2. The other orders sought in paragraphs 1, 3 and 4 of Pilisa Lawyers Motion filed on 7 November, 2007 are adjourned generally.
3. The defendants shall pay the plaintiffs costs of the application on a party/party basis, to be taxed if not agreed.
________________________
Umba Lawyers: Lawyer for the Plaintiff/Respondents
Pilisa Lawyers: Lawyer for the first & second Defendants/Applicants
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