Sai Business Grouping Inc v Mainland Holdings Ltd, Chairman [2010] PGNC 242; N3853 (5 February 2010)

N3853

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 53 OF 2007

BETWEEN

SAI BUSINESS GROUP INC
Plaintiff

AND

CHAIRMAN, MAINLAND HOLDINGS LIMITED
First Defendant

AND

CHIEF EXECUTIVE OFFICER, MAINLAND HOLDINGS LIMITED AND MAINLAND HOLDINGS LIMITED
Second Defendants

Lae: Gabi .J
2010: 5th February

PRACTICE & PROCEDURE – Order 13 Rule 2 of National Court Rules – Methods of enforcement of judgment for payment of money – Methods are cumulative not alternative remedies – Judgment cannot be enforced by an order for committal or sequestration if time limit made so as to found a right to committal or sequestration in default of payment.

Cases cited
Papua New Guinea Cases

Nil

Overseas cases

Foster v Jackson (1615) Hob 52
Hulbert v Cathcart [1893] UKLawRpKQB 209; [1894] 1 QB 244
Re Broughton [1916] NSWStRp 67; (1916) 17 SR (NSW) 29
Re Oddy [1905] UKLawRpCh 147; [1906] 1 Ch. 93

Counsel

S. Togo, for the Plaintiff
L. Manua, for the Defendants

RULING

5th February 2010

1. GABI, J: Introduction: There are two applications on notice before the Court. The first application is by the plaintiff, who seeks committal or punishment of Ronnie Aigapa and Richard Geenhaugl, the Chairman and Chief Executive Officer respectively of Mainland Holdings Ltd, for contempt on the basis that they "deliberately and willfully" disobeyed the order of 19th September 2008. The second one is by the defendants to either dismiss or stay the plaintiff's application.

2. The defendants argue that Order 13 Rule 2 of the National Court Rules sets out the process a judgment creditor must follow in order to enforce a judgment for the payment of money, that the other methods of enforcement must be used prior to instituting committal proceeding and that committal proceeding is not an automatic remedy. The plaintiff, on the other hand, submits that committal proceeding is an alternative remedy. As such, a party is at liberty to apply for an order for committal before the other methods of enforcement are used.

3. The issue is whether committal proceeding is an alternative remedy.

Facts

4. The brief facts were that in February 2007 this action was filed to recover the sum of K191, 200 being for dividend payments for the year 2005 which was paid to the defendants to distribute to the shareholders of the plaintiff. It was alleged that the payments were made to the wrong persons and so on 19th November 2007, the Court made the following order:

"1. Messrs Mesiya Noiau, Joseph Tembra, Peter menieng and Jessy Setra, the signatories to Bulolo District Administration Trust Account Number: 1001246647 with Bank of South Pacific, forthwith pay out from that account the sum of K79, 200.00 to Sai Busines Group Inc.

2. Messrs Mesiya Noiau, Joseph Tembra, Peter Menieng and Jessy Setra, shall within seven (7) days, give full account to the Plaintiff and to the Respondents, of the receipt and application of the sum of K191, 200.00 received from the Second Respondent, being the 2005 dividends of the Applicant from the Second Respondent.

3. If the accounting refered to item two (2) of this order show that monies were paid to non members of Sai Business Group Inc. or otherwise lost in the process, such monies be reimbursed to Sai Business Group Inc. by the Second Respondent.

4. Cost of the proceeding is made against the Respondents to be agreed if not taxed within seven (7) days.

5. Time is abridged."

5. On 19th September 2008, following an application by the plaintiff, the Court varied the order of 19th November 2007 to read:

"1. Paragraph three (3) of the Order of this Court dated 19th November 2007 is confirmed.

2. The Second Respondent pay the sum of K191, 200.00 to Sai Business Group Inc. forthwith.

3. Cost is awarded against the Respondents to be taxed if not agreed."

6. On 26th September 2008, the defendants appealed against the decision. On 26th October 2009, the appeal was dismissed for want of prosecution. On 27th October 2009, Daniels & Associates Lawyers wrote to the defendants requesting payment before close of business that day and threatened to file contempt proceeding if no payment were made. On 28th October 2009, Daniels & Associates Lawyers wrote to the lawyers for the defendants requesting payment. On 6th November 2009, the plaintiff filed its motion. On 13th November 2009, the defendants filed their application. On 14th November 2009, the defendants filed an application for review (SCR No. 50 of 2009) of the order of 19th September 2008 at the Supreme Court Registry.

The Law

7. Order 13 Rules 2, 6 and 8 of the National Court Rules provide:

"2. Payment of Money. (42/2)

(1) A judgement for the payment of money (not for the payment of money into Court) may be enforced by one or more of the following means:-

(a) levy of property; or

(b) attachment of debts; or

(c) charging order; or

(d) appointment of a receiver; or

(e) in a case in which Rule 6 applies but subject to Rule 8-

(i) committal; and

(ii) sequestration.

(2) A judgment for the payment of money into Court may be enforced by one or more of the following means:-

(a) appointment of a receiver; or

(b) in a case in which Rule 6 applies, but subject to Rule 8-

(i) committal; and

(ii) sequestration.

(3) Sub-rules (1) and (2) do not affect any other means of enforcement of a judgement for the payment of money...

6. Attendance. (42/7)

(1) Where the Court, by summons or otherwise, makes an order in any proceedings for the attendance of a person-

(a) for the purpose of giving evidence; or

(b) for the production of any document or thing; or

(c) to answer a charge of contempt; or

(d) for any other purpose;

and the person defaults in attendance in accordance with the order, the Court may, on application by a party or to its own motion-

(e) issue, or make an order for the issue of, a warrant to the Sheriff or such other person as the Court may appoint for the arrest of the person in default and for the production of the person in default before the Court or before an examiner or other person for the purpose of the proceedings and for his detention in custody in the meantime; and

(f) order the person in default to pay any costs occasioned by the default.

(2) Sub-rule (1) does not affect-

(a) the powers of he Court to punish of or contempt; or

(b) the provisions of Order 14 Division 6 (contempt)...

8. Substituted Performance. (49/9)

(1) Where a judgement requires the person bound to do an act and the person bound does not do the act, the Court may-

(a) direct that the act be done by a person appointed by the Court; and

(b) order the person bound to pay the costs incurred pursuant to the directions.

(2) Sub-rule (1) does not affect-

(a) any powers of the Court relating to the execution of instruments by order of the court; or

(b) the powers of the Court to punish for contempt."

8. The question is whether committal proceeding is an alternative remedy. Both counsel were unable to refer me to any authority on the point. In fact, there is no authority on that question in this jurisdiction.

9. The present rules of Court are based on the Rules of New South Wales Supreme Court and the Supreme Court of England. O13 r2 is similar in terms to Supreme Court Rules of New South Wales (42/2). Ritchie's Supreme Court Procedure (NSW) has the following note (Vol. 1 page 2891):

"A judgment or order for payment of money to a person may be enforced by any of the means set out...and these are cumulative and not alternative remedies. Thus different kind of writs of execution may be issued at the same time although they cannot all be acted upon simultaneously: Foster v Jackson (1615) Hob 52; Re Broughton [1916] NSWStRp 67; (1916) 17 SR (NSW) 29."

10. In Re Broughton (supra), a judgment was obtained against Power in the District Court. On 25th October 1915, a writ of execution issued to enforce the judgment against land of which Power was the registered proprietor. The writ was registered on 28th October 1915, and was current for twelve months. No return was made to the writ, nor was it returned to the issuing office. On 5th February 1916, a second writ of execution was issued on the same judgment and registered. The Registrar of the District Court sold Power's land under the second writ, and lodged a transfer to the purchaser for registration on 14th June 1916. On 16th June 1916, a caveat against portion of the land included in the transfer was lodge by Laycock claiming as transferee from Power under a transfer. It was held (1) that Laycock had not lost his priority under his transfer from Power, as the transfer from the District Court Registrar had not been registered when he

filed his caveat; and (2) that the second writ was wrongly issued as at the date of its issue the first writ had not expired or been brought back to the office, and there has been no return to the first writ. Harvey J. said at 34:

"The facts in this case are that the writ of fi. fa was issued in Oct., 1915, and registered on the 28th Oct., 1915, it was current for twelve months, and could have been made available against any common law title lands of judgment debtor for that period. No return was made to it by the sheriff, nor was it returned to the issuing office when the second writ was issued, and, therefore, in my opinion, the second writ was wrongly issued. The bailiff might have sold under the original writ up to Oct., 1916, but he did not purport to do so. In my opinion, therefore, the sale was inoperative to pass anything."

11. In the Supreme Court Practice (1993) ("The White Book") with reference to English O45 r1, which is the same as our O13 r2, it is stated in the notes that "a judgment or order for the payment of money to a person may be enforced by any of the ...methods listed ...which are not alternative, but cumulative remedies. On the other hand, if the judgment or order does not and as a general rule it will not, specify a time for the payment of the money to a person, the method of enforcement by way of an order of committal or writ of sequestration will not be available." (Volume 1, page 731).

12. Mainland Holdings Ltd was required to pay the sum of K191, 200.00 to Sai Business Group Inc. "forthwith." This prompted the lawyers for the plaintiff to threatened contempt proceeding and in fact applied for an order for committal.

13. In the White Book, it is stated "that a judgment for the recovery of money from a person cannot be enforced by an order for committal or writ of sequestration, nor can a supplemental order be made fixing a time for payment by a certain day or limiting the time within which it is to be made, so as to found a right to sequestration or committal in default of payment (Re Oddy [1905] UKLawRpCh 147; [1906] 1 Ch. 93; Hulbert v Cathcart [1893] UKLawRpKQB 209; [1894] 1 QB 244)." (1993 Volume 1, page 731).

14. In Re Oddy (supra), the Court found that the defendant had committed a breach of trust and ordered that the plaintiff recover from the defendant a certain sum of money, being the amount of the loss occasioned to the trust estate. The judgment was not an order for payment, but an order for recovery of a certain sum of money. Subsequently, the plaintiff applied for and was granted a supplemental order that the defendant pay the money within four days of the service of the order. The defendant appealed. The Court of Appeal allowed the appeal and held that the judgment could not be supplemented by a four-day order so as to found a right to issue a writ of attachment against the defendant in default of payment within the stipulated time. Stirling L.J. said at page 99:

"[I]t appears to me to be abundantly clear that a judgment for recovery of a sum of money could not be supplemented by an order for payment within a limited time...I agree with the argument urged on behalf of the appellant that making such a supplemental order is not enforcing an order already made. It is making an additional and another order, which appears to me to be contrary to the practice of the Court in such a case as this."

15. In this case, the order of 19th November 2007, which was a final order, did not specify a time for payment of the sum of K191, 200.00. Subsequently, it was varied so that the payment was to be made forthwith. I am of the view that it was inappropriate to order payment forthwith considering the fact that the defendants have the right to appeal or apply for review of the order. It is clear to be that the second order gives the plaintiff the right to apply for an order for committal in default of payment within the time stipulated. As such, I refuse to enforce the judgment by an order for committal. Accordingly, I dismiss the plaintiff's application with costs.

___________________________________________________________
Daniels & Associate Lawyers: Lawyer for the Plaintiff
Rageau, Manua & Kikira Lawyers: Lawyer for the Defendants