Application of Deputy Commissioner of Taxation of the Commonwealth of Australia v Yii Ann Hii [2017] PGNC 415; N7642 (20 November 2017)

N7642

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS (COMM) NO. 48 OF 2016

IN THE MATTER OF RECIPROCAL ENFORCEMENT OF JUDGEMENTS ACT (CHAPTER 50)

THE APPLICATION OF DEPUTY COMMISSIONER OF TAXATION OF THE COMMONWEALTH OF AUSTRALIA
Plaintiff

V

YII ANN HII
Defendant

Waigani: Kariko, J
2017: 7^th & 20^th November

PRACTICE & PROCEDURE – summonses for production – application to set aside - summonses issued following registration of foreign judgement – whether an abuse of process

Cases Cited:
Papua New Guinea Cases

Bank of South Pacific Ltd v South Pacific Timber Exports Ltd (2004) N2712
ETS Nominees (PNG) Pty Ltd v Catholic Archdiocese of Port Moresby Board of Trustees [1997] PNGLR 670
In re: Koitaki Plantations Ltd (2017) N6670
KK Kingston Pty Ltd v Declan Kennedy (1995) N1389
Michael Wilson v Clement Kuburam (2016) SC1489
The State v Peter Painke [1976] PNGLR 210

Overseas cases Cited:

Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98
R v Baines [1908] UKLawRpKQB 159; [1909] 1 KB 258

Legislation:

National Court Rules
Reciprocal Enforcement of Judgment Act, Chapter 50

Counsel:

Mr M M Varitimos, QC and Ms B Sinen, for the Applicants
Mr P Lowing and Ms E Parua, for the Plaintiff/Respondent

DECISION

20^th November, 2017

1. KARIKO J: Theophilus George Constantinou and Emmanuel Asigau have moved to set aside Summonses for Production directed to each of them.

Brief background

2. It is appropriate that I first set out brief factual background of this proceeding leading to the applications:

• The plaintiff filed this proceeding on 11^th February 2016 to register a foreign judgment, being a judgement of the Supreme Court of Queensland, Australia, made 11^th May 2015.
• On 24^th March 2016, this Court ordered the registration of that judgment, which is for the recovery of a tax debt.
• The defendant applied to have that Order set aside but that motion was dismissed on 18^th November, 2016.
• Before that and on 7^th June 2016, the plaintiff obtained ex parte interim injunctive orders against the defendant and several companies in which he held shares, from dealing with their assets including selling them (the Interim Orders).
• On 15^th July 2016, the plaintiff filed proceeding MP No. 37 of 2016 to have the defendant adjudged insolvent and this Court ruled in favour of the petition on 15^th August 2017. That decision is subject of an appeal by the defendant that is pending determination by the Supreme Court.
• In relation to this proceeding, Summonses for Production were filed on 28^th September, 2017 against several persons including the applicants. Similar Summonses were filed on 23^rd October, 2017 to bring the total of Summonses to nine.
• Each of the applicants then filed the present applications.
  

The Summonses

3. The Summonses apparently resulted from the plaintiff uncovering information showing that the property described as Lot 30, Section 38, Hohola, National Capital District, Papua New Guinea and contained in State Lease Volume 14 Folio 77 (the Property) previously owned by Investwell Limited was recently sold to Iaraguma Limited – that a contract of sale was entered into in March 2017 and the sale progressed until registration of the transfer of title in September. At the relevant time, the defendant allegedly held the majority shares in Investwell Limited. Two Summonses was issued to the applicant Constantinou purportedly on the basis that the applicant owns Iaraguma Limited and is a director of the company, while the Summons issued to the applicant Asigau is thought to be based on the claim that he acted as lawyer for Iaraguma Limited in the sale of the Property.

4. In summary, all Summonses including those three direct the persons summoned to produce:

(1) Copies of any advertisement for sale of the Property;
(2) All files, documents and correspondence relating to:

• (a) listing and negotiation of the sale of the Property;
• (b) the contract of sale of the Property; and.
• (c) obtaining the required statutory approvals for the sale of the Property;

(3) All records relevant to the payment of a deposit for the sale of the Property; and
(4) Any settlement statement in relation to the sale of the Property.

Application to set aside

5. Order 11 Rule 7 National Court Rules gives the Court discretion to set aside a Summons for Production.

6. The applicants urged the Court to uphold their applications on grounds of abuse of process mainly for reasons that:

(a) The Summonses are not for the purpose of a pending trial, hearing or application;
(b) Neither are they bona fide for the purpose of obtaining relevant evidence; and
(c) They amount to a “fishing expedition”;

7. The plaintiff submitted to the contrary stating that the Summonses are relevant to pursue enforcement of the Judgement.

Consideration

8. Mr Lowing for the plaintiff stressed that there are two parts to proceedings under the Reciprocal Enforcement of Judgment Act, Chapter 50. The first allows for foreign judgements to be registered in this country and the second part of the proceedings is enforcement of the registered foreign judgment. He argued that while the foreign judgement has been registered in the present case, the proceeding is not finalised because the enforcement of that judgement is available for the plaintiff to pursue. Counsel relied on the observation of Sevua J in the case of KK Kingston Pty Ltd v Declan Kennedy (1995) N1389 that:

The Reciprocal Enforcement of Judgment Act, has two purposes. Firstly, is to make provisions for the enforcement in Papua New Guinea of Judgments given in foreign country which accord reciprocal treatments to judgments given in Papua New Guinea and secondly, it is for facilitating the enforcement in foreign countries of judgments given in Papua New Guinea.

9. I accept the plaintiff’s submission on this point and note that a registered foreign judgement like other judgements of this Court may be enforced by various ways.

10. Order 13 Rule 2 National Court Rules lists different means by which a judgement for the payment of money (not for payment of money into Court) may be enforced. That Rule relevantly reads:

(1) A judgment 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) ... (re committal and sequestration)

(2) . . . (re payment of money into court)
(3) Sub-rules (1) and (2) of this Rule do not affect any other means of enforcement of a judgment for the payment of money.

11. In Bank of South Pacific Ltd v South Pacific Timber Exports Ltd (2004) N2712 Sakora J decided that Order 13 Rule 2(3) confined enforcement of judgement to the means provided under the National Court Rules, while Hartshorn J in the recent case of In re: Koitaki Plantations Ltd (2017) N6670, determined that enforcement of judgement is not restricted to the courses provided under the National Court Rules but may be pursued by any means provided by law. While there are the differing views, the important point to note from both cases is that there are various processes open to this Court to enforce judgement debts.

12. Some of the methods of enforcement may be pursued in the same proceeding that ordered the judgement debt while in other cases it would be necessary to file separate proceedings. For example, applications for levy of property or attachment of debts may be applied for in the same proceeding while another proceeding would be required for an application for appointment of a receiver.

13. Contempt charges for disobedience of a court order (for example, where there is default in payment of a debt within a specified time), while not strictly an enforcement proceeding, may also be pursued in the same proceeding.

14. It is not in dispute that in the present case there are no pending hearings or applications in respect of the originating action. There is no application for enforcement of the judgement debt nor is there any contempt application. The defendant being the judgement debtor has been declared insolvent but that is the subject of a separate proceeding.

15. It is trite law that the categories of abuse of process are not closed. In all proceedings, the court must be alert to possible abuse of its processes. Mr Varitimos provided helpful submissions citing relevant cases in the discussion of the principle of an abuse of court process and in particular with respect to summonses for production and subpoenas.

16. In my opinion, the following remarks of O’Leary AJ in The State v Peter Painke [1976] PNGLR 210 are worthy of noting:

There is no doubt that this Court, as a superior court of record, has inherent jurisdiction to take steps to prevent any abuse of its process. It is a power that extends to all situations where the justice of the case requires it to be exercised, and it is not confined to any closed categories of cases.

17. And as Gavara-Nanu, J observed in Michael Wilson v Clement Kuburam (2016) SC1489 at [25]:

The types of abuses of process may vary from case to case but to establish an abuse of process there must be evidence showing that the processes of the court have been improperly used; or have been used for an improper purpose; or have been used in an improper way; or that such abuse of process have resulted in the right of the other party being denied, defeated or prejudiced: National Executive Council v. Public Employees Association [1993] PNGLR 264 and The State v. Peter Painke [1976] PNGLR 210.

18. It has been held by this Court that it is an abuse of process if a summons for production is issued to obtain evidence not material to the pending proceeding; ETS Nominees (PNG) Pty Ltd v Catholic Archdiocese of Port Moresby Board of Trustees [1997] PNGLR 670 which affirmed that proposition stated in Botany Bay Instrumentation & Control Pty Ltd v Stewart [1984] 3 NSWLR 98. The summons must be for the purpose of a pending trial hearing or application.

19. It follows that that if the evidence sought to be obtained is immaterial or irrelevant to the proceeding, the summons may be regarded as a “fishing expedition”; R v Baines [1908] UKLawRpKQB 159; [1909] 1 KB 258.

20. In the present case, the evidence sought to be obtained must be relevant to the substantive proceeding or relevant to any enforcement application including for contempt. But it is noted that the substantive proceeding has been determined, and it is not disputed that there are no pending hearings or applications in respect of the originating action.

21. In his written extract of submissions and fortified in oral arguments, counsel for the plaintiff suggested that the Summonses seek to ascertain if the Interim Orders have been breached. Mr Lowing explained that there is some “scant evidence” of a breach of the injunctive orders. To my mind, that submission agrees with the applicants’ contention that the issue of the Summonses constitute an abuse of process and is in essence a “fishing expedition”.

22. While the plaintiff believes the defendant is in contempt of the Court for breaching the Interim Orders, no contempt proceeding has been filed. It seems to me that the plaintiff is hoping that the Summonses will provide further evidence that may justify it filing contempt proceedings or assist it to initiate enforcement proceedings to recover the proceeds of the sale of the Property to satisfy a part of the judgement debt. The fact of the number of Summonses that have been issued plus the broad and general nature of the evidence sought in the summonses lends weight to the submission that they constitute a “fishing expedition”.

Conclusion

23. I find proper grounds have been made out in favour of the applications. Costs are to be awarded against the plaintiff but I am not entirely satisfied that they should be awarded on an indemnity basis as submitted by the applicants.

Order

24. Accordingly, I order that:

(1) The two Summonses for Production filed 28^th September, 2017 and directed to Theophilus George Constantinou are set aside.
(2) The Summons for Production filed 28^th September, 2017 and directed to Emmanuel Asigau is set aside.
(3) The Plaintiff pays the Applicant’s costs of and incidental to the two Notices of Motion to set aside the Summonses on party-party basis.
(4) Time for entry of these orders is abridged to the time for settlement by the Registrar which shall take place forthwith.

________________________________________________________________
Pacific Legal Group Lawyers: Lawyer for the Applicants
Leahy Lewin Lowing Sullivan Lawyers: Lawyer for the Plaintiff/Respondent