Pansat Communications Pty Ltd v Vele [1999] PGSC 12; SC604 (5 May 1999)

Unreported Supreme Court Decisions

SC604

PAPUA NEW GUINEA

[SUPREME COURT OF JUSTICE]

SCM NO. 3 OF 1998
BETWEEN: PANSAT COMMUNICATIONS PTY LIMITED
APPELLANT
AND: MOREA VELE
FIRST RESPONDENT
AND: THE INDEPENDENT STATE OF PAPUA NEW GUINEA
SECOND RESPONDENT

Kapi DCJ Hinchliffe Sheehan JJ
1 October 1998
5 May 1999

JUDGMENT AND ORDERS – Enforcement – Statutory prohibition on execution against State – Claim by and against The State Act 1996, s 13.

An action for mandamus or contempt of court proceedings may be brought against Solicitor-General or Departmental Head responsible for financial matters for non compliance with requirements under s 14 (2) and (3) respectively.

Counsel

GJ Sheppard for the appellant

P Young for the respondents.

5 May 1999

KAPI DCJ HINCHLIFFE SHEEHAN JJ: This is an appeal by way of a notice of motion to review a refusal by the National Court to grant leave for judicial review under O 16 of the National Court Rules.

The background to this appeal is as follows. On the 19^th December 1997, the parties obtained consent orders in the proceedings, OS 139 of 1997, in the National Court. Apart from other orders, the Court ordered that the State (the second respondent) pays to Pansat Communications Pty Ltd (the appellant) the sum of K19.5 million by way of liquidated damages. There was some suggestion that the consent orders are a nullity and the second respondent and its legal advisers indicated that they would challenge the orders. No proceedings have been brought to set aside the orders.

Subsequent to the consent orders, the appellant obtained a Certificate of Judgment pursuant to s 13 (2) of the Claims By and Against the State 1996 (the Act). It was subsequently endorsed by the Solicitor-General pursuant to s 14 (2) of the Act. The appellant then served the Certificate of Judgment upon the Secretary for Finance for satisfaction of the judgment pursuant to s 14 (3) of the Act. The State failed to satisfy the judgment.

On the 23^rd June 1998, the appellant filed judicial review proceedings in the National Court for an order in the nature of mandamus to direct the Secretary of Department of Finance to observe the requirements of s 14 (3) of the Act, namely, to satisfy the judgment out of moneys legally available.

Leave for judicial review was heard by Sevua J. and in a judgment dated the 22^nd June 1998, he refused leave and dismissed the application. In refusing to grant leave, the trial judge concluded that the appellant had no prospect of succeeding in that the order sought by the appellant is in effect a proceeding in the nature of “execution, or process in the nature of execution or attachment ...against the ..... revenue of the State” which is prohibited by s 13 (1) and s 14 (5) of the Act. The appellant has appealed against this decision.

This appeal raises an important question of the proper interpretation and effect to be given to s 13 and s 14 of the Act. It is convenient to set out these provisions:

“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.

(2) Where a judgement is given against the State, the registrar, clerk or other proper officer of the court by which the judgement is given shall issue a certificate in Form 1 to the party in whose favour the judgement is given.

14. SATISFACTION OF JUDGEMENT AGAINST THE STATE

(1) The certificate referred to in s 13 (2) shall be served on the Solicitor General by:

(a) personal service; or

(b) leaving the document at the office of the Solicitor-General

with the person apparently occupying the position of personal secretary to the Solicitor-General between the hours of 7.45 a.m. and 12 noon p.m. and 4.06 p.m., or such other hours as may from time to time to be declared by or under the Public Services (Management) Act 1995 to be the normal public service hours of duty on any day which is not a Saturday, Sunday or a public holiday declared by or under the Public Holidays Act (Chapter 321).

(2) The Solicitor –General shall, within 60 days from the date of service upon him of a certificate under section 13(2), endorse the certificate in Form 1.

(3) Upon receipt of the certificate of a judgement against the State bearing the Solicitor-General’s endorsement may be satisfied, the Departmental Head responsible for finance matters shall, within a reasonable time, satisfy the judgement out of moneys legally available.

(4) Any payment in satisfaction of judgement may, in the absolute discretion of the Departmental Head responsible for finance matters, be made by instalments, provided the judgement is thereby satisfied within a reasonable time.

(5) No action:

(a) for or in the nature of mandamus; or

(b) for contempt of court,

or otherwise lies against the Solicitor-General or the Departmental Head responsible for finance matters in respect of the satisfaction of a judgement under this Act, other than for failure to observe the requirements of Subsection (2), (3) or (4), as the case may be, or unless other exceptional circumstances can be shown to the satisfaction of the court”

The trial judge considered these provisions and set out the arguments put before him by both parties. He then concluded:

“In my view, the plaintiff’s counsel’s submission is mischievous. The nature of an order for mandamus is really an order to compel a person to do an act. In this case, the plaintiff seeks an order by way of writ of mandamus to compel the first defendant to carry out his duty. What then is the first defendant’s duty that the plaintiff is seeking to compel by order of the Court? The duty is to settle the judgment debt by payment from moneys legally available. In my view, that is tantamount to the plaintiff seeking execution of the judgment debt.

The order by way of mandamus is an order to compel the first defendant to pay to the plaintiff. It is no different to the plaintiff seeking enforcement of the judgment debt. Therefore in my view, what the plaintiff seeking here is, enforcement, which is clearly prohibited by sections 13 (1) and 14 (5) of the Act.

The plaintiff’s notice of motion clearly spells out what he is seeking. He seeks an order by way of mandamus requiring the first defendant ‘within 14 days of the date of this order to satisfy the consent judgment in OS 130 of 1995 out of moneys legally available’.

In my view, the plaintiff is seeking an order to compel the first defendant to effect payment. Surely that must be seen as an application to enforce the consent judgment.

I consider that the use of the court process to compel the State, the judgment debtor, to pay or settle a judgment debt, whether wholly or partly, is part of the process of enforcement of a judgment debt. I reiterate that this is prohibited by s 13 (1) and s 14 (5) of the Act............I think the plaintiff’s application borders on abuse of the court’s process, in view of the prohibition found in the Act.

I am of the view that the use of the Court’s process to grant an order in the nature of mandamus, as sought by the plaintiff, is no different to asking the Court for an order to enforce the judgment debt by compelling the first defendant to pay. It is my view that, that amounts to enforcement which is prohibited by law. The plaintiff’s application therefore must be refused.”

In coming to this conclusion, the trial judge followed Wagambie and Kupo v Brigadier General Rochus Lokinap & Others [1991] PNGLR 145 and Steven Pupune & Others v Ubum Makarai and PNGBC (Unreported judgment of the National Court dated 26^th September 1997, N1647).

The first of those decisions no longer reflects the law since it was a decision based on the former Claims by and Against the State Act (Chapter 30) and the wholly exclusionary provision of s 6 of that Act. It has now been repealed and replaced by the present 1996 legislation which came into force on 6 February 1997.

The second case cited also cannot be relied on since it was based on a claim to issue garnishee proceedings and at issue was whether a Provincial Government came within the definition of State and was therefore protected by the (present) Act. Clearly those cases, one focused on repealed legislation and the other on direct execution process are clearly distinguishable.

Two recent unreported National Court decisions; Emas Estate Pty Ltd v. Morea Vele & The State (in July 1991) & Sealark Shipping Pty Ltd and Bismark Maritime Pty Ltd v. The Secretary for Treasure and Corporate Affairs & The State (19 July 1998) which considered the present Act were not referred to the learned trial judge though the first was mentioned in passing as an ongoing trial. These decisions were handed down after the ruling in the present case. These decisions squarely raised the issue under the present legislation and it is desirable that this Court should give a definitive riding on the issue.

The issue raised in this case is essentially one of proper interpretation and application of sections 13 and 14 of the Act. Section 13 (1) is clear in its terms that no suit, execution or attachment or process in the nature of execution or attachment may be brought against the property or revenue of the State. In the normal course applications to the court for Judicial Review of administrative actions are not automatically proceedings in the nature of attachment or against the revenue of the State. In the present case, the judicial proceedings have not been brought directly against the revenue of the State. Clearly, the proceeding is not in the nature of attachment. The question is; whether, the proceeding is a “suit” or “a process in the nature of execution against the revenue of the State”? We are of the opinion that it is a suit in the nature of execution against the revenue of the State.

However, s 13 has to be read with s 14 of the Act. Section 14 requires the Solicitor-General and the Departmental Head responsible for financial matters to comply with certain requirements in relation to a judgment given against the State. The first is that the Solicitor-General should endorse a Certificate of Judgment within 60 days of service upon him of the Certificate (s 14 (2)). The second is that when such Certificate is served upon the responsible Departmental Head for finance matters, he shall satisfy the judgment out of moneys legally available within a reasonable time (s 14 (3)). Payment in satisfaction of the judgment may be made by way of instalments ( s 14 (4)).

Subsection 14 (5) specifically prohibits any action for mandamus or contempt of court proceedings against the Solicitor-General or the responsible Departmental Head in respect of the satisfaction of a judgment other than for failure to observe the requirements set out in s 14 (2), (3) and (4) of the Act. This prohibition is no different in effect to the prohibition under s 13 (1) of the Act except that the prohibition here is specifically against an action for mandamus or contempt of court proceedings.

However, there is an express exception to this prohibition in the latter part of s 14 (5). This effectively means that an action for an order for mandamus or contempt of court to enforce the requirements set out in s 14 (2) and (3) of the Act may be brought against the appropriate officer. Where there is a failure by the Solicitor-General or the Departmental Head responsible for financial matters to comply with the requirements under s 14 (2) and (3) of the Act, an action for mandamus or contempt of court may be brought against them to ensure compliance.

In the present case, the Departmental Head failed to satisfy the judgment. That is a failure on the part of the Departmental Head to comply with the requirement to satisfy the judgment. I accept that the judicial review proceedings is a suit or process in the nature of execution against the revenue of State. However, an action for mandamus or contempt of court in respect of satisfaction of a judgment is expressly provided for by s 14 (5) of the Act.

In our opinion, s 14 was enacted with the intention to ensure that judgments against the State are satisfied. The latter part of s 14 (5) expressly allows an action for an order in the nature of mandamus and contempt of court to ensure that that the two officers comply with the requirements. The practical effect of this view is that if an action for mandamus is not complied with, an action for contempt of court may be taken out against the appropriate officer to effect compliance. If this interpretation is not adopted, the State could refuse to comply with the requirements with impunity. If the State is allowed to do this, judgments obtained against the State would be rendered worthless. We cannot imagine that the Parliament intended such an absurd result.

The satisfaction of a judgment against the State under s 14 is qualified by two matters. The first is that it may satisfy judgments “from moneys legally available”. Whether or not there are moneys legally available is a separate question and it has not arisen at this stage of the proceedings. That is a matter which may arise at the substantive trial and can be determined at that time. The second matter is that the State may choose to satisfy the judgment by instalments. It is empowered to do this under s 14 (4) of the Act. Again this is a matter which has not arisen at this stage and it is not necessary to deal with the issue fully.

The interpretation we have adopted of s 14 can be read harmoniously with s 13 of the Act. The protection afforded to the State by s 13 (1) is far reaching. It prohibits all legal processes that may be brought against the property and the revenue of State. The two causes of action which are permitted to be brought under s 14 (5) are confined to the requirements set out under s 14 (2) and (3) of the Act. We find that the two sections can be read harmoniously in this way.

We find that the trial judge was correct in his interpretation of s 13 (1) and first part of s 14 (5) of the Act but fell into error when he failed to give meaning and effect to the latter part of s 14 (5) of the Act. The cases Emas Estates Pty Ltd v Morea Vele & The State (supra) and Sealark Shipping Pty Ltd v The Secretary for Treasury and Coporate Affairs & The State (supra) gave meaning and effect to the latter part of s 14 (5) of the Act.

As this is an application for leave for judicial review, the trial judge ought to have granted leave and allowed the matter to proceed to trial on the substantive issues.

We would allow the appeal, quash the decision of the trial judge and grant leave for judicial review. We further order that the respondents pay the appellant’s costs of the appeal.

Lawyers for the Appellant: Maladinas

Lawyers for the Respondents: Allens Arthur Robinson