Papua New Guinea Forest Authority v Tou [2008] PGSC 18; SC934 (22 August 2008)

SC934

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA 86 OF 2006

BETWEEN:

PAPUA NEW GUINEA FOREST AUTHORITY
Appellant

AND:

BEWA TOU & OTHERS
Respondents

Waigani: Salika, Sakora, Batari, JJ
2006: 28 November
2008: 22 August

Counsel:
Mr I Sheppard, for the Appellant
Mr P Parkop, for the Respondents

22 August, 2008

1. BY THE COURT: This is an appeal from a decision of National Court given on 3 August, 2005 in WS 756 of 2001.

2. The National Court there awarded interest on 8% to run from January 1990 to January 2003.

3. The appellant argued that the National Court erred in law in awarding 8% interest from January 1990 to January 2003.

4. The appeal is not grounded on the 8% interest awarded but the time period for which the award was granted.

5. The appellant argued that the interest should run from the date the writ was issued in WS 756 of 2001.

6. The respondents on the other hand argued that the Court has a discretion to decide when the interest should run from.

7. The issue is what date should interest be calculated from?

8. In this case the National Court granted judgment to the Respondent for an amount of K942,809.72 plus interest and cost. The principal amount being royalty entitlement for logs harvested on the Respondent’s land between 1990 and 1994.

9. Following the judgment the Respondent submitted a calculation of the interest they were entitled to be based on 8% of the principal from 1990 to date 2002 and three months in 2003.

10. This calculation was based on the fact that the principal amount comprises of royalty entitlement that was due to the Plaintiff but not paid, and was deposited in a Specific Trust Account by Appellants and the Independent State of Papua New Guinea.

11. The Respondent’s calculation was assessed by ANE Accountants, a private accounting Firm.

12. The evidence before the Court below also showed that the Appellant had paid one Peter Apoi who claimed to be a landowner, part of the royalty money in 1994, and was paid 8% interest from 1992 to 1999.

13. The Appellant failed to pay the Respondents interest as calculated by the accountants. Officers of the appellant were charged for contempt of court and convicted. They appealed to the Supreme Court. The Supreme Court overturned the convictions but ordered that interest be determined by the National Court.

14. Evidence before the Court below also showed royalties due to the Respondent were collected between 1990 to 1994 but was not paid to the Respondent except an amount of K484, 900.00 paid to one Peter Apoi in 1999. The balance was kept in a Special Trust Account until 1996 when a dispute over ownership over the land between the Respondent and the State was resolved in the Respondent’s favour.

15. The matter thus came before the National Court for assessment where the Court ruled that the interest should be calculated and paid from January 1990 to January 2003 at 8%.

16. The appellants relied on Section 1 of the Judicial Proceedings (Interest on Debts and Damages) Act Chapter 52 to advance its argument that the interest should run from the date of filing of the Writ of Summons to the date of the judgment.

17. Sections 1 and 2 of the Act read as follows:-

1. Interest on certain debts and damages.

(1) Subject to Section 2, in proceedings in a court for the recovery of a debt or damages the court may order that there be included in the sum for which judgment is given interest, at such rate as it thinks proper, on the whole or part of the debt or damages for the whole or part of the period between the date on which the cause of action arose and the date of the judgment.

(2) Where the proceedings referred to in Subsection (1) are taken against the State, the rate of any interest under that subsection shall not exceed 8% yearly.

2. Interest on interest, etc.

Nothing in Section 1—

(a) authorizes the awarding of interest on interest; or

(b) applies in relation to a debt on which interest is payable as of right, whether under an agreement or otherwise; or

(c) affects the damages recoverable for the dishonour of a bill of exchange.

18. The appellant also relied on the practice of the Court where the Courts have generally and on most occasions awarded interest at 8% from the date the writ was filed to the date of judgment.

19. The starting point is s.1 of the Judicial Proceedings (Interest on Debts and Damages) Act. The provision does not restrict the awarding of the interest only from the date of commencement of proceedings to the date of judgment as the appellant is contending.

20. Section 1 does not restrict such discretion of the Court to personal injuries claims as the appellant also contends. In any case, the claim was for the recovery of a debt.

Section 1 of the Act gives the Court a general discretion subject only to s.2 of the Act.

21. The Court may order that the interest on the whole or part of the debt or damages for the whole or part of the period between the date on which the cause of action arose and the date of judgment be paid so date of instituting / filing action, WS.

22. The Supreme Court in Pinzger v Bougainville Copper Limited (1985) PNGLR 160 held that:

"In actions for damages for personal injuries the discretionary power deriving from the Judicial Proceedings (Interest on Debts and Damages) Act (Ch No 52) 51 to award interest "for the whole or part of the period between the date on which the cause of action arose and the date of the Judgment" is unless special circumstances indicate otherwise, to be exercised according to the following principles.

(a) Interest on special damages (including loss of wages) should be awarded from the date of the accident to the date of the trial at half the appropriate rates.
(b) Interest on damages for pain and suffering and loss of amenities should be awarded at the appropriate rate from the date of service of the writ to the date of trial; and
(c) No interest should be allowed for loss of future earnings".

23. Pinzger v Bougainville (supra) is a case where the plaintiff sued for personal injuries suffered. This case is not a claim for personal injuries rather it is a case of a debt in the form of royalties due but not paid to land owners and interest on the principal debt. The Respondents had been seeking payment of the royalties since 1990. They had written to the appellants without success on several occasions. After waiting for payments and not getting it, they sued. The cause of action arose in January 1990.

24. Did the trial judge err in awarding interest from the date the cause of action arose that is January 1990 to January 2003? The appellant has not shown this Court where the Court has made the error.

25. The respondents have on the other hand demonstrated with clear authority on the strength of Section 1 of the Judicial Proceedings (Interest on Debts and Damages) Act and the case authority of Pinzger v Bougainville Copper Ltd that the trial Judge did not err.

26. We accordingly dismiss the appeal and confirm the orders of the National Court given on 3 August 2005.

27. Costs are awarded to the Respondents.

Blake Dawson Waldron Lawyers: Lawyer for the Appellant
Powes Parkop Lawyers: Lawyer for the Respondent