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Chief Collector of Taxes v Kila Kapa & Associates [1990] PGLawRp 602; [1990] PNGLR 140 (30 March 1990)

Papua New Guinea Law Reports - 1990

[1990] PNGLR 140 - Chief Collector of Taxes v Kila Kapa & Associates�

[1990] PNGLR 140

N819

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

CHIEF COLLECTOR OF TAXES

V

KILA KAPA AND ASSOCIATES LAWYERS

Waigani

Jalina AJ

23 March 1990

30 March 1990

PRACTICE AND PROCEDURE - National Court - Jurisdiction - Unlimited jurisdiction - No monetary limits - Monetary limit of District Court not affecting - Costs - District Courts Act (Ch No 40), s 21 - Constitution, ss 166, 172(1).

COSTS - National Court - Claim within monetary limit of District Court - Costs on District Court scale - Discussion - National Court Rules, O 22, r 25.

INFERIOR COURTS - District Courts - Jurisdiction - Monetary limits - Not exclusive jurisdiction - National Court unlimited jurisdiction not affected - Costs on District Court scale - District Courts Act (Ch No 40), s 21 - Constitution, ss 166, 172(1) - National Court Rules, O 22, r 25.

Under the District Courts Act (Ch No 40), s 21, the District Court has �in addition to any jurisdiction conferred by any other law, ... jurisdiction in all personal actions at law or in equity where the amount of the claim or the amount of value of the subject matter of the claim does not exceed K10,000�.

The Constitution, s 172(1), provides:

�Establishment of other courts.

Subject to this Constitution, Acts of the Parliament may establish, or provide for the establishment of, courts within the National Judicial System in addition to the Supreme Court and the National Court, and may define, or provide for the definition of, their respective powers, functions and jurisdictions and their relationship with other components of the National Judicial System.�

The Constitution, s 166(1), provides that the National Court is a court of unlimited jurisdiction.

Held

N1>(1)����� The District Courts Act, s 21, read in conjunction with the Constitution, s 172, does not deprive the National Court of jurisdiction to deal with claims involving less than K10,000.

N1>(2)����� Accordingly, the Chief Collector of Taxes may sue to recover unpaid tax up to K10,000, in either the National Court or the District Court, but subject, in appropriate cases in the National Court, to costs on the District Court scale pursuant to O 22, r 25 of the National Court Rules.

Cases Cited

Horrell v Lord St John of Bletso [1928] 2 KB 616; [1928] All ER 516.

O�Doherty v McMahon [1971] VicRp 75; [1971] VR 625.

Motion

This was an application on notice seeking to have service of a writ of summons for unpaid income tax of K1,326.04 set aside on the ground that the National Court lacked jurisdiction.

Counsel

A Wasina, for the applicant/defendant.

J Weigall, for the plaintiff/respondent.

Cur adv vult

30 March 1990

JALINA AJ: By writ of summons dated 15 February 1990, the plaintiff claimed from the defendants K1,326.04 being the total of amounts allegedly payable by the defendant to the plaintiff pursuant to the provisions of the Income Tax Act 1959.

The defendant has, by notice of motion, dated 9 March 1990 and filed herein, sought the following orders:

N2>(a)����� that the service upon it of the writ be set aside on the ground that the court has no jurisdiction to determine all or part of the plaintiff�s claim;

N2>(b)����� that the issue of the writ was irregular;

N2>(c)����� such other and further orders as the court sees fit.

The motion has been made pursuant to O 7, r 8 of the National Court Rules. Rule 8 provides, inter alia, that the court may, on motion made by the defendant under r 7, by order:

N2>(a)����� set aside the originating process; or

N2>(b)����� set aside the service of the originating process on the defendant.

In support of its application the defendant has filed an affidavit sworn by one Andrew Wasina. Through par 3 of the affidavit the defendant says that:

�The Courts have jurisdictional limitations to the amount that can be claimed. District Courts have jurisdictional limits of up to K10,000 and the National Court has amounts in excess of K10,000. Although the National Court has an inherent power and can exercise concurrent powers with District Courts, for purpose of appeal, it would be proper that the National Court does not unnecessarily encroach upon the jurisdictional areas of other courts.�[sic]

The monetary limit specified in s 21 of the District Courts Act (Ch No 40) is the only basis upon which the question of jurisdiction of the National Court to entertain this matter is raised and through the operation of s 172(1) of the Constitution. Consequently this judgment is confined to the issue of whether or not the National Court has jurisdiction to entertain the plaintiff�s claim, although some discussions will be had on the question of costs.

The civil jurisdiction of the District Court, at least for claims based on the amount or value of the subject matter of the claim, is as specified in s 21 of the District Courts Act (Ch No 40). Section 21 provides, inter alia, as follows:

N2>�21.��� Civil jurisdiction

(1)����� Subject to this Act, in addition to any jurisdiction conferred by any other law, jurisdiction in all personal actions at law or in equity where the amount of the claim or the amount or value of the subject matter of the claim does not exceed:

(a)����� where the Court consists of one or more Magistrates Grade V � K10 000.00; and

(b)����� where the Court consists of one or more Magistrates Grade IV � K8 000.00; and

(c)����� where the Court consists of one or more Magistrates Grade III � K4 000.00; and

(d)����� where the Court consists of one or more Magistrates Grade II � K2 000.00.

(2)����� (Repealed).

(3)����� Subsection (1) shall not be taken to limit the jurisdiction of Courts in cases where by any law, money, irrespective of amount, may be recovered before a Court.�

Section 172(1) of the Constitution provides as follows:

N2>�172.�� Establishment of other courts

(1)����� Subject to this Constitution, Acts of the Parliament may establish, or provide for the establishment of, courts within the National Judicial System in addition to the Supreme Court and the National Court, and may define, or provide for the definition of, their respective powers, functions and jurisdictions and their relationship with other components of the National Judicial System.�

Mr Wasina submits that by virtue of the operation of s 172(1) of the Constitution, the powers, functions and jurisdiction of the District Court insofar as they relate to the amount involved in these proceedings have been defined through s 21 of the District Courts Act, and as such the National Court has no jurisdiction. The National Court only has jurisdiction in respect of civil claims exceeding K10,000 and in respect of matters before it on appeal. Mr Wasina has not made any submissions to me on the question of the issue of the writ being irregular, nor has he referred me to any cases in Papua New Guinea or elsewhere in support of his submission.

Ms Weigall for the Chief Collector of Taxes submits that the National Court has jurisdiction, in fact it has unlimited jurisdiction in view of the provisions of s 166(1) of the Constitution. In making this submission she concedes that should the action succeed in the National Court, the plaintiff would only be entitled to costs on the District Court scale. Although Ms Weigall did not refer me to it, she appears to me to be making the concession (as to costs at the District Court scale) pursuant to O 22, r 25 of the National Court Rules, in view of the amount in the substantive proceedings being less than K10,000. Order 22, r 25, provides as follows:

N2>�25.��� Costs where Judgment for a Small Amount

(1)����� Where in an action for tort or contract the plaintiff recovers by judgment or otherwise a sum of less than K10,000 (or an order for the possession of goods the value of which is less than K10,000 or a sum of money plus an order for possession of goods the aggregate value of which is less than K10,000) he shall, unless the Court or a judge otherwise orders, be entitled only to the costs he would have been entitled to if he had brought his action in the District Court.

(2)����� For the purposes of sub-rule (1) of this Rule a plaintiff shall be treated as recovering the full amount recoverable in respect of his claim without regard to any deduction made in respect of contributory negligence on his part.�

I will consider the issue of costs later. Returning now to the main issue before me I am of the opinion that even though (the) District Courts were established in 1963 by the District Courts Act, and as such came into existence well before the National Court was established at Independence on 16 September 1975, nevertheless they are courts that exist pursuant to and for the purposes of s 172(1) of the Constitution. It is therefore the Act that defines the powers, functions and jurisdictions of the District Court and its relationships with other components of the National Judicial System which of course includes the National and Supreme Courts. It is consistent with the Final Report of the Constitutional Planning Committee in 1974 where it said at p 8/3:

�There should be a National Court consisting of the Chief Justice, the Deputy Chief Justice and other judges, with broad power to dispense justice throughout the country, and also in cases which involve a law of this country but arise outside Papua New Guinea. We have provided for the National Court�s jurisdiction to be altered by ordinary law (provided that law specifically refers to the jurisdiction of the court) as we believe it is important not to unduly limit the power of Parliament to make changes in the jurisdiction of the highest courts, as well as of subordinate courts.�

Section 21 of the District Court Act does refer specifically to the jurisdiction of the District Court, but does not go far enough so as to deprive the National Court of its jurisdiction. From my reading of s 21 it says �a Court� has jurisdiction � meaning the District Court (up to a limit of K10,000) and other courts, presumably a superior court, have jurisdiction. It does not say �only� a District Court has jurisdiction. It is in my view permissive, in that it allows for recovery of amounts up to K10,000 in the District Court as well as the National Court whereas prior to that amendment all civil claims exceeding K2,000 had to be made in the National Court. The intention behind the increase of the District Court�s civil jurisdiction to K10,000 was to improve the system and to make it easier for the people to make a civil claim in the District Court and not to deprive the people of their right to seek redress in any court they consider appropriate. It was not to give exclusive jurisdiction to the District Court. This is consistent with the then Justice Minister Paul Torato�s speech to Parliament when he introduced the bill on 7 November 1980 to amend the Act to increase the jurisdiction to K10,000, a copy of the debates on which I have had the benefit of reading.

The fact that s 21 is permissive and not prohibitive can be seen from subs (3) which says that subs (1) shall not be taken to limit the jurisdiction of Courts in cases where, by any law, money, irrespective of amount, may be recovered from a Court. The words �... by any law ... before a Court� bring it within the ambit of s 166(1) of the Constitution to enable the unlimited jurisdiction of the National Court to apply (the Constitution, being �any law� and, the National Court being �a Court� for the purposes of subs (3)).

If a prima facie right to recover in the National Court through the operation of s 166(1) of the Constitution is to be taken away, it should be taken away by express words. Horrell v Lord St John of Bletso [1928] 2 KB 516; [1928] All ER 516. With regard to presumptions as to jurisdiction it is stated in Maxwell on the Interpretation of Statutes, 12th ed, (1969), at 154:

�Where a statute passed after the establishment of the High Court of Justice �confers or imposes on any individual, when a situation described in the statute exists, a new right or a new liability which the executive branch of government will enforce, it is a question of construction of that statute (a) whether jurisdiction to determine whether or not that situation exists in the case of a particular individual is conferred upon the High Court or upon some inferior tribunal and, if upon the latter, (b) whether or not jurisdiction is conferred upon the High Court to correct the determination of the inferior tribunal for errors within jurisdiction�. If the statute contains no express provision as to (a), the intention of Parliament is presumed to be that the High Court shall have jurisdiction to determine whether the described situation exists or not. If, however, the statute expressly confers this jurisdiction on the inferior tribunal, �the intention of Parliament as to (b) is presumed to be that the High Court shall have jurisdiction to correct the determinations of the inferior tribunal for �errors within jurisdiction,� unless the statute contains provisions which expresssly deprive the High Court of jurisdiction of this kind.�

In quoting the above, I do realise that it relates to new rights or liabilities which the executive branch of government will enforce, which is not the issue before me, but I have referred to it by way of analogy for the proposition that in the absence of express words ousting its jurisdiction, a superior court has jurisdiction. I am therefore of the opinion that the National Court has jurisdiction to entertain the plaintiff�s claim. It follows that I dismiss the defendant�s application. I reserve any orders as to costs of this application for the trial judge.

As I have ruled that the National Court has jurisdiction it follows that the Chief Collector of Taxes may sue pursuant to s 264 of the Income Tax Act and recover any unpaid tax in any court of competent jurisdiction. The Chief Collector of Taxes may, in other words, sue for and recover any unpaid tax against the applicant/defendant in either the District Court or the National Court.

COSTS

As I have stated above, Ms Weigall has conceded that any costs payable would be at the District Court Scale pursuant to O 22, r 25. The object of this rule, which is based on O 65, r 12 of the Victorian Supreme Court Rules, is as stated in O�Doherty v McMahon [1971] VicRp 75; [1971] VR 625 at 628:

�The object of the rule is to protect the defendant against the unnecessary expense of higher costs in a court which is not appropriate for the case. The plaintiff, however, is left free to select his court. If he fails no protection of the defendant is necessary because he receives costs applicable in the court to which he is taken. If he succeeds, the defendant is liable for costs appropriate to the court to which he is taken, provided, however, that the plaintiff obtains more than half of the amount which the lower court has jurisdiction to award. If the plaintiff recovers less than that amount the defendant is liable only for costs applicable in the lower court, in the absence of a special order.�

This has always been understood to be the practice in Papua New Guinea.

As the trial of the substantive matter is yet to be heard, I do not consider it necessary to discuss the issue as to the appropriate scale of costs at this stage. That should be left for the taxing master.

Ruled that claim within jurisdiction of National Court

Lawyer for the applicant/defendant: Kei Vuhata Kapa.

Lawyer for the plaintiff/respondent: J Weigall.