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Tau v Raka [2007] PGNC 99; N3202 (1 October 2007)

N3202
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1419 OF 2006

BETWEEN:

KEDEA TAU
Plaintiff

AND:

LOHIA RAKA, THE SHERIFF OF PAPUA NEW GUINEA
Defendant

Waigani: Davani .J
2007: 15 August
1 October

PRACTICE AND PROCEDURE – extension to give s. 5 notice – notice did not issue – plaintiff did not issue writ within extended period – notice effectively expired – s. 5 of Claims By and Against State Act.

PRACTICE AND PROCEDURE – claim for unpaid costs and maintenance arrears – to be lodged in the courts from which action emanated – claim irregularly before the court – abuse of court process.

INTEREST – claim for – must be made on court proceedings – claim can be at the agreed rate or at a prescribed rate – s. 1 (2), 3 of Judicial Proceedings (Interest on Debts and Damages) Act.

Cases Cited:

Papua New Guinea Cases
Nil

Overseas Cases

London, Chatham and Dover Railway Co v South Eastern Railway Co [1893] UKLawRpAC 41; [1893] AC 429;
FA Pidgeon and Son v Daneshurst Investments [1986] 1 Qd R 448;
Gilsenan Melpa Pty Ltd v Tom Yalu [1993] PNGLR 132 N1161.

Counsel:

M. Age, for the plaintiff
W. Hagahuno, for defendants

DECISION

1 October, 2007

1. DAVANI .J: Before me is Notice of Motion filed by Williams Attorneys for and on behalf of the defendant seeking orders that;

1. The whole proceedings be dismissed for lack of s. 5 Notice issued pursuant to the Claims By and Against the State Act (‘CBASA’) or alternatively that;

2. Proceedings be dismissed for disclosing no reasonable cause of action pursuant to O. 12 r. 40 (1) (a) of the National Court Rules (‘NCR’);

3. Costs and other orders.

2. ;ټThe defe defendant dant relies on the affidavit of Bernard Koae sworn on 4 December, 2006.

3. &##160;;The tiff opposes thes this application and relies on her affidavit sworn on 30 M 30 March,arch, 2007 and filed on 3 April, 2007.

4. ـ By AmendAmended Writ of Summonummons ands and Statement of Claim filed on 5 October, 2006, the plaintiff makes a claim for damages and interest. The claim for damages is under the following heads;

- negligence;
- loss and damages;
- maintenance and costs.

5. & The fact facts are as pleaded in the Statement of Claim and which are denied by the defendant. The plaintiff alleges the following;

1. On 3 January, 1996, the Poresby ict Cordered in proceedings DC 485 of 1995 that ohat one Tane Tau Peru Peruka pay maintenance for the plaintiff;

2. Tau Peruka filed an appeal against this order but which was dismissed on 5 March, 1997 for want of prosecution and the District Court order of 3 January, 1996, was re-instated;

3. Tau Peruka applied to have the appeal re-instated but the application was dismissed on 5 July, 1999;

4. Because of non-payment of maintenance, the plaintiff applied to the Port Moresby District (Family) Court to enforce the maintenance order. On 23 December, 1999, the Port Moresby District Court issued an order for the seizure of a vehicle, GX Toyota Land Cruiser Registration No. CAD 387 owned by Tau Peruka;

5. On 14 April, 2000, the Port Moresby District Court again issued a second order for the seizure of the said motor vehicle;

6. On 9 June, 2000, the vehicle was seized by the police and handed over to the defendant’s office, situated at Gordons, National Capital District;

7. Thereafter, the defendant engaged the services of a private auctioneer, Mioks Real Estate and Auctioneer, to auction confiscated goods including the said motor vehicle;

8. Tau Peruka appealed to the Supreme Court but the appeal was dismissed on 27 September, 2000;

9. The vehicle was successfully auctioned on 24 February, 2001, for K35,000.

10. During the period 24 February, 2001, to 16 February, 2006, the plaintiff requested from the defendant, the proceeds of the auction sale, to be paid to her. On 23 October, 2001, in proceedings WS 1518 of 2001, the defendants filed proceedings against the auctioneer to recover K35,000 together with interest. The plaintiff pursued payment of the proceeds of the auction for over 5 years and incurred costs, as a result;

11. On 17 February, 2006, the plaintiff received a cheque for K34,120.00 from the National Judicial Staff Services, being payment of the auction proceeds. K880.00 was deducted by the defendant as his fees;

12. As at 17 February, 2006, the plaintiff alleged in the Writ of Summons and Statement of Claim, that the maintenance arrears and costs due to her were as follows;

- maintenance for Joseph Tau, K4,500.00;

- maintenance for Tau Tau, K19,725.00;

- maintenance arrears per family court order 3/1/96 - K5,745.00;

- legal costs as per family court order dated 3/1/96, K500.00;

- costs ordered by Supreme Court 11/8/00 and 27/9/00 estimated at K4,530.00.

13. The plaintiff seeks the balance of the damage owing to her and interest which she calculates as follows;

- balance of damage - K3,264.00;

- interest at 8 percent on the amount of K35,000.00 from 24 February, 2001 to 17 February, 2006 - K14,000.00;

- interests and other orders.

Application to dismiss proceedings

6. &##160;;i. S.i. S. 5 Not5 Notice - Kedea Tau (the plaintiff) has attached to her affidavit copy of s. 5 notice dated 26 October, 2004. In that notice, the plaintiff states this;

"Notice is hereby given pursuant to s. 5 of the Claims By and Against the State Act 1996 that the proposed plaintiff wishes to institute proceedings in the National Court against the State as second defendant (Sheriff of Papua New Guinea being the first defendant) for damages and costs to be paid out of the consolidated revenue fund as a result of an act or default of the Sheriff or a sheriffs officer in relation to court proceedings DC 485 of 1995, CIA 183 of 1996 and SCA 70 of 1999."

7. Alto atd cheKedo Taua#8217#8217;s affidavit is letter from the Office of the Acting Secretary & Attorney-General dated 15 Sepr, 20ich aledgeeipt e plaintiff’s lawyer’s letter of 5 Augu August, 2st, 2004, 004, and wand which hich granted the plaintiff an extension of 21 days to file notice pursuant to s. 5 of the Claims By and Against the State Act.

8. ټThtreafthr, the plai plaintiffs lawyer sent a letter dated 5 August, 2004, addressed to the Attorney-General seeking "...tallow exte of time to give written notice of her intention to make a claim againsgainst thet the Inde Independent State of Papua New Guinea...". The letter states further "...We ask therefore that you allow a further period of time to enable Ms Tau to give a written notice of her intention to make a claim against the State." I discuss the significance of these passages, later below.

9. &&#160Stat did did not reot respond to this letter. The Writ of Summons and Statement of Claim was filed on 29 September, 2006, and subsequently amended on 5 October, 2006.

10. ;&#16Hagahuno fono for the the defendant submits that the s. 5 notice given by the plaintiff was in relation to the nature of the claim referred to in that notThat notics not apply to the plaintiff’s pr;s presentesent clai claim because the plaintiff received the monies the subject of the notice, on 17 February, 2006. The undisputed facts are that the Sheriff paid a sum of K34,120.00 to the plaintiff on 17 February, 2006.

11. ҈&The plai plaintiff&tiff’s Writ of Summons and Statement of Claim was filed on 29 September, 2006, some 7 months after payment to the plaintiff by the Sheriff and 2 years and 1 month, after the Attorney-General granted the 21 days extension of time within which to give notice to the State. In that Statement of Claim, the plaintiff makes a claim for the balance due to her from the proceeds of the sale by auction, a sum of K3,264 and interest of K14,000.00.

12. Mr Hagahuno submits that s. 5 notice issued earlier was to claim the principal amount of K35,000.00. Interest, damages and costs would have been consequential upon issue of the Writ. He submits that because the plaintiff did not issue a writ after applying for the extension of time to give notice, although threats were made to issue and because the plaintiff accepted payment in full settlement of the claim, that once the plaintiff accepted the payment, that the s. 5 Notice issued earlier is now void. He submits that the plaintiff should make a fresh claim for damages and interest after the payment and that for that claim to hold, the plaintiff must give fresh s. 5 notice of her intention to claim interest and costs. He submits that there is no evidence that a s. 5 Notice was given after settlement of the principal amount advising, of the plaintiff’s intention to claim damages owing and interest. He submits that under those circumstances, the plaintiff has not given notice under s. 5 of the CBASA.

13. ټInimy vnow, notice gice given on 21 October, 2004 was in relation to the unpaid auction proceeds and damages and costs arising from that. I accept Mr Hagahuno’s submission because in Ms Age’s letter to the Attorney-General’s office of 6 August, 2004, she states the following;

"the said vehicle was received and later sold by the Sheriff through an auctioneer Mioks Real Estate and Auction Ltd for K35,000. Ms Tau was advised that the money was received by the auctioneer who failed to pay the proceeds of the sale to the Sheriff Trust Account in 2000. Ms Tau has not received any payment to date, despite her attendance at the Sheriff’s office on numerous occasions throughout the 3 years to date. Further, it appears that a draft Writ of Summons was prepared by the Solicitor-General in an effort to recover the money from the auctioneer. Ms Tau, having been shown a copy of the drat Writ of Summons and given her numerous visits to the Sheriff’s office, remained hopeful for the Sheriff’s office to commence proceedings against the auctioneer, hence she did not commence any court proceedings herself. To date, however, no court proceedings has issued a period of more than 3 years have lapsed.

We have recently written to the Sheriff asking whether the Sheriff will commence court action against the auctioneer to recover the K35,000, otherwise we have instruction to commence proceedings on behalf of Ms Tau against the Sheriff and the State to recover damages. No response has been forthcoming.

We ask therefore that you allow a further period of time to enable Ms Tau to give a written notice of her intention to make a claim against the State."

(my emphasis)

14. s A M didenot file court prrt proceedings until two (2) years later, on 17 February, 2006, and only after her client had received the proceeds of the auction sale.

15. &ـAtt to the affidavitdavit of t of the plhe plaintiff is copy of a Writ of Summons and Statement of Claim by the Sheriff of Papua New Guinea agains Auctr, filed on 23 October, 2001. In that Statement of Claim, the sheriff as the plai plaintiffntiff, pleads the present plaintiff’s claim and seeks recovery of the K35,000.00 together with interest and costs, from the auctioneer. Bernard Koae, the acting principal legal Officer of the National Judicial Staff Services deposes in his affidavit sworn on 4 December, 2006 the circumstances surrounding the filing of the Writ against the auctioneer. He states;

i. The sheriff, through the auctioneer, Miok Real Estate, sold the vehicle by auction. The auctioneer never paid the proceeds to the sheriffs account.

ii. The plaintiff accepted K34,120.00 from the Sheriff in full and find settlement of the auction proceeds and that there are no other payments outstanding or owing by the Sheriff to the plaintiff.

16. &##160;lai piff tiff responesponds to Bernard Koae’s affidavit by her affidavit sworn on 30 March, 2007. She states that at no time did she receive the paymf K3400 as and final settlement of her claim agai against tnst the Shhe Sheriff. Neither the plaintiff nor the defendant have put forward documentation showing that monies paid by the Sheriff were in full and final settlement of the claim or were not. All I have is the undisputed evidence that the plaintiff received K34,120.00 being the balance of the auction proceeds because the Sheriff retained K880.00 for his costs.

17. &Reverting back to the issu issues before the court, should this claim be dismissed because s. 5 Notice was not issued.

18. &ـSecondlyondly, shou should this claimismisecausre is no cauo cause ofse of acti action before the court.

19. ـ In relatrelation to the s. 5 Notice, thes shot the Notice issu issued byed by Age and Associates was in relation to the claim for the outstanding auction monies. After receiving xtensf timgive nove notice, and after giving notice dated 5ted 5 Augu August 2004, the plaintiff did not file court proceedings. In fact, instead of giving notice within the extended period, the plaintiff again asked for a further extension of time to give notice. The plaintiff was wrong in doing that. But in any event, between 5 August, 2004 and February, 2006, a period of approximately 1 year and 6 months, the plaintiff did not file court proceedings. The claim was settled in February, 2006. It was after the claim was settled that the plaintiff then filed court proceedings. And in that claim, the plaintiff claims for the balance of child maintenance arrears, interests and costs.

20. The evidence is that because maintenance arrears remained unpaid, the plaintiff took out enforcement proceedings in the District Court, which resulted in Tau Paruka’s vehicle being seized and auctioned for K35,000.00 on 24 February, 2001. Is the claim for the balance of these maintenance arrears rightly before this court? It is not. In any event, the "balance of damages" of K3,264.00 claimed by the plaintiff is not particularized to show whether it is maintenance arrears or Legal costs. Even then, the District Court maintenance arrears should not have been lumped together with Family Court and Supreme Court costs orders. This is clearly an irregularly pleaded claim and an abuse of court process. The appropriate thing to do under the circumstances was to claim the balance of the maintenance arrears in the Family Court, and pursue the aspect of outstanding costs orders in the courts from which these orders emanated, being proceedings DCA 485 of 1995 (District (Family) Court), CIA No. 183 of 1996 (National Court Appeal) and SCA 70 of 1999 (Supreme Court appeal).

21. &#160nd tiat s. 5 Notice dace dated 26 October, 2004 issued by the plaintiff was in relation to the claim for outstanding auction monies which have been paid. The s. 5 notice issued then is clearly not for outstanding maintenance arrears which makes up the "balance of damages" claim in the Writ of Summons and Statement of claim. The claim for outstanding maintenance arrears should be pursued in the District (Family) Court, not the National Court.

22. Adnitio, lly clhem foi inte interest mentioned in the issued s. 5 notice was not pursued because the outstanding auction proceeds paid.plaincannoim anrest component on its own unless on court proceedineedings. Igs. I deal deal with with this this further below. Clearly, s. 5 notice was not issued for the claim now before the court.

23. ii. Do toceerings discloisclose a cause of action? Because I have already found that s. 5 Notice did not issue, proceedings should rightly be dismissed. But I will ed toider econd issue because both parties have rave raisedaised subm submissions which ought to be considered.

24. ټ&#he plai plaintiffstiffs claim is for balance of damages and interest. The balance of damages is in relation to Family Courtreme costs and maintenance arrears. As stated above, enforcement of costs should be m be made iade in those particular courts. The sheriff is only responsible for funds which are held in the sheriffs account (s. 1 of Sheriffs Regulation 1983) and which are made up of "all monies payable to and recovered by the sheriff or his officers and all charges, fees, poundage and expenses which the sheriff is entitled to charge for his services." (s.2 of Sheriffs Regulations). The Sheriff is not responsible for payment of costs incurred in other courts.

25. Astfor aie mnante arrears, ars, a truck was seized and auctioned to recover these arrears. If there are maintenance arrears still showing, the proceedings should led i famiurt, his c

26.&#16. < &#160 &#160 In reIn relation to theresterest claimed, the plaintiff claims interest at 8 percent per annum. She has not pleaded the basis of this claim for 8 percent. If she is relying on the rate set out in s. 1 of the , then according to s.1 and s.2 of that act, Interest only applies in respect of matters in court. The plaintiff is claiming interest for the period starting 24 February, 2001 to 17 February, 2006. The Writ of Summons and Statement of Claim was filed on 29 September 2006. Obviously, 8 percent interest under the Judicial Proceedings (Interest on Debts and Damages) Act is not applicable. If the plaintiff is claiming interest from another source, she has not shown that.

27. Eftn ather ettel of notice tice was issued by Age and Associates, it did not file the Writ of Summons and Statement of Claim. It only did so after the plaintiff received monies owed to her. A pt lawould filed proceedingsdings imme immediatediately after receiving the extension of time, to also claim interest for the period the plaintiff did not benefit. She did not. Interest will only be claimed if there is an action on foot. This then takes me to the second issue.

28. ҈S buldroc proceedingedings be dismissed for disclosing no reasonable cause of action?

29. The plaintiff’s claim for interest is based on the Judicial Proceedings (Interest on Debts and Damages) Act.

30. ـThe plai tiff claimslaims K14,000.00 being interest outstanding for the period 24 February, 2001, to 17 February, 2006.

31. The Judicial Proceedings (Interest on Debts and Damages) Act, is an Act that "makes provision for interest in certain judgments." Furthermore, s. 1 and s. 2 of that Act are clear, that turt mder ist to be includedluded in t in the suhe sum for which the judgment is given (s. 1) and that nothing in subsection 1 applies to a debt on which interest is payable as a right whether under an agreement or otherwise (s. 2). The only time a party can claim interest is where proceedings have been filed. I set out in full, s. 1 (2) and s. 3 of the Act.

"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.

3. Interest on debt under judgment or order.

(1) Subject to Subsections (2) and (3), where judgment is given or an order is made for the payment of money, interest shall, unless the court otherwise orders, be payable at the prescribed rate from the date when the judgment or order takes effect on such of the money as is from time to time unpaid.

(2) Where, in proceedings on a common law claim, the court directs the entry of judgment for damages and the damages are paid within 30 days after the date of the direction, interest on the judgment debt shall not be payable under Subsection (1) unless the court otherwise orders.

(3) Where, in proceedings for damages on a common law claim, the court makes an order for the payment of costs and the costs are paid within 30 days after the ascertainment of the amount of the costs by taxation or otherwise, interest on the costs shall not be payable under Subsection (1) unless the court otherwise orders.

(4) Notwithstanding anything in this section, where the judgment given or the order made is given or made against the State—

(a) the rate of interest payable under Subsection (1) shall not exceed 8% yearly; and

(b) any payment under Subsections (2) and (3) shall be deemed to have been made on the date of the drawing of the cheque for payment; and

(c) where the sum awarded is increased on appeal—interest shall only be payable on the increase in accordance with this Section from the date when the appellate judgment or order takes effect."

32. &#16efer also to the case Gilsenan Melpa Pty Ltd v Tom Yalu [1993] PNGLR 132 N1161. In that case, the respondent owed thellanum ofy for done. There was delay in payment. The appellant pointed this this out out to thto the rese respondent and also that a charge of 2 percent was being incurred, as stated on the invoices that had been issued. Subsequently the principal amount of K24,153.50 was paid. The court found that there was no evidence that there was any agreement for the payment of interest because the agreement for the work was oral and there was no reference to interest.

33. &&#160resteonly only arose rose after the work was done and the words appeared on the bottom of the invoice. In that case, Justice Woods referred to the Judicrocee (Int on Debts and Damages) Act and s. 1 s. 1 of t of that ahat act. He pointed out that this legislation made it clear that interest under that section can only be awarded where there is an action and consequent order for the recovery of a debt or damages (see pg. 1 – head note 2). Thus, the original action must be for the original debt; there cannot be an action merely for interest. His Honour referred to the case of FA Pidgeon and Son v Daneshurst Investments [1986] 1 Qd R 448 at 451 where Connelly .J when referring to legislation similar to the Judicial Proceedings (Interest on Debts and Damages) Act said;

"Lord Denning M R at p 661 of Tehno-Impex had said that the Act only applied where judgment was given for the principal sum. The restrictive language in which s 3(1) (similar to our s 1) was framed reflects the fact that neither the Admiralty Court, nor Courts of Chancery awarded interest except in respect of monies for which they were giving judgment. See Lord Brandon's speech at p 116, and of course it was the established view that courts of common law had no jurisdiction to award interest, contract apart, save pursuant to statute. It follows that the plaintiff cannot obtain a judgment for interest in these circumstances pursuant to the Common Law Practice Act."

34. ټ&#ection tion 1 will will not apply where there is clear agreement for interest. In this case, there was no agreement for the payment of interest.

36. ـ In WaWallace v Motor Vehicles Insurance (PNG) Trust (1991) unreported N1037, Doherty J discussed the effects of the Judicial Proceedings (Interest on Debts and Damagct

37. ـ This cass case before me now can be distinguished from the instances where interest is charged by banks and creditcies. With banks, there is always an agreement to pay interest, whether in the mortgage doce document or the loan application. With credit agencies, interest is usually covered in the original application for credit facilities and, anyway, the penalty can be immediate by withdrawal of all credit facilities. The noting of an intention to charge interest on the bottom of invoices after goods have been supplied or work done does not assume thereby an agreement to pay interest, but it can be used as a claim for interest if court proceedings are taken for a debt and the Judicial Proceedings (Interest on Debts and Damages) Act is relied upon. However, as stated already, this does not cover a claim for the interest alone in such situations after the principal sum has been paid.