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Bongoro v Palma [2016] PGNC 188; N6384 (29 June 2016)

N6384

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

MP (COMM) 15 of 2016

IN THE MATTER OF THE INSOLVENCY ACT
CHAPTER NO. 253 AND IN THE MATTER OF

CAMILLUS DAGMA
BONGORO
Plaintiff

AND:
BARI PALMA
Defendant

Waigani: Hartshorn J.

2016: 24^th, 29^th June

Application to dismiss debtor’s summons – s. 24 (1) (a) and (b) Insolvency Act considered

Cases cited:

PNG Lands Ltd v. Tano Dawahi Ltd (2016) N6307
Rex Paki v. Motor Vehicles Insurance (PNG) Ltd (2010) SC1015
Timothy Patrick v. Pepi Kimas (2010) N3913

Counsel:

Mr. M. Kombri, for the Plaintiff
Mr. R. G. Otto, for the Defendant

29^th June, 2016

1. HARTSHORN, J: This is a decision on an application to dismiss a debtor’s summons. The application is made pursuant to s. 24 (1) (a) and (b) Insolvency Act.

Background

2. A debtor’s summons has been issued by Mr. Bongoro the plaintiff, against Mr. Palma the defendant, for payment by Mr. Palma of K 275,119.06 together with interest. This is the amount of costs payable by Mr. Palma to Mr. Bongoro as taxed by the taxing officer in Election Petition proceeding 93 of 2012, on 26^th January 2016.

3. Mr. Palma seeks to dismiss the debtor’s summons as he contends that:

a) an application to review the taxation of costs decision has been filed but has not yet been heard due to alleged delays by the Supreme Court Registry;

b) until there is a decision on the review, there is no finality as to how much is owed by him as taxed costs to Mr. Bongoro.

4. Mr. Bongoro submits that the application to dismiss the debtor’s summons should be refused as amongst others:

a) the filing of the application for review does not operate as a stay of the debtor’s summons;

b) the application for review was filed out of time.

5. Section 24 (1) Insolvency Act is as follows:

“24. Application to dismiss summons.

(1) A debtor served with a debtor's summons may apply to a Judge in the prescribed manner and within the prescribed time to dismiss the summons on the ground that—
(a) he is not indebted to the creditor serving the summons; or
(b) he is not indebted in an amount that justifies the creditor in presenting an insolvency petition against him.”

6. Section 24 (1) (a) Insolvency Act provides the ground for dismissal as being that the debtor is not indebted to the creditor. I interpret this to mean that the debtor is not indebted to the creditor for any amount as distinct from being indebted to the creditor for the amount stated in the debtor’s summons.

7. In this instance, Mr. Palma in his evidence has not denied that he is indebted to Mr. Bongoro. He deposes that he “cannot be deemed to owe” Mr. Bongoro the taxed amount, which is not the same as a denial of indebtedness. Counsel for Mr. Palma conceded that Mr. Palma owes Mr. Bongoro some amount but that the amount could not be finalised until the review was completed.

8. I am not satisfied therefore that Mr. Palma can succeed under s. 24 (1) (a) as it has not been shown that he is not indebted to Mr. Bongoro for any amount.

9. As to s. 24 (1) (b), that Mr.Palma is not indebted in an amount that justifies a creditor presenting an insolvency petition against him, s. 25 (2) Insolvency Act provides that the amount of a debt of a single creditor must be over K100.00 before the creditor may present an insolvency petition. Here there is no evidence that the amount of indebtedness of Mr. Palma to Mr. Bongoro is less than K100.00. Mr. Palma is unable to succeed under s. 24 (1) (b) Insolvency Act therefore.

10. Consequently, as I am satisfied that Mr. Palma has been unsuccessful in applying for dismissal of the debtor’s summons on the grounds provided for in s. 24 (1) Insolvency Act, his dismissal application should fail. Given this it is not necessary to consider the other submissions of counsel apart from as to costs.

11. As to costs, Mr. Bongoro seeks them on a solicitor client basis. I am not satisfied that a case has been made out for such an award when the appropriate tests for such an award referred to in Rex Paki v. Motor Vehicles Insurance (PNG) Ltd (2010) SC1015, Timothy Patrick v. Pepi Kimas (2010) N3913 and PNG Lands Ltd v. Tano Dawahi Ltd (2016) N6307 are considered.

Orders

12.

1. The notice of motion of the defendant filed 30^th May 2016 is dismissed;
   
2. the costs of and incidental to the said notice of motion of the plaintiff are to be paid by the defendant on a party party basis to be taxed if not agreed.
   

_________________________________________________
Kombri & Associates : Lawyers for the Plaintiff
Themis Lawyers: Lawyers for the Defendant