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Bongoro v Palma [2017] PGNC 432; N8756 (1 June 2017)

N8756

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

MP 15 OF 2016

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

CAMILLUS DANGIMA
BONGORO
Petitioner

AND:
BARI PALMA
Respondent

Waigani: Hartshorn J
2017: 31^st May, 1^st June

INSOLVENCY - Application for an adjudication of insolvency

Cases Cited

Camillus Bongoro v. Bari Palma (2016) N6384

Counsel:

Mr. M Kombri, for the Petitioner
Mr. W. Otto, for the Respondent

Oral decision delivered on
1^st June 2017

1. HARTSHORN J: The petitioner Camillus Dangima Bongoro, seeks that Bari Palma be adjudged insolvent.

2. There was an appearance by counsel for Mr. Palma to oppose the petition.

3. The creditor’s petitions of Mr Bongoro petitions that the act of insolvency committed by Mr. Palma is that he failed for 30 days to pay, secure or compound, a debt of K257,119.06 that he was required to pay, by a debtor’s summons. Such an act of insolvency is provided for in s.21(1)(h) Insolvency Act.

4. The debtor’s summons was issued in proceeding MP 15 of 2016 on 21^st March 2016 and was served by substituted service as ordered by the court on 4^th April 2016, by publication on 20^th May 2016 in both the Post Courier and National newspapers.

5. The debtor’s summons requires payment of K275,119.06 taxed costs awarded in proceeding EP 93 of 2012.

6. I am satisfied that the creditor’s petition, the affidavit verifying petition contained at the foot of the petition, the summons endorsed on the petition and the affidavit in support, were served on Mr. Palma personally and that he acknowledged receipt on 2^nd August 2016, by virtue of the affidavit of service of Mr. Martin Kombri filed 3^rd August 2016.

7. No objection has been taken to the form of these documents. I am satisfied with their form in any event. I note that the creditor’s petition and affidavit verifying petition are both signed and sworn respectively by Mr. Bongoro.

8. I note further, that as required by this court, as there was no appearance by Mr. Palma on 21^st April 2017 for the hearing of this petition, the order of this court which adjourned the hearing to 18^th May 2017 was advertised in both daily newspapers.

9. Mr. Palma then appeared by his counsel on 18^th May 2017 and his counsel appeared before the court on the further adjourned hearing on 31^st May 2017.

10. Counsel for Mr. Palma submitted first, that Mr. Palma does not owe anything in this proceeding. There is however, no evidence before this Court to the effect that Mr. Palma does not owe anything. The only affidavit filed by Mr. Palma himself is that filed in support of an application for an adjournment that has already been dealt with. In that affidavit Mr. Palma deposes that amongst others, he disputes the claim, which is an order for costs against him and which is the subject of a review pending in the National Court.

11. Mr. Palma does not give any details of why he disputes the claim – no specifics are given. Also, no affidavit is filed by Mr. Palma pursuant to s. 34 Insolvency Act. This provision provides for a debtor intending to show cause against a petition, to file an affidavit that is intended to be used for that purpose. Mr. Palma has not filed such an affidavit.

12. In addition, the notice of motion for an application for review in the National Court was filed on 26^th February 2016. The last mention of the matter in that Court was February 2017 but there has not been any appearance before the Court in that proceeding on behalf of Mr. Palma since October 2016.

13. There is no evidence of any stay of this proceeding and so this court is entitled to proceed with the hearing of the creditor’s petition. I note that the review application was filed some 15 months ago and Mr. Palma has been aware at least since May 2016 that a debtor’s summons had issued and since August 2016 that a creditor’s petition had issued against him in respect of the subject debt.

14. Applications for the debtor’s summons to be dismissed and stayed have been refused in MP 15 of 2016 and there is no evidence of any successful appeals against these refusal orders. The petition has been brought on the basis of an act of insolvency by non-compliance with a debtor’s summons and not strictly because of non-payment of debt.

15. I note also in my decision refusing the dismissal of the debtor’s summons reported as (2016) N6384, at paragraph 7 that Mr. Palma in his evidence has not denied that he is indebted to Mr. Bongoro and that his counsel conceded that Mr. Palma owes Mr. Bongoro some amount. There is no evidence that that part of my decision has been successfully appealed.

16. The second point raised on behalf of Mr. Palma is that there is no evidence that the taxed costs have been converted into a judgment debt and that this is necessary pursuant to s. 24 Insolvency Act. Section 24 Insolvency Act does not provide any such thing. Clearly that reference is a mistake.

17. In any event, it is not necessary for a debt to be a judgment debt for a debtor’s summons to be issued in respect of that debt. I refer to s. 23(1) and s. 21(1)(h) Insolvency Act in this regard.

18. Pursuant to s.23(1), a debtor’s summons may be granted on a creditor proving to a Judge’s satisfaction that a debt sufficient to support a petition in insolvency is due. Pursuant to s. 21(1)(h), that sum is K100.00.

19. Counsel for Mr. Palma did not rely on any authority for his submission that only a judgment debt, as distinct from a debt due, can be the basis for the issuance of a debtor’s summons. In any event, the debtor’s summons has not been successfully appealed, set aside or stayed and non-compliance with the debtor’s summons is the act of insolvency relied upon.

20. The third point raised on behalf of Mr. Palma is that Mr. Palma has not been tested that he owes the subject amount. I am not clear exactly what is meant by this. It is clear however that Mr. Palma has had ample opportunity and plenty of time to properly dispute that he owes the subject debt in this proceeding, but he has failed to do so in this proceeding.

21. The fourth point raised on behalf of Mr. Palma is that this petition is premature as there is no judgment debt. I have already dealt with this point. The other points raised, that further steps were required to be taken and that this proceeding is unusual, have no merit and do not warrant further consideration.

22. Consequently, pursuant to s. 35 Insolvency Act, I am satisfied as to the proof of the debt deposed to and as required by Mr. Bongoro, in his affidavit evidence and of the act of insolvency alleged, being that a debtor’s summons has not been complied with. Consequently, for the above reasons, I adjudicate Mr. Bari Palma, the debtor, insolvent.

Orders

23. It is ordered that:

a) The debtor BARI PALMA is adjudicated insolvent;

2. The 14^th June 2017 at 9:30am is fixed as the date for the holding of a general meeting of creditors of Bari Palma for the election of a trustee;
   

100. On 30^th June 2017 at 9:30am Bari Palma shall attend at the office of the Registrar of National Court Waigani and shall deliver to the trustee acting in respect of his estate, a full and accurate statement verified on oath of;
     

i) his debts and other liabilities;

2. the names and residences (as far as they are known to him) of his creditors and;
3. the cause of his inability to meet his engagements.
   

4. Bari Palma shall pay Camillus Dangima Bongoro’s costs of and incidental to this petition;
   
5. Time is abridged.

__________________________________________________________________
Kombri and Associates Lawyers: Lawyers for the Petitioner
Win and Win Lawyers: Lawyers for the Respondent