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Bank of Tonga v Fotofili [1998] TOLawRp 9; [1998] Tonga LR 69 (13 May 1998)

IN THE SUPREME COURT OF TONGA
Supreme Court, Nuku’alofa

C274/96 & 336/97

Bank of Tonga

v

Fotofili

Lewis CJ
8, 12, and 13 May 1998; 13 May 1998

Practice and procedure ⎯ garnishee proceedings against Kingdom Crown immunity ⎯ garnishee proceedings

The judgment debtor was paid a salary by the Kingdom of Tonga as a noble and Parliamentary basic salary. The judgment creditor made an ex parte application which sought to garnishee sums owed, or to be owed, by the Kingdom of Tonga to the judgment debtor. The Kingdom sought to assert its immunity from garnishee proceedings under the Crown Proceedings Act (Cap 13).

Held:

1. Garnishee proceedings cannot be brought in respect of any money due or accruing due, or alleged to be due or accruing due, from the Crown. Garnishee proceedings cannot succeed where the subject property was that of the Crown.

2. The application is refused.

Cases considered:

Hollinshead v Hazleton [1916] 1 AC 428

Statutes considered:

Bankruptcy (Ireland) Amendment Act 1872 (UK)

Civil Law Act Cap 25

Crown Proceedings Act Cap 13

Regulations considered:

Supreme Court Rules 1991

Counsel for judgment creditor: Ms Tapueluelu
Counsel for judgment debtor: No appearance

Judgment

These proceedings arise out of an action brought by the plaintiff Bank against the Hon Kalaniuvalu Fotofili, to recover a substantial sum of money owed by him under a loan agreement. The Bank obtained judgment in default of defence (case number 336/97) on December 17th, 1997, and an order was issued that the Hon Fotofili deliver up his dwelling house at Fongoloa in satisfaction of the sums owed.

The Judgment Creditor makes exparte application seeking to garnishee sums owed, or to be owed, by the Kingdom of Tonga to the Judgment Debtor. These sums are firstly his salary as a noble, amounting to $6,000.00 per annum, to be given over at the rate of $495.00 per annum per fortnight, and secondly his “Parliamentary basic salary” of $12,375.00 per annum.

The Kingdom seeks to assert its immunity from garnishee proceedings under the Crown Proceedings Act (Cap 13). This decision therefore centres on the interpretation to be given to the section 8 of the Act in dispute. That section provides:

“S8 No execution or attachment or process in the nature thereof, shall be issued against the property or revenues of the Kingdom of Tonga in any suit, but when Judgment is given against the Kingdom of Tonga, the Registrar of the Supreme Court shall give to the party in whose favour a judgment is given a certificate in the form in the Schedule to this Act” (my emphasis).

The Bank accepts, as I understand its submissions, that garnishee proceedings are caught in this section by virtue of the section’s first clause, which I have highlighted above. However, counsel for the Bank argues that the “property” sought in this case is not that of the “Kingdom of Tonga” as envisaged by the statute. Citing a House of Lords decision, namely Hollinshead v Hazleton [1916] 1 AC 428, as authority for this proposition.

Having read this decision, I have formed the opinion that it cannot avail the plaintiff in this case. It was a decision under the English Bankruptcy (Ireland) Amendment Act 1872, and as such is not directly applicable here. It is indeed true that in that case, an order was made appropriating part of a Member of Parliament’s salary in order to satisfy his creditors. However, the order appears to direct the Member to pay the sums required once he received the salary, and was not attached to his salary before it reached him. Moreover, given the existence in Tonga of the Crown Proceedings Act, I do not think that an aged English statute can be used in this way, via the Civil Law Act Cap 25 or at all.

The Solicitor-General in his submissions argues that s 8 is an unambiguous provision, and one which covers the situation in the instant case. His case is that garnishee proceedings, by definition, seek property from a party owing a debt to the Judgment Debtor. The property sought in this case, therefore, must be that of the Crown, up until the point where the money is transferred from the Kingdom to the Judgment Debtor. Since the Bank seeks to bring proceedings before this has taken place, it brings an action “... against the property or revenues of the Kingdom of Tonga ...” which cannot, as a result of s 8 be preferred. Salaries paid by the Crown remain “property” of the Crown pursuant to s 8 until they are paid into the employee’s bank account.

Given the existence of the Crown Proceedings Act, the references made in submissions to Halsbury’s Laws of England, and from there to the English Rules of the Supreme Court cannot bind this court. I note, however, that the English position mirrors that taken by the Tongan Act, as I have interpreted it. Briefly, it seems clear that garnishee proceedings cannot be brought “... in respect of any money due or accruing due, or alleged to be due or accruing due, from the Crown” - RSC Order 77, 80 r 16(1).

To conclude, it is clear that s 8 cannot properly be construed in the manner claimed by counsel for the Bank. Garnishee proceedings cannot succeed where the subject property is that of the Crown. Given the circumstances of this case, and for these reasons, the application is refused.

Costs of this application to be those of the Kingdom of Tonga to be fixed or agreed.