The two most commonly garnisheed debts are money in a bank and wages not yet paid. Order 13 Division 7 of the National Court Rules 1983 deals expressly with both.
Rules 55 and 56(6)
Salary or wages not yet payable to a judgement debtor shall, for the purposes of this Order, be deemed to be a debt accruing to the judgement debtor from the garnishee.
The amount to be fixed by the Court from salary or wages payable to the judgement debtor shall not exceed two-thirds of the sum payable each normal pay-day until the extent of the attachment is satisfied — but the judgement debtor may apply to the Court at any time for a variation of the sum fixed, with notice to the judgement creditor.
The Court fixes the amount, and it may not exceed two-thirds of each pay. The debtor keeps at least a third.
And the cap is not the end of it: the debtor may apply at any time for a variation, with notice to the creditor. A debtor left unable to meet basic living costs should apply rather than simply default. There is no time limit on that application — “at any time”.
Note also the opening words of Rule 56(1): the garnishee notice is issued “subject to any Act”. Where legislation protects particular earnings or benefits from attachment, that legislation prevails over the Rules.
Rule 54
(1) A sum standing to the debtor’s credit in an account in a bank is a sum due or accruing, notwithstanding that any condition relating to demand of payment is unsatisfied.
(2) The same applies to a deposit account notwithstanding a condition that notice is required before withdrawal, that a personal application must be made, that a deposit book must be produced, or that a receipt for money deposited must be produced.
From leave to payment
- Move for leave under Rule 56(1). This may be done without filing or serving notice of the motion — r 56(2).
- Satisfy the Court that the judgement is unsatisfied and there is a debt due or accruing from the garnishee — r 56(3).
- The Court fixes the amount, being the sum due plus an allowance for interest accruing after leave and costs of the garnishee proceedings — r 56(5); and for wages, not more than two-thirds of each pay — r 56(6).
- File and serve the garnishee notice in Form 60, with each affidavit used on the leave motion, on the garnishee personally and on the judgement debtor, not less than three days before the return date — r 57(1). Service on a garnishee may not be effected outside Papua New Guinea.
- On service the debt is attached and bound in the garnishee’s hands — r 58(1).
- Move for payment on the return date.
Rules 60 and 61
Rule 60 — where the garnishee has paid into Court, the Court shall, on motion pursuant to the garnishee notice, order payment out to the judgement creditor of the money paid in, or so much as is required to satisfy the judgment, together with interest and such costs of the garnishee proceedings as may be payable to the judgement creditor out of the debt attached.
Rule 61 — otherwise the Court may order the garnishee to pay the judgement creditor the debt attached to the extent specified, or so much as is required to satisfy the judgment, together with interest and costs.
Both are subject to Rules 62 and 63.
(1) The judgment creditor’s costs of the garnishee proceedings shall, unless the Court otherwise directs, be retained by the judgement creditor out of the money recovered, and in priority to the debt under the judgement.
(2) Where the garnishee incurs trouble or expense in giving effect to the attachment, the Court may order the judgement creditor to pay the garnishee such sum as the Court thinks fit by way of recompense — and that sum is included in the creditor’s costs of the proceedings.
Rules 62 and 63
Rule 62 — the garnishee disputes liability. Where, on the hearing, the garnishee disputes liability to pay the debt attached, the Court may hear and determine the questions in dispute and direct the entry of such judgement, or make such order, as the nature of the case requires.
Rule 63 — someone else claims the money. Where it appears that a person other than the judgement debtor is, or claims to be, entitled to the money or the debt, or to any charge or lien on, or other interest in it, the Court may make orders for giving that person notice, and may hear and determine his claim.
Rule 64 — the garnishee is discharged
(1) Where a garnishee pays money into Court, pays in compliance with an order, or execution is levied against him under an order in the garnishee proceedings, the payment or levy shall be a discharge of the liability of the garnishee to the judgement debtor to the extent of the amount paid or levied.
(2) That is so notwithstanding that the garnishee proceedings are subsequently set aside, or that the judgement from which they arise is subsequently reversed.
(3) It does not apply to a payment or levy on account of costs the garnishee is ordered to pay.
A bank or employer who complies with a garnishee order is protected absolutely against the debtor, even if the judgment is later reversed on appeal. Without that protection, no garnishee could safely comply.
Where the judgment is reversed, the debtor’s remedy lies against the judgment creditor, not against the garnishee. Compare the undertaking as to damages in interlocutory matters, which performs a similar risk-allocating function.
Sources
- National Court Rules 1983 — O 12 r 6; O 13 rr 53–65, Div 7; O 14 Div 7; Form 60
Before relying on anything here, read the current text of the National Court Rules 1983 and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.