Often the most effective way to enforce a money judgment is to intercept money owed to the debtor before it reaches them. Order 13 Division 7 of the National Court Rules 1983 provides for it.
Rule 53
“garnishee” means a person from whom a judgement creditor claims that a debt is due or accruing to the judgement debtor.
“judgement creditor” means a person entitled to enforce a judgement or order for the payment of money (not into Court).
“judgement debtor” means a person required by a judgement or order to pay money (not into Court).
Rule 54 — conditions are ignored
(1) A sum standing to the credit of a judgement debtor in an account in a bank shall be a sum due or accruing to the judgement debtor, notwithstanding that any condition relating to demand of payment is unsatisfied.
(2) A sum standing to the credit of a judgement debtor in a deposit account shall likewise be a sum due or accruing, notwithstanding that any of the following has not been satisfied —
(a) a condition that notice is required before money is withdrawn;
(b) a condition that a personal application must be made;
(c) a condition that a deposit book must be produced;
(d) a condition that a receipt for money deposited must be produced.
Ordinarily money in a bank account is payable only on demand or on the conditions of the account. Rule 54 sweeps those aside for garnishee purposes. A term deposit requiring notice is still attachable.
Rule 55 does the same for employment: salary or wages not yet payable to a judgement debtor shall be deemed to be a debt accruing to the judgement debtor from the garnishee. See garnisheeing wages or a bank account.
Rule 56
(1) A judgement creditor may, with the leave of the Court, but subject to any Act, file and serve on the garnishee a garnishee notice in Form 60 — (a) of attachment, to the extent of an amount specified, of debts due or accruing to the judgement debtor from the garnishee; and (b) of motion for payment.
(2) The creditor may move for leave without filing or serving notice of the motion.
(3) The Court shall not give leave unless it appears that (a) the judgement or order is unsatisfied; and (b) there is a debt due or accruing to the judgement debtor from the garnishee.
(4) The Court shall, in giving leave, fix the amount for specification in the notice.
The amount shall be the sum of —
(a) the amount due under the judgement on the date leave is given; and
(b) such amount as the Court may determine having regard to (i) interest on the judgement debt accruing after that date; and (ii) costs of the garnishee proceedings.
The amount attached is not merely the judgment sum. It includes an allowance for interest continuing to accrue at 8% yearly under Order 12 Rule 6, and for the costs of the garnishee proceedings themselves.
Rule 56(7) — the notice must include such particulars of the debt attached as are known to, or reasonably capable of ascertainment by, the judgement creditor and as are necessary to enable the garnishee to identify the debt — including, where the garnishee is a banker or other person carrying on business at more than one place, the place of keeping of the account.
That last requirement is practical: a bank with branches across the country cannot be expected to search every one.
Rule 57
(1) The judgement creditor shall, not less than three days before the date fixed by the garnishee notice for the motion for payment, serve the garnishee notice and each affidavit used on the motion for leave — on the garnishee personally and on the judgement debtor.
(2) Service on a garnishee may not be effected outside Papua New Guinea.
The judgment debtor is entitled to notice as well — it is their money being taken, and they may wish to dispute the debt or apply to vary the amount.
Sub-rule (2) is a real territorial limit: a foreign bank or a foreign employer cannot be garnisheed under this Division. Where the debt is held abroad, this route is not available.
Rule 58 — the moment it bites
(1) On service of a garnishee notice on a garnishee, all debts mentioned in the notice and due or accruing to the judgement debtor from the garnishee shall be attached and bound in the hands of the garnishee to the extent of the amount specified.
(2) Where, after service, the garnishee acts with reasonable diligence to give effect to the attachment but nevertheless pays the judgement debtor or otherwise deals with the debt, the Court may order that the debt attached be reduced to the extent of the payment or satisfaction.
Attachment operates immediately on service of the notice. From that moment the garnishee must not pay the debtor.
Sub-rule (2) protects a garnishee acting in good faith. A bank that pays out despite acting with reasonable diligence — because a transaction was already in train, for instance — may have the attached debt reduced accordingly. A garnishee who simply ignores the notice has no such protection.
Rule 59
(1) A garnishee may pay into Court all debts attached to the extent of the attachment.
(2) If the garnishee pays into Court before the day fixed by the notice for the motion for payment —
(a) he may retain out of the debts attached the sum of K10.00 for his costs; and
(b) he shall not, unless he takes some further step in the proceedings, be liable for any costs of the garnishee proceedings.
A bank or employer served with a garnishee notice is caught between two claimants. Rule 59 gives a clean exit: pay the money into Court before the return date, retain K10.00 for costs, and take no further part.
A garnishee who does that incurs no costs liability. One who contests the proceedings, or ignores the notice and pays the debtor, may.
Sources
- National Court Rules 1983 — O 12 r 6; O 13 rr 2, 53–59, Div 7; O 22; 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.