Court dismisses instalment order application where judgment debtors lack current ability to pay despite having assets.

[*625] 1982 September 21

(N. NICOLAOU, AG. D.J.)

IN THE DISTRICT COURT OP NICOSIA

Irene Miltiadous,

Plaintiff,

v.

Neophytos Theologhos and Another,

Defendants.

(Action No. 2176/82).

Civil Procedure - Execution - Judgment debt - Instalment order - Principles applicable - Part IX of the Civil Procedure Law, Cap. 6 - Judgment-debtors not in a position, at present, to be ordered to pay any instalment - Application dismissed.

M. Charalambides, for Judgment-Creditor.

Judgment-Debtors in person.

JUDGMENT

The following judgment was delivered by:-

N. NICOLAOU. AG.D.J.; The applicant judgment-creditor [*626] obtained judgment against both defendants on 13.5.82 for the sum of

£72.850 mils with interest thereon at 4% per annum from 15.5.82 to final payment, plus £20.150 mils costs.

The plaintiff on 6.7.82 filed the present application against both the above respondents by which she is seeking an order under the provisions of Part IX of the Civil Procedure Law, Cap. 6, for the payment of the above judgment-debt by monthly or other periodical paymente.

The applicants affidavit, which is attached to her application, is, inter alia, stating that the above judgment-debt is still due and unpaid and furthermore that the defendants are working, without stating what sort of work they are doing, and that they are in a position to honour their liabilities and for this reason the applicant asked the Court to issue the relevant order under Part IX of the Civil Procedure Law.

Both defendants, who are husband and wife, appeared in Court on 21.9.82 and were examined upon oath as to their financial position and as to their ability to pay their debt.

Respondent No. 1 has, inter alia, stated that he is not at all in a position to pay any sum towards his judgment-debt as he is completely out of work. He has in fact stated that he is as from 30.8.82 registered as an unemployed person with the Nicosia District Labour Office and he is in need of such work to support his family which consists of himself, his wife and four infant children. [*627]

He is a displaced person from Kyra. - Morphou and they are now residing at -Anthoupolis Refugee Establishment and he is staying in a house provided by the Cyprus Government.

He has further stated that during the year 1981 he has been out of work for nine months in spite of his effort to find employment even as a worker, his job really being a house-painter.

He is a cigarette smoker of about 10-12 cigarettes per day; he is not engaged in gambling at all now.

He even stated that as soon as his financial abilities change, he would certainly pay off his debt.

Respondent No. 2 has, inter alia, stated that she was born in Moutoulla village and her mother gave her as dowry £1,000.- instead of £2,000,- which was her original promise. She has no other means and no other income whatsoever.

She went on stating that during the year 1980 she took up employment as a road-worker and that now she is not working at all. She is a housewife, looking after her four infant children. She furthermore stated that the Welfare Office is providing them with some money, with the use of which they survive.

The Supreme Court on a number of occasions had the opportunity to discuss the principles that should guide the Court in the exercice of its powers under Fart DC of the Civil Procedure Law. [*628]

In the case of National Bank of Greece v. Nicos Trihinas. (1976) 2 J.S.C. 411, a non exhaustive enumeration of the fact's that will have a bearing on the decision of the Court is made which are the following

(a) The earnings of the judgment-debtor;

(b) The needs for his necessaries and those of his family, in which their age, if under 18, and their education are to be considered as "necessaries";

(c) Any other obligations of the judgment-debtor to any third person; and

(d) The magnitude of the debt and the period of time required to pay it off.

In Rolandis. Louka ana Soteriades Ltd. v. Andreas Koutsiou. (1970) 1 C.L.R. 25, it was indicated that expenses for cigarettes, drinks and other entertainment for the respondent and. his family are not considered as necessaries.

In the case of Anestos Adamou Kokoni v. .Xenophon Ioannides. (1963) 2 C.L.R. 468, it was, inter alia, stated that the debtor may not be allowed to go about creating obligations other than those for the essential needs of himself and his family and then putting them forward as an excuse for his inability to pay his judgment-debt.

In the said case of National Bank of Greece, v. Nicos Trihinas (supra) Pikis, Ag.P.B.C., as he then was, at p.4.13 states:-[*629]

"In determining whether the debtor should be ordered to pay a judgment-debt by monthly instalments and, if so by what amount, a balance must be kept between the need to keep the instalments realistically within the means of the debtor, without at the same time frustrating the reasonable expectations of a creditor to receive his money back. Whereas a debtor must not be harrassed by having to pay a debt, one must not gain the impression that a debtor will, without sufficient cause, be allowed, to write off his obligations. If this was to happen, business confidence would be seriously shaken, in an area where the public has a vital interest with adverse repercussions on business activities. "

"Part IX of the Civil Procedure Law is. a piece of legislation designed to create a mechanism for the payment of debt, out of the earnings of the debtor, where the debtor has no property that may be seized in execution and is otherwise unable to pay his debt immediately".

Section 86 of the Civil Procedure Law. Cap. 6, provides:-

"Where a judgment for the payment of money remains wholly or in part unsatisfied (whether a writ of execution has been issued or not) the [*630] judgment-creditor may apply that the debtor be examined respecting his ability to make the payment".

Section 88 provides:-

"On the appearance of the debtor before the Court he may be examined on oath by or. on behalf of the creditor and by the Court, respecting his ability to pay the money and for the discovery of property applicable to the payment, and as to the disposal which he may have made of any property; and he shall be bound to produce on oath, or otherwise, all books, papers and documents in his possession or power 'relating to property applicable to the payment".

Section 91 provides:-

"The Court may, if it thinks fit, upon or at any time after any such investigation, direct that the sum due under the judgment shall be paid by instalments at such times and in such amounts as it may think proper".

The corresponding procedure in England is effected -

(i) by Order 48 of the Rules of the Supreme Court 1965, Examination of Judgment Debtor, etc., and,

(ii) by the Debtors Act, 1869, s,5. [*631]

Before the Debtors Act, 1869, a judgment-debtor who failed to pay even through poverty was liable to indefinite imprisonment.

Section 4 of that Act provided that with certain exceptions no person should be arrested or imprisoned for making default in payment of a sum of money.

Sums payable in respect of death duties and purchase tax are also excepted, although the debtor has the protection of s. 4 in respect of other debts to the Crown. (Crown Proceedings Act,. 1947, s.26(2)). Furthermore, that section provides that even in the excepted cases imprisonment shall not exceed one year.

A judgment summons may be and usually is issued in the County Court, which has jurisdiction even though a High Court judgment is involved, (County Court's Act, 1959. ss. 139 and 120).

In the High Court it comes before a Judge of the Chancery Division in Bankruptcy, (Bankruptcy Act. 1914. s.107).

The applicant must obtain leave to issue it and must show by affidavit why it should be issued in the High Court. (Practice Direction, (1956) 2 All E.R. 928). The debtor is then examined as to his means and may be committed if he does not attend. If the Judge comes to the

conclusion that he has not paid as much as he could have done, he may commit him to prison then and there; but he [*632] usually orders him to pay by stated instalments, making an order that he be committed on failure to do so.

Debtors Act, 1869. s. 5.

Section 5 of the Debtors Act, 1869, provides for the committal to prison for a term not exceeding six weeks, or until payment of the sum due, of any person who makes default in payment of any debt or instalment of any debt due from him in pursuance of any order or judgment of a competent Court,

Before committed, it must be proved to the satisfaction of the Court that the person making default has or has had since the date of the order or judgment the means to pay and has neglected or refuses or neglects to pay same, (Nesom v. Metcalfe, (1921) 1 K.B. 400).

On being satisfied that the debtor has had the means it is the practice to make an instalment order, which may be discharged where default has been made in paying the instalments to enable the creditor to take proceedings in some other way, e.g. by execution or bankruptcy. (Re Mitchell. (1910) 54 S.J. p.252; Stenor v. Fowle. (1887) 13 App, Cases p.20).

Bearing in mind the above stated authorities and weighing the evidence before me, I find that both respondents are not in a position, at present, to be ordered to pay any instalment, however small it may be, and for these reasons the application is, therefore, dismissed with no order as to costs.

Application dismissed

without costs.