[1973] PNGLR 334

PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]

MARIA AKAWE (BY HER NEXT FRIEND LOA YA)

V

WELLS

Port Moresby
Prentice J

10 April 1973
4 May 1973
10 May 1973

INFANTS AND CHILDREN - Sanctioning of settlements - Power of Court - Relevant consideration is benefit of infant - Courts and Laws Adopting Ordinance, 1888.

The power of the Supreme Court in Papua New Guinea in relation to the sanctioning of settlements upon infant plaintiffs is, in the absence of legislation, that of the royal prerogative as parens patriae, formerly invested in the Lord Chancellor in England, and so invested by virtue of s. 10 of the Courts and Laws Adopting Ordinance, 1888. The power includes that of refusing to enter judgment embodying a compromise which is not considered to be for the infant’s benefit.

Katundi and Katundi (Infants) v. Hay [1940] St.R.Qd. 39 per Philp J. at p. 42 approved.

Form of scheme to be approved discussed.

Motion

Akawe Akruma and his wife Wamenu Epia died as the result of a motor vehicle accident leaving their two surviving infant children Maria and Purame.

On 31st August, 1970, a writ No. 325 of 1970 (N.G.) was issued on behalf of the infant plaintiff Maria claiming damages under s. 11 of Part IV of the Law Reform (Miscellaneous Provisions) Ordinance, 1962, in respect of her father’s death. No dependants were named in the writ. In April 1973, a notice of motion for approval of a settlement in the sum of $2,550 on behalf of both children came on for hearing and was adjourned for argument.

On 30th July, 1971, a second writ No. 312 of 1971 (N.G.) was issued on behalf of the infant plaintiff Maria claiming damages under Part IV and Part V of the Law Reform (Miscellaneous Provisions) Ordinance, 1962, in respect of her mother’s death. A sum of $500 was offered in settlement of this claim.

A total sum of $3,050.00 having been received by the plaintiff’s solicitor (the Public Solicitor) in purported settlement of all claims arising from the death of the parents of Maria and Purame, leave was granted to substitute a new notice of motion in action No. 325 of 1970 and amendments to the writ allowed naming the plaintiff Maria and her sister Purame as dependants and adding the damages claim under Part V. Affidavit evidence in support of the motion suggested a dependency value of $2.00 per week for each child, which capitalized at 7 per cent produced figures of $1,150 for Maria and $1,400 for Purame.

Counsel

W. A. Lalor and M. Campbell for the plaintiff.
L. Lawson for the defendant.
Cur. adv. vult.

10 May 1973

PRENTICE J: His Honour referred to the proceedings and facts and continued:

On 31st August, 1970, a writ of summons No. 325 of 1970 (N.G.) was issued on behalf of the abovementioned infant by her next friend Loa Ya, claiming damages under s. 11 of the Law Reform (Miscellaneous Provisions) Ordinance 1962 as a result of the death of her father Akawe Akruma in a motor vehicle accident (both the father and mother were killed as a result of carbon monoxide leakage in a car in the Highlands District). The writ was said to be on behalf of “the relatives of Akawe Akruma and of such persons as were by native custom dependent upon (her)”. No persons were named. An appearance was entered to this writ, and directions given on summons. Twelve months later judgment by default was sought. This matter seems to have remained dormant in the court files until a notice of motion apparently wrongly marked 312 of 1971 (N.G.) was filed, some further eighteen months later, for approval of a settlement in the amount of $2,550 on behalf of the children named therein, namely Maria and Purame. This motion was brought on before me on 10th April, 1973, and I thereafter heard evidence from Mr. District Commissioner Clancy, directed towards justifying the settlement, and suggesting the verdict moneys be “visibly” settled and administered in the Highlands, (a subsidiary element, rendering this desirable in Mr. Commissioner’s opinion, was said to be the ever-present possibility of payback on negligent drivers). The matter was then stood over for argument.

On 30th July, 1971, a second action No. 312 of 1971 (N.G.) was commenced by the same infant claiming damages under Part IV and under Part V of the above-mentioned Ordinance in respect of the death of Wamenu Epia, mother of the plaintiff, “for the benefit of the relatives of the said deceased”. No such relatives were named. No further action seems to have taken place in this suit. Both writs were wrongly issued in the “New Guinea” registry.

On 4th May, 1973, Mr. Lalor appeared before me and informed me that it had been intended to move for approval of a settlement in the first abovementioned matter; a sum of $3,050 in all having been received by his office in purported settlement of all claims arising from the death of the parents of Maria and Purame. A new notice of motion numbered 325 of 1971 (N.G.) but apparently intended to be entered in matter 325 of 1970 (N.G.) on which was indorsed the consent of the defendant’s solicitors to the order sought therein, was then tendered by Mr. Lalor.

I granted leave to substitute the new notice of motion. As the consent of the defendant’s solicitors was evident I allowed amendment of the indorsement to the writ by substituting for the words “for the benefit of . . . death” the words “herself and her sister Purame” and by adding at the foot the words “and for damages under Part V of the Law Reform (Miscellaneous Provisions) Ordinance 1962 for the benefit of the estate of the said Akawe Akruma for the loss of expectation of life and consequential loss caused to the said deceased”.

Mr. Lalor seeks sanction of a compromise. As to the amount of $2,550, I shall say more shortly. As to the $500 in settlement of the Part V claim, he informs me that it has been the usual practice where administration has not been taken out, to claim such damages in the compensation to relatives claim, so that finality may be reached. The $500 will be paid to the Administrator or Public Curator as the case may be, he assures me.

Mr. Lalor has cited the appropriate authorities to me and has pointed out that the Court’s powers are not as extensive and unrestricted as was thought at the time of preparation of the first (abortive) notice of motion. There being no such legislation in Papua New Guinea, as for example, the New South Wales, Damages (Infants and Persons of Unsound Mind) Act, 1929-1947, and no administering authority like the Public Trustee in New South Wales; the position is comparable to that in Queensland in 1940 (see Philp J. in Katundi and Katundi (Infants) v. Hay[ccclxix]1). Apparently the power to be exercised is that of the royal prerogative as parens patriae, formerly invested in the Lord Chancellor in England, and which I take to be invested in me as a judge of this Court (s. 10, Courts and Laws Adopting Ordinance 1888); which power includes that of refusing to enter judgment embodying a compromise which is considered not to be for the infant’s benefit (Philp J.[ccclxx]2).

In a further case in 1956, Phillips v. Munro[ccclxxi]3 the same judge, Philp J. discussing the powers of the Supreme Court of Queensland, enunciated that except in very exceptional circumstances, the court will not sanction payment to the infant, nor payment to the father or any other person, unless it appoints him guardian of the estate, on proper security given. That was a case of personal injuries, in which the court was astute to underline the continuing liability of the parents to maintain the child, a liability which should not be avoided by recourse to the child’s verdict moneys. His Honour remarked, “There is danger in appointing even the father or other relative to be guardian of the estate to receive and hold the infant’s money even though security be exacted.

In many instances the large sum of money received on behalf of an infant, whether as damages or lottery winnings, is regarded as ‘family money’ and not as the separate property of the child. Many fathers into whose hands such moneys may come (no matter how honest they may be) would through ignorance have little understanding of their legal duty to preserve the infant’s estate. For example, I apprehend that few fathers would realize that it is primarily a father’s duty to maintain the infant out of his own pocket and not out of the infant’s income.

Again the fact that a child would be loth to charge his father or other relative with breach of trust or to sue the sureties upon such a charge is a matter for the court to have in mind when considering the protection of the infant against himself.

Because of these matters it seems to me that generally speaking it is preferable that the Public Curator or a trustee company should act as trustees for the infant . . .”

This case was followed by Moffitt J. in New South Wales, in Payne v. Egan[ccclxxii]4.

Both the abovementioned cases were concerned with the products of actions for personal injuries. Different considerations have to some extent applied in Compensation to Relatives Act (Fatal Accident Acts) claims, where ex necessitate the court has been required to take somewhat bolder action, so as to provide for day-to-day and year-to-year needs of the orphaned children. An example under the very different English system is shown in Woodley v. Tersons Ltd.[ccclxxiii]5, where Devlin J. authorized payment to bank trustees to allow of a wider range of investments.

This Court’s powers are regulated by Order XLVI, rule 2 which directs that verdict moneys may be ordered to be paid into court and be subject to orders for payment out to be made by a judge from time to time and that moneys may be held on trust as directed.

Section 19 (1) of the Infants Ordinance of 1956 enacts that “Where a verdict is recovered or a judgment entered for an amount as damages in an action brought by an infant by its next friend, the court may order that a settlement of this amount be made for the benefit of the infant, and may appoint a trustee for the settlement.”

His Honour referred further to the facts concerning dependency and continued:

In an opinion annexed to the affidavit of Mr. Keenan, the latter’s officer Mr. Hoath, canvasses the facts of the deceased’s earning capacity, and the circumstances surrounding the anticipated support of the infant plaintiff and her sister, had the fatal accident not intervened. He has arrived at a figure of $3.00 per week for each child, as representing the value of their dependency for ten and fourteen years respectively, to their each attaining eighteen years. He has proceeded to capitalize this dependency at 7 per cent at $1,150 for Maria and $1,400 for Purame.

I am of the opinion that the allowance of a dependency at the rate of $3.00 per week for each child is high, having regard to the present state of affairs, and the living conditions of the deceased as a plantation worker.

On the other hand it has been put to me by Mr. Lalor, that 7 per cent is not an attainable figure on investment in Papua New Guinea. Over a period of seven years the interest rate on inscribed stock in Papua New Guinea would apparently average 6.4 per cent. He has suggested that the reality may require consideration of a figure closer to the Savings Bank rate of interest of 3 3/4 per cent.

I am asked to make orders which will produce a sum to be held in a Savings Bank account at the disposition, subject to safeguards, of Yano Belo, M.H.A., and of Ludwig Iana, guardians according to native custom, each of one of the infants, for the schooling, clothing and maintenance of the children.

Clearly it will become a matter of increasing difficulty for this Court to be approached yearly or more frequently for approval of disbursement of verdict moneys. With the increased growth of motor cars, obviously the number of accidents, and regrettably, fatal accidents, will increase. Precedent exists for the establishment of special bank accounts by the Registrar of the Court for which periodic payments might be made to infants (see the orders of Smithers J. on 20th September, 1962, W.S. 4 of 1961 (P); and of Cameron-Smith A.J. on 4th November, 1964, W.S. 62 of 1962 (P)). I consider the course now proposed to me by counsel involving the setting up of a bank account with $275 from each of the children’s shares in the hands of Yano Belo and Ludwig Iana as trustees, for the normal maintenance of the children—an account into which yearly interest from the investment of the balance of the funds by the Registrar shall be paid—to be a sensible one; and that the interests of the children can be safeguarded thereunder.

Such a course will reduce the amount for investment, and the amount in the Savings Bank will attract interest only at 3 3/4 per cent as I am advised. But the remainder will no doubt be invested in Papua New Guinea inscribed stock drawing interest at an average figure of 6.4 per cent. Having regard to these figures and possibilities, and the quite high assessment of dependency in the opinion of Mr. Hoath, I consider the suggested settlement one which should be sanctioned. Being of the opinion it would be for the benefit of the infant plaintiffs I so sanction the said settlement.

I also approve of the scheme for setting up a trust Savings Bank for a portion of the moneys and investment of the remainder. I do so, with the understanding that special orders may yet be sought for additional payment out to meet special larger contingencies that may arise. In particular I note that it is the custom in Kagua for a dowry to be paid with a girl on marriage. I would anticipate that the court would most likely approve recourse to the invested funds for such a purpose, should either of the children marry before attaining their majority.

His Honour then made usual orders including the following:

Judgment be entered for the plaintiff in the amount of $500 in respect of the action under Part V of the Law Reform (Miscellaneous Provisions) Ordinance 1962;

The defendant do pay to the plaintiff $200 as costs of this action;

The sum of $275 from the share of Maria Akawe and the sum of $275 from the share of Purame Akawe be transferred to Yano Belo of Kagua and Ludwig Iana of Karia as trustees for the said Maria Akawe and Purame Akawe, they to stand possessed of the said moneys on the following trusts which shall be performed in the manner as set out below:

(a)      that the said moneys shall be deposited in an interest bearing account with the Commonwealth Savings Bank;

(b)      that the said trustees shall apply such of the said money and interest thereon as shall be required for the maintenance, education benefit for advancement of the said Maria and Purame Akawe during their minority;

(c)      the said trustees shall pay the balance of any money remaining in the said bank account upon both the said Maria and Purame attaining the age of twenty-one years to them in equal shares;

(d)      that the Assistant District Commissioner, Kagua or such other Government officer who may in the future most nearly perform the functions of that position shall be a co-signatory of the said bank account and no money shall be withdrawn from the said account otherwise than under the signature of the said officer and at least one trustee;

(e)      that at the end of each calendar year the trustees shall forward to the Registrar of the Supreme Court a report showing how the various amounts withdrawn from the said trust during the year have been expended.

I further order that a copy of this judgment be forwarded to Mr. Clancy, District Commissioner, Southern Highlands with the request that he explain the contents of the same to Yano Belo and Ludwig Iana and that a further copy be sent to the Assistant District Commissioner, Kagua for a lodgment with the sub-district office files.

Orders accordingly.

Solicitor for the plaintiff: W. A. Lalor, Public Solicitor.
Solicitors for the defendant: Gaden, Bowen & Stewart.

[ccclxix][1940] St. R. Qd. 39.
[ccclxx][1940] St. R. Qd. 39, at p. 42.
[ccclxxi][1957] St. R. Qd. 427.
[ccclxxii](1967) 86 WN. (Pt. 1) (N.S.W.) 64.
[ccclxxiii][1958] 3 All ER. 305.