N3203

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 692 OF 2005

BETWEEN:

HICKS MEREKE as the representativeof the shareholders 
and next of kins ofdeceased shareholders of seven former
Co-operative Societies of Toaripi area of Gulf Province who held 
shares in the former Toaripi Associationof Co-operative Societies 
whose names appear in the within claim
Plaintiff

AND:

BOARD OF DIRECTORS OF PNG 
FEDERATION OF CO-OPERATIVE ASSOCIATIONS LTD
Defendant

Waigani: Davani .J
2007: 16 August
1 October

PLEADINGS – representative action – probate action on deceased person’s estate – endorsement as to capacity to sue – endorsement on writ shall be verified by affidavit – O. 5 r’s 14, 15, 16, 20 of National Court 	Rules.

PLEADINGS – endorsement on writ, defective – cannot be cured – action to be dismissed.

Cases cited:

Bowler v Mollem Co. Ltd [1954] 3 All ER;
Rus Mongogl v MVIT [1985] PNGLR 300;

Counsel:

E. Kogoro, for the plaintiff
G. Manda, for defendant

DECISION

1 October, 2007

1. DAVANI .J: Before the court is the defendant’s second amended notice of cross motion filed on 17 May, 2007. In that motion, the defendant seeks the following orders;

1.	The dismissal of proceedings;

(i)	for breach of s.14 (1) and s.15 (1) of the Public Curators Act and s. 44 of the Wills, Probate and Administration Act;

(ii)	for non-compliance with O. 4 r. 20 (2) (3) of the National Court Rules;

or alternatively, that 

2.	The defendant be granted leave to file their Defence out of time.

2.     The application is opposed by the plaintiff. Both the counsel rely on several affidavits which I will refer to throughout.

Background

3.     By Writ of Summons and Statement of Claim filed on 11 May, 2005, the plaintiff, as next of kin of deceased shareholders, applies for a declaration of trust, an account of property the subject of the trust, an account of the profits, rents, dividends, interests, monies and income received by the defendant on account of the Toaripi Association and its shareholding co-operative societies in respect of the property subject to the Trust and other orders. 

4.     The plaintiff claims to be the representative of the next of kin of deceased shareholders. The deceased shareholders were shareholders of seven former Co-operative Societies which had shareholdings in the Toaripi Association of Co-operative Societies Limited (‘the Toaripi Association’). The shareholdings and interest of the Toaripi Association have been transferred to the PNG Co-operative Investment Limited (‘PNGCI’) and later to the PNG Federation of Co-operative Association Ltd (‘FCA’).

5.     The defendant is the Board of the FCA. This Board was created in the 1940s, by indigenous Papua New Guineans. 

6.     The claim before the court is in relation to the dividends of the PNGCI. The plaintiff alleges that since its incorporation in 1968 and until its deregistration on or about 2002, PNGCI had not paid any dividends to any of the shareholders of the Toaripi Association and other co-operative societies. The plaintiff claims that since the acquisition of the assets of the PNGCI, the FCA through its defendant board has neglected or refused to notify the shareholders or the next of kin of deceased shareholders of the status of their beneficial ownership of assets held by FCA and controlled by the FCA’s board. The plaintiff alleges that the FCA has not declared any dividends or paid any interest on investments.

7.     The defendants deny this claim but did not file a Defence, which is why it now seeks leave to file its Defence out of time.

The applications

8.     The defendants submit that according to the Wills, Probate, & Administration Act Chapter 291 (‘WPA’) and the Public Curator Act 1951 (‘PCA’), the plaintiff should have first obtained the Public Curator’s consent prior to filing these proceedings. The defendant submits that this is because the plaintiff’s representative Mr Mereke is suing in a representative capacity for and on behalf of shareholders and the next of kin of deceased shareholders. 

9.     This then takes me to the issue before the court which is;

1.	Whether the proceedings should be struck out for non-compliance with s. 14 (1) and 15 (1) of the Public Curators Act and s. 44 of the Wills, Probate, Administration Act.

10.     In this case, it is an undisputed fact that all deceased persons whose claims are being pursued died without leaving wills. In relation to such a scenario, s. 44 of the WPA applies. S. 44 reads;

"44.	Initial vesting in Public Curator

Until probate or administration is granted, the property of a deceased person vests in the Public Curator, in the same manner and to the same extent as formally, personal estate in England vested in the Ordinary."

11.     Division 6 of the WPA provides for the manner in which an intestate’s residuary estate will be distributed. 

12.     Section 14 of the PCA reads;

"14.	Taking possession of deceased estates.

(1)	Where a person dies leaving property in the country and, as far as the Public Curator or a Public Curator's agent can ascertain—

(a)	he left no will; or

(b)	he left a will, but no executor was appointed in the will; or

(c)	he left a will and an executor was appointed in the will, but the executor—

(i)	is dead; or

(ii)	is too far from the place where the property or any part of it is situated to be able to take care of it without delay; or

(iii)	does not intend, or neglects, to act as executor, the Public Curator, or a Public Curator's agent on his behalf, may immediately and without any order under this Division take possession of the property or any part of it.

(2)	When the Public Curator or a Public Curator's agent has taken possession under Subsection (1) of the real estate of a deceased person, he may—

(a)	take any steps and incur any expense that he thinks necessary for preserving it or anything in, on, or annexed to it; and

(b)	collect and sell any product of it that would decrease in value by being kept, and incur any necessary expense in connection with the collection or sale.

(3)	Where the Public Curator or a Public Curator's agent has taken possession under Subsection (1) of the personal estate of a deceased person, he may—

(a)	sell or dispose of it, or any part of it, if it appears to him that it will be for the benefit of the estate of the deceased person that he should do so; and

(b)	pay out of it, or of the proceeds of it—

(i)	the funeral expenses of the deceased person; and

(ii)	the expenses incurred in collecting, preserving, selling, or disposing of the personal estate; and

(iii)	the expenses incurred under Subsection (2)."

13.     In this case, Hicks Mereke is suing in his personal capacity for and on behalf of shareholders and deceased persons. Section 14 of the PCA is clear that in situations where deceased persons died without leaving a will, the Public Curator or his agent may immediately and without any order, take possession of the property or any part of it. But in this case, although the Public Curator is a party to the proceedings (see Court order of 18th July, 2006), he has not made any application to the Court, although s. 10 of the PCA allows him to do that.

14.     Additionally, the plaintiff has not complied with the various provisions in the National Court Rules in relation to representative proceedings. These are O. 5 r. (14) (15) (16). Respectively, these rules relate to representation; administration cases etc; trustee, etc; and deceased persons. The more appropriate provision is O. 5 r. 16 which provides that if the estate of a deceased person is interested and that there is no personal representative, that the court may on the application of any party, 

"order that the proceedings continue in the absence of a person representing the estate of the deceased person or by order (with the consent of the person appointed), appoint a person to represent that estate for the purposes of the proceedings."

15.     I agree with Mr Manda that this has not been done, more particularly O. 4 r. 20 which states that if the plaintiff sues in a representative capacity or more appropriately, if the proceedings had been correctly commenced as a probate action, the endorsement shall show that fact. Order 4 r. 20 reads;

"20.	Endorsement as to capacity. 

(1)	Before a writ of summons is issued it must be endorsed—

(a)	where the plaintiff sues in a representative capacity—with a statement of the capacity in which he sues; and

(b)	where a defendant is sued in a representative capacity—with a statement of the capacity in which he is sued.

(2)	In probate actions the endorsement shall show whether the plaintiff claims as creditor, executor, administrator, residuary legatee, legatee, next-of-kin, heir-at-law, devisee, or in any and what other character.

(3)	The issue of a writ of summons in a probate action shall be preceded by the filing of an affidavit by the plaintiff, or by one of the plaintiffs, verifying the endorsement on the writ."

16.	The plaintiff has not complied with the requirements of O. 4 r. 20 of the NCR which is that;

i.	The Writ of Summons must have endorsed on it a statement of the capacity in which the plaintiff is suing (O. 4 r. 20 (1) (a)).

ii.	Because it is a probate action, that the endorsement on the Writ of Summons and Statement of Claim shall show the capacity in which the plaintiff is suing (O. 4 r. 20 (2));

iii.	The plaintiff should also file an affidavit, verifying the endorsement on the writ (O. 4 r. 20 (3)).

17.	The plaintiff has not complied with any one of the above requirements.

18.     What will now become of this proceeding?

19.     As was held by Lord Denning in Bowler v Mollem Co. Ltd [1954] 3 All ER at pg. 556 and also cited by Pratt .J in Rus Mongogl v MVIT [1985] PNGLR 300; "the thing which cannot be cured is the bringing of an action in a representative capacity when that capacity does not exist." 
(my emphasis)

20.     Because that has not occurred, the proceedings must be dismissed in their entirety for the plaintiff to properly recommence the action. The plaintiff should also seek proper legal advice on how best to commence an action where deceased persons’ representatives are claiming on deceased persons estate.

21. In relation to the costs of the proceedings, the plaintiff no doubt is somebody not well versed with the law. He gave instructions to a law firm to act for him which included giving him the correct advice and filing the correct proceedings. But this did not happen. Although the plaintiffs’ lawyers were advised by the defendants lawyers by their letter of 16 May 2007 to correct the obvious anomalies, the plaintiffs lawyers did not attend to this. This letter is attached to the affidavit of Gregory Manda sworn on 17 May, 2007, marked as annexure ‘A’. Again, in that letter, the plaintiffs’ lawyers were advised that if they did not withdraw the proceedings because of the various procedural defects I pointed out earlier, that the defendants will produce this letter to the court and seek Solicitor/client costs on an indemnity basis. On that basis, the plaintiffs’ lawyers must pay the defendants costs.

Court’s formal orders

1.	The action is dismissed in its entirety;

2.	The plaintiff has liberty to re-file this proceeding in the correct form but on 14 days notice to all interested parties;

3.	Stevens Lawyers shall pay the defendants solicitor/client costs of the proceedings, assessed on a solicitor/client and on a full indemnity basis, to be taxed if not agreed.

_____________________

Stevens Lawyers: Lawyer for the plaintiff
Greg Manda Lawyers: Lawyer for the defendant