N10790
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WPA NO. 122 OF 2022

IN THE MATTER OF WILLS, PROBATE AND ADMINISTRATION ACT 1966

IN THE ESTATE OF CHRIS YER NANGOI OF YUK YUK VILLAGE, KARKAR LLG, SUMKAR DISTRICT, MADANG PROVINCE

Waigani: Carey J
2024: 2nd April & 13th May

MEDIATION – Alternative Dispute Resolution Rules 2022 - Mediator’s Certificate of Bad Faith
WILLS, PROBATE & ADMINISTRATION – Wills, Probate and Administration Act 1966 – Public Curator Act 1951 – Public Curator (Amendment) Act 2020
LETTERS OF ADMINISTRATION – deceased died intestate – application for administration by second wife of deceased – first wife of deceased opposing the application – first wife of deceased is the intervener 

The Plaintiff who is the second wife of the deceased sought letters of administration for the estate. The Intervener is the first wife of the deceased and objected this application. The matter was ordered to mediation which resulted in a failed mediation and issuing of a Mediator’s Certificate – No Settlement Due to Bad Faith. The Plaintiff and her lawyer acted in bad faith. 
Held:
1.	The Plaintiff acted in bad faith during the course of mediation. 
2.	The Intervener is appointed as the sole administrator of the estate of the deceased.
3.	The distribution of the estate of the deceased is as follows:
a.	One-third of the estate is to be divided equally between the three wives; and
b.	Two-thirds of the estate is to be divided equally between the six children. 
4.	The Plaintiff and the lawyer for the Plaintiff shall pay the Intervener’s costs on an indemnity basis.
5.	The time for the entry of these Orders is abridged to the time for settlement by the Registrar which shall take place forthwith. 

Cases Cited:
Hargy Oil Palm Limited v Ewasse Landowners Association Incorporated [2013] N5441
Koitaki Plantation Limited v Charlton Ltd [2014] N5656
Lepanding Singut v Kelly Kinamun, Albo Enterprises Pty Ltd, Fedelis Agin, Papua New Guinea Banking Corporation, Paul Piru and John Kil [2003] N2499
Emmanuel Mai v Madang Development Corporation Limited and Rabtrab Madang Limited and Rabtrab Niugini Limited and G. Lutz Company Limited and Anderson Foodland Limited [2016] SC1576

Legislation:
Order 2 Rule 11 of ADR Rules 2022
Order 19 of National Court Rules
Public Curator Act (Chapter 81)
Public Curator (Amendment) Act 2020
Wills, Probates and Administration Act (Chapter 291)

Counsel: 
Mr. Rekana Tuva, for the Plaintiff/Applicant
Mr. Benjamin Samiat, for the Respondent/Intervener 

JUDGMENT
13th May 2024

1.     CAREY J: This is the judgment for the determination on the issue of bad faith by Carol Simoi (the Plaintiff/Applicant) in the mediation of the matter as indicated by the Mediator’s Certificate - No Settlement Due to Bad Faith dated 5th May 2023.

BACKGROUND
2.	The Applicant is the second wife of Chris Yer Nangoi (the deceased) and had two sons fathered by the deceased. She asserts that she is entitled to the estate of the deceased.

3.	Ramantha Sariman is the third wife of the deceased and had a daughter fathered by the deceased. She also indicates that she is entitled to the estate of the deceased.

4.	Robin Yer Nangoi (the brother of deceased) sought to be appointed as an administrator of the estate of the deceased.  

5.	Jane Nangoi (the Intervener) is the customary wife of the deceased and the marriage existed for over 20 years until the death of the deceased. 

6.	The Intervener has three children from the marriage with the deceased, Ben Nangoi born on 11th May 2002, Junior Chris Nangoi born on 19th December 2009 and Estelle Nangoi born on 14th March 2014. 

7.	The Court ordered mediation to allow parties to work out a solution as to who would be appointed as the administrator of the estate of the deceased. 

8.	The parties attended to mediation on the 14th, 19th, 20th, 24th and 25th April 2023 and 2nd May 2023 with the result being a Mediator’s Certificate – No Settlement Due to Bad Faith. 

ISSUES FOR DETERMINATION

9.	Whether the Applicant acted in ‘bad faith’ in the mediation process? 

10.	If the Applicant acted in bad faith in the mediation process, what are the likely consequences?

11.	Who should be appointed administrator of the deceased estate? 

12.	Who are the beneficiaries of the estate?

13.	How is the estate to be distributed?

14.	The Mediator’s Certificate – No Settlement Due to Bad Faith sets out the facts and circumstances for which the bad faith certificate was issued. 

15.	It indicates as follows:

‘(a) no genuine participation or efforts by the Plaintiff to engage in a meaningful way for settlement;
(b) despite numerous private sessions and reality checks done with the Plaintiffs, the Plaintiff’s still held onto their position/s and preferred the matter be dealt with in Court;
(c) raising of legal issues and arguments by the lawyer for the Plaintiff was not helpful thus impeding the mediation process;
(d) Plaintiffs did not avail themselves in two occasions to resolving issues when given time to meet and work with the Defendants to talk and work on the issues raised at the mediation and returned with their same position;
(e) on 25th April 2023, the Mediators had a separate session with key people, namely:
•	Jane Nangoi (First wife);
•	Carol Simoi (Second wife);
•	Ramantha Sariman (Third wife); and
•	Robin Yer Nangoi (Deceassed older brother)
Settlement was reached on the distribution of the estate and the formula of the deceased’s estate, however, when parties returned for the joint session with the lawyers and the rest of the team, the Plaintiffs changed their mind/position based on their lawyer’s advice and withdrew their agreement; and
(f) the Plaintiffs entered into mediation reluctantly and were not truly serious about resolving the matter. Their basic position to still go to Court was confirmed when they ‘unexpectedly’ decided to reject Jane Nangoi’s offer for (1) joint administration in preference instead of a sole administrator by Robin Yer Nangoi and for (2) parties to review Jane’s distribution formula and as a result, the mediation was terminated.’

16.	In this regard the Court finds that the Plaintiff acted in bad faith as this is a finding of fact which has been indicated through the Court ordered mediation process. 

17.	Order 2 Rule 11 of the ADR Rules 2022 states as follows:

‘(1) Where a party fails to discharge any of that party’s duties under Order 2 Rule 10, the mediator may issue a bad faith certificate in Form 3D of Schedule 2 and a copy of the certificate shall be furnished by the mediator to all parties. 
(2) Subject to sub-rule (3), where the Court is satisfied that a party has not participated in good faith in the mediation or has impeded the mediation, or has otherwise failed to meet that party’s obligations under a mediation order or agreement, the Court may order:
(a) the dismissal of the proceeding; or
(b) the striking out of a defence and enter judgment; or
(c) the striking out of a defence to a cross-claim and enter judgment for a plaintiff or cross-claimant; or
(d) that any claim for relief by the defaulting party is stayed until further order;
 	(e) costs on an indemnity or lawyer and client basis; and or
(f) make such further or other orders as it may consider appropriate in the   circumstances and in the proceeding.
(3) The Court shall not make an order under sub-rule (2)(a) to (e) unless the Court has heard all parties as to why any of those heads of relief should not be granted. 

18.	The likely consequences for a party acting in bad faith are outlined in the paragraph immediately preceding this one. 
 
19.	 Section 38 of the Wills, Probate and Administration Act (Chapter 291) states:

‘The National Court has jurisdiction to grant probate of the will or administration of the estate of a deceased person leaving property within the country’.
20.	 The Public Trustee as defined in the Public Curator (Amendment) Act 2020 which is an Act to amend the Public Curator Act (Chapter 81) operates so:

‘the functions of the Public Trustee include the following:
(a) to administer and distribute a deceased's estate in accordance with Section 25 of the Constitution; and 
(b) to administer and distribute testate estates under the Wills, Probate and
 Administration Act (Chapter 291);  and 
(c) to administer a trust or an estate for a minor; and 
(d) to administer a trust or an estate for a missing person; and 
(e) to administer an estate as directed by a Court.’

21.	As such this Court can make orders in the appointment in respect of the grant of administration. 

22.	 The use of mediation as an effective tool to resolving disputes of the type in this case are indicated in Hargy Oil Palm Ltd v Ewasse Landowners Association Inc. [2013] N5441.

23.	When a party acts in bad faith, the Court may make further orders as it deems appropriate per the ADR Rules 2022.

24.	In this instance, the Court is persuaded that it would not be in the interest of justice to dismiss the proceedings given the impact of such a decision on the beneficiaries of the estate.

25.	There are consequences for acting in bad faith in terms of determination of penalty associated with the party or parties operating under such position. See Koitaki Plantation Limited v Charlton Ltd [2014] N5656. 

26.	With regard to the assertions by the Respondent/Intervener that the Plaintiff’s/Applicant’s behavior was in contempt of the Court, I am not persuaded that the alleged contemptuous act seriously undermines the Court authority.  See Emmanuel Mai v Madang Development Corporation Limited and Rabtrab Madang Limited and Rabtrab Niugini Limited and G. Lutz Company Limited and Anderson Foodland Limited (2016) SC1576.

27.	There are rules in place per the ADR Rules 2022 which regulate the behaviour of the parties in terms of what should take place due to a bad faith certificate being issued. 

28.	I have considered the circumstances of this case in totality and submissions of counsel and arrive at the position of admonishing counsel for the Plaintiff/Applicant to ensure that there is familiarization and compliance of the Professional Conduct Rules 1989. 

29.	The Court is now exercising its discretion in addressing the legal issues and the consequences of the bad faith certificate. 

30.	As the Plaintiff/Applicant has ruled herself out of being granted letters of administration through the bad faith certificate being issued it is for this Court to have made the determination who should be appointed administrator of the estate of the deceased.

31.	The Intervenor/Respondent’s who has a vested interest and based on the reality of having been the first wife who was married to the deceased for over 20 years and who in good faith engaged in the mediation process and offered reasonable distribution arrangements is most suited to be appointed as the Administrator of the estate of the deceased.

32.	Section 44 of the Wills, Probate and Administration Act (Chapter 291) states, “Until probate or administration is granted, the property of a deceased person vests in the Public Curator”.

33.	This is a temporary position until such time as the National Court issues a grant of administration of the estate of the deceased who has died intestate as is the case in this matter. 

34.	 Sections 81 to 84 of the Wills, Probate and Administration Act (Chapter 291) are indicated below for clarity on the distribution of the estate.

81. Interpretation of Division 6.
(1) In this Division - 
"child", in relation to an intestate, includes an illegitimate child of the intestate;
"issue", in relation to an intestate, includes an illegitimate child of the intestate;
"residuary estate", in relation to an intestate, means—
(a) the residue of - 
(i) the net money arising from the sale and conversion of the property, after payment of costs; and
(ii) the ready money of the deceased (so far as it is not disposed of by the will (if any)); and
(b) any investments for the time being representing that residue, including (but without prejudice to the trust for sale) any part of the estate of the deceased that may be retained unsold and is not required for purposes of administration after making the payments and setting aside the fund specified in Section 69.
(2) In the application of this Division to the estate of a person who dies leaving more than one wife by valid customary marriages surviving him, any residuary estate or share in an estate to which a single wife would, under this Division, be entitled shall be divided between those wives.
(3) Where by virtue of the operation of Subsection (2) the residuary estate of an intestate would be divisible between the wives of the intestate and some other person in such a way that the share of the other person would be greater than the share of a wife, then, notwithstanding this Division, the share of the other person shall be reduced, and the share of the wife shall be increased, so that the shares are equal.

82. Surviving spouse but no issue.
(1) Where a person dies intestate in respect of his residuary estate, leaving a surviving spouse but no issue - 
(a) where the residuary estate does not exceed in value K20,000.00 the spouse is entitled to it; and
(b) where the residuary estate exceeds in value K20,000.00 the spouse is entitled to K20,000.00 and has a charge on the whole estate for that sum with interest at the rate of 4% per annum from the date of the death of the intestate until payment.
(2) Where by the operation of Subsection (1)(a) a spouse is entitled to K20,000.00 or a lesser sum being the proceeds of a policy or policies of insurance on the life of the intestate, it is not necessary for the spouse, in order to obtain administration of the estate of the intestate, to enter into a bond with respect to the proceeds of the policy or policies to which he is so entitled.
(3) The provision made by Subsection (1)(b) for the spouse is in addition to, and without prejudice to, the interest and share of the spouse in the residue of the estate remaining after giving effect to that paragraph in the same way as if the residue had been the whole estate of the intestate, but that subsection shall not be applied more than once in respect of any estate.

83. Surviving mother but no spouse, issue or father.
(1) Where a person dies intestate in respect of his residuary estate, leaving a mother but no spouse, issue or father - 
(a) where the residuary estate does not exceed in value K1,000.00 the mother is entitled to the estate; and
(b) where the estate exceeds in value K1,000.00 the mother is entitled to K1,000.00 and has a charge on the whole estate for that sum with interest at the rate of 4% per annum from the date of the death of the intestate until payment.
(2) Where by the operation of Subsection (1)(a) a mother is entitled to K1,000.00 or a lesser sum being the proceeds of a policy or policies of insurance on the life of the intestate, it is not necessary for the mother, in order to obtain administration of the estate, to enter into a bond with respect to the proceeds of the policy or policies to which she is so entitled.
(3) The provision made by Subsection (1)(b) for the mother is in addition to, and without prejudice to, the interest and share of the mother in the residue of the estate remaining after giving effect to that paragraph in the same way as if the residue had been the whole estate of the intestate, but that subsection shall not be applied more than once in respect of any estate.

84. Distribution on intestacy generally.
(1) Subject to this section and to Sections 82 and 83, where a person dies intestate - 
(a) if the intestate leaves a widow or widower – she or he is entitled, if the intestate leaves issue, to one-third or, if the intestate leaves no issue, to one-half of the estate; and
(b) if the intestate leaves a father and a mother but no widow or widower or issue – the estate shall be distributed equally between the father and the mother, and in the case of the latter for her own use; and
(c) if the intestate leaves a widow or widower a father and a mother but no issue – one-half of the estate shall be distributed equally between the father and the mother, and in the case of the latter for her own use; and
(d) if the intestate leaves a widow or widower and a father but no issue or mother – the father is entitled to one-half of the estate; and
(e) if the intestate leaves a widow or widower and a mother but no issue or father – the mother is entitled to one-half of the estate; and
(f) if the intestate leaves a father but no widow or widower, issue or mother—the father is entitled to the estate; and
(g) if the intestate leaves a mother but no widow or widower, issue or father—the mother is entitled to the estate; and
(h) if the intestate leaves a widow or widower but no issue, father or mother—the widow or widower is entitled to the estate; and
(i) subject to Paragraphs (a) to (h), the estate or the portion of the estate to which those paragraphs do not apply shall be distributed in equal shares among the children of the intestate living at his decease and the representatives then living of any children who predeceased the intestate, or, if there are no such children or representatives, among the next of kin of the intestate who are in equal degree and their representatives.
(2) In the application of Subsection (1)(i) - 
(a) where a child - 
(i) has any property, or any estate or interest in any property, by settlement of the intestate; or
(ii) was advanced by the intestate during his lifetime,
the child or his representative shall bring that property, estate, interest or advance into account in estimating the share (if any) to be taken by him in the distribution; and
(b) except as otherwise provided in this Division, the children of a person who died before the intestate take only the share that the person would have taken if living at the death of the intestate, and if more than one shall take in equal shares; and
(c) no representation shall be admitted amongst collaterals after brothers' and sisters' children; and
(d) brothers or sisters or, when they take as representatives, brothers' or sisters' children take in priority to grandparents; and
(e) where brothers' or sisters' children are entitled and all the brothers or sisters of the intestate have died before him - 
(i) they do not take as representatives; and
(ii) all those children take in equal shares; and
(f) no distinction shall be drawn between males and females or between relationship of the whole blood and relationship of the half blood; and
(g) for all purposes of distribution and division a husband and his wife shall be treated as two persons.
(3) The father of a deceased illegitimate child shall not take under Subsection (1) as such unless, in the opinion of the National Court, he has, during the lifetime of the child recognised the child as his own and acted towards it as though it were his legitimate child.

35.	  The Court in the exercise of its discretion does so with regard to legal principles. As stated in Lepanding Singut v Kelly Kinamun, Albo Enterprises Pty Ltd, Fedelis Agin, Papua New Guinea Banking Corporation, Paul Piru and John Kil [2003] N2499, ‘the need to do justice on the merits of the case is fundamental as demonstrated by the Supreme Court decision.’

36.	As indicated in paragraph 25, I have considered that in the exercise of discretion it would be unjust to dismiss the proceeding based on bad faith and the need to do justice on the merits of this case dictate the determination of the administrator of the estate of the deceased. 

37.	I now turn my attention to how the estate is to be distributed based on the Wills, Probate and Administration Act (Chapter 291) given the intestacy reality. 

38.	The unintended consequence of dying intestate is that there may be beneficiaries who the deceased may not have contemplated or wanted to be the recipients. 

39.	As such it is instructive that individuals ensure that they have a will in place to provide for those beneficiaries for which they intend to have the benefit of their estate. 

40.	The distribution of the estate of the deceased is as follows:

a.	One-third of the estate is to be divided equally between the three wives; and
b.	Two-third of the estate is to be divided equally between the six children. 

SUMMARY

41.	The application by the Plaintiff/Applicant to be granted the Letter of Administration of the estate of the deceased is refused. The Intervener is appointed as the sole administrator of the estate of the deceased. The distribution of the assets of the deceased estate are as indicated in this judgment in the preceding paragraph. 

ORDER
42.	    It is ordered that:

1.	The Plaintiff acted in bad faith during the course of mediation. 

2.	The Intervener is appointed as the sole administrator of the estate of the deceased.

3.	The distribution of the estate of the deceased is as follows:

a.	One – third of the estate is to be divided equally between the three wives; and
b.	Two – thirds of the estate is to be divided equally between the six children. 

4.	The Plaintiff’s lawyer is admonished to ensure familiarisation and compliance with the Professional Conduct Rules 1989. 

5.	The Plaintiff and the lawyer for the Plaintiff shall pay the Intervenor’s costs on an indemnity basis.

6.	The time for the entry of these Orders is abridged to the time for settlement which shall take place forthwith. 

Ordered accordingly.

Tuva & Associates Lawyers: Lawyers for the Plaintiff/Applicant
Holingu Lawyers: Lawyers for the Intervener/Respondent