Mereke v Board of Directors of PNG Federation of Co-operative Associations Ltd [2007] PGNC 98; N3203 (1 October 2007)

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. Thl appiocats o iosedpby thby the plaintiff. Both the counsel rely on several affidavits which I will refer to throughout.

Background

3. &##1 Wron mmatemtatement ofnt of Claf Claim fiim filed oled on 11 May, 2005, the plaintiff, as next of kin of deceased shareholders, applies for a declaration of , an nt oferty the subject of the trust, an accouaccount ofnt of the 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. ټ&#he plai plaintiff tiff claims to be the representative of the next of kin of deceased shareholders. The deceased shareholders were shareholders of seven former Co-operative Societies whic sharings in the ToariToaripi Aspi 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. &#16 defendant is the BoardBoard of the FCA. This Board was created in the 1940s, by indigenous Papua New Guineans.

6.&ـ҈Taim before the court is in relation to the dividends of the Pthe PNGCI.NGCI. The The plainplaintiff 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. &#1e defendants deny this chis claim but did not file a Defence, which is why it now seeks leave to file its Defence out of time.

8. ـThe defesdants suts suts submit bmit that that accoraccording 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. &##160;;This thes then take 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 PuCuratct and s. 44 . 44 of thof the Wills, Probate, Administration Act.

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

"44. Initial vesting inng in Publ 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. ionis of 6he WPA proi>provides for the manner in which an intestate’s residuary estate will be distributed.

12.&ـ҈Sn 14 of the PCA reads;

"14. <14. Takb>Taking ping possesossession sion 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, ickskeere suis suing in his personal capacity for and on behalf of shareholders and deceased persons. Section 14 of t>PCAPCA allows him to do that.

14. &#dditionally, the plaintifintiff 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). Respectivehese rela representatentation; ion; adminadministration 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. ـI agree Mith Mr Mand 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 mpproply, i proceedings had been correctly commencmmenced ased as a pr 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;

1. 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)).
   
2. 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. ټ What wilt will now become of this proceeding?

19. As was held by Lord nenni Bowler v Mollem Co. Ltd [1954] 3 All ER at pg. 556 and also cited by Pratt .J in RngoglITtheg which cannot be cured is the bringing of an a an actionction in a in a repr representesentative capacity when that capacity does not exist."

(my emphasis)

20. ҈ Because ause that has not rccurred, the proceedings must be dismissed in their entirety for the plaintiff to properly recommence the action. The plaintiff should also seek propgal a on hst to c to commence an action where deceased pers persons&#ons’ 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