N4055

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 69 OF 2009

BETWEEN:

KONZE KARA as Administrator of the estate of KIBIKANG YAKKA KARA, Deceased
Plaintiff

AND:

PUBLIC CURATOR OF PAPUA AND NEW GUINEA
First Defendant

AND:

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Defendant

Waigani: Hartshorn J.
2009: 21st October,
2010: 13th April

FRAUDS AND LIMITATIONS ACT – ss. 16(1)(a) and 19(1) considered - Security for Costs - Order 14 Rule 25 National Court Rules - consideration of evidence requirements

Facts:

1. The Plaintiff as administrator of a deceased estate, is suing the Public Curator and the State in respect of the Public Curator's administration of the estate.

2. The First Defendant seeks the dismissal of the proceeding as it discloses no cause of action, is frivolous or vexatious and is an abuse of process as the proceeding is statute barred. He also seeks security for costs. 

Held:
1. The First Defendant has not established that the Plaintiff's claims are statute barred pursuant to ss. 16 (1) (a) and 19 (1) Frauds and Limitations Act.

2. The First Defendant has not provided evidence of the likely costs and outlays of defending the proceeding and the circumstances of the Plaintiff. Consequently, even if there was a prima facie entitlement to security costs, the Court is not able to properly determine whether and if so what amount should be ordered.

3. The applications for dismissal of the proceeding and for security costs are refused 

Cases cited: 

Papua New Guinea cases

Reynolds v. Walcott [1985] PNGLR 316
Osprey Industries v. Hallam [1992] PNGLR 557 

Overseas Cases

Crumbie v. Wallsend Local Board [1891] 1 QB 503
Huyton v. Liverpool Corporation [1926] 1 KB 146 
Konskier v. B Goodman Ltd [1928] 1 KB 421
Clarkson v. Modern Foundries [1957] 1 WLR 1210
Cartledge v. E Jopling & Sons Ltd [1963] AC 758
Forster v. Outred [1982] 1 WLR 86
UBAF Ltd v. European American Banking Corporation [1984] QB 713 
Re Loftus; Green v. Gaul [2005] EWHC 40

Counsel:

Mr. J. L. Shepherd, for the Plaintiff 
Mr. R. Saulep, for the First Defendant
Mr. T. Burslem, for the Second Defendant

13th April, 2010

1. HARTSHORN J: The Plaintiff as administrator of a deceased estate is suing the First Defendant, the Public Curator of Papua New Guinea and the Second Defendant, the State, in respect of the Public Curator’s administration of the estate. 

2. The First Defendant seeks:

a) the dismissal of the proceeding pursuant to Order 12 Rule 40 National Court Rules as it discloses no cause of action, is frivolous or vexatious and is an abuse of process as the proceeding is statue barred,

b) security for costs. 

3. The Second Defendant supports the First Defendant’s application.

4. The Plaintiff opposes the application.

Whether proceeding statue barred

5. The First Defendant submits that any cause of action that the Plaintiff may have that is founded on tort, would have accrued more than 6 years before this proceeding was commenced and is statute barred pursuant to s. 16(1) (a) Frauds and Limitations Act. Further, any cause of action that the Plaintiff may have is statute barred pursuant to s.19 (1) Frauds and Limitations Act.

6. The Plaintiff submits that:

a) the cause of action in negligence that is founded in tort, continued until 13th December 2006 when the First Defendant ceased administering the estate. As the duty of care, the negligence and consequent loss continued until then, the right of action also continued,

b) the causes of action for breach of statutory duty, breach of fiduciary duties and devastavit are not claims founded in contract or tort or any of the other causes of action caught by s. 16 (1)(a) or 19 (1) Frauds and Limitations Act.

7. I have already held in my decision concerning the First Defendant’s application under the Claims By and Against the State Act, that the Plaintiff's cause of action against the State is statutory and not one founded in contract or tort.

Negligence

8. The Plaintiff submits that his cause of action in negligence continued until the First Defendant ceased his administration of the estate.

9. In the case of a tort actionable per se, the cause of action accrues when the wrongful act is committed. Where a tort is actionable only on proof of damage, such as negligence, the cause of action accrues when the damage occurs. Some torts may be continuous and a fresh cause of action arises daily as the tort continues; Crumbie v. Wallsend Local Board [1891] 1 QB 503, Huyton v. Liverpool Corporation [1926] 1 KB 146, Konskier v. B Goodman Ltd [1928] 1 KB 421, Clarkson v. Modern Foundries [1957] 1 WLR 1210, Cartledge v. E Jopling & Sons Ltd [1963] AC 758, Forster v. Outred [1982] 1 WLR 86 and UBAF Ltd v. European American Banking Corporation [1984] QB 713. These cases are of persuasive value in this jurisdiction.

10. In this case, the First Defendant’s administration of the estate ceased on the 13th December 2006. The Plaintiff alleges amongst others, that the First Defendant owed a duty of care until then and was negligent. This proceeding was filed in January 2009. There is no evidence on behalf of the First Defendant to show that a cause of action of the Plaintiff in negligence was not accruing or did not accrue up to at least 13th December 2006.

11. Consequently I am not satisfied that the Plaintiff's cause of action in negligence is statue barred.

Other causes of action

12. The Plaintiff submits that his other causes of action for breach of statutory duty, breach of fiduciary duty and devastavit are not claims founded in contract or tort or are otherwise caught by ss. 16 (1) (a) or 19 (1) Frauds and Limitations Act and are not statute barred. If these causes of action are not caught by ss. 16 (1) (a) or 19 (1), it is clear that they are not statute barred.

13. Even if these causes of action are founded on tort, and I make no finding on this point, as there is no evidence as referred to in paragraph 10 above and as there was no submission by the First Defendant that these causes of action if founded on tort are not torts where the cause of action accrues when damage occurs, the First Defendant has not properly satisfied this court that these causes of action are statute barred.

s. 19 (1) Frauds and Limitations Act

14. The First Defendant also submits that the proceeding should be dismissed as the causes of action of the Plaintiff were statute barred pursuant to s.19 (1) Frauds and Limitations Act. After I had reserved my decision, I drew to the attention of counsel the English High Court decision of Re Loftus; Green v. Gaul [2005] EWHC 40 which had come to my attention in the course of research. This decision concerns amongst others, s. 22 (a) Limitation Act 1980 (Eng), which is similar to s.19 (1) Frauds and Limitations Act. Following a consideration of submissions that I had invited, I am satisfied that s. 19 (1) Frauds and Limitations Act has no application to the circumstances of this case. The English equivalent of s. 19 (1) applies to claims of beneficiaries of a deceased estate to a share or interest in the estate. The claims in this case are by an administrator for damages for breaches of duty in respect of the former administration of the estate.

15. The First Defendant’s application that the proceeding be dismissed is accordingly, refused.

Security for costs

16. The First Defendant submits that the Plaintiff should pay security for costs as the claim is for in excess of K45 million, vast resources will be required to defend it and the Defendants are prejudiced against as they do not have sufficient documentation upon which to rely to defend the proceeding.

17. The Plaintiff submits that the application should be refused as:

a) he is not ordinarily resident overseas,

b) although he sues in a representative capacity, it is not as envisaged by Order 14 Rule 25 (b) National Court Rules and persons in his position should not be required to provide security for costs,

c) this court has a discretion to refuse security if such an application is being used oppressively as in this case with the First Defendant seeking security in the sum of K500,000,

d) there is no evidence of the First Defendant’s likely costs and outlays.

18. In the cases of Reynolds v. Walcott [1985] PNGLR 316 at 319 and Osprey Industries v. Hallam [1992] PNGLR 557 at 560, evidence was given of the likely costs and outlays and of the circumstances of the party against whom security was sought. Here there is no such evidence. Consequently, even if there was a prime facie entitlement to security for costs, there is no evidence upon which this court could properly determine whether an amount should be ordered given all the circumstances and if so what that amount should be. The application for security for costs is refused.

Orders

19.

a) the orders sought in paragraphs 3, 4 and 5 of the amended notice of motion of the First Defendant filed 23rd March 2009, are refused.

b) the costs of and incidental to the application for the orders sought in paragraph 19 (a) are to be paid by the First Defendant to the Plaintiff.

_________________________________________
Blake Dawson Lawyers: Lawyers for the Plaintiff 
Saulep Lawyers: Lawyers for the First Defendant 
Office of the Solicitor-General: Lawyers for the Second Defendant