Bird-West v AON Superannuation (PNG) Ltd [2022] PGNC 68; N9505 (9 March 2022)

N9505

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 143 OF 2021 (IECMS-CC2)

ALEENA ELIZABETH BIRD-WEST

V

AON SUPERANNUATION (PNG) LIMITED

Waigani: Wawun-Kuvi, AJ
2022: 18^th January, 9^th March

CIVIL- PRACTICE AND PROCEDURE-- Originating Summons- Superannuation (General Provisions) Act 2000-Whether there was a valid nomination? Whether the Court has jurisdiction to determine who should receive the amount standing to the credit of a deceased member?

Cases Cited

Van Der Kreek v Van Der Kreek [1979] PNGLR 185
Van Der Kreek, Re Judgments Enforcement (Reciprocal Arrangements) Act [1978] PNGLR 398

Reference

Superannuation (General Provisions) Act 2000

Counsel:

Mr Luwi Dos, for the Plaintiff
Ms Jeanale Nigs, for the Defendant

RULING

9^th March, 2022

1. WAWUN-KUVI, AJ: The Plaintiff Aleena Elizabeth Bird-West (Mrs. West) by Originating Summons seeks various declarations to the effect that Randel James West, a member to the defendant AON Superannuation (PNG)
   Limited (AON) did not have a valid nominee at the time of his death and that, the amount standing to his credit be paid to her or in the alternative to the Estate of Randel James West.
   
2. AON argues that Randel James West has a valid nominee and that the Court does not have jurisdiction.
   
3. There is no dispute as to the factual circumstances leading to the filing of the Originating Summons.
   
4. The defendant, AON, is a superannuation fund bound by the Superannuation (General Provisions) Act 2000 (Superannuation Act).
   
5. Randel James West commenced employment with The Corps (PNG) Limited in 2008. On 28 July 2009 he applied as a participating employee to AON. He commenced contributions on 10 November 2009.
   
6. Mrs. West, the plaintiff, was married to Randel James West at the time of his demise in the year 2015.
   
7. The events preceding his demise as stated are not disputed.
   
8. At the time of the lodgment of his application on 28 July 2009, Randel James West nominated one Carolyne Evelyn West as his beneficiary. He filled in relationship as wife.
   
9. Sometime in August 2009, Randel James West separated from Carolyne Evelyn West.
   
10. On 10 June 2011, Randel James West and Carolyne Evelyn West filed an application for Consent Divorce Orders in the Magistrate’s Court in Queensland.
    
11. On 27 April 2013, the divorce took full effect and the marriage between Randel James West and Carolyne Evelyn West was terminated.
    
12. On 27 February 2015 Randel James West married Mrs. West in Cairns Australia.
    
13. On or around June 2015 Randel James West was terminated from employment by Corps (PNG) Limited.
    
14. On 9 December 2015 Randel James West died at the age of 47 from a heart attack at the Port Moresby General Hospital.
    
15. On 21 November 2019, Letters of Administration for the Estate of Randel James West was granted by the National Court to Mrs. West.
    
16. AON has refused to pay to Mrs. West the amount standing to the credit of Randel James West. As stated, it maintains that the valid nominee is Carolyne Evelyn West.
    
17. It is common ground that the merits of the declaration sought are to be determined on the construction of the Superannuation Act.
    

What is the process to nominate and change a nominee?

18. Section 94 of the Superannuation Act sets out the process of nomination.
    
19. A member shall nominate in a prescribed manner, a qualified person to receive his entitlement upon his death: section 94(1).
    
20. The member may amend at any time after giving written notice in the prescribed form: section 94(3).
    
21. The Superannuation Fund, here, the defendant, shall ensure that at least annually the member is informed and shall advise the member:
    

(a) of the Fund's record of the member's nominee; and

(b) that the member may change the nominee at any time.

22. Section 94(4) of the Superannuation Act is a mandatory responsibility imposed upon the defendant to inform its members at least annually of its records as it relates to the member’s nominee and that the member may change the nominee at any time.
    
23. The defendant’s obligation commenced 10 November 2010, a year after the member commenced contributions. And continued up until his demise in 2015.
    
24. Maria Loko of AON stated that the appropriate process to update member records is for the member to submit an update form. She attaches a sample in “ML2” in her affidavit sworn and filed on 23 December 2021. She states that the defendant never received a form.
    
25. The Superannuation Act which AON is bound by provides the mandatory requirements. Contrary to Maria Loko’s assertions, it was the mandatory obligation of AON to inform its member. There is nothing before the Court that AON complied with that mandatory requirement.
    
26. The absence of any mandatory notice to Randel James West in compliance with section 94(4) of the Superannuation (General Provisions) Act 2000, is sufficient proof that the defendant failed in its mandatory obligation to ensure that the member was aware of his nomination and that he was at liberty to change his nomination.
    
27. There is nothing in the initial application form annexed as ML1 to the affidavit of Maria Loko which informs the member of his options to change his nominations.
    
28. The relevance of the failure to notify the member will be addressed later.
    

Who are nominees?

29. Section 94 (1) of the Superannuation Act, states:

“(1) A member of an ASF shall nominate, in the prescribed manner, a qualified person to receive such proportion of the entitlements payable to the member on his death as is specified in the nomination.”

30. The above section demonstrates that, it is not open to the member to nominate any person he wishes but is limited to a “qualified person”.
    
31. Section 92 of the Superannuation Act defines qualified person to mean:

"..... any one or more of the following: —

(a) a member or members of his family; and

(b) any other person or persons;”

32. Family is defined by section 92 to mean the “spouse, children, dependent parents or other dependent relative of the member.”
    
33. Whilst defence counsel contends that Carolyne Evelyn West falls within the definition of other person under section 92(b) of the Act, recourse must be taken from the nomination filled by the member. MLI in the affidavit of Maria Loko, shows that the member nominated Carolyne Evelyn West and stated her relationship as wife. The member did not nominate any other person, rather he nominated his spouse.
    
34. Spouse is defined by section 92 to “include the legal or customary wife or wives, or the legal or customary husband of the member but does not include a person who, in accordance with any law or custom, is no longer entitled to maintenance.” [Emphasis mine].
    

Was Carolyn Evelyn West the spouse of Randel James West?

35. No.
36. There is no dispute that at the time of death, the legal wife of Randel James West was Mrs. West, the plaintiff.
    
37. His divorce to Carolyne Evelyn West was finalized on 27 April 2013.
    

What is the effect of the divorce in Australia?

38. The Reciprocal Enforcement of Judgements Act 1976 (Chapter 40) is the legislative framework that enables the recognition and registration of foreign judgments in Papua New Guinea.
    
39. Section 8 of the Reciprocal Enforcement of Judgements Act 1976 (Chapter 40), states:
    

“8. General effect of certain foreign judgements.

(1) Subject to this section, a judgement to which Part II. applies or would have applied if a sum of money had been payable under it, whether it can be registered or not, and whether, if it can be registered, it is registered or not—

(a) shall be recognized in any court as conclusive between the parties to it in all proceedings founded on the same cause of action; and

(b) may be relied on by way of defence or counter-claim in any such proceedings.” [Emphasis mine]

40. Section 1 of the Reciprocal Enforcement of Judgements Act 1976 (Chapter 40) defines judgment to mean “a judgement or order given or made by a court in any civil proceedings...............for the payment of a sum of money in respect of compensation or damages to an injured party”
    
41. In Van Der Kreek v Van Der Kreek [1979]^[1], the Supreme Court endorsed Ex parte Van der Kreek; Re Van de Kreek [1978] PNGLR 398 and held:
    

“The words “civil proceedings” in s.1 of the Act are not technical or governed by legal art and are broad enough to include an order for a cash property settlement, albeit in divorce proceedings.”

42. The wife had instituted divorce proceedings in Queensland under the Matrimonial Causes Act 1959 (Aust) but finally determined under the provisions of the Family Law Act 1975 (Aust.). During that period, all the husband’s property was situated in Papua New Guinea. The claim and the Order were not directed at any specific property. The wife then sought to obtain $7000 from the husband in Papua New Guinea. The registration of the Queensland order was granted. Following an unsuccessful application to set aside the order granting registration, the husband appealed to the Supreme Court.
    
43. The husband had argued at the National Court, that the order could not be registered because it was not an order made in civil proceeding, but in divorce proceedings, the two being distinct and the later not being capable of registration in Papua New Guinea under the Reciprocal Enforcement of Judgements Act 1976.
    
44. The Supreme Court held that whilst the order in Queensland was a judgment in personam, it was not considered as such because of section 1 (2) (a) of the Reciprocal Enforcement of Judgements Act 1976 which expressly excludes matrimonial causes and proceedings in connection with matrimonial matters. However, Supreme Court held that the order falls within section 5 (2) (c) of the Act because the laws of Papua New Guinea recognize the jurisdiction of the original Court.
    
45. Section 5 (2) (c) states:
    

“2. Subject to Subsection (3), for the purposes of this section the courts of the country of the original court shall be deemed to have had jurisdiction—

c) in the case of a judgement given in an action other than an action of a type referred to in Paragraph (a) or (b), if the jurisdiction of the original court is recognized by the law of the registering court.”

46. The relevance of this decision as it relates to the present case, is that section 8 of the Act, refers expressly to judgments under Part II. That Kreek v Kreek [1979] was discussing a judgment under Part II. Furthermore, Kreek v Kreek, involved the same State in Australia and the same legislation as the present case.
    
47. The rationale is therefore that the divorce order between Randel James West and Carolyne Evelyn West in Queensland, can be registered in Papua New Guinea and although it has not been registered, pursuant to section 8(1) (a) of the Reciprocal Enforcement of Judgements Act 1976, this Court is obligated to recognize the judgment or order as being conclusive between Randel James West and Carolyne Evelyn West.
    
48. Furthermore, as in Kreek v Kreek [1979], Randel James West was resident in Papua New Guinea and was contributing to AON at the time of his demise.
    
49. Carolyn West may register the judgment in Papua New Guinea and make a claim for the superannuation. But much of this is dependent upon the divorce order itself.
    
50. The consent divorce order states:
    

“3. That unless otherwise specified in these Orders, and save for (the purposes of enforcing any money due under these or any subsequent Order-

(a) Each party shall retain as his or her own property absolutely all assets and/ or financial resources, contingent or otherwise, of whatsoever description and wheresoever situated in which the party is entitled, or which is or are in the possession and/or control of that party as at the date hereof;
(b) Each party forego any claim they may have as to any superannuation benefit belonging to or earned by the other; ....”

51. It is clear from the order that both parties did not intend to make claim to the other’s superannuation. And that the parties had severed ties financially and were responsible for their own individual finances save for the Carolyne Evelyn West paying Randel James West $10, 000.00.
    

Did Randel James West have a valid nominee at the time of his death?

52. The defendant failed to comply with its mandatory obligations to inform Randel James West to change his nominations from 2009 to 2015.
    
53. In 2011, when Randel James West filled in the consent orders, his clear intentions were that Carolyn Holmes was not entitled to his financial assets and superannuation wherever they lay.
    
54. The combined effect of those events renders the nomination invalid.
    

What is the procedure in paying out contributions where there is no valid nomination?

55. Section 95 of the Superannuation Act provides that at the time of death of the member and where there is no valid nomination, or no nominee is alive, the amount standing to the credit of the member shall be paid:
    

(a) either by a process of mediation or allocation conducted by the defendant in accordance with the Regulations or

(b) by a decision of a court of competent jurisdiction.

56. The plaintiff relies of section 95(b) contending that there is no valid nominee and thus the Court must decide what is to become of the monies standing to the credit of Randel James West.
    
57. The jurisdiction of the Court is intertwined with the determination as to whether there exists a valid nomination.
    
58. In the present matter, as there is no valid nominee, the Court has jurisdiction to decide what becomes of the monies standing to the credit of Randel James West.
    

Who receives the amount standing to the credit of Randel James West?

59. Randel James West died without a will. The plaintiff obtained letters of administration by the National Court on 21 November 2019.
    
60. The consequence of which is that the amount standing to the credit of Randel James West shall be paid to the estate of Randel James West.
    
61. The Administrator of the estate is the plaintiff.
    

Costs

62. Whilst the plaintiff has asked the Court for costs to be ordered on an indemnity basis. I will not order as such. The defendant is entitled to protect the contributions of its members. The plaintiff was not listed as a nominee and was required to show sufficient standing. The member died without a will and so it was legally incumbent on the plaintiff to obtain letters of administration. She only did so in 2019. Furthermore, because the nominee was listed as wife. It was incumbent on the plaintiff to show to the defendant that the nominee was no longer a valid nominee because of the divorce proceedings. This was only obtained in December of 2020. The proceedings were filed 20 July 2021.
    
63. The Orders for costs are for the defendant to pay the plaintiff’s cost on a party-party basis, which shall, if not agreed, be taxed.
    

Conclusion

64. In conclusion I make the following orders:
    1. Randel James West did not have a valid nominee at the time of his demise.
    2. Section 95(b) of the Superannuation (General Provisions) Act 2000 empowers the Court to determine who should receive the amount standing to the credit of Randel James West in the event there is no valid nominee.
    3. The Defendant shall therefore pay forthwith the entitlements of the deceased member Randel James West to the Plaintiff as the Administrator of the deceased member’s Estate.
    4. The Defendant shall pay the Plaintiff’s costs on a party-party basis, which shall, if not agreed, be taxed.

________________________________________________________________
Jema Lawyers: Lawyers for the Plaintiff
Dentons PNG: Lawyer for the Defendant

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^[1] PGSC 28; [1979] PNGLR 185 (6 July 1979)