Akap v Korakali [2012] PGSC 17; SC1179 (26 April 2012)

SC1179

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 82 OF 2007

BETWEEN

SAKARAIAS AKAP
IN SUBSTITUTION FOR KANDASO AKAP
Appellant

AND

KENNETH KORAKALI
First Respondent

AND

TEDDY'S PLANT HIRE LIMITED
Second Respondent

AND

TEDDY'S GENERAL STORES LIMITED
Third Respondent

Waigani: Mogish, Yagi & Makail, JJ
2009: 26th November & 2012: 26th April

PRACTICE & PROCEDURE - Dismissal of proceedings - Exercise of discretion - Cause of action - Agreement based on custom - Money received as compensation for personal injury sustained in a motor vehicle accident - Enforceability of agreement - Authority to issue proceedings - Deceased party - Survival of cause of action - Substitution of deceased party - Failure to apply - Effect of - Proceedings incompetent and abuse of process - Discretion properly exercised - Appeal dismissed- National Court Rules - O 5, rr 10 & 12, & O 12, r 40.

PRACTICE & PROCEDURE - Notice of motion - Motion for dismissal of proceedings - Time for hearing - Short service - Hearing of motion at date of trial - Hearing by consent of parties - Effect of - Waiver of right to adjournment - Inherent powers of Court - Hearing of application may be heard on short notice - National Court Motions Amendment Rules 2005 - O 4, r 49(11).

Facts

Kandaso Akap and his wife Pokawan Kandaso who at all material times was a paraplegic held interests in the respondent companies. They commenced proceedings in the National Court to have the respondents account for profits made from business operations of the second and third respondents and for damages. The action was based on breach of contract and customary law. It arose from a dispute over money paid as compensation by the Motor Vehicle Insurance Trust to Pokawan Kandaso following injury she sustained in a motor vehicle accident that rendered her a paraplegic. The parties are from Enga Province and are related by blood and through marriage. Pokawan Kandaso shared her compensation money with these relatives and started successful business in the respondent companies.

On the respondents' motion seeking dismissal of the proceedings, the National Court dismissed the proceedings holding that:

1. Pokawan Kandaso had not authorised the issuance of the proceedings;

2. she died and was without a substitute; and

3. the agreement to share compensation intended under a statutory scheme and awarded by a Court to her as a paraplegic was unenforceable.

On appeal, the appellant argued among other reasons, that the primary judge erred when; (a) he heard the application for dismissal on short notice at the date of trial, thus denying the appellant a fair hearing, (b) the proceedings was an abuse of process when Enga custom permitted him to be and was granted substitution of Kandaso Akap and Pokawan Kandaso; and, (c) he was entitled to benefit from the money paid as compensation to Pokawan Kandaso by Motor Vehicles Insurance Trust.

Held:

1. The relevant Rule that prescribed the time for the hearing of a notice of motion stipulate that a motion may be moved or heard not less than 3 clear days after service. In the present case, the appellant's counsel consented to the hearing of the application on short notice at the date of trial. Therefore, the appellant had waived his right to an adjournment of the hearing of the application and the primary judge had not erred when he heard the application on short notice: O 4, r 49(11) of the National Court Motions Amendment Rules 2005.

2. There was no evidence supporting the appellant's submission that the issues raised in the respondents' application were determined in an earlier ruling, hence res judicata.

3. In a case where a plaintiff dies but the cause of action in the proceedings survives his death and an application for substitution of the deceased plaintiff is not made within 3 months preceding the death, the proceedings may be dismissed as being incompetent and an abuse of process: O 5, r 12(1) & O 12, r 40(1)(c) of the National Court Rules.

4. An application for substitution of a deceased party may be made after 3 months had expired and the party making the application must provide a reasonable explanation for the delay in making the application. In a case where no attempts are made or the explanation is unsatisfactory, the application may be refused: Thomas Kaidiman -v- PNG Electricity Commission (2002) N2343 and POSFB -v- Sailas Imanakuan (2001) SC677 referred to.

5. The primary judge had not erred when he dismissed the proceedings for failure to disclose a cause of action, frivolous and vexatious and an abuse of process.

6. Appeal is dismissed with costs. The decision of the National Court is affirmed.

Cases cited:
Papua New Guinea cases:

Curtain Bros (PNG) Ltd -v- UPNG (2005) SC788
The State -v- Sam Akoita & Others (2009) SC1016
Telikom Limited -v- ICCC (2008) SC906
Robert Kalasim & Anor -v- Aina Mond & Ors (2006) SC828
Thomas Irai -v- The State (2007) SC687
John Baipu -v- The State (2005) SC796
Thomas Kaidiman -v- PNG Electricity Commission (2002) N2343
POSFB -v- Sailas Imanakuan (2001) SC677

Overseas cases:

House -v- King (1936) 55 CLR 499

Counsel:

Mr R Mann-Rai, for Appellant
Mr G Sheppard with Ms S Nepal, for Respondents

26th April, 2012

JUDGMENT

1. BY THE COURT: The appellant appeals against the interlocutory judgment of the National Court of 24th July 2004 in relation to proceedings WS. No. 1661 of 2002; Sakaraias Akap (substituting Kandaso Akap) & Pokowan Kandaso -v- Kenneth Korakali & Ors. The appeal lies without leave because the interlocutory judgment was final in nature pursuant to section 14 (3) (b) (iii) of the Supreme Court Act, Ch. No. 37.

Background Facts

2. The proceedings in the National Court was based on a combination of contract law and customary law. The second plaintiff Pokawan Kandaso, who is now deceased, was injured in a motor vehicle accident and rendered a paraplegic. In separate National Court proceedings, she successfully sued and received compensation from the Motor Vehicle Insurance Trust ("MVIT") in 1992 a sum of K100,365.00 (K95,000.00 after legal costs were paid). The parties in the National Court are from Enga Province and related to Pokawan Kandaso either through marriage or by blood. They met and agreed in accordance with what is claimed as their custom, to share the compensation money among themselves including Pokawan Kandaso. Pokawan Kandaso, who was then hospitalised, was allocated K15,000.00 as her share. Others were also allocated various share amounts. The share agreement then became a vehicle for the establishment of business. Each party's interest in the business was proportionate to each party's share in the compensation.

3. A construction company was thus established in 1993 by the first respondent, who was an accountant by profession and the business became profitable and a successful venture. A dispute subsequently arose among them. Kandaso Akap and Pokawan Kandaso therefore instituted an action for account in the National Court to essentially get the respondents to, among other things, account for all the company's profits since its establishment in 1993. While the proceedings was pending, Pokawan Kandaso died. Subsequently, Kandaso Akap also died. He died on 03rd August 2004. The National Court subsequently granted leave for the appellant to be substituted for Kandaso Akap as the plaintiff to pursue the proceedings.

4. The respondents denied the claim and raised as their defence firstly, the first respondent had been running as a successful business venture prior to the share agreement and hence denied owing to Kandaso Akap and Pokawan Kandaso any profits of the business. Secondly, all parties were paid their entitlements pursuant to the share agreement. Thirdly, Pokawan Kandaso did not authorise the issuance of the proceedings prior to death and therefore was without a substitute to maintain the proceedings.

5. On 16th July 2007, the respondents moved a motion seeking dismissal of the proceedings on various grounds. The National Court dismissed the proceedings as failing to disclose a cause of action, frivolous and vexatious and an abuse of process holding that:

(a) Pokawan Kandaso did not authorise the issuance of the proceedings;

(b) she died and was without a substitute; and

(c) the agreement to share compensation intended under a statutory scheme and awarded by a Court to her as a paraplegic was unenforceable.

The Law

6. The appeal is against the primary judge's exercise of discretion in dismissing the proceedings. In appeals against an exercise of discretion, it is the law that an appellant bears the onus of establishing that the Court below made an error in the exercise of its discretion in dismissing the proceedings. It is not sufficient to show that the primary judge should have found otherwise. In House -v- The King (1936) 55CLR 499, Dixon, Evatt and Mc Tiernan JJ said at 504:

"The manner in which an appeal against an exercise of discretion should be determined is governed by established principle. It is not enough that the judges comprising the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion." (Emphasis added).

7. This principle was approved and adopted in Curtain Bros (PNG) Ltd -v- UPNG (2005) SC788 and subsequently endorsed and applied in The State -v- Sam Akoita & Others (2009) SC1016. In Curtain Bros (supra), the Supreme Court stated:

"The appellant Court will not interfere with a discretionary judgment on a procedural matter within its jurisdiction, except where the exercise of that discretion is clearly wrong. A discretionary judgment may be set aside if an identifiable error occurred in the exercise of discretion. Alternatively, it may be set aside where there is no identifiable error, but the resulting judgment or order is "unreasonable or plainly unjust" and such that an error can be inferred. These principles are well established. We adopt a passage from Kitto J in the Australian High Court case of Australia Coal and Shale Employees' Union v The Commonwealth [1953] HCA 25; (1956) 94 C.L.R. 621 at p.627, which was adopted by Clarkson J. in Breckwoldt & Co. (N.G.) Pty Ltd v. Gnoyke [1974] PNGLR 106 at p.112 - 113:

'The decision by the primary judge to stay the action was made in exercise of a judicial discretion and I accept that in those circumstances the principles on which this Court should act are as described by Kitto J. in Australian Coal and Shale Employees' Union v The Commonwealth ... the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgments is that there is a strong presumption in favour of the correctness of the decisions appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance......'"

8. Hence, the overriding consideration in this appeal is, we must be satisfied that some identifiable error had been made by the primary judge in the exercise of discretion.

Grounds of Appeal

9. The appellant raised 19 grounds of appeal. One of them (ground 3(ii)(a)) was withdrawn at the hearing. The rest may be summarised as follows:

(a) Breach of National Court Rules relating to hearing of notices of motion, hence breach of natural justice;

(b) Res judicata;

(c) Authority to issue proceedings and substitution of party and

(d) Cause of action - Enforceability of agreement

Consideration of Grounds of Appeal

(a) Breach of natural justice

10. Turning to the ground on breach of National Court Rules relating to hearing of the notice of motion, hence breach of natural justice, counsel for the appellant made lengthy submissions on this ground. In short, it was submitted that the primary judge failed to find that the notice of motion filed by the respondents had been short served on the basis that there was no proof of service. It was further argued notwithstanding that leave to dispense with the requirement for service was specifically sought in the notice of motion the primary judge failed to accord to the parties, especially the appellant, a fair opportunity to make submissions on the question of leave.

11. Moreover, his Honour failed to direct his mind to the necessity of making specific orders granting leave to the respondents to make the application before hearing the application. His Honour's failure, it was argued, denied the appellant's right to a fail hearing. Counsel further submitted that the exercise of discretion by the primary judge was erroneous on the basis that his Honour failed to give any or adequate consideration to the agreement between the parties to fix the matter for trial that day and when the respondents moved their application on short notice, they acted contrary to their agreement. The combined effect of all these arguments was that, the application came as a surprise to the appellant and such was contrary to the principles of natural justice enshrined in section 59(1) of the Constitution and amounted to an abuse of process of the Court.

12. Counsel for the respondents in responding to these submissions referred us to the transcripts of proceedings of 16th July 2007 and while conceding that the application was short served nevertheless submitted that the appellant had consented to the hearing of the application. By consenting, the appellant had waived his right to an adjournment and cannot now complain of being denied a fair hearing.

13. We accept that under the National Court Motion Amendment Rules 2005, the prescribed time for hearing of a notice of motion is not less than 3 clear days after service: O 4, r 49(11). This is a general rule. There are however exceptions to this rule, and one of them is for instance where the matter is urgent or where parties consent to the hearing on short notice. In the present case, there is no dispute the respondents' notice of motion filed on 12th July 2007 was served on the date of trial. It was short served on the appellant.

14. However, the transcript of proceedings of the National Court dated 16th July 2007 shows that his Honour had made a specific order allowing the respondents to move the application. This was after his Honour received the appellant's consent for the application to be moved by the respondents on that day. He heard submissions of both counsel on the application and delivered his decision on 24th July 2007 dismissing the proceedings.

15. The Supreme Court in Telikom Limited -v- ICCC (2008) SC906 held, that the fact that proceedings are well advanced is not a sufficient reason not to dismiss the proceedings for abuse of process. Given this, we are satisfied that the appellant's right to a fair hearing based on the principles of natural justice had not been breached or denied.

16. In any event, we consider the National Court has inherent jurisdiction, a power which it could exercise at any time, to prevent abuse of its process and wasting of the Court's time to hear the application to dismiss at the trial. In that respect, counsel for the respondents referred his Honour to the Court's inherent jurisdiction. The appellant's counsel did not object to the Court exercising its inherent power to hear the application on short notice. We consider the issues raised by the respondents' application in relation to substitution of deceased party, authority to issue proceedings and enforceability of the share agreement are matters which had a direct bearing on the competency of the proceedings and may be raised at any stage of the proceedings.

17. We therefore dismiss this ground.

18. As an extension to the breach of natural justice argument, counsel for the appellant raised arguments in relation to breach of O. 4 r 49(8) of the Motions (Amendment) Rules, 2005 relative to the requirement that all motions must contain a concise reference to the Court's jurisdiction to grant the relief or order sought. Counsel submitted that his Honour erred in considering other issues which were not pleaded in the notice of motion filed on 12th July 2007. These issues were substitution of parties, lack of authority to issue proceedings and the enforceability of the agreement as pleaded in the amended statement of claim. Counsel therefore submitted that in taking those matters into account, his Honour acted contrary to O. 4 r 49(8) of the Motions (Amendment) Rules, 2005.

19. We dismiss this submission by the appellant's counsel for one simple reason and that is, counsel did not object to the issues raised in this ground of appeal in the Court below when opposing the application. We accept the respondents' submission that, as this ground raising those issues had not been objected to in the Court below, the appellant is not entitled to raise them now without leave of the Court, and we note, no leave has been sought and obtained by the appellant. The law in that regard is well settled in that objection may be taken where a party intends to raise issues not previously raised in the National Court: see Robert Kalasim & Anor -v- Mond & Ors (2006) SC828.

20. We are satisfied that the appellant had the opportunity to object to the grounds raised and relied upon by the respondents in support of the application for dismissal of proceedings. He had not done so. Therefore, he cannot now rely on them in this appeal.

(b) Res judicata

21. The second ground raises the issue of res judicata. In this ground, it was submitted for the appellant his Honour had failed to find the same application under O 12, r 40 of the National Court Rules had been made and ruled upon by Kandakasi, J on 15th August 2003. Counsel referred to a transcript of proceedings before Kandakasi, J suggesting a similar application by the respondents was ruled upon by his Honour in 2003, thus the issues raised in the present application are res judicata. It should be stated, appeals to the Supreme Court are by way of re-hearing on the evidence and materials that were properly before the Court whose decision is the subject of the appeal: see section 6 of the Supreme Court Act, Ch. No. 37.

22. The transcript of proceedings in question was not properly put before the National Court on 16th July 2007 when the respondents made the application and neither on 24th July 2007 when the National Court handed down its decision. The National Court transcript of proceedings shows the appellant's counsel, in response to one of the respondents' arguments that the statement of claim offended the rule on brevity and clarity, submitted inter-alia, the statement of claim was amended pursuant to and in accordance with an earlier Court order. The appellant's counsel led no evidence in support of this submission but instead invited his Honour to refer to an order that was "somewhere" in the Court file. When the National Court re-convened to hand down its decision on the respondents' application, the appellant's counsel only made mention of the "Transcript of Proceedings" for 15th August 2003. The appellant bears the onus to demonstrate to our satisfaction that the primary judge fell into error in circumstances where there is clear evidence of an earlier court decision on the issue.

23. In effect, his Honour and the respondents were never given an opportunity to consider the transcript of proceedings in question and this happened due to the appellant's failure. This being the case, it is our respectful view, it is not only incorrect but also improper to allege the primary judge failed to give consideration to materials (transcript of proceedings) which were not properly put before him at the first given opportunity.

24. In our view, the fact that the primary judge took time to carefully consider the submissions and evidentiary materials also lends support to the view that the Court's decision was not made in error. In any case, even if a similar application was made earlier and refused, the respondents were entitled to bring another application of a similar nature on account of the fact that pleadings were amended subsequent to the refusal of the earlier application. This ground is misconceived and is dismissed.

(c) Authority to issue proceedings and substitution of party

25. Turning to the issues of authority to commence proceedings and substitution of party, we consider them fundamental to the question of continuation of proceedings against the respondents because they raise the issue of competency of proceedings in the National Court. It is not disputed Pokawan Kandaso died while the proceedings was pending before the National Court. There is however some dispute as to whether another person had been substituted in her place to maintain the proceedings following her death.

26. Counsel for the appellant argued that the respondents had failed to cite the relevant rules on the jurisdictional basis of the Court in the notice of motion so as to give notice to the appellant of the nature and grounds of the application. We reject this submission firstly on the basis of what we have earlier said in that no objection was taken on this point before the primary judge; and secondly, the application was brought under O 12, r 40 of the National Court Rules. O 12, r 40 gives wide powers to the Court to dismiss proceedings where pleadings do not disclose a reasonable cause of action, the proceedings are frivolous and vexatious and an abuse of process. It states:

"40 Frivolity, etc.

(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings-

(a) no reasonable cause of action is disclosed; or

(b) the proceedings are frivolous or vexatious; or

(c) the proceedings are an abuse of process of the Court, the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

(2) ..........."

27. In our view, the issues concerning "substitution" of parties and lack of authority to issue proceedings clearly fall within the ambit of O 12, r 40 and this should have alerted the appellant to the procedural requirement for substitution of deceased party under O 5, r 12. Indeed, we note in his submissions in opposition to the respondents' application, counsel drew his Honour's attention to the question of admissibility of evidence. Counsel objected to the use of an affidavit of Pokawan Kandaso sworn on 15th September 2004 and filed on 17th September 2004 on the basis that the affidavit belonged to a deceased person and executed days before the deceased died in highly suspicious circumstances. As Pokawan Kandaso had died, her affidavit could not be tendered without the consent of the appellant. It was further submitted the respondents had failed to give notice of intention to rely on that affidavit for the purpose of the application. Its use surprised the appellant. In our view, these matters demonstrate to us counsel sufficiently knew the nature and grounds of the application. Hence, this argument must fail.

28. Furthermore, his Honour's attention was drawn by counsel to the objection taken with regards to the use of affidavit by the respondents where it was argued that the affidavit was "being the affidavit of death (a deceased) person executed days before the deponent died in highly suspicious circumstances" and should not have been accepted and relied upon by his Honour in considering the application. He also argued his Honour erred when he accepted and relied on the affidavit when it was inadmissible because Pokawan Kandaso was a deceased.

29. We reject these submissions because according to the transcript of proceedings, the objection was based on "lack of notice" rather than "being the affidavit of death (a deceased) person executed days before the deponent died in highly suspicious circumstances" and of a deceased person, hence inadmissible. This was what counsel said when objecting to the use of the affidavit at paragraph 10 of page 4 of the transcript:

".......Your Honour, I will object to that because my friend has not given notice that he is going to rely on that. We cannot have motions by surprise and abuse like this."

30. We find the grounds of objection are new ones as they have not been raised before his Honour when counsel objected to the use of the affidavit. We further find they are not properly before us, hence counsel's submissions that his Honour wrongly accepted and relied on the affidavit must fail. In any event, we consider that his Honour properly exercised his discretion in dismissing the objection having regard to the affidavit evidence before him. We are unable to see any real prejudice that may be suffered by the appellant in the circumstance particularly where the affidavit was made in 2003 and its contents were within the appellant's knowledge. For this reason, we are not satisfied that the primary judge erred in the exercise of discretion.

31. In our view, this was a straight forward application. As we have alluded to it was based on the lack of authority to issue proceedings and failure to substitute a new party in place of the deceased Pokawan Kandaso. The only argument the appellant was able to put up in opposing the application was that Engan custom permitted the husband of the deceased and his relatives to benefit from the compensation received from Motor Vehicles Insurance Trust. Counsel referred his Honour to an opposing affidavit of one Lolie Monagi sworn and filed on 27th April 2006 to substantiate his argument and further submitted that Lolie Monagi's evidence was sufficient proof of substitution of Kandaso Akap and Pokawan Kandaso as they were married couple.

32. In that respect, we note his Honour was mindful of and did consider the appellant's claim of custom based on Enga custom in the affidavit of Lolie Monagi but was more concerned about how Kandaso Akap could commence proceedings over moneys that belonged to his wife, Pokawan Kandaso, and in addition the reasons for the delay of over two years in applying for substitution of Pokawan Kandaso. His Honour raised this issue at paragraph 40 of page 29 of the transcript of proceedings:

".......All right. I just want to know - can you say something on how the first plaintiff can lawfully commence a proceeding over entitlements that belong to the second plaintiff, Pokawan Kandaso, forgetting the fact that they are now deceased? At the very first instance on what legal basis was Kandaso Akap included as a party?"

33. The issue raised by his Honour is trite. It raises the issue of competency of proceedings. It appears His Honour was not satisfied Enga custom created a legally binding and enforceable contractual relationship giving Kandaso Akap a recognized right or cause of action known to law to commence proceedings against the respondents over money paid as compensation by MVIT to Pokawan Kandaso.

34. We agree no more with his Honour's remarks on this issue. We wish, however, to reiterate a further point and that is that in our opinion, such Enga custom is repugnant to the general principles of humanity under the Constitution, Sch. 2.1 which we have alluded to earlier. Where a custom is found to be inconsistent with a principle of constitutional law, that custom shall be deemed inappropriate and inapplicable and is otherwise unconstitutional. In Thomas Irai -v- The State (2007) SC687 the Supreme Court held that only customs which are not inconsistent with a written law or general principles of humanity should be retained. See also John Baipu -v- The State (2005) SC796. It follows any argument in relation to the application of Enga custom must fail. That means the procedural requirement of substitution of deceased party under O 5, r 12 is mandatory and must be met by the appellant before the proceedings can be maintained against the respondents.

35. O 5, r 12 relevantly provides:

"12. Failure to proceed after death of party. (8/12)

(1) Where –

(a) a party dies but a cause of action in the proceedings survives his death; and

(b) an order under Rule 10 for the addition of a party in substitution for the deceased party is not made within three months after the death,

the Court may, on application by a party or by a person to whom liability on the cause of action survives on the death, order that, unless, within a specified time after service of the order in accordance with Sub-rule (2), a party is added in substitution for the deceased party, the proceedings be dismissed so far as concerns relief on the cause of action for or against the person to whom the cause of action or the liability thereon, as the case may be, survives on the death.

(2) On making an order under Sub-rule (1), the Court shall give such directions as it thinks fit for service of the order on the persons (whether parties or not) interested in continuing the proceedings."

36. This rule has been a subject of judicial consideration on a number of occasions. In commenting on the effect of O 5, r 12, Injia, J (as he then was) in Thomas Kaidiman -v- Papua New Guinea Electricity Commission (2002) N2343 said at p 4:

"In my view, whilst Rule 10 & 12 do not expressly stipulate that an application under Rule 10 must be made within 3 months of the death of a party, it is implicit in Rule 12(1)(b) that a person who has an interest in the deceased's estate is entitled to make such an application within 3 months of the death but it is made outside the 3 months, then the Court may still entertain the application and make an order substituting a party but subject to certain conditions stipulated in rule 12(1)."

37. His Honour went on at p 5:

"An order under rule 12(1) is discretionary and it is exercised on proper grounds. In the present case, I am satisfied that the applicant is an heir to the estate of the late plaintiff, that she has a direct interest in the proceedings on behalf of the estate of the late plaintiff and that she has acted promptly in making this application after being advised of her legal rights. I am also satisfied that the nature of the claim is such that proof of the claim is substantially based on documentary evidence in the form of records of employment which records should be readily available to both parties and that the action may be prosecuted without any great difficulty."

38. We accept that the Court has discretion to consider applications of this nature outside 3 months: see Thomas Kaidiman (supra) and POSFB -v- Sailas Imanakuan (2001) SC677.

39. On our part, we consider in cases where a party dies but the cause of action in the proceedings survives his death and an application for substitution of the deceased party is not made within 3 months of death, the proceedings may be dismissed as being incompetent and an abuse of process: O 5, r 12 & O 12, r 40 of the National Court Rules.

40. In other words, an application for substitution may be made after 3 months has expired, however, the party making the application must provide a reasonable explanation for the delay in making the application. In a case where no attempts are made or the explanation is unsatisfactory, the application may be refused.

41. In the present case, the proceedings was incompetent and an abuse of process because following Pokawan Kandaso's death, the cause of action in the proceedings survived and no substitution of the deceased was made either within or after the lapse of 3 months following the death. No explanation had been given for the delay in bringing the application for substitution. Indeed, no such application had been filed at the time the respondents moved their application although a belated attempt was made by counsel for the appellant expressing a position that an application for substitution would be made but in our view, that is no explanation of the delay in bringing an application for substitution of the party.

42. For these reasons, we are of the opinion that his Honour was correct in accepting the respondents' submissions that unless there was an order for substitution, the proceedings could not be maintained. We find no error committed by his Honour.

43. Secondly, there is no dispute that the appellant was substituted in place of Kandaso Akap pursuant to a Court order of 06th June 2005. As for Pokawan Kandaso, we have found no error in his Honour's finding that no-one was substituted for her in the proceedings. Thus, the next issue is whether Pokawan Kandaso had authorised the commencement of proceedings on her behalf.

44. Counsel for the appellant submitted that his Honour failed to give due consideration to the evidence contained in the affidavit of Frank Pyaso Thomas sworn on 05th June 2006 and filed on 16th June 2006 which stated that the first respondent engineered the proceedings in Wabag entitled WS No 1420 of 1999: Pokawan Kandaso -v- Kandaso Akap & Sakarias Akap to keep the entire business for himself. Further, it was contended that his Honour erred in finding that the proceedings in Wabag established Pokawan Kandaso's intention that she had not authorised the issuance of the proceedings. It was also submitted that his Honour erred in finding there was a "rift between the first plaintiff (Kandaso Akap) and the paraplegic (Pokawan Kandaso)" in relation to the legal proceedings in Wabag WS No. 1420 of 1999: Pokowan Kandaso -v- Kandaso Akap and Sakarias Akap when there was in fact no evidence supporting such a finding.

45. These submissions were put forward to demonstrate that his Honour had failed to properly consider the evidence in the affidavit of the appellant sworn on 06th August 2004 and on 11th August 2004 and the affidavit of Frank Pyaso Thomas (supra) refuting the respondents' claim that Pokawan Kandaso had not authorised the issuance of the proceedings. It was submitted the evidence overwhelmingly established that Pokawan Kandaso was influenced by the first respondent to sue Kandaso Akap and the appellant. As such, his Honour should not have found that Pokawan Kandaso had not authorised the issuance of the present proceedings.

46. We reject this submission. We find that his Honour had sufficiently considered the evidence for and against the issue of Pokawan Kandaso's authority to issue the proceedings in question and arrived at the finding that she had not authorised its issuance. In our view there was ample evidence on which his Honour reached such a conclusion because his Honour's conclusion was based on the affidavit of Pokawan Kandaso (supra), wherein she stated that she had not benefited from the money and so had instituted proceedings in Wabag, WS No. 1420 of 1999: Pokowan Kandaso -v- Kandaso Akap and Sakarias Akap, to recoup money from Kandaso Akap and the appellant. For these reasons, we find that there was evidentiary basis on which his Honour was able to conclude that these factors were further evidence re-enforcing lack of substitution.

47. In our view, it was a reasonable and rational conclusion open to his Honour based on evidence that the proceedings in Wabag go to establish Pokawan Kandaso's intention and the rift between her and her husband Kandaso Akap notwithstanding the Enga custom on customary inheritance and succession following death of a person or what her state of mind was prior to her death. The significant and overriding consideration was that, she did not benefit from the money.

48. This issue also greatly concerned us in this appeal. We are perturbed that money paid as compensation by MVIT to Pokawan Kandaso was shared among the parties. That money was specifically paid to compensate her for the injury she sustained in a motor vehicle accident. The injury was not only very serious but more importantly permanent. She was rendered a paraplegic. The evidence before his Honour which was not disputed was that, she had spent a long time in hospital following the motor vehicle accident and even after MVIT had released the money to her. That money was to meet all her medical and associated expenses including her daily needs and sustenance such as food and clothing. Put simply, she was a paraplegic and could not work to raise money to look after herself. Instead the compensation money was shared among the parties. This is totally incomprehensible and unacceptable. For all these reasons, we dismiss this ground.

49. This leads us to the final ground, which is the enforceability of the share agreement.

(e) Cause of action - Enforceability of agreement

50. The last ground relates to the cause of action. It arises from the share agreement and raises the issue of enforceability. His Honour found no cause of action was maintainable against the respondents because the agreement to share compensation that was intended under a statutory scheme and awarded by a Court was unenforceable. In support of this ground, counsel for the appellant submitted that there was a cause of action under customary law, in that according to Enga custom, the share agreement entitled him and others to receive a share of the compensation money and may also sue to enforce any breach of agreement.

51. To further support this proposition, counsel submitted his Honour erred in assuming that the sum of K227, 680.00 paid by the first respondent was paid for the benefit of or to Pokawan Kandaso when there was evidence to the contrary. Counsel further submitted his Honour's decision to dismiss the proceedings shut out the appellant who was entitled to lay claim to the estates of Kandaso Akap and Pokawan Kandaso under Enga custom. By dismissing the proceedings, it gave an unfair advantage to the first respondent to keep the business to himself even though he was not entitled under Enga custom.

52 Earlier, we have found his Honour did not err when he found that Engan custom did not create and give right to Kandaso Akap to sue the respondents over money paid by MVIT to Pokawan Kandaso. This finding plus her affidavit stating that she had not authorised the proceedings in question and that, she had instituted proceedings in Wabag to recoup moneys from her husband, Kandaso Akap, and others persuaded his Honour to find that the money was not used for her benefit. In essence, the overriding consideration was that such a custom would undermine the policy and scheme as provided for under the Motor Vehicles (Third Party Insurance) Act, which policy and scheme ensured Pokawan Kandaso was compensated.

53. We reiterate that the money was paid by MVIT to compensate Pokawan Kandaso and not anyone else. The question whether or not the appellant was entitled to lay claim to the estate of the deceased under Enga custom was a matter of conjecture in view of the fact that Pokawan Kandaso, had not authorised the issuance of the proceedings in her name coupled with the evidence that a pre-existing proceedings was commenced by her against her husband Kandaso Akap in Wabag. In any event, the proceedings in the National Court was not a claim by or on behalf of the estate of the deceased.

54. Thus, it is unreasonable, unconscionable and an equitable fraud for someone else such as the appellant to claim any right to the money pursuant to the share agreement. We concur with the primary judge that the share agreement is unenforceable. Accordingly, we are satisfied that his Honour correctly found that no cause of action was maintainable against the respondents because the agreement to share compensation intended under a statutory scheme and awarded by a Court was unenforceable.

Conclusion

55. In conclusion, we are of the view his Honour had properly exercised his discretion in dismissing the proceedings because to commence, maintain, or defend an action in proceedings without substituting a deceased party who is deceased would be an abuse of the process of the Court, particularly when there is provision in the National Court Rules allowing for substitution of deceased party: see O 5, rr 10 & 12 of the National Court Rules, Thomas Kaidiman (supra) and POSFB -v- Sailas Imanakuan (supra). In the same vein, commencing, maintaining or defending an action without the authority of a party named would be an abuse of process of the Court, particularly when the party named dies: see O 5, r 10 of the National Court Rules, Thomas Kaidiman (supra) and POSFB -v- Sailas Imanakuan (supra). Finally, his Honour properly dismissed the proceedings because no cause of action was maintainable in law against the respondents as the agreement to share compensation intended under a statutory scheme and awarded by a Court to Pokawan Kandaso is unenforceable.

Order

56. For all these reasons we order that:
1. the appeal be dismissed.
2. the decision of the National Court is affirmed.
3. cost is awarded to the respondents to be taxed if not agreed.

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Gregory Manda Lawyers: Lawyers for the Appellant
Young & Williams Lawyers: Lawyers for the Respondents