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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCA No.54 OF 2010
BETWEEN:
PUBLIC CURATOR OF PAPUA NEW GUINEA
First Appellant
AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Appellant
AND:
KONZE KARA as Administrator of the estate of KIBIKANG KARA
Respondent
Waigani: David J, Yagi J & Murray J
2011: 29th April
2014: 15th December
CIVIL LAW – appeal – estate claim – claim against administrator - breach of duty – statutory duty – common law duty in devastavit
APPEALS – claim against a statutory body – whether notice of claim is required to be served – Claims By & Against the State Act, Section 5 -
APPEALS – survival of cause of action – characterization of cause of action - whether cause of action in negligence or interest in deceased's estate – Frauds & Limitation Act, Sections 16 & 19
APPEAL – joinder of parties - National Court Rules, Order 5 Rule 8.
Cases cited:
Papua New Guinea Cases
Re Moresby North East Parliamentary Election (No.1): Goasa Damena v. Patterson Lowa [1977] PNGLR 424
SCR No. 1 of 1982: Re Philip Bouraga [1982] PNGLR 178
Bougainville Copper Foundation v Galeva Kwarara [1988-89] PNGLR 110
SCR No. 1 of 1998; Reservation pursuant to s. 15 of the Supreme Court Act (2001) SC672
Curtain Bros (PNG) Ltd v UPNG (2005) SC788
Philip Num v National Housing Corporation (2006), OS No. 115 of 2003, Unreported & Unnumbered Judgment delivered by David, J in Mt. Hagen on 25 August 2006
Jeffrey Turia v Gabriel Nelson (2008) SC949
Mineral Resources Development Company Ltd v Mathew Sisimolu (2010) SC1090
Haiveta v Wingti (No.2) [1994] PNGLR 189
Henao v Coyle (2000) SC655
NCDC Water and Sewerage Ltd v Tasion (2002) SC696
Ipili Porgera Investments Ltd v Bank of South Pacific Ltd & RIFL (2007) SCA No.15 of 2006, Unreported & Unnumbered Judgment of Injia DCJ (as he then was) and Cannings J delivered on 27 June 2007
Overseas cases cited:
Crumbie v Wallsend Local Board [1891] UKLawRpKQB 17; [1891] 1 QB 503
Huyton v Liverpool Corporation [1926] 1 KB 146
Legislation cited:
Claims By and Against the State Act 1996
Frauds and Limitations Act 1988
Public Curator Act 1951
Wills, Probate and Administration Act, Chapter 291, Revised Laws of Papua New Guinea
Supreme Court Rules
National Court Rules
Treatises cited:
Halsbury's Laws of England, 4th Edition Reissue, Vol.17(2)
Counsel:
Ralph Saulep, for the Appellants
Jeffery L. Shepherd, for the Respondent
DECISION
15 December, 2014
1. BY THE COURT: This is an appeal against the whole of two interlocutory judgments of the National Court both made on 13th of April 2010 in proceedings WS No.69 of 2009 where that court dismissed two applications moved by the First Appellant seeking, amongst others, orders to dismiss the proceedings before that court on the basis, it was contended that; the Respondent failed to comply with Section 5 of the Claims By and Against the State Act (the CBASA) by not giving any notice or proper notice of intention to make a claim against the defendants within the statutory time limitation period; pursuant to Order 12 Rule 40 of the National Court Rules, they disclosed no reasonable cause of action or were frivolous or vexatious or were an abuse of the process of the court as they were statute barred; pursuant to Order 14 Rules 25 and 29 of the National Court Rules, orders for security for costs; and pursuant to Order 5 Rule 8 of the National Court Rules, an order for the joinder of the Registrar of Companies was necessary.
Background
2. The Respondent is the younger brother of the late Kibikang Yakka Kara (the deceased) who died intestate in Port Moresby on the 16th of September 1991.
3. It is alleged that the deceased left behind several valuable assets including shares in a company and real estate properties.
4. Upon his death, the whole of the deceased's estate including the assets was automatically vested under the administration and management of the First Appellant by operation of law: Section 44 of the Wills, Probate and Administration Act, Chapter 291, Revised Laws of Papua New Guinea (the WPAA).
5. The administration and management of the deceased's estate was subsequently transferred to the Respondent by consent of the First Appellant on the 13th of December 2006 in proceedings OS No.764 of 2006 commenced by the Respondent against the First Appellant to revoke the First Appellant's administration of the deceased's estate. When the Respondent assumed the responsibility, he formed the opinion that there was gross maladministration and mismanagement of the estate by the First Appellant.
6. The Respondent therefore commenced proceedings in the National Court on the 28th of January 2009 against the First Appellant and the State claiming damages for maladministration and mismanagement alleging negligence and breach of statutory duty. As against the Appellant, it is alleged that as administrator of the deceased's estate he failed to properly manage the estate which included plantations and real estate properties resulting in the estate incurring substantial losses. As against the State, the Respondent asserts the principle of vicarious liability on the basis that the First Appellant was performing statutory duties as an officer and agent of the State.
7. The First Appellant then filed two applications which he moved on the 7th of August 2009 and the 21st of October 2009 respectively.
8. The first was by way of an Amended Notice of Motion filed on the 23rd of March 2009 seeking, amongst others, an order to dismiss the proceedings under Order 12 Rule 40 of the National Court Rules on the basis that; they disclosed no reasonable cause of action, or were otherwise frivolous or vexatious, or were an abuse of the process of the court as they were statute barred. The Appellants relied on Sections 16 and 19 of the Frauds and Limitations Act 1988 (the Frauds Act) as the basis for claiming that the proceedings were frivolous and vexatious. Non-compliance with Section 5 of the CBASA was also relied upon as a further ground in the application upon which the proceedings were sought to be dismissed. In this application, the First Appellant also sought orders for security for costs pursuant to Order 14 Rules 25 and 29 of the National Court Rules.
9. The other application was moved by way of a Notice of Motion filed on the 25th of March 2009 seeking, amongst others, an order to join certain persons as parties to the proceedings one of whom was the Registrar of Companies.
10. The only affidavit relied on by the First Appellant to support his applications was that of Paul Wagun sworn and filed on the 17th of April 2009.
11. The State which is named as the Second Appellant in this appeal supported the First Appellant's applications.
12. The Respondent contested the applications and relied on the affidavit of Konze Kara sworn on the 17th of March 2009 and filed on the 18th of March 2009.
13. The applications concerning the issues of Section 5 notice under the CBASA and the joinder of parties were heard on the 7th of August 2009. The applications concerning the issues of; whether the proceedings should be dismissed because they disclosed no reasonable cause of action or were frivolous or vexatious or were an abuse of the process of the court because they were statute-barred under Sections 16(1) and 19 of the Frauds Act; and security for costs were heard on the 21st of October 2009. Two separate decisions on these issues and others were then delivered by the National Court on the same day on the 13th of April 2010. The first decision relates to the issue of Section 5 notice under the CBASA and the joinder of parties. The second decision relates to the issue of Sections 16(1) and 19 of the Frauds Act and security for costs.
14. With respect to the first decision, the Court found that Section 5 notice requirement under the CBASA does not apply and therefore refused the application. The Court also refused to grant orders for joinder of other parties.
15. As regards the second decision, the Court was of the opinion that time did not commence to run with respect to the claims made in the proceedings until at least 13th of December 2006 when the First Appellant's administration of the estate ceased and accordingly ruled that the action was brought within time. Consequently the Court also refused the orders sought. The Court also refused orders sought for security for costs.
Grounds of Appeal
16. The First Appellant's appeal is essentially against the primary judge's findings of fact and application of the law. The grounds of appeal are set out below:
"As to the Decision regarding the requirement to give Section 5 Notice pursuant (to) the Claims By and Against the State Act 1996 ("the Act").
3.1 His Honour erred in fact and/or at law in finding that the Public Curator or the Office of Public Curator, is not the "State" within the meaning of the Claims By and Against the State Act 1996.
3.2 His Honour erred in fact and/or at law in finding and holding that the Respondent/Plaintiff did not need to comply with a Section 5 Notice of the said Act, on the grounds that only causes founded upon contract, torts or breach of constitutional rights, are treated as "Claim" within the meaning of the said Act.
3.3 His Honour erred in fact and/or at law in finding that the common law cause known as "Devastavit" was not a "claim" within the meaning of the said Act and therefore, Section 5 Notice for such a cause was not required.
3.4 His Honour erred in fact and/or at law in finding that "Statutory" causes of action included Section 36 of the Public Curator Act 1951 were not included in the word "Claim" within the meaning of Claims By and Against the State Act 1996 and as a consequence, the Respondent did not need to comply with a Section 5 Notice.
3.5 In respect to the Second Appellant, His Honour erred in fact and/or at law in finding and holding that a Section 5 Notice need not be served or was not required.
3.6 His Honour erred in fact and/or at law, in failing to find that even if a Section 5 Notice of Intention to Sue was served upon the Second Appellant, such Notice was served well outside the period stipulated for such service.
3.7 As the Mortgagee Banks had sold off all the respective Properties (the subject of the proceedings) before the coming into operation of the Claims By and Against the State Act 1996, His Honour erred in fact and/or at law in not holding that in respect of such causes of action, the Respondent was required to give a Section 5 Notice of Intention to Sue, as required by Section 21 of that Act.
3.8 Joinder: His Honour erred in fact and/or at law in finding that the Registrar of Companies, should not be joined as a Party to the proceedings, when he should have.
As to the Decision regarding Frauds and Limitations Act 1988 – ss. 16(1)
3.9 His Honour erred in fact and/or at law in holding that the Respondent's/Plaintiff's Claim and causes of action was or were not Statute barred by Section 16(1) of the Frauds and Limitations Act 1988.
3.10 His Honour erred in fact and/or at law when he held that the Respondent's/Plaintiff's causes of action to Sue the State arose on 13th December 2006 when the Respondent was appointed as Administrator of the Estate and not when the individual properties were sold by the respective mortgagee sales by the said Mortgagee Banks.
3.11 His Honour erred in fact and/or at law in failing to exercise his discretion in favour of the Appellants on the grounds that there is and was evidence of actual prejudice upon the Appellants due to the passage of time and delay in bringing the proceedings.
3.12 His Honour erred in fact and/or at law in finding that an action based upon the Common Law principle of "Devastavit", was not a cause that was barred by Section 16(1) of the Frauds and Limitations Act 1988.
3.13 His Honour erred in fact and/or at law by failing to hold that a cause of action founded upon a Common Law principle including Devastavit shall comply with the Section 5 - Notice of Intention to Sue."
17. It is clear to this Court that there are two central contentions in this appeal. The first relates to the application of Section 5 of the CBASA and the second concerns Sections 16 and 19 of the Frauds Act. These were the grounds on which the Appellants relied upon in the Court below to dismiss the proceedings and were unsuccessful. They claim in this appeal that the Court below erred in fact and/or at law in determining these issues.
18. In addition to the central issues, we note the appeal is also against the refusal by the Court below to make an order for joinder of a party.
19. There are 13 grounds of appeal. It is apparent that many of these grounds are inter-related. Grounds 3.1 to 3.7 and 3.13 relate to the issue of Section 5 notice whilst grounds 3.9 to 3.12 relate to the issue of time limitation. Ground 8 relates to the issue of joinder of the Registrar of Companies.
Leave to Appeal
20. The First Appellant submitted that no leave was required. The Respondent did not state his position on the point. We are of the respectful view that as the decisions, the subject of this appeal, were interlocutory in nature, leave is required for all grounds of appeal even where they involve questions of law or questions of mixed fact and law: Jeffrey Turia v Gabriel Nelson (2008) SC949 (Kirriwom J, Cannings J, Yagi J). We note that no leave was obtained from the Supreme Court in that regard so this appeal is incompetent and could be dismissed on that basis alone. However, as the appeal grounds raise a number of important issues, we propose to consider and determine them as well.
Issues
21. In our view the following issues arise from the appeal grounds for consideration and determination:
(i) Whether the Public Curator or the Office of Public Curator is deemed the "State" within the meaning of the CBASA?
(ii) If the Public Curator is deemed the State, whether the respondent is required to serve a notice under Section 5 of the CBASA?
(iii) Whether the common law claim of devastavit is a "claim" within the meaning of the Section 2 of the CBASA?
(iv) Whether the claim by the respondent is time barred under Section 16(1) of the Frauds Act?
(v) Whether the Registrar of Companies should be joined as a party in the proceedings?
First Issue:
Whether the Public Curator or the Office of Public Curator is deemed the "State" within the meaning of the CBASA?
22. The determination of this issue will depend on the construction of Section 2 of the CBASA. That provision states:
(1) A person making a claim against the State in contract or in tort may bring a suit against the State, in respect of the claim, in any court in which such a suit may be brought as between other persons.
(2) The provisions of this Act apply to applications for the enforcement against the State of a right or freedom under Section 57 (Enforcement of guaranteed rights and freedoms) of the Constitution and for damages for infringement of a right or freedom under Section 58 (Compensation) of the Constitution.
23. This provision gives a person a right to make a claim in contract or tort against the State in a Court of competent jurisdiction. This right is also extended to actions for enforcement of guaranteed rights and freedoms under the Constitution and for damages for any breach thereof.
24. The First Appellant submits that the term the "State" as used in Section 2 of the CBASA by necessary implication includes and applies to the Public Curator or the Office of the Public Curator. It is argued that for the purpose of Section 36 of the Public Curator Act 1951 (the Public Curator Act) the Public Curator should be regarded as the State.
25. Section 36 of the Public Curators Act states:
"Where by any act or thing done or omitted by the Public Curator, any of his officers or a Public Curator's agent acting, or assuming in good faith to act, under this Act, any person sustains an injury that would have entitled him to a remedy if it had been done or omitted by a private person, he is entitled to the same remedy against the State as he would have been entitled to against a private person."
26. The trial Judge in considering this particular issue referred to a number of decisions of both the Supreme Court and National Court which considered the term "State" as used in the CBASA and concluded that the Public Curator was not included in the "State".
27. The trial Judge's reasons are found in paragraphs 9 to 13 of his judgement. In essence, the trial judge applied the six criteria test approved by the Supreme Court in SCR No. 1 of 1998; Reservation pursuant to s. 15 of the Supreme Court Act (2001) SC672 (Reservation pursuant to s. 15 of the Supreme Court Act (2001)) (Amet CJ, Los J, Sheehan J, Salika J, Sakora J) and found that although the appellant was a statutory body and entity of the State, it did not meet all the requirements of the test. These requirements are:
1. The body or entity is established by the Constitution;
2. The body or entity is part of the three tier structure of government enshrined in the Constitution;
3. Like the other tiers of government the body or entity is constituted by elected representatives;
4. The National Government exercises some control over provincial governments in political, administrative and financial matters;
5. The body or entity falls within the definition of "governmental body" contained in the Constitution; and
6. Judgement debts are recoverable from monies allocated in the budgetary process of provincial governments.
28. This was what the trial judge stated in his judgment:
9. For it to be necessary that the notice requirement of the Claims Act are followed in respect of the Plaintiff's claims against the Public Curator, the Public Curator must be included in the term "State" as used in the Claims Act.
10. The leading authority on whether an entity is included in the term "State" in the Claims, is SCR No. 1 of 1998; Reservation pursuant to s. 15 of the Supreme Court Act (2001) SC672. The Supreme Court held that a provincial Government is included in the term "State" in the Claims Act. Numerous decisions of this court have considered the question. They include Naomi Vicky John v National Housing Corporation (2005) N2770, where Lay J. (as he then was), after a detailed consideration of SCR No. 1/98(supra), held that the National Housing Corporation was not included in "State". Then in Wamena Trading Ltd v Civil Aviation Authority of Papua New Guinea (2006) N3058, another decision of Lay J., it was held that the Civil Aviation Authority was not included in "State". Recently in Anave Megaraka Ona v National Housing Corporation (2009) N3623, a decision of Sevua J., it was held that the National Housing Corporation was not included in "State".
11. In the Naomi John case (supra) Lay J. listed 6 criteria that persuaded the Supreme Court in SCR 1/98 to arrive at its decision as to whether a provincial government was included in "State". These criteria are whether the subject entity:
12. Lay J. stated that as in his view, the National Housing Corporation only fulfilled 2 of the criteria and that "....to meet the test applied by the Supreme Court, it is not enough that an entity is financially dependent on the State and controlled by the State, it must also itself be part of the three tier structure of constitutional government.", he determined that the National Housing Corporation is not included in "State".
13. I respectfully agree with the criteria listed by Lay J in Naomi John (supra) as I stated in Peter Komba v National Capital District Commission (2007) unreported, unnumbered, delivered 26th July 2007. In that case I held that the National Capital District Commission was included in "State".
29. It appears the argument by the Appellant on this issue rests squarely on Section 36 of the Public Curator Act. The Public Curator Act was enacted to establish the Office of the Public Curator and to provide for the functions, powers and duties of that office. The Public Curator Act is structured into 7 parts. Part I deals with Preliminary matters; Part II deals with matters relating to Administration; Part III deals with the Functions of the Public Curator; Part IV deals with Overseas Estates and Interests in Estates; Part V deals with Accounts, Records, Reports, etc.; Part VI deals with legal proceedings and Part VII deals with Miscellaneous matters.
30. As we alluded to, PART III of the Public Curator Act deals with the functions of the Public Curator. The powers and functions of the Public Curator are provided in Sections 5 to 24 of that Act. These include, amongst others, the administration of estates of deceased persons (Sections 10 and 11); management of the property of missing persons (Section 12); taking possession and dealing with the property of a deceased with or without a will (Section 14); investing monies of an estate (Section 17); paying debts owed by the estate (Section 20) and rejecting debts allegedly owed by the estate and distribution of assets of the deceased persons (Section 21). In our view, a combined reading of these provisions makes it clear that the primary function of the Public Curator is to provide a service oriented duty to the public in the area of estate management and administration in both instances of testacy and intestacy. It is equally clear that the functions and operations of the Public Curator are funded by the State from the public purse at no cost to the public although in limited instances certain costs and expenses are recoverable from the estate (see Section 15 (7) and (8) and Section 19(1)(c)).
31. It is because of the public nature of his duty that the Public Curator is given protection in terms of the general immunity given to him under Section 35(3) of the Public Curator Act. That provision states:
"The Public Curator, his officers and the Public Curator's agents are not personally liable to any person for acts done in good faith in the performance of their respective duties, unless it is shown that any such act was done not only illegally but also wilfully or with gross negligence."
32. Section 36 falls under Part VI. In general, this Part deals with; legal proceedings relating to disputes arising from orders made under ss. 10, 11 and 12 of the Act (section 32); administration of estates (section 33); complaints against the Public Curator (section 34); general indemnity against the Public Curator and his officers and agents (section 35); and general remedy against the Public Curator and his officers and agents (section 36).
33. In PNG Power Ltd v Augerea (2013) PGSC 53; SC1245 (Kandakasi, J, Manuhu, J Kawi, J)(PNG Power Limited), the Supreme Court revisited the question of what "governmental bodies" were given the existence of difference of opinion as to the proper application of the Supreme Court decision in Reservation Pursuant to s15 of the Supreme Court Act (2001) more specifically on the question of whether authorities, agencies, corporations and other government bodies established by the State and or Provincial Governments are part of the State and engaged in an extensive discussion of the subject. The Supreme Court there stated that the phrase "governmental bodies" was defined by Schedule 1.2(1) of the Constitution and the definition there was restated in the Reservation Pursuant to s15 of the Supreme Court Act (2001) where it observed:
"The power of the people is vested in all "governmental bodies" which administer and exercise them on behalf of the people. These governmental bodies include "the National Government", "a Provincial Government", "an arm, department, agency or instrumentality of the National Government or a Provincial Government" or "a body set up by statute or administrative act for government or official purposes."
34. After making reference to a decision of the Supreme Court in NCDC v Jim Reima (2009) SC993 (Davani, Manuhu, David JJ) where it was held that the NCDC was part of the State and therefore a governmental body, the Supreme Court observed:
"56. Following these two authoritative decisions of the Supreme Court, there is no doubt that, a national government, a provincial and local level government is part of the State because:
(1) They are established by the Constitution;
(2) They are part of the our system of government as provided for in our Constitution;
(3) They are constituted by elected representatives; and
(4) For governmental bodies lower than the national government, the national government exercises some control of them politically, administratively, and financial matters.
57. There has however been some controversy on the question of whether; authorities, agencies, corporations and other government bodies established by the State and or provincial governments are part of the State. One view is that, they are. On the other hand, there is a contrary view that, they are not part of the State. The latter view goes on to say that, since such bodies are not part of the State they are not protected or covered by provisions such as ss. 5 and 13 of the CBASA."
35. Moreover, after referring to a number of decisions of the National Court constituted by different judges which support opposing views which included the case of Naomi Vicki John v National Housing Corporation (2005) N2770 which was followed by the primary judge in one of the decisions appealed in the matter before us, the Supreme Court further stated that the difference of opinion stemmed from the misunderstanding of the second last paragraph in Reservation Pursuant to s15 of the Supreme Court Act (2001) where it was stated:
"It is to be remembered that this protection does not apply to assets and finances of developmental enterprises of provincial governments that have independent corporate status and operate commercially. They are subject to the ordinary laws as corporate citizens. However any profits these developmental enterprises contribute to the provincial budgets become assets belonging to the people and they are also protected from execution processes. In like manner, any tax revenue generated under delegated legislative authority becomes state finances and is protected."
36. The Supreme Court made these further observations:
"60. This difference of opinions have come about in our respectful view because of a misunderstanding of what the Supreme Court said in its passing comment in its second last paragraph of its decision in the Reservation Pursuant to Section 15 of the Supreme Court Act, (2001), which we have quoted above. If what the Supreme said in that case is considered in its proper context, it is easy to see, how or why entities set up by the National or a provincial government purely for commercial purposes and not to render a particular kind of critical community service, could not be considered as part of the State. The State of Papua New Guinea would be guilty of promoting discrimination between state owned enterprises and a private enterprise which gives the state owned enterprises an unfair commercial advantage or benefit that is not accorded to private enterprises. A good example of that would be the protection provided under s. 13 of the CBASA and long before that provision comes to play, the requirements for notice under s. 5 of the same Act.
61. In the particular context of the issues before the Supreme Court in the Reservation Pursuant to Section 15 of the Supreme Court Act, (2001), the Supreme Court was in our humble view, correct in taking the following factors into account to arrive at its decision that provincial governments are part of the State:
(1) They are established by the Constitution;
(2) They are part of the three tier structure of government enshrined in the Constitution;
(3) Like the other tiers of government they are constituted by elected representatives;
(4) The National Government exercises some control over provincial governments in political, administrative and financial matters;
(5) They fall within the definition of "governmental body" contained in the Constitution; and
(6) Judgment debts are recoverable from monies allocated in the budgetary process of provincial governments.
62. Taking these factors into account without any careful consideration as did Lay J., in Naomi Vicky John v. National Housing Corporation52 and followed by Hartshorn J., in Konze Kara v. Public Curator of PNG53 to determine whether entities other than a form of government is a State for the purpose of the requirements under s. 5 and the protection provided to the State under s. 13 of the CBASA can easily be misguided and erroneous for one serious but simple reason. The very nature of most governmental bodies or entities other than the national government, provincial governments and local level governments established by the State or a provincial government would not easily meet all of the above factors, especially the first three factors. Yet they would be charged with a duty and or responsibility of providing an important and critical service such as the provision of water, electricity, public housing, telecommunications, public transport, public banking, public health, public educational services and or the control over the production, importation and use of narcotics and other drugs, or dissemination of governmental and or public information as in the case of national broadcasting, or medical services. Given the essential nature of these kinds of services, they could simply not be left to the free market forces in a welfare State as developed in England and spread internationally, including our country. Traditionally, with origins mainly in England, such essential services formed the core function of the State. Later government leadership and thinking changed and they moved to the idea of service specialized organizations which saw the corporatization and privatization of some of these services. All of this was done in the hope of bringing greater efficiency in the management and delivery of these services at affordable prices. It is therefore normal to see such entities charging and receiving nominal fees as opposed to the prevailing commercial rate which are determined by the free market forces.
63. In our country, we started off as a nation with most of these key service areas remaining as key government departments. Later without much careful consideration and debate, the government moved to corporatization and privatization. Except for the cases in which there has been full privatization as in the case of the former Papua New Guinea Banking Corporation being sold to the Bank South Pacific, most of the other key service areas remain in government owned and controlled entities. This is necessary and important to maintain so the people of Papua New Guinea are well served rather than being driven by profit and they are charged with all sorts of outrageous fees and charges only seen in our country as is done by Bank South Pacific Limited and the other banks operating in our country. For instances, despite declarations of substantial profits each year, fees and charges even for deposits and customers withdrawing their own funds and a clearing of cheques issued by that bank are being charged. Given these, an important and determinative test in our view to determine whether an entity is part of the State or not is the nature or kind of service and or duties and responsibilities the entity under consideration has or owes to a particular part of the country or the whole country. If the kind of service or duties and responsibilities the entity has, falls into one of the traditional critical functions and or duties and responsibilities of the State, and that entity is not operating as a private enterprise purely for profit, with all of the features of a private enterprise present, such an entity should easily qualify to be part of the State. Accordingly, we endorse Sawong J.'s view in Sengus Investment Ltd v National Broadcasting Corporation,54 that it would be necessary to consider, amongst others, "the corporate structure and purpose of the organization as set out in its enabling legislation" as well as in the way it carries on its business.
64. Given the conflicting National Court decisions on point, it is necessary to briefly comment on some of the decisions. We start with the decision in Noami Vicky John v. National Housing Corporation (supra). There, His Honour, Lay J., (as he then was) held that the National Housing Corporation (NHC) is a governmental body but is not part of the State because it did not meet all of the factors or elements identified by the Supreme Court decision in Reservation Pursuant to Section 15 of the Supreme Court Act, which we outline in paragraph 54 above. His Honour did have regard to the corporate and commercial nature of the NHC and its set up and operations. However, His Honour did not give any consideration to the fact that the NHC was charged with the duty and responsibility of providing public housing. It is notorious fact that the NHC charges only nominal rentals from its tenants which does not compare at all to the kinds of rents charged in the open market place. The NHC depends heavily on the National Government for most of its funding, which also appoints the board members and service to the NHC is deemed service to the State by s.19 of the National Housing Corporation Act 1990, in the case of the managing director and s. 20 (5) and (6) of the Act. These, in our view, qualified the NHC to be an entity which is part of the State.
65. The errors evident in the above case were unfortunately carried over into the decision with respect in Konzi Kara v. Public Curator, (supra) by His Honour Hartshorn J. There, His Honour followed Lay J's., approach in the Naomi Vicky John case and held that, the Public Curator was not part of the State because it was a corporate entity, which has perpetual succession and has power to sue and be sued and that office did not meet all of the elements identified in the Reservation Pursuant to Section 15 of the Supreme Court Act. In so doing, His Honour with respect did not take into account the fact that, the Public Curator was a government institution which comes under the Department of Justice and Attorney General, which carries on a very critical function namely, the administration of intestate deceased estates, which is a traditional welfare government's function or service. The Public Curator is appointed by the National Government and paid out of public funds through government appropriations and is accountable to the people through the government of the day and Parliament. The Public Curator does not charge and collect professional fees at rates like those charged by other professionals in the private sector for his services and the office does not exist for generating profits for the government.
66. We make the same observations with respect to the decisions in Wamena Trading Ltd v. Civil Aviation Authority of Papua New Guinea (supra), another decision of Lay J., which held that the Civil Aviation Authority was not included in the definition of "State" as well as the decision of Sevua J (as he then was) in Anave Megaraka Ona v. National Housing Corporation,55 which held that the NHC is not a part of the State.
67. Carefully taking into account what we have said above, we are of the view that the decisions in Mt Hagen Urban Local Level Government v. National Housing Corporation was correct. Similarly, we consider the decision in Okam Sakarius v. Chris Tep (2003) holding the Cocoa and Coconut Extension Agency as part of the State by Salika J (as he then was) was correct and so was the decision in Sarakuma Investment Ltd v. Peter Merkendi,56 holding the East Sepik Provincial Liquor Licensing Board as part of the State by Cannings J. We are of the similar view concerning the decision in Sengus Investment Ltd v. National Broadcasting Corporation (supra) by Sawong J holding the defendant as part of the State. All of these decisions clearly show that, each of the entities had to deal with a specific National Government agenda, program, duty or service more than them being established purely for the purposes for making profits for the government.
68. Notwithstanding the differences in opinions as noted above, all of the above authorities and others agree that, all entities established by the National Government or a provincial government or a local level government, with some form of government control and ownership and funding is a governmental body. This should be the test to determine if an entity or a body is a governmental body. To this, we add the purpose for which the entity has been established. If it is for an important public purpose, the kind that traditionally were the function of welfare states governments is in the case of telecommunications, electricity, public transport, water and sanitation, health and education, this would render the entity a governmental body. This would be the case even if the entity appears to have private corporate status and structure." (Our emphasis)
37. In Philip Num v National Housing Corporation (2006), OS No. 115 of 2003, Unreported & Unnumbered Judgment delivered by David, J in Mt. Hagen on 25 August 2006, a case referred to by Sevua J in Anave Megaraka Ona v National Housing Corporation (2009) N3623, His Honour applied the test propounded by PNG Power Limited in holding that the National Housing Corporation falls within the meaning of the term "State" for purposes of the CBASA. Similarly, in Mineral Resources Development Company Ltd v Mathew Sisimolu (2010) SC1090 (Lenalia J, Davani J, Kariko, J), the Supreme Court held that Mineral Resources Development Company Ltd was an entity of the State because its enabling legislation and Constitution demonstrated that it was answerable to the State in all its functions hence the need to comply with Section 5 requirements of the CBASA before a claim was made against it.
38. It is argued that by enacting Section 36 and vesting liability, it necessarily follows that the liability of the Public Curator, its officers or agents automatically becomes the liability of the State. In other words the State is vicariously liable for any acts or omissions of the Public Curator, its officers or agents. No authority was cited to us as the basis for advancing this submission, but we consider the argument to be persuasive and having merit.
39. This is demonstrated by the provisions of Part VI of the Public Curator Act which precede Section 36. Those provisions from Sections 32 to 35 set out the mechanism for resolving disputes or complaints relating to the management or administration of an estate of a deceased. Section 36 is a general provision. We agree with the Appellants' submission that the statutory remedy envisaged by Section 36 should not be confused with a cause of action. Upon closer examination of Section 36, it is not a cause of action. Rather, it is a provision that imputes liability upon the State subject to satisfying the elements of Section 36 and these elements would be; first, an act or thing done or is omitted to be done; second, by the Public Curator or his officers or agents; third, acting or assuming in good faith to act under the Public Curator Act; fourth, any person sustains an injury; fifth, that would have entitled that person to a remedy if it had been done or omitted to be done by a private person; and sixth, he is entitled to the same remedy against the State as he would have been entitled to against a private person. We are of the view that if Parliament did not intend that result, it would have expressly provided so in the legislation. This is consistent with the settled principle of statutory construction that 'the express mention of one thing excludes the other. see Re Moresby North East Parliamentary Election (No.1): Goasa Damena v Patterson Lowa [1977] PNGLR 424, SCR No. 1 of 1982: Re Philip Bouraga [1982] PNGLR 178 and Bougainville Copper Foundation v Galeva Kwarara [1988-89] PNGLR 110.
40. We respectfully adopt and endorse the further test propounded by the Supreme Court in PNG Power Limited and the reasons behind the formulation of the test. Applying that test, we find that the Public Curator of Papua New Guinea which is a statutory corporation with perpetual succession pursuant to Section 2(2)(a)(b) of the Public Curator Act and consequently capable of suing and being sued in his corporate name and style is deemed the "State" within the meaning of the CBASA more specifically for purposes of Section 2.
41. For these reasons, we find that the primary judge fell into error when he determined that the Public Curator or the Office of the Public Curator was not part of the State within the meaning of the CBASA.
42. Before dealing with the second issue, it is necessary to first deal with the third issue.
Third Issue:
Whether the common law claim of devastavit is a "claim" within the meaning of Section 2 of the CBASA?
43. The common law claim known as devastavit is a claim for loss against an executor or administrator or trustee of an estate as a
result of mis-management and wastage committed by these officials. Generally an action for devastavit can occur in 3 ways as a result
of; direct abuse; mal-administration; and by neglect: see paragraphs 792 to 798, Halsbury's Laws of England, 4th Edition Reissue,
Vol.17(2).
44. The authors of Halsbury's Laws of England, 4th Edition Re-issue, Vol.17(2) at paragraph 792 describe the nature of a devastavit
as follows:
"A personal representative in accepting the office accepts the duties of the office, and becomes a trustee in the sense that he is personally liable in equity for all principles of the ordinary trusts which in courts of equity are considered to arise from his office. The violation of his duties of administration is termed a devastavit; this term is applicable not only to a misuse by the representative of the deceased's effects, as by spending or converting them to his own use, but also to acts of maladministration or negligence."
45. It is said to be direct abuse when the executor, administrator, or trustee, sells, embezzles, or converts to his own use, the goods entrusted to him; or releases a claim due to the estate or surrenders a lease below its value. These instances sufficiently show that any wilful waste of the property in the estate will be considered as a direct devastavit.
46. As to mal-administration, it is said that devastavit by mal-administration most frequently occurs by payment of claims which are not due nor owing; or by paying others out of the order in which they ought to be paid; or by the payment of legacies before all the debts have been satisfied.
47. Where the action is based on neglect, this usually occurs where there is negligence on the part of an executor, administrator, or trustee resulting in wastage to the estate in terms of direct destruction or mal-administration of the assets. Instances of such conduct include the neglect to sell goods or property at a fair price, failure to take appropriate action within a reasonable time, or, if the goods are perishable the failure to sell or dispose of the goods before they become wasted.
48. In general terms then, the principle of devastavit imposes on executors, administrators and trustees of an estate a fiduciary duty to act in good faith and with due diligence in the interest of the estate and the law seeks to punish the defaulting officials for their failure to act accordingly by making them responsible for the losses which may be sustained by the estate entrusted to them and therefore, where a party has been guilty of a devastavit, he or she is required to make up the loss out of his or her own estate.
49. In our view the common law claim has been partially codified in Papua New Guinea under two statutes namely; the WPAA and the Public Curator Act. These legislation prescribe, amongst others, the functions, duties, responsibilities and obligations upon persons who act as an executor, administrator and trustee and the remedies available for breach of duty.
50. In Papua New Guinea upon death, whether in testacy or intestacy, the whole of the estate of the deceased automatically vests in the Public Curator. This is expressly provided for under Section 44 of the WPAA. It states:
"44. Initial vesting in 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 formerly personal estate in England vested in the Ordinary."
51. The vesting of a deceased's estate in the Public Curator is a temporary measure until such time as a formal grant of probate of the will or administration of the estate is made by the National Court or the Registrar under Sections 39 or 42 of the WPAA as the case may be. This does not preclude the Public Curator from applying for formal orders should he decide to do so. We set out those provisions below:
"39. Grant on evidence or presumption of death.
(1) Where the National Court is satisfied, whether by direct evidence or on presumption of death, that a person has died leaving property in the country, the Court has jurisdiction to grant probate of his will or administration of his estate as if he were a deceased person, notwithstanding that after the grant it may appear that he was living at the date of the grant.
(2) Subject to this Act, where a grant is or has been made of probate of the will or administration of the estate of a person who the National Court is satisfied is dead, notwithstanding that it subsequently appears that the person was living at the date of the grant the person administering the estate by virtue of the grant has the same rights, powers, privileges, duties and liabilities as the personal representative of a deceased person, and in any Act the expression "personal representative" includes the person administering the estate for the time being by virtue of the grant."
"42. Grant by Registrar.
(1) On application made to him supported by affidavits on which in his opinion the National Court would grant probate or administration, the Registrar may, subject to this section, make a grant of representation by signing his order for the grant and sealing it with the seal of the National Court.
(2) The Registrar shall not grant representation without an order of the National Court—
(a) where a caveat has been lodged, and has not expired or been withdrawn; or
(b) where it appears to him to be doubtful whether the probate or administration ought to be granted."
52. Under Section 46 of the WPAA, the executor, administrator or trustee of an estate has statutory as well as common law duties and liabilities in respect to a deceased's estate. It states:
"46. Rights and duties of executor, etc.
Subject to this Act and any other Act, the personal representative of a deceased person has the same rights and is subject to the same duties with respect to the property of that person as executors and administrators had or were subject to with respect to personal estate before 1 January 1873."(Our emphasis)
53. It is our respectful opinion that this provision clearly recognises and preserves a claim of right based on the common law with respect to personal estate before 1st of January 1873.
54. Whilst it may be perceived that a claim in devastavit is not traditionally considered as falling within or under a traditional branch of the common law of tort per se, the principle of devastavit which is confined to liabilities to beneficiaries for violation of duties of administration of a deceased's estate by his personal representative extends to acts or omissions of a personal representative in negligence as we have alluded to earlier. The constituent elements of the tort of negligence are; first, there is a duty of care recognised by law owed by the defendant to the plaintiff; second, there is a breach of that duty; third, material injury has resulted from the breach; fourth, there is a reasonably proximate connection between the defendant's conduct and the resulting injury; and fifth, the absence of any conduct by the plaintiff disabling him from bringing an action for the injury suffered, eg not guilty of contributory negligence or voluntarily assumption of risk. We are persuaded by the Appellants that all these elements are required to be proven in a claim for devastavit based on negligence.
55. For these reasons, we are of the respectful opinion that the common law claim of devastavit based on negligence is a "claim" within the meaning of Section 2 of the CBASA: see Frederick Martins Punangi v Sinai Brown (2004) N2661, Mision Asiki v Manasupe Zurenuoc (2005) SC797 and Morobe Provincial Government v The State (2007) SCA No. 44 of 2005, Unreported & Unnumbered Judgment, (Hinchliffe, J, Jalina, J & Lay, J) delivered on 28th June 2007 at Waigani on the meaning of the word "claim". These cases confirm that for a "claim" to fall within the meaning of Section 2 of the CBASA, it must be an action that is founded on contract or tort or a breach of constitutional rights under Sections 57 or 58 of the Constitution. It follows that the primary judge erred when he found that a claim based under Section 36 of the Public Curator Act was a statutory cause of action and not one founded in contract or tort.
Second Issue:
If the Public Curator is deemed the State, whether the respondent is required to serve a notice under Section 5 of the CBASA?
56. In our deliberation on the first and third issues, we have concluded that the Public Curator is deemed the "State" for the purposes of the CBASA and that a claim in devastavit based on negligence is a claim which falls within the meaning of Section 2 of the CBASA. Therefore Section 5 of the Claims By and Against the State Act will apply to the Public Curator. Consequently, there is a legal obligation for the respondent to serve a notice of intention to make a claim under Section 5 of the CBASA.
57. We note that the Respondent served a notice of intention to make the claim on the Solicitor General on 13th of April 2007 and a copy of the notice delivered to the First Appellant on the same day: see paragraphs 39 to 41 of the Affidavit of Konze Kara and annexures "W" and "X" to that affidavit. No affidavit material was filed by any of the Appellants concerning any of the matters deposed to by Mr. Kara about service of the notice. Was this notice in compliance with all the requirements of Section 5 of the CBASA? The answer to this question primarily will depend on when the cause of action in negligence and devastavit arose.
58. We will expound later when we deal with the fourth issue, but we are of the opinion that the cause of action in negligence and devastavit accrued or continue to accrue up to the 13th of December 2006 when the First Appellant ceased administration of the estate by court order. So the Respondent was required to give a notice of intention to make a claim under Section 5 of the CBASA by the 13th of June 2007.
59. The Plaintiff (Respondent herein) gave his notice of intention to make a claim on 13th of April 2007 therefore within time.
Fourth Issue:
Whether the claim by the respondent is time barred under Section 16(1) of the Frauds Act?
60. The Public Curator submits that the claim by the Respondent is time barred under Sections 16 and 19 of the Frauds Act. It is contended that the alleged acts complained of by the Respondent occurred in or about 1992 which is more than twelve years ago and therefore the claim is time barred.
61. For convenience, we set out below Sections 16 and 19 of the Frauds Act.
"16. Limitation of actions in contract, tort, etc.
(1) Subject to Sections 17 and 18, an action—
(a) that is founded on simple contract or on tort; or
(b) to enforce a recognisance; or
(c) to enforce an award, where the submission is not by an instrument under seal; or
(d) to recover any sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture,
shall not be brought after the expiration of six years commencing on the date on which the cause of action accrued.
(2) An action for an account shall not be brought in respect of any matter which arose more than six years before the commencement of the action.
(3) Subject to Subsection (4), an action upon a specialty shall not be brought after the expiration of twelve years commencing on the date when the cause of action accrued.
(4) Nothing contained in Subsection (3) shall be construed as affecting any action for which a period of limitation is specified by any other Act, and that subsection shall be read and construed accordingly.
(5) An action shall not be brought upon any judgment after the expiration of twelve years commencing on the date when the judgement became enforceable.
(6) No arrears of interest in respect of any judgment debt shall be recovered after the expiration of six years commencing on the date when the interest became due.
(7) Subject to Subsection (8), an action to recover any penalty or forfeiture, or sum by way of penalty or forfeiture, recoverable by virtue of any enactment shall not be brought after the expiration of two years commencing on the date when the cause of action accrued.
(8) For the purpose of Subsection (7) the word "penalty" does not include a fine to which any person is liable on conviction of a criminal offence."
"19. Actions claiming personal estate of a deceased person, etc.
(1) No action in respect of any claim—
(a) to the personal estate; or
(b) to any share or interest in the personal estate,
of a deceased person, whether such claim is under a will or on intestacy, shall be brought after the expiration of twelve years commencing on the date when the right to receive the personal estate or the share or interest in the personal estate accrued.
(2) No action to recover arrears of interest in respect of any legacy, or damages in respect of such arrears, shall be brought after the expiration of six years commencing on the date when the interest became due."
62. The argument by the Public Curator is based on the pleadings where Mr. Kara claims that the Public Curator and or his agents were negligent in the discharge of their duties and responsibilities in properly managing the deceased's estate resulting in rental properties being sold thereby causing the estate to incur substantial losses.
63. The pleadings also allege statutory breaches under the Companies Act for alleged failure to file annual statutory returns on behalf of the companies owned by the estate. The acts or omissions complained of are said to occur between the period 1991 and 1996. The Public Curator argues that the causes of action are time barred because the actions or omissions complained of occurred well over the time limits prescribed by Sections 16 and 19 of the Frauds Act. A claim in negligence is a tort covered by Section 16(1)(a) for which the period of limitation is 6 years. A claim in the estate is covered by Section 19 for which the period of limitation is 12 years. It is contended that the primary judge erred in two respects; firstly, in relation to his finding that there was continuing breach by the Public Curator until he was replaced by Mr. Kara in December 2006; and secondly, the trial Judge was wrong in law in placing evidential burden of proof on the Public Curator.
64. As regards the first contention, it was submitted that there cannot be a continuing breach in a claim in negligence because the cause of action in negligence occurs once only, that is, there is only a single breach. It was submitted that in the present case, that occurred when the sale of the rental properties were completed in or about 1996.
65. As regards the second contention, it was submitted by the Public Curator that there is no law which imposes the burden of proof on a defendant to prove the case for the plaintiff, and in this case, by requiring the defendant (Public Curator) to prove by evidence that there was no ongoing or continuing breaches up until December 2006.
66. In response, it was submitted on behalf of Mr. Kara that as regards the first contention relating to the continuity of the negligence of the Public Curator, that these grounds offend Rule 8(c) of Order 7 of the Supreme Court Rules for failing to state with sufficient particularity the alleged errors of law committed by the trial Judge and should be struck out. Alternatively, it was submitted that the negligence was continuing and continued up until 13th December 2006 when the Public Curator conceded by relinquishing and transferring the administration of the estate to Mr. Kara pursuant to a consent court order. It was argued that in a negligence claim, damages is an essential element and where injury is continuing so too will the cause of action and the right of action. The cases of Crumbie v Wallsend Local Board [1891] UKLawRpKQB 17; [1891] 1 QB 503 and Huyton v Liverpool Corporation [1926] 1 KB 146 were cited as the authorities supporting this argument.
67. With regards to the second aspect, it is submitted that the evidence presented by Mr. Kara was to the effect that the alleged negligence by Public Curator was continuing and the Public Curator failed to adduce evidence to the contrary and hence the primary judge did not err in making the finding.
68. We think that the answer to the issue lies in the proper characterisation of the various claims raised by Mr. Kara. This is because Sections 16 and 19 of the Frauds Act apply to various types of causes of action. An action that is founded on tort is covered by Section 16(1)(a) whilst Section 19 on face value deals with claims against the personal estate or any share or interest in the personal estate of a deceased person. Which of the two limitation periods should apply in an action founded on devastavit?
69. The phrase "personal estate" in Section 19(1) is not defined anywhere in the Frauds Act. So if the phrase is not defined in the Frauds Act, then what does it mean?
70. The phrase is defined in Section 1 of the WPAA. It means "all property other than real estate".
71. The phrase is also defined in Section 1 of the Public Curator Act as:
""personal estate" includes –
(a) leasehold estates and other chattels real; and
(b) moneys; and
(c) shares of Government and other funds; and
(d) securities for moneys; and
(e) debts; and
(f) choses in action; and
(g) credit goods; and
(h) all other property,
and any share or interest in any such thing, but does not include any property that is real estate;"
72. The definitions of the phrase in both the WPAA and Public Curator Act are generally the same and demonstrate that there is a marked distinction between "personal estate" and "real estate".
73. The phrase "real estate" is defined in Section 1 of the WPAA. It means:
"(a) messuages, lands or hereditaments of any tenure whether corporeal, incorporeal or personal; or
(b) any undivided share in any such messuages, lands or hereditaments; or
(c) an estate, right or interest (other than a chattel interest) in any such messuages, lands or hereditaments,
but does not include land held under a lease for a term of less than 21 years whether or not there is a right to renew the lease;"
74. The same phrase is defined in Section 1 of the Public Curator Act as:
"real estate" includes –
(a) messuages, lands, rents and hereditaments of freehold or any other tenure, whether –
(i) corporeal; or
(ii) incorporeal; or
(iii) personal; and
(b) any undivided share of, and any estate, right, or interest (other than a chattel interest) in, any such messuages, lands, rents or hereditaments; and
(c) land included under a lease for 21 years or more".
75. The definitions of the phrase "real estate" in both the WPAA and Public Curator Act are the same.
76. The principles of statutory interpretation are well settled in this jurisdiction. The Court must give effect to the legislative intention and purpose expressed in the language used in the statute. If the words used in the statute are clear and unambiguous, the Court must adopt the plain and ordinary meaning of those words. However, if the words are not so clear or are ambiguous, the Court must construe the words in a fair and liberal manner in ascertaining their meaning and give an interpretation which gives meaning and effect to the legislative intention in the provision.
77. In our view, the ordinary meaning of the phrase "personal estate" is clear. It means all property other than real estate.
78. We are of the view that if Parliament did not intend that result, it would have expressly provided so in the legislation. This is consistent with the settled principle of statutory construction that the express mention of one thing excludes the other. see In re Moresby North East Parliamentary Election (No.1): Goasa Damena v Patterson Lowa [1977] PNGLR 424; SCR No.1 of 1982: Re Philip Bouraga [1982] PNGLR 178; and Bougainville Copper Foundation v Galeva Kwarara [1988-89] PNGLR 110.
79. In our view, the claim by Mr. Kara really is not a claim against the personal estate of the deceased or any share or interest in the personal estate of the deceased. Hence, Section 19 will not apply. The claim however basically is against the First Appellant for maladministration and mismanagement of the estate of the deceased particularly in relation to real property. The claim, as we have opined already, is in tort inclusive of the principle of devastavit. So Section 16 will necessarily apply.
80. So when did the cause of action in the present case accrue? The First Appellant submits that the time commenced in 1992 as per the pleading in the statement of claim when it is alleged that he committed the acts of negligence. The respondent submits that time accrued or continued to accrue up to the 13th of December 2006 when he was appointed by court order as the Administrator of the deceased's estate. The trial judge accepted the respondent's submission and held that the cause of action in negligence was not statute barred.
81. In rejecting the First Appellant's submission, the primary judge held that no evidence was produced by the First Appellant to show that the respondent's cause of action was not accruing or did not accrue up to the 13th of December 2006. We are of the view that this was in accordance with the well settled legal principle of law "he who alleges must prove it."
82. As regards the accrual of the cause of action, the primary judge observed as follows:
"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] UKLawRpKQB 17; [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."
83. The primary judge placed heavy reliance on Crumbie and Huyton to support the proposition that some torts may be continuous and a fresh cause of action arises daily as the tort continues. It is instructive that we give a summary of the two cases.
84. The Crumbie case concerned a claim against a local authority for damage done to a property. The brief facts are that a local authority carried out excavation works for the purpose of laying a sewer. After laying the sewer, the ground was not properly backfilled. As a consequence, there was subsidence or sinking by the soil or ground causing damage to the plaintiff's house. The subsidence began more than 6 months after the completion of works and continued up to the time when the action was commenced by the plaintiff. The plaintiff sued the local authority for damages to his property and obtained judgment against the local authority in the Court of first instance. The local authority applied to the Court of Appeal to set aside the judgment contending that the claim by the plaintiff was time barred under a provision of the Public Health Act 1875 which provided that an action against a local authority for anything done or intended to be done under the statute must be commenced within six months after the accruing of the cause of action. At the trial, the evidence showed that the sewer was completed in 1885. In March 1886, some subsidence started to occur and continuously caused cracks to the walls of the plaintiff's house and other damage. From 1st of February 1889 onwards, the process of subsidence continued and the cracks in the walls of the plaintiff's house and other damage continued to increase up to 1st of August 1889, the date on which a writ was issued by the plaintiff. Lord Esher, MR who delivered the judgment of the Court of Appeal to which Lord Justices Bowen and Fry agreed, in refusing the application, held that where there are successive damages, a fresh cause of action arises in respect of each successive damage.
85. In Huyton, the plaintiff owned gas pipes that were already laid underneath a street. The defendant municipal corporation was empowered by a special statute to break up streets and lay water pipes. The special statute specifically authorised the municipal corporation to "open or break up the road or pavement of a street .... and shall with all convenient speed complete the work for which the same shall be broken up, and fill in the ground and re-instate and make good the road or pavement ..... so opened or broken up." The defendant municipal corporation after digging up the ground and laying the pipes, failed to ram up the ground sufficiently and as a consequence the plaintiff's gas pipes were deprived of the support owing to a subsidence of the soil which caused the gas pipes to crack. The work was completed in September 1923. A series of cracks started a few months before and continued even after the completion of the work by the municipal corporation. The plaintiff commenced an action against the municipal corporation for damage suffered with respect to the fractured gas pipes in December 1924, about 15 months after the work was completed. The local authority relied on a statute (Public Authorities Protection Act 1893) which essentially accorded protection to public authorities against suits commenced six months after the completion of works. The Court of first instance found the local authority liable to the plaintiff. The municipal corporation appealed to the Court of Appeal relying strongly on the cause and damage principle. It contended that time began to run when the injury was caused and not when the damage that successively occurred and therefore the plaintiff's action was time-barred under the statute. The Court of Appeal unanimously rejected the argument by the municipal corporation and dismissed the appeal. It held that there was a continuing duty upon the municipal corporation to remedy the neglect in terms of the improper filling of the ground and that time did not begin to run so long as the duty remained undischarged. In other words there was a continuing duty on the municipal corporation to ensure that the soil was properly filled and packed to prevent the gas pipes from cracking.
86. Two clear principles emerge from these two cases. Firstly, where there is a legal duty to do an act and so long as that duty remained undischarged, time does not run. The second principle is that in cases where there is a successive or ongoing breach, each successive breach constitutes a fresh or new cause of action.
87. In the case before us, the facts pleaded as constituting the claim for negligence and breach of duty are set out in paragraphs 4 to 11 of the Amended Statement of Claim filed on 3 April 2009. The specific paragraphs are 10, 10A and 11. For convenience, we set out these paragraphs:
"10. Prior to the appointment of the Plaintiff as the Administrator of the Estate of the Deceased on 13 December 2006, the First defendant so negligently administered the Estate of the Deceased that the Estate incurred the losses referred to in paragraph 11 hereof:
Particulars of Negligence
At all material times when the First Defendant was in control of the administration of the Estate up to 13 December 2006:
a) The First defendant failed to manage or properly manage the rental properties of the Estate and KKI.
b) The First defendant failed to manage or properly manage the rental income derived from the rental properties of the Estate and KKI.
c) The First Defendant failed to pay or apply in a timely manner the rental income derived from the rental properties of the Estate and KKI against the mortgage commitments owed by the Deceased (and thereof the Estate following the death of the Deceased) and KKI to the Australia and New Zealand Banking Group (PNG) Limited ("ANZ Bank") and to the former Papua New Guinea Banking Corporation ("PNGBC") as successor to the Bank of Hawaii (PNG) Limited.
d) By reason of the failure of the First Defendant to meet the mortgage commitments of the Estate and KKI when due from the said rental income:
i) the PNGBC issued a Notice of Default to KKI for the sum of K134,825.21 on 7 October 1992 in respect of the following mortgage securities:
ii) the ANZ Bank issued a Notice of Default to the Estate for the sum of K3,005,837.86 on 10 March 1994 in respect of the following mortgage securities:
e) All of the properties referred to in the said Notices of Default were forfeited to the PNGBC and ANZ Bank as respective mortgagees exercising power of sale because of the failure of the First Defendant to properly manage the said rental properties and the rental income derived therefrom.
f) The First Defendant thereafter failed to manage or properly manage the remainder of the real estate properties owned by the Estate and KKI, in particular the Morea-Tobo Road property, the Kittyhawk Street House No. 1, the Kittyhawk Street House No. 2 and the Mount Diamond Farm # 2.
g) The First Defendant failed to insure and keep insured the remainder of the real estate properties owned by the Estate and KKI, by reason of which failure the Estate lost the benefit of the insurable value of the 7-bedroom Morea-Tobo Road property which was destroyed by fire in 1992 and the 5-bedroom Kittyhawk Street House No. 1 which was destroyed by fire in 1998.
h) The First Defendant failed to comply with statutory requirements in respect to the Estate and KKI in that as from the date of the death of the Deceased on 16 September 1991 down to the appointment of the Plaintiff as Administrator of the Estate in December 2006, the First Defendant failed to:
i) prepare and lodge any annual tax returns in respect of the Estate and KKI with the Internal Revenue Commission in breach of the Income Tax Act;
ii) prepare and lodge any annual returns in respect of KKI with the Registrar of Companies in breach of Companies Act 1997;
iii) pay annual State rents when due or at all for any of the State Leases referred to in paragraphs 5 and 6 hereof.
i) KKI was removed from the Register of registered companies by the Registrar of Companies on 3 June 2002 by reason of the failure of the First Respondent to have complied on behalf of the Estate with the annual reporting requirements of the Companies Act 1997 in respect of KKI.
j) KKI and accordingly the Estate lost the benefit of the market value of the Mount Diamond Farm # 2 which was transferred or purportedly transferred by the Registrar of Companies (as trustee of the Estate as principal shareholder of the deregistered KKI) to POM Productions Ltd for the sum of K24,700 pursuant to a contract for sale dated 3 February 2006.
k) The value of Mount Diamond Farm # 2 at the time of sale or purported sale by the Registrar of Companies to POM Productions Ltd was in excess of K3,000,000.
l) By reason of the First Defendant's non-payment inter alia of the State rent for the Morea-Tobo property, the Estate's title to that property was forfeited to the State and the State re-issued a replacement title to Baiyer Valley Cattle Limited in or about September 2006 wherefor the Estate lost the benefit of the unimproved market value of the Morea-Tobo property estimated at K700,000 as at 31 December 2007.
m) The First Defendant wrongfully applied a sum exceeding K41,000 the property of another deceased estate or trust fund being administered by the First Defendant in payment of a judgment debt and costs obtained against the Estate, the First Defendant and the Second Defendant in proceedings WS No. 708 of 1996 and then wrongfully applied that sum as a debt said by the First Defendant to be owing by the Estate to the First Defendant and/or the Second Defendant.
n) The First Defendant failed to implement and maintain proper accounting records for the Estate.
o) The Plaintiff is unable to particularise each and every act or omission of the First Defendant because of the First Defendant's failure and refusal to account to the Plaintiff, or to produce proper or any books of account or inventories. The Plaintiff will endeavour to provide further particulars if and when the First Defendant gives proper discovery and inspection.
10A. Further or alternatively, the First Defendant:
(a) by reason of the matters referred to in paragraph 10 breached his duty under the general law and/or the Public Curator Act to duly administer and distribute the Estate of the Deceased, and in particular to preserve the assets, to deal properly with them, and to apply them in the due course of administration;
(b) negligently and/or in breach of his general law duties and/or his fiduciary duties, and/or his statutory duties failed to take any or any timely or effective steps to realise the assets of the Estate and carry out its proper administration and distribution;
(c) by reason of the matters referred to in paragraph 10 breached his fiduciary duties inter alia to safeguard the assets of the Estate, not to use, deal with, dispose of or otherwise apply the assets of the Estate other than in the course of the proper administration, and to account for the assets of the Estate;
(d) by reason of the matters referred to in paragraph 10 acted illegally and also wilfully and or with gross negligence within the meaning of section 35(3) of the Public Curator Act;
(e) in breach of section 30(1) of the Public Curators Act failed to transmit during the months of January and July in each year or at all to the Secretary for Finance returns of monies received and paid by him during the last six months in respect of the Estate, or to furnish returns of all balances or sums in his hands to the credit of the Estate;
(f) in breach of section 30(2) of the Public Curators Act failed to keep proper books of account in relation to the matters referred to in subsection 30(1) of the Act;
(g) in the premises is liable inter alia in devastavit to make good the loss caused to the Estate.
11. In consequence of the said negligence, breaches of fiduciary duties, breaches of general duties, and breaches of statutory obligations of the First Defendant, the Estate has sustained economic loss and/or damages estimated at K45,680,060 as at 31 December 2007 and continuing, particulars of which economic loss and/or damages are contained in the Schedule hereto."
88. In our view paragraph 11 of the pleading alleges that damages in respect to the injury was continuing and hence the right or cause of action was continuing. In effect the respondent is pleading that the damages arising from the negligent acts or omissions continue to run until such time as the first appellant takes action or step to discharge his fiduciary duty as the trustee, administrator or executor of the estate. We are satisfied the pleading is sound and consistent with the principles in Crumbie and Huyton.
89. We endorse the primary judge's reasons for ruling on this aspect and as a consequence find no error in his ruling. The respondent's claim therefore is not statute-barred.
Issue 5 - Whether the Registrar of Companies should be joined as a party in the proceedings.
90. This particular issue relates specifically to ground 3.8 which we have set out earlier.
91. In the proceedings before the National Court, the First Appellant made an application to join a number of parties as defendants in the proceedings. In the notice of motion filed on 25th of March 2009, initially only two parties were named namely, Rolf Lahui and the Registrar of Companies. The third party proposed which was inserted into the motion in hand writing was Robert Wong trading as Robert Wong & Associates. However, in the ruling delivered by the primary judge, His Honour referred to five parties. These were; Rolf Lahui, Ivan Pomaleu (Registrar of Companies), Robert Wong, Australia & New Zealand Banking Group (PNG) Limited and Bank South Pacific Limited.
92. After hearing submissions on the application, the primary judge refused to grant the application for the reasons that:-
(i) no relief is being sought against any of them;
(ii) the proposed parties will not be affected by reliefs sought in the proceedings (amended statement of claim);
(iii) the joinder of the proposed parties is unnecessary.
93. It should be noted that the present appeal relates to only one of the proposed parties, that is, the Registrar of Companies (Ivan Pomaleu).
94. As we have alluded earlier, the affidavit supporting the application was sworn by Paul Wagun on the 17th of April 2009. The relevant facts deposed to in the affidavits are paragraphs 1, 2, 4, 5 and 11. The most significant of all is paragraph 11 where it is alleged that the Registrar of Companies, in his capacity as a trustee of the deregistered company owned by the estate, acted wrongfully in disposing of two of the properties owned by the estate at prices that were undervalue.
95. The First Appellant submits that the Registrar of Company is a necessary party to be joined because of his dealings with the properties.
96. The respondent submits that this ground of appeal should be struck out because it offends the Supreme Court Rules, Order 7 Rules 8(c) and 9. In the alternative, it is argued the application for joinder was misconceived and/or without merit because there is nothing untoward the reasoning of the primary judge.
97. There is no doubt that the primary judge dealt with the application under Order 5 Rule 8 of the National Court Rules. This Rule states as follows:
"8. Addition of parties. (8/8)
(1) Where a person who is not a party –
- (a) Ought to have been joined as a party; or
- (b) Is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceedings may be effectually and completely determined and adjudicated on,
the Court, on application by him or by any party or of its own motion, may, on terms, order that he be added as a party and make orders for the further conduct of the proceedings.
(2) A person shall not be added as plaintiff without his consent.
(3) Without limiting the generality of Sub-rule (1), where a person not a party to proceedings for possession of land is in possession (by himself or by a tenant) of the whole or any part of the land, the Court, on application by him, may, on terms, order that he be added as a defendant and make orders for the further conduct of the proceedings."
98. There is merit in the submission by the Respondent as to the competency of this ground based on the requirement of the Supreme Court Rules for the need to state a ground with sufficient particularity. We set out the provisions of Order 7 Rules 8(c) and 9:-
"8. The notice of appeal shall –
(a) .........................................;
(b) .........................................;
(c) State briefly but specifically the grounds relied upon in support of the appeal;
(d) .........................................;
(e) .........................................;
(f) .........................................; and
(g) ..........................................
9. Without affecting the specific provisions of Rule 8, it is not sufficient to allege that a judgment is against the evidence or the weight of the evidence or that it is wrong in law, and the notice must specify with particularity the grounds relied on to demonstrate that it is against the evidence and the weight of the evidence and the specific reasons why it is alleged to be wrong in law."
99. The Supreme Court has in the past considered the requirement of these provisions of the rules in a number of decisions and held that a ground that does not comply with the rules in terms of lack of sufficient particularity is incompetent and must be struck out: see Haiveta v Wingti (No.2) [1994] PNGLR 189; Henao v Coyle (2000) SC655; NCDC Water and Sewerage Ltd v Tasion (2002) SC696 and Ipili Porgera Investments Ltd v Bank of South Pacific Ltd & RIFL (2007) SCA No.15 of 2006, Unreported & Unnumbered Judgment of Injia DCJ (as he then was) and Cannings J delivered on 27 June 2007.
100. Ground 3.8 alleges that the primary judge erred in fact and/or law in making a finding but says no more. It does not say how, why or to what extent or in what respect the error was allegedly committed. In our opinion, the ground clearly offends the requirement of the rules. We therefore accept the submission of the Respondent that the ground suffers material defects in terms of sufficient particulars and should be struck out.
101. The Respondent should have raised this competency issue at an early stage prior to the substantive hearing of the appeal and this issue was obvious at the outset. However, because the issue was not raised earlier, the parties were allowed to argue the merits of the ground. It is for this reason that in our respectful view we should also give consideration to the merits of the ground.
102. The primary judge's exercise of power under National Court Rules, Order 5 Rule 8 arises from an interlocutory proceeding and is clearly discretionary in nature. We have already stated this in the beginning. It is now well settled in the leading case of Curtain Bros (PNG) Ltd v UPNG (2005) SC788 that where there is an appeal against a discretionary judgment, the onus is on the appellant to clearly show or demonstrate an identifiable error or that the decision was unreasonable or just plainly wrong. The appellate court must be slow to substitute its own discretion except where there is clear identifiable error.
103. In this instance, we find that the primary judge properly considered the facts and the relevant principles and reached a conclusion. The First Appellant has not satisfactorily shown to us an identifiable error and we are not convinced that the primary judge committed any error of fact and/or law in the exercise of his discretion. We dismiss this ground of appeal.
ORDER:
104. The formal orders of the Court are:
__________________________________________________________
Saulep Lawyers: Lawyer for the First Appellant
Blake Dawson Lawyers: Lawyer for the Respondent
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